IP Transactions: Identifying & Transferring Ownership

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Examining the bundle of rights associated with patent, trademark, and copyright rights; how to determine the original owner of those rights; and the major concerns with transferring those rights to another

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IP Transactions: Identifying & Transferring Ownership

  1. 1. IP Transactions: Identifying & Transferring Ownership<br />April 6, 2011<br />Elizabeth Herbst Schierman<br />US Patent Attorney<br />schierman@dykaslaw.com<br />CLE Presentation Sponsored by <br />the Intellectual Property Law Section of the Idaho State Bar<br />
  2. 2. Topics Covered<br />Intro to IP Rights<br />The bundle of rights for Patent, Trademark, & Copyright<br />Original Ownership<br />Determining ownership at creation<br />Transferring Ownership<br />Assignment vs. License<br />Common IP Ownership Concerns<br />
  3. 3. Disclaimers<br />Law addressed is U.S. Patent/Trademark/Copyright Law<br />Trademark law discussed is focused on federal law<br />Focusing on registration<br />Consult a Estate/Bankruptcy/Tax Attorney<br />
  4. 4. Intro to IP Rights<br />Copyright Rights:<br />Reproduction<br />Adaptation to create derivative works<br />Distribution of copies by sale, rental, lease, lending<br />Performance / Display<br />Moral Rights (for Visual Art)<br />Attribution<br />Integrity<br />
  5. 5. Intro to IP Rights<br />Creation:<br />Original work of authorship fixed in tangible form<br />Term (for work created Jan. 1, 1978, or later): <br />Generally: Life of last surviving author + 70 years (Dec. 31st)<br />Work Made for Hire: Earlier of 120 years after creation & 95 years after publication (Dec. 31st)<br />
  6. 6. Intro to IP Rights<br />Rights:<br />Right to exclude, within the area**, junior users from adopting/using marks likely to cause confusion<br />**Area for federally-registered mark = Nationwide<br />**Area for state-registered mark = Statewide<br />**Area for common law mark = “Geographic” area in which mark used<br />
  7. 7. Intro to IP Rights<br />Creation:<br />Use in commerce<br />Must be distinctive, i.e., capable of distinguishing the goods/services upon which it is used from good/services of others<br />Term:<br />Common Law: Until earlier of abandonment or loss of distinctiveness<br />Federal Registration: 10 Years, renewable in 10-year increments with declaration of use<br />
  8. 8. Intro to IP Rights<br />“Inventor’s Rights” <br />a.k.a. prospective patent rights<br />Ability to:<br />File application for patent<br />Transfer right, title, & interest<br />Does NOTinclude right to exclude others from practicing invention<br />
  9. 9. Intro to IP Rights<br />Creation:<br />Invention = Conception + Reduction to Practice<br />Term: Until earliest of<br />Abandonment <br />Passage of statutory bar to patentability<br />Transfer of rights<br />Issuance of patent<br />
  10. 10. Intro to IP Rights<br />Patent Rights:<br />Exclude others from <br />Making, <br />Using,<br />Selling, <br />Offering for sale, and <br />Importing <br />the Claimedinvention in the United States<br />
  11. 11. Intro to IP Rights<br />Creation:<br />Issuance of Patent<br />Term:<br />Utility Patent: 20 Years from first filing date, if maintenance fees paid<br />Design Patent: 14 Years from issuance<br />
  12. 12. Original Ownership<br />Original Owner(s) of Copyright<br />Generally: Author(s) is/are Owner(s)<br />Author(s) = Creator(s) of the original expression in the work<br />Work Made for Hire = Employer is Owner<br />(1) Prepared by employee w/i scope of employment; or<br />(2) Express written agreement & w/i specific categories of work<br />
  13. 13. Original Ownership<br />Original Owner of Trademark<br />The source of associated goods/services<br />Individual <br />Business<br />
  14. 14. Original Ownership<br />Original Owner(s) of “Inventor’s Rights”<br />Individual(s)who conceived of the invention<br />Depends upon claims in application/patent<br />
  15. 15. Original Ownership<br />Original Owner(s) of Patent Rights<br />Holder(s) of right, title, and interest in invention/patent application at time of issuance of patent<br />May or may not be indicated on face of patent<br />
  16. 16. Transferring Ownership<br />Assignment <br />Transfer of ownership (right to exclude)<br />License <br />Waiver of right to sue<br />Inheritance<br />Bequeathal in will<br />Intestate succession<br />Operation of Law<br />Bankruptcy<br />
  17. 17. Transferring Ownership<br />Transferrable in whole or in part by<br />Assignment/Grant **<br />License**<br />Operation of Law<br />Inheritance<br />Bequeathal<br />Intestate Succession<br />** Subject to Termination – 17 USC § 203<br />
  18. 18. Transferring Ownership<br />Rights NOT Transferrable<br />Moral Rights<br />May be waived, expressly, in writing<br />Copyright transfer termination right<br />Cannot be waived<br />Cannot be contracted away<br />
  19. 19. Transferring Ownership<br />Assignment - Only with good will<br />Fed. TM App or Reg.: in writing, duly executed<br />License<br />TM Owner must exercise quality control or the license may constitute forfeiture of rights<br />Inheritance – with good will<br />Bankruptcy – Treated differently than other IP<br />
  20. 20. Transferring Ownership<br />Rights NOT Transferrable<br />Trademark rights without good will<br />Intent-To-Use Federal TM Application: <br />Not assignable, except to successor business<br />
  21. 21. Transferring Ownership<br />Assignment: <br />Gives assignee<br />Power to take action / Prosecute application (with other rights holders)<br />Right to have issuing patent issued to it<br />Must be in writing<br />Must include assignor’s entire ownership interest or a percentage thereof<br />Bundle of rights must stick together!<br />
  22. 22. Transferring Ownership<br />License:<br />Licensee may receive ???<br />Assurance of license to hoped-for patent rights<br />Know-how<br />May be limited as to time, geographical, area, field of use, etc.<br />
  23. 23. Transferring Ownership<br />Inheritable, to an extent:<br />Legal representatives of deceased or incapacitated inventor may make application for patent<br />Executor or Administrator<br />(But Intestate – Heirs of Inventor)<br />Bankruptcy – At least “patent pending”<br />Pre-Filing: ? (consult a bankruptcy att’y)<br />
  24. 24. Transferring Ownership<br />Assignment:<br />Must include assignor’s entire ownership interest or a percentage thereof<br />Bundle of rights must stick together!<br />License:<br /><ul><li>May be limited as to time, geographical area, field of use, etc.
  25. 25. Inheritance
  26. 26. Bankruptcy</li></li></ul><li>Common Issue 1: - Joint Ownership<br />Joint Authors:<br />2+ authorsw/ intent (@ creation) of co-authorship & <br />Each made independently-copyrightable contribution<br />Not Joint Author: Editor, Assistant, Draftsman (?)<br />Possible Joint Author: Architect, Software Coder, Web Designer<br />
  27. 27. Common Issue 1: - Joint Ownership<br />Joint Authors <br />Co-Owners / Tenants-In-Common<br />Each has independent right to exercise or license copyright rights<br />Must account to co-owners for profit earned from licensing or use<br />
  28. 28. Common Issue 1: - Joint Ownership<br />Joint Owners of Trademark<br />Rare and risky!<br />Co-owners with structure to assure joint quality control of goods/services<br />No right to exploit mark or transfer rights (assign or license) without consent of joint owner(s)<br />
  29. 29. Common Issue 1: - Joint Ownership<br />Better alternatives (maybe): <br />Jointly-operated entity owns trademark<br />One entity owns, licenses to other entity<br />Related Joint Users:<br />Mark used by related companies inures to benefit of Registrant or Applicant for registration<br />
  30. 30. Common Issue 1: - Joint Ownership<br />Co-inventors:<br />All who contributed to conception<br />Requires: Some quantum of collaboration or connection b/w inventors<br />Not a co-inventor: One who suggests result to accomplish, but not means to accomplish result<br />
  31. 31. Common Issue 1: - Joint Ownership<br />Any & all co-inventors must be identified in application<br />Unavailable Joint Inventor:<br />All available joint inventors can file if joint inventor<br />Cannot be found or reached after diligent effort; or<br />Refuses to join in an application<br />
  32. 32. Common Issue 1: - Joint Ownership<br />Joint Patent Holders:<br />Inventor(s) not having assigned rights<br /> Assignee(s)<br />In absence of agreement to the contrary, each joint owner of patent may<br />Exercise patent rights,<br />Without consent of, and<br />Without account to co-owners<br />
  33. 33. Common Issue 2: - Recording Transfer<br />Recordable in the Copyright Office:<br />Transfer of copyright ownership<br />Other document pertaining to copyright<br />Requirements:<br />Actual signature of executor or sworn/official certification of true copy<br />Fee<br />Constructive notice<br />
  34. 34. Common Issue 2: - Recording Transfer<br />Original applicant presumed to be owner of TM App or Reg unless there is an assignment<br />Recordable in the US Pat & TM Office:<br />Assignments<br />Other document affecting title (licenses, security interests, etc.)<br />Assignment void against subsequent good faith purchaser, unless assignment recorded<br />
  35. 35. Common Issue 2: - Recording Transfer<br />Inventor(s) presumed to be owner of application and resulting patent unless there is an assignment<br />Recordable in the US Pat & TM Office:<br />Assignment<br />Other document affecting title (licenses, security interests, etc.)<br />
  36. 36. Common Issue 2: - Recording Transfer<br />Recording necessary for<br />Assignee to take action<br />Assignee to be issued patent<br />Assignment void against subsequent good faith purchaser, unless recorded<br />
  37. 37. Common Issue 2: - Recording Transfer<br />Child Apps w/ No New Material<br />Types:<br />Continuation<br />Divisional<br />Nonprovisional from provisional<br />Assignment need not be re-recorded<br />Re-recording needed for USPTO’s records to reflect the assignment<br />
  38. 38. Common Issue 2: - Recording Transfer<br />Child Apps w/ New Material<br />Types:<br />Continuation-in-Part<br />Nonprovisional from provisional<br />New assignment needed for execution and recording<br />
  39. 39. Common Issue 3: - Securing Rights<br />Standing to File Application:<br />Owner of copyright or any exclusive right in the work, i.e.,<br />Author<br />Copyright claimant<br />Owner of exclusive right(s)<br />Duly authorized agent of such author, other copyright claimant, or owner of exclusive rights<br />
  40. 40. Common Issue 3: - Securing Rights<br />1(a) Application – In Use<br />Owner of trademark used in commerce<br />1(b) Application – Intent-to-Use<br />Person with bona fide intention to use trademark in commerce <br />
  41. 41. Common Issue 3: - Securing Rights<br />Inventor(s) is/are initial applicant(s)<br />Assignee may be identified at filing<br />All owners must act together<br />Licensee does not have power to take action<br />
  42. 42. Common Issue 3: - Securing Rights<br />Duty of Candor:<br />All involved in filing or prosecution <br />Must disclose info material to patentability<br />Small Entity Status<br />For-profit: No more than 500 employees<br />Nonprofit: Depends on type<br />No rights, existing or promised, to non-small entity<br />
  43. 43. Common Issue 4: - Enforcing Rights<br />Prerequisite to Bringing Suit:<br />Registration or Preregistration<br />(Works Originating in the US)<br />Standing to Sue:<br />Legal or beneficial owner of exclusive right<br />Other person having/claiming interest:<br />May be Joined<br />Shall be allowed to Intervene<br />
  44. 44. Common Issue 4: - Enforcing Rights<br />Standing to Sue – Lanham Act Sect. 43(a)(1)<br />“[a]ny person who believes that he or she is likely to be damaged”<br />Trademark Owner(s) / Assignee(s)<br />Licensee(s), exclusive and non-exclusive <br />(Depending on terms of license)<br />Evidence of reasonable likelihood of suffered competitive or commercial injury<br />
  45. 45. Common Issue 4: - Enforcing Rights<br />Standing to Sue – Lanham Act Sect. 32(1)<br />“registrant”<br />Registrant<br />Exclusive licensee with rights tantamount to assignment (depending on court)<br />Notnon-exclusive licensee<br />
  46. 46. Common Issue 4: - Enforcing Rights<br />Prerequisite to Bringing Suit:<br />Issued Patent!!!<br />Standing to Sue: <br />Definitely: (All) Owner(s)<br />Patent Owner(s) <br />Exclusive licensee w/ “all substantial rights” <br />Possibly: Exclusive licensee w/ < “all substantial rights”<br />No standing: Non-exclusive licensee<br />
  47. 47. Common Issue 5: - Not-Yet-Created Rights<br />Original ownership of future rights indeterminable prior to creation<br />“agreement to assign” or “will be assigned” <br />Vests only equitable rights in IP<br />Does not vest legal title<br />“Hereby assigns and agrees to assign all right, title, and interest . . . “<br />Should prevent future original owner from otherwise transferring rights<br />
  48. 48. Take-Away Tips<br />Rights-Transfer Contracts:<br />Investigate original ownership & Conduct title search<br />Clarify rights &limitations<br />Ownership of modifications<br />Responsibility for securing rights<br />Standing to enforce rights<br />
  49. 49. Take-Away Tips<br />Hiring potential IP creator? Contract for IP ownership<br />Track details of what, when, how, & who<br /><ul><li>Record transfer documents</li></ul>Business change of name or merger<br />Consider financial/tax implications<br />
  50. 50. QUESTIONS ?<br />Elizabeth Herbst Schierman<br />US Patent Attorney<br />Boise, Idaho<br />www.linkedin.com/in/EHSchierman<br />

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