If you have a patent, you do not need to keep it to yourself forever. There are many reasons why someone would want to sell or transfer patent rights to someone else. No matter what your reason is for doing so, the process is not all that difficult. If you want to learn more about your options, a California sporting goods patent lawyer can tell you more.

What Are Patent Rights, and Can They Be Sold or Transferred?

Patents provide an inventor with the exclusive, legal right to make, sell, use, or license an invention. In general, a patent will remain in place for 20 years from the filing date. In accordance with United States patent law, patents are treated as personal property. As such, a California patent may be:

  • Sold (assignment)
  • Transferred to a company
  • Partially assigned
  • Licensed rather than transferred

How Does a Patent Assignment (Transfer of Ownership) Work?

If you are considering transferring ownership of your patent, whether to an Orange County company or by sale, there are requirements and steps you’ll first need to take.

Required Elements Typically Included in an Assignment Agreement

  • Identification of assignor and assignee
  • Description of the patent and application being transferred
  • The scope of the rights (full or partial assignment)
  • Payment terms and conditions
  • The transfer effective date
  • Warranties and representations of the parties
  • Whether future improvements are included
  • Dispute resolution process information

Step-by-Step Process to Transfer Patent Rights

  • Draft the patent assignment agreement
  • Ensure that all parties have signed the agreement
  • Record the assignment with the USPTO Assignment Recordation Branch
  • Pay any required fees
  • Update internal or corporate intellectual property ownership records
  • Provide notice to relevant partners or licensees

Transferring Patent Rights to a Company vs. an Individual

If you want to transfer patent rights to a company in Orange County instead of a person, the same fundamental process and steps will apply.

This kind of transfer is common in situations like:

  • An employee-inventor may be required to transfer patent rights to their employer under their contract
  • A startup founder assigns a patent to a newly formed company, so the business holds the IP
  • An inventor assigns a patent to a commercialization partner who has the resources to develop and bring the invention to market

In some instances, a corporate transfer:

  • A transfer may be required by investors or lenders as part of the financing terms so the company owns the patent rather than the inventor
  • Centralizing patent ownership is a form of liability management as it reduces complications when negotiating or enforcing rights
  • Assigning other related patents can help create a centralized portfolio

When Does It Make Sense to Sell or Transfer Your Patent Rights?

There are certain instances in which it makes sense to sell or transfer the rights to your patent. This includes:

  • To generate immediate capital rather than wait for commercialization
  • To exit certain responsibilities, like manufacturing, sales, or operations
  • To reduce the financial risk associated with production and marketing
  • To allow a company with greater resources to commercialize
  • As part of:
    • Portfolio expansion
    • Positioning
    • Financing
    • Mergers

Is a Transfer of Patent Rights the Same as Licensing?

If you are interested in transferring the rights to your patent, you may wonder if this process is the same as licensing. In short, these are two different avenues.

Patent Assignment (Transfer or Sale)

When you transfer or sell a patent, this provides full ownership rights to the assignee, while the assignor gives up their control and future rights to the assignee.

This is often used for corporate transactions, start-ups, and exit strategies.

Patent Licensing

Licensing, on the other hand, allows a California inventor full ownership rights to the product and invention while granting limited rights to use or commercialize the invention. The license may be exclusive, non-exclusive, or territorial.

Those who license their patents may receive royalties, milestone payments, or even lump-sum compensation.

Risks and Legal Considerations to Be Aware Of

It’s important to understand that the transfer or sale of your patent does come with legal risks. As such, you should be aware that the following can pose serious risks:

  • Failure to properly record the assignment with the USPTO
  • Ambiguous or incomplete transfer rights
  • Unclear royalty or payment information
  • Conflicts with previous licensing agreements
  • Potential tax valuation issues
  • Impact on existing business partners or investors

Talk to a Patent Lawyer

If you have any questions about how to transfer patent rights or if you have any other options that might be better suited to your situation, contact Burns Patent Law. We can help you figure out the best use for your patent rights and how you can potentially profit from your invention.