There are a few ways that the owner of a patent can transfer their ownership of a patent to another party.
Ownership of a Patent
A patent provides the legal right of ownership to the inventor for any device, substance, method or process that is new, inventive and useful. This right allows the owner(s) of a patent to exploit their invention exclusively for the duration of the patent, therefore allowing a business to gain a monopoly for their product over the patent lifetime.
Why might you transfer ownership of a patent
If you are the patent owner, there are many circumstances in which you might want to transfer ownership of the patent. These situations might include but are not limited to:
- Selling your right for a lump sum payment or for royalties, or
- Letting others manage the right for commercial purposes.
If you decide to completely transfer ownership rights, you will no longer have any legal ownership over the patent, and will lose any right for performance obligations.
How can I transfer ownership of a patent
As patents confer legal ownership rights, the applicant or patentee can transfer these rights to another party at any time during the life of the patent. This is known as assignment. The applicant or patentee must be either:
- An individual,
- A company,
- A combination of the above.
Assignment or transmission to a business must be in the name of the owners of business, and not the business or trading name. If the assignee’s are a corporation, it must be made in the name of the corporation. The transfer application cannot be made in the name of the directors or shareholders. If the transfer of the patent is to a trust, it must be made in the name of the trustee’s. For example, the patent must be transferred to ‘Neil Mink’ and not ‘Niel Mink as Trustee for the Soprano Family Trust’.
You must inform the Commissioner of Patents in writing that you are intended to transfer the ownership or interest of the application or patent. To inform the Commission in writing, you may use the “Request to Amend Ownership Details of an Application or Patent”, which is available on the IP Australia website. The form should identify the patent number being transferred as well as documentary evidence of the patent.
Documentary evidence of proof of title can include:
- deed of assignment,
- merger document,
- dated letter from assignor asking to transfer the patent to the assignee.
The documents must include the signature of the assignor. The documents must also include the following information:
- Full name and address of parties,
- Position in the company if company seal is not provided,
- Patent application number,
- Description of the interest being transferred, either whole or partial interest.
Other important information:
- Transfer document must be dated and signed by the current owners, and
- There is no fee for requesting an assignment of a patent.
Another option – Licensing
Another option to monetize a patent is to issue a license. This will allow the patent owner to commercially exploit the patent without losing their ownership rights. Parties may use licenses in exchange for a payment of royalties or a lump sum, whilst also allowing their invention to be in the market with no further personal costs.
The three different kinds of licensing arrangements include:
- Exclusive license
- Sole license
- Non-exclusive license.
Exclusive license allows the licensee (the party that has been granted the license) to have exclusive access to the patent. Sole license is where both the licensee or licensor (the party that issues the license) can use the patent. Non-exclusive license allows the licensor to issue a license to multiple parties.
- Legal owners of a patent can transfer the patent to another party. This will remove any legal interest that the patentee’s previously held.
- Assignment of a patent must be to an individual or a body that has separate legal personality including corporations or trusts.
- The assignors must inform the Commision of Patents in writing about the details of the transfer, including the patent, and the details of the assignees.
- Licensing the patent is also another option to monetize an invention.
If you need assistance with any patent or IP issues, you can contact our patent attorneys and IP lawyers – just call 1300 337 997 or complete the form.