An agreement to assign is not the same as a present assignment of a patent or patentable invention and does not have the same effect. An agreement to assign often requires the execution of an additional assignment to transfer legal title, whereas a present assignment does not. It is possible to assign rights to future patentable inventions with the proper language.
In many cases, one will want to avoid executing a further assignment to gain legal title, and prefers the assignment to occur on the execution of one document. Why? Because what if the inventor / intended-assignor is later unavailable or uncooperative? The situation is then more complicated, expensive, and time consuming. In some cases, litigation may be necessary to force the inventor/assignor to execute an assignment or to otherwise vest an intended-assignee with legal title.
While the applicable state law usually determines the interpretation of an agreement regarding patent ownership, Federal Circuit law determines whether an agreement effects a present assignment of a patent. Board of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 583 F.3d 832 (Fed. Cir. 2009). The following cases demonstrate the difference between the language of: “shall be …exclusive property of”, “agrees to assign,” “will assign,” and “hereby assigns.”
“Shall Be and Remain Exclusive Property Of“
Two inventors were named on US Patent 6,075,451: Mayer Micheal Lebowitz and James Seivert. Without an agreement or rule of law otherwise, the co-inventors are presumptive joint legal owners of the patent. 35 USC 116, 262.
After the inventors died, Tobi Gellman as trustee of the Mayer Micheal Lebowitz Trust sued Telular Corporation among others for infringing the patent in the case of Gellman v. Telular Corp. 449 Fed. Appx. 941 (Fed. Cir. 2011). Gellman claimed the Trust was the sole owner of the patent. The defendant(s) claimed the case had to be dismissed because the Trust was not the full owner of the patent.
Gellman claimed that Mr. Seivert was an employee of Mr. Lebowitz at Cellular Alarm and that the terms of his employment included full transfer of rights to any resulting inventions. However, the evidence of this comprised an unsigned agreement titled “agreement for consulting services.” That agreement provided as follows:
“[A]ny and all ideas, discoveries, inventions, [etc.] . . . developed, prepared, conceived, made, discovered or suggested by [Mr. Seivert] when performing services pursuant to this Agreement . . . shall be and remain the exclusive property of Cellular Alarm. [Mr. Seivert] agrees to execute any and all assignments or other transfer documents which are necessary, in the sole opinion of Cellular Alarm, to vest in Cellular Alarm all right, title, and interest in such Work Products.” (emphasis added).
The court found that even if the agreement had been signed, the language of the agreement did not effect a present transfer of ownership. The language of “shall be and remain the exclusive property” is not the same as “hereby assigned.”
Gellman argued the “remain” language indicated the invention had been fully conveyed previously. However the court found that Mr. Seivert’s contributions to the inventions remained only in equitable status until such time as Mr. Seivert “execute[d] any and all assignment or other transfer documents which are necessary . . . to vest in Cellular Alarm all right, title and interest in such inventions.” The agreement at most created an equitable obligation of Mr. Seivert to assign to Cellular Alarm. That equitable title could be converted to legal title (legal ownership) if and when Mr. Seivert actually assigned or, if necessary, through a law suit to force Mr. Seivert to execute an assignment. This did not happen. And the case was dismissed because the Trust did not have full legal title to the patent.
“Hereby Assign” v. “Agree to Assign”
It is possible for an employee to assign any and all of his or her rights to future patentable inventions. But the assignment must expressly undertake the assigning act at the time of the agreement, and not leave it to some future date.
In Board of Trustees of the Leland Stanford Junior Univ. v. Roche Molecular Sys., 583 F.3d 832 (Fed. Cir. 2009), Holodniy, a researcher that was employed by Stanford, arranged to spend time at Catus, as a visitor, to learn laboratory techniques as a part of a Standford-Cetus collaboration related to HIV.
Before visiting Catus Holodniy signed a Copyright and Patent Agreement (“CPA”) with Standford. The CPA provided, “I agree to assign or confirm in writing to Stanford and/or Sponsors that right, title and interest in . . . such inventions as required Contracts or Grants.”
Later, when visting Catus, Holodniy signed a visitor confidentiality agreement (“VBA”) which provided, “I will assign and do hereby assign to CETUS, my right, title, and interest in each of the ideas, inventions and improvements.”
Standford secured patents naming Holodniy as an inventor. Standford sued Cetus’s successor, Roche, for infringement. Roche defended on the ground that it owned the interest of Holodniy in the patent based on the assignment provision of the VBA.
The court found that the “agree to assign” language of the first CPA to Standford was not a present assignment. Instead, it was only a mere promise to assign rights in the future. It was not an immediate transfer of expectant ownership interests. Standford might have an equitable claim against Holodniy, but Standford did not immediately gain legal title to Holodniy’s inventions as a result of the CPA.
In contrast, the court found that the “do hereby assign” language of the VBA to Cetus effected a present assignment of Holodniy’s future inventions to Cetus.
Therefore, at the time of the lawsuit for infringement, Roche–Cetus’s successor– had Holodniy’s rights in the patents and Standford did not. This demonstrates a big difference between “agrees to assign” and “do hereby assign”. The former requires additional step(s), such as the signing of another assignment document, to carryout the transfer of title/ownership, whereas the latter does not require any further step to transfer legal title in the invention.
Other cases where the language did not provide a present assignment are:
- Advanced Video Techs. LLC v. HTC Corp., 879 F.3d 1314, 1317-18 (Fed. Cir. 2018) (“will assign to the Company” does not create an immediate assignment);
- IpVenture, Inc. v. ProStar Computer, Inc., 503 F.3d 1324, 1327 (Fed. Cir. 2007) (employment agreement providing that the employee “agree[s] to assign” was not a present assignment); and,
- Arachnid, Inc. v. Merit Indus., 939 F.2d 1574, 1580-81 (Fed. Cir. 1991) (“will be assigned” does not constitute a “present assignment of an existing invention” or “a present assignment of an expectant interest”).
Other cases where the Federal Circuit found the language of “does hereby assign” or “hereby grant” sufficient to effect an automatic transfer of later arising patent rights, include:
- DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290 (Fed. Cir. 2008) ( “does hereby grant and assign”);
- Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1253 (Fed. Cir. 2000) (“hereby conveys, transfers and assigns”);
- FilmTec Corp. v. Allied-Signal Inc., 939 F.2d 1568, 1570, 1573 (Fed. Cir. 1991) (“does hereby grant”).
The hereby assign language effects a present assignment, according to the Federal Circuit, and should better avoid the need of executing further documents to transfer legal title to a patent or patentable invention. Even though an additional assignment or assignment conformation is often executed when a patent application is filed, including the present assignment language in an earlier employment or consulting agreement is a prudent step in case the inventor / intended-assignor is later unavailable or uncooperative.