By Jim Kulbaski
Recording a patent assignment of a U.S. patent at the USPTO is important, as it protects the owner of the patent from an assignment which is improper. 35 USC § 261 provides:
An interest that constitutes an assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.
Assuming more than three months has passed since the patent has been assigned, what should be done to best protect the ownership rights to the patent? The answer is straightforward; record the executed assignment as soon as you can, even though more than three months has passed.
The purpose of the above quoted provision in 35 USC § 261 is to encourage the early recording of patent assignments. The statute prevents bona fide purchases for valuable consideration from obtaining your patent rights. If there was no recording or late recording of the patent assignment at the USPTO, then a purchaser for value who does not know about a patent assignment could become the owner of patent that your company actually owns.
If you miss the three month date for recording the assignment, it is still important and valuable to record the assignment at the USPTO. First, there is no reason to further delay recording the assignment at the USPTO and the statute still provides benefits when the assignment is recorded more than three months after it is executed. At the very end of 35 USC § 261, there is recited “or prior to the date of such subsequent purchase or mortgage.” Thus, if there is some type of assignment inconsistent with your rights that occurs six months after the execution of the assignment, if you recorded the assignment five months after execution date, that inconsistent assignment at the sixth month period would be void under 35 USC § 261 because the recording would have occurred “prior to the date of subsequent purchase or mortgage.”
Second, if the assignment was recorded, subsequent purchasers of the patent could not be bona fide, as they should do a search of the USPTO assignment records, and would determine that they were not purchasing the patent from the true owner, as recorded at the USPTO. Thus, the assignment should be recorded, even if it the assignment occurred more than 3 months ago. If by chance there was a bona fide purchaser for value at the four month point who purchased the patent from an improper entity, then the rightful patent owner could be out of luck and out of patent rights because the assignment was not recorded. However, a purchaser for value of the patent after the five month date would not obtain title to the patent, as the patent assignment was recorded at the four month date which is “prior to the date of subsequent purchase,” as provided in the statute. Not only is this conclusion supported by the language of the statute, but recording the assignment would prevent future purchasers from someone who is not the true owner from being considered bona fide purchasers.
Another question could arises is whether the assignment could be re-executed to restart the three month window. The answer is no, because there are no rights left to be assigned by the previous owner. The previous owner presumably assigned all rights to the patent more than three months ago, so there are not rights held by the previous owner to transfer to the new owner. Further, there is no need to execute a new assignment between the new owner and the previous owner as the statute already provides that if the assignment is recorded, even if more than 3 months after it is executed, a subsequent purchase of the patent is void.
So, don’t despair if you miss the three month window recited in 35 USC § 261, file the assignment as soon as you can and you will still receive protection from improper transfers which occur after the date when the assignment was recorded.