provisional patent assignment

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15 U.S.C. 1123 ; 35 U.S.C. 2(b)(2) .

57 FR 29642 , July 6, 1992, unless otherwise noted.

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Editorial note on subchapter a of chapter i, editorial note:.

Part 2 is placed in the separate grouping of parts pertaining to trademarks regulations.

PART 3—ASSIGNMENT, RECORDING AND RIGHTS OF ASSIGNEE

Editorial note.

Nomenclature changes to part 3 appear at 68 FR 14337 , Mar. 25, 2003.

§ 3.1 Definitions.

For purposes of this part, the following definitions shall apply:

Application means a national application for patent, an international patent application that designates the United States of America, an international design application that designates the United States of America, or an application to register a trademark under section 1 or 44 of the Trademark Act, 15 U.S.C. 1051 , or 15 U.S.C. 1126 , unless otherwise indicated.

Assignment means a transfer by a party of all or part of its right, title and interest in a patent, patent application, registered mark or a mark for which an application to register has been filed.

Document means a document which a party requests to be recorded in the Office pursuant to § 3.11 and which affects some interest in an application, patent, or registration.

Office means the United States Patent and Trademark Office.

Recorded document means a document which has been recorded in the Office pursuant to § 3.11 .

Registration means a trademark registration issued by the Office.

[ 69 FR 29878 , May 26, 2004, as amended at 80 FR 17969 , Apr. 2, 2015]

Documents Eligible for Recording

§ 3.11 documents which will be recorded..

( a ) Assignments of applications, patents, and registrations, and other documents relating to interests in patent applications and patents, accompanied by completed cover sheets as specified in § 3.28 and § 3.31 , will be recorded in the Office. Other documents, accompanied by completed cover sheets as specified in § 3.28 and § 3.31 , affecting title to applications, patents, or registrations, will be recorded as provided in this part or at the discretion of the Director.

( b ) Executive Order 9424 of February 18, 1944 ( 9 FR 1959 , 3 CFR 1943-1948 Comp., p. 303) requires the several departments and other executive agencies of the Government, including Government-owned or Government-controlled corporations, to forward promptly to the Director for recording all licenses, assignments, or other interests of the Government in or under patents or patent applications. Assignments and other documents affecting title to patents or patent applications and documents not affecting title to patents or patent applications required by Executive Order 9424 to be filed will be recorded as provided in this part.

( c ) A joint research agreement or an excerpt of a joint research agreement will also be recorded as provided in this part.

[ 62 FR 53202 , Oct. 10, 1997, as amended at 70 FR 1824 , Jan. 11, 2005; 70 FR 54267 , Sept. 14, 2005; 78 FR 62408 , Oct. 21, 2013]

§ 3.16 Assignability of trademarks prior to filing of an allegation of use.

Before an allegation of use under either 15 U.S.C. 1051(c) or 15 U.S.C. 1051(d) is filed, an applicant may only assign an application to register a mark under 15 U.S.C. 1051(b) to a successor to the applicant's business, or portion of the business to which the mark pertains, if that business is ongoing and existing.

[ 64 FR 48926 , Sept. 8, 1999]

Requirements for Recording

§ 3.21 identification of patents and patent applications..

An assignment relating to a patent must identify the patent by the patent number. An assignment relating to a national patent application must identify the national patent application by the application number (consisting of the series code and the serial number; e.g., 07/123,456). An assignment relating to an international patent application which designates the United States of America must identify the international application by the international application number; e.g., PCT/US2012/012345. An assignment relating to an international design application which designates the United States of America must identify the international design application by the international registration number or by the U.S. application number assigned to the international design application. If an assignment of a patent application filed under § 1.53(b) of this chapter is executed concurrently with, or subsequent to, the execution of the patent application, but before the patent application is filed, it must identify the patent application by the name of each inventor and the title of the invention so that there can be no mistake as to the patent application intended. If an assignment of a provisional application under § 1.53(c) of this chapter is executed before the provisional application is filed, it must identify the provisional application by the name of each inventor and the title of the invention so that there can be no mistake as to the provisional application intended.

[ 80 FR 17969 , Apr. 2, 2015]

§ 3.24 Requirements for documents and cover sheets relating to patents and patent applications.

( a ) For electronic submissions: Either a copy of the original document or an extract of the original document may be submitted for recording. All documents must be submitted as digitized images in Tagged Image File Format (TIFF) or another form as prescribed by the Director. When printed to a paper size of either 21.6 by 27.9 cm (8 1 ⁄ 2 by 11 inches) or 21.0 by 29.7 cm (DIN size A4), the document must be legible and a 2.5 cm (one-inch) margin must be present on all sides.

( b ) For paper or facsimile submissions: Either a copy of the original document or an extract of the original document must be submitted for recording. Only one side of each page may be used. The paper size must be either 21.6 by 27.9 cm (8 1 ⁄ 2 by 11 inches) or 21.0 by 29.7 cm (DIN size A4), and in either case, a 2.5 cm (one-inch) margin must be present on all sides. For paper submissions, the paper used should be flexible, strong white, non-shiny, and durable. The Office will not return recorded documents, so original documents must not be submitted for recording.

[ 69 FR 29879 , May 26, 2004]

§ 3.25 Recording requirements for trademark applications and registrations.

( a ) Documents affecting title. To record documents affecting title to a trademark application or registration, a legible cover sheet ( see § 3.31 ) and one of the following must be submitted:

( 1 ) A copy of the original document;

( 2 ) A copy of an extract from the document evidencing the effect on title; or

( 3 ) A statement signed by both the party conveying the interest and the party receiving the interest explaining how the conveyance affects title.

( b ) Name changes. Only a legible cover sheet is required ( See § 3.31 ).

( c ) All documents.

( 1 ) For electronic submissions: All documents must be submitted as digitized images in Tagged Image File Format (TIFF) or another form as prescribed by the Director. When printed to a paper size of either 21.6 by 27.9 cm (8 1 ⁄ 2 by 11 inches) or 21.0 by 29.7 cm (DIN size A4), a 2.5 cm (one-inch) margin must be present on all sides.

( 2 ) For paper or facsimile submissions: All documents should be submitted on white and non-shiny paper that is either 8 1 ⁄ 2 by 11 inches (21.6 by 27.9 cm) or DIN size A4 (21.0 by 29.7 cm) with a one-inch (2.5 cm) margin on all sides in either case. Only one side of each page may be used. The Office will not return recorded documents, so original documents should not be submitted for recording.

§ 3.26 English language requirement.

The Office will accept and record non-English language documents only if accompanied by an English translation signed by the individual making the translation.

[ 62 FR 53202 , Oct. 10, 1997]

§ 3.27 Mailing address for submitting documents to be recorded.

Documents and cover sheets submitted by mail for recordation should be addressed to Mail Stop Assignment Recordation Services, Director of the United States Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia 22313-1450, unless they are filed together with new applications.

§ 3.28 Requests for recording.

Each document submitted to the Office for recording must include a single cover sheet (as specified in § 3.31 ) referring either to those patent applications and patents, or to those trademark applications and registrations, against which the document is to be recorded. If a document to be recorded includes interests in, or transactions involving, both patents and trademarks, then separate patent and trademark cover sheets, each accompanied by a copy of the document to be recorded, must be submitted. If a document to be recorded is not accompanied by a completed cover sheet, the document and the incomplete cover sheet will be returned pursuant to § 3.51 for proper completion, in which case the document and a completed cover sheet should be resubmitted.

[ 70 FR 56128 , Sept. 26, 2005]

Cover Sheet Requirements

§ 3.31 cover sheet content..

( a ) Each patent or trademark cover sheet required by § 3.28 must contain:

( 1 ) The name of the party conveying the interest;

( 2 ) The name and address of the party receiving the interest;

( 3 ) A description of the interest conveyed or transaction to be recorded;

( 4 ) Identification of the interests involved:

( i ) For trademark assignments and trademark name changes: Each trademark registration number and each trademark application number, if known, against which the Office is to record the document. If the trademark application number is not known, a copy of the application or a reproduction of the trademark must be submitted, along with an estimate of the date that the Office received the application; or

( ii ) For any other document affecting title to a trademark or patent application, registration or patent: Each trademark or patent application number or each trademark registration number or patent against which the document is to be recorded, or an indication that the document is filed together with a patent application;

( 5 ) The name and address of the party to whom correspondence concerning the request to record the document should be mailed;

( 6 ) The date the document was executed;

( 7 ) The signature of the party submitting the document. For an assignment document or name change filed electronically, the person who signs the cover sheet must either:

( i ) Place a symbol comprised of letters, numbers, and/or punctuation marks between forward slash marks (e.g., /Thomas O'Malley III/) in the signature block on the electronic submission; or

( ii ) Sign the cover sheet using some other form of electronic signature specified by the Director.

( 8 ) For trademark assignments, the entity and citizenship of the party receiving the interest. In addition, if the party receiving the interest is a domestic partnership or domestic joint venture, the cover sheet must set forth the names, legal entities, and national citizenship (or the state or country of organization) of all general partners or active members that compose the partnership or joint venture.

( b ) A cover sheet should not refer to both patents and trademarks, since any information, including information about pending patent applications, submitted with a request for recordation of a document against a trademark application or trademark registration will become public record upon recordation.

( c ) Each patent cover sheet required by § 3.28 seeking to record a governmental interest as provided by § 3.11(b) must:

( 1 ) Indicate that the document relates to a Government interest; and

( 2 ) Indicate, if applicable, that the document to be recorded is not a document affecting title (see § 3.41(b) ).

( d ) Each trademark cover sheet required by § 3.28 seeking to record a document against a trademark application or registration should include, in addition to the serial number or registration number of the trademark, identification of the trademark or a description of the trademark, against which the Office is to record the document.

( e ) Each patent or trademark cover sheet required by § 3.28 should contain the number of applications, patents or registrations identified in the cover sheet and the total fee.

( f ) Each trademark cover sheet should include the citizenship of the party conveying the interest.

( g ) The cover sheet required by § 3.28 seeking to record a joint research agreement or an excerpt of a joint research agreement as provided by § 3.11(c) must:

( 1 ) Identify the document as a “joint research agreement” (in the space provided for the description of the interest conveyed or transaction to be recorded if using an Office-provided form);

( 2 ) Indicate the name of the owner of the application or patent (in the space provided for the name and address of the party receiving the interest if using an Office-provided form);

( 3 ) Indicate the name of each other party to the joint research agreement party (in the space provided for the name of the party conveying the interest if using an Office-provided form); and

( 4 ) Indicate the date the joint research agreement was executed.

( h ) The assignment cover sheet required by § 3.28 for a patent application or patent will be satisfied by the Patent Law Treaty Model International Request for Recordation of Change in Applicant or Owner Form, Patent Law Treaty Model International Request for Recordation of a License/Cancellation of the Recordation of a License Form, Patent Law Treaty Model Certificate of Transfer Form or Patent Law Treaty Model International Request for Recordation of a Security Interest/Cancellation of the Recordation of a Security Interest Form, as applicable, except where the assignment is also an oath or declaration under § 1.63 of this chapter . An assignment cover sheet required by § 3.28 must contain a conspicuous indication of an intent to utilize the assignment as an oath or declaration under § 1.63 of this chapter .

[ 57 FR 29642 , July 6, 1992, as amended at 62 FR 53202 , Oct. 10, 1997; 64 FR 48927 , Sept. 8, 1999; 67 FR 79523 , Dec. 30, 2002; 69 FR 29879 , May 26, 2004; 70 FR 1824 , Jan. 11, 2005; 70 FR 56128 , Sept. 26, 2005; 73 FR 67775 , Nov. 17, 2008; 77 FR 48825 , Aug. 14, 2012; 78 FR 62408 , Oct. 21, 2013]

§ 3.34 Correction of cover sheet errors.

( a ) An error in a cover sheet recorded pursuant to § 3.11 will be corrected only if:

( 1 ) The error is apparent when the cover sheet is compared with the recorded document to which it pertains, and

( 2 ) A corrected cover sheet is filed for recordation.

( b ) The corrected cover sheet must be accompanied by a copy of the document originally submitted for recording and by the recording fee as set forth in § 3.41 .

§ 3.41 Recording fees.

( a ) All requests to record documents must be accompanied by the appropriate fee. Except as provided in paragraph (b) of this section, a fee is required for each application, patent and registration against which the document is recorded as identified in the cover sheet. The recording fee is set in § 1.21(h) of this chapter for patents and in § 2.6(b)(6) of this chapter for trademarks.

( b ) No fee is required for each patent application and patent against which a document required by Executive Order 9424 is to be filed if:

( 1 ) The document does not affect title and is so identified in the cover sheet (see § 3.31(c)(2) ); and

( 2 ) The document and cover sheet are either: Faxed or electronically submitted as prescribed by the Director, or mailed to the Office in compliance with § 3.27 .

[ 63 FR 52159 , Sept. 30, 1998, as amended at 69 FR 29879 , May 26, 2004]

Date and Effect of Recording

§ 3.51 recording date..

The date of recording of a document is the date the document meeting the requirements for recording set forth in this part is filed in the Office. A document which does not comply with the identification requirements of § 3.21 will not be recorded. Documents not meeting the other requirements for recording, for example, a document submitted without a completed cover sheet or without the required fee, will be returned for correction to the sender where a correspondence address is available. The returned papers, stamped with the original date of receipt by the Office, will be accompanied by a letter which will indicate that if the returned papers are corrected and resubmitted to the Office within the time specified in the letter, the Office will consider the original date of filing of the papers as the date of recording of the document. The procedure set forth in § 1.8 or § 1.10 of this chapter may be used for resubmissions of returned papers to have the benefit of the date of deposit in the United States Postal Service. If the returned papers are not corrected and resubmitted within the specified period, the date of filing of the corrected papers will be considered to be the date of recording of the document. The specified period to resubmit the returned papers will not be extended.

[ 62 FR 53203 , Oct. 10, 1997]

§ 3.54 Effect of recording.

The recording of a document pursuant to § 3.11 is not a determination by the Office of the validity of the document or the effect that document has on the title to an application, a patent, or a registration. When necessary, the Office will determine what effect a document has, including whether a party has the authority to take an action in a matter pending before the Office.

§ 3.56 Conditional assignments.

Assignments which are made conditional on the performance of certain acts or events, such as the payment of money or other condition subsequent, if recorded in the Office, are regarded as absolute assignments for Office purposes until cancelled with the written consent of all parties or by the decree of a court of competent jurisdiction. The Office does not determine whether such conditions have been fulfilled.

§ 3.58 Governmental registers.

( a ) The Office will maintain a Departmental Register to record governmental interests required to be recorded by Executive Order 9424. This Departmental Register will not be open to public inspection but will be available for examination and inspection by duly authorized representatives of the Government. Governmental interests recorded on the Departmental Register will be available for public inspection as provided in § 1.12 .

( b ) The Office will maintain a Secret Register to record governmental interests required to be recorded by Executive Order 9424. Any instrument to be recorded will be placed on this Secret Register at the request of the department or agency submitting the same. No information will be given concerning any instrument in such record or register, and no examination or inspection thereof or of the index thereto will be permitted, except on the written authority of the head of the department or agency which submitted the instrument and requested secrecy, and the approval of such authority by the Director. No instrument or record other than the one specified may be examined, and the examination must take place in the presence of a designated official of the Patent and Trademark Office. When the department or agency which submitted an instrument no longer requires secrecy with respect to that instrument, it must be recorded anew in the Departmental Register.

Domestic Representative

§ 3.61 domestic representative..

If the assignee of a patent, patent application, trademark application or trademark registration is not domiciled in the United States, the assignee may designate a domestic representative in a document filed in the United States Patent and Trademark Office. The designation should state the name and address of a person residing within the United States on whom may be served process or notice of proceedings affecting the application, patent or registration or rights thereunder.

[ 67 FR 79522 , Dec. 30, 2002]

Action Taken by Assignee

§ 3.71 prosecution by assignee..

( a ) Patents—conducting of prosecution. One or more assignees as defined in paragraph (b) of this section may conduct prosecution of a national patent application as the applicant under § 1.46 of this title , or conduct prosecution of a supplemental examination or reexamination proceeding, to the exclusion of the inventor or previous applicant or patent owner. Conflicts between purported assignees are handled in accordance with § 3.73(c)(3) .

( b ) Patents—assignee(s) who can prosecute. The assignee(s) who may conduct either the prosecution of a national application for patent as the applicant under § 1.46 of this title or a supplemental examination or reexamination proceeding are:

( 1 ) A single assignee. An assignee of the entire right, title and interest in the application or patent, or

( 2 ) Partial assignee(s) together or with inventor(s). All partial assignees, or all partial assignees and inventors who have not assigned their right, title and interest in the application or patent, who together own the entire right, title and interest in the application or patent. A partial assignee is any assignee having less than the entire right, title and interest in the application or patent. The word “assignee” as used in this chapter means with respect to patent matters the single assignee of the entire right, title and interest in the application or patent if there is such a single assignee, or all of the partial assignees, or all of the partial assignee and inventors who have not assigned their interest in the application or patent, who together own the entire right, title and interest in the application or patent.

( c ) Patents—Becoming of record. An assignee becomes of record as the applicant in a national patent application under § 1.46 of this title , and in a supplemental examination or reexamination proceeding, by filing a statement in compliance with § 3.73(c) that is signed by a party who is authorized to act on behalf of the assignee.

( d ) Trademarks. The assignee of a trademark application or registration may prosecute a trademark application, submit documents to maintain a trademark registration, or file papers against a third party in reliance on the assignee's trademark application or registration, to the exclusion of the original applicant or previous assignee. The assignee must establish ownership in compliance with § 3.73(b) .

[ 65 FR 54682 , Sept. 8, 2000, as amended at 77 FR 48825 , Aug. 14, 2012]

§ 3.73 Establishing right of assignee to take action.

( a ) The original applicant is presumed to be the owner of an application for an original patent, and any patent that may issue therefrom, unless there is an assignment. The original applicant is presumed to be the owner of a trademark application or registration, unless there is an assignment.

( b ) In order to request or take action in a trademark matter, the assignee must establish its ownership of the trademark property of paragraph (a) of this section to the satisfaction of the Director. The establishment of ownership by the assignee may be combined with the paper that requests or takes the action. Ownership is established by submitting to the Office a signed statement identifying the assignee, accompanied by either:

( 1 ) Documentary evidence of a chain of title from the original owner to the assignee ( e.g., copy of an executed assignment). The documents submitted to establish ownership may be required to be recorded pursuant to § 3.11 in the assignment records of the Office as a condition to permitting the assignee to take action in a matter pending before the Office; or

( 2 ) A statement specifying where documentary evidence of a chain of title from the original owner to the assignee is recorded in the assignment records of the Office ( e.g., reel and frame number).

( 1 ) In order to request or take action in a patent matter, an assignee who is not the original applicant must establish its ownership of the patent property of paragraph (a) of this section to the satisfaction of the Director. The establishment of ownership by the assignee may be combined with the paper that requests or takes the action. Ownership is established by submitting to the Office a signed statement identifying the assignee, accompanied by either:

( i ) Documentary evidence of a chain of title from the original owner to the assignee ( e.g., copy of an executed assignment). The submission of the documentary evidence must be accompanied by a statement affirming that the documentary evidence of the chain of title from the original owner to the assignee was or concurrently is being submitted for recordation pursuant to § 3.11 ; or

( ii ) A statement specifying where documentary evidence of a chain of title from the original owner to the assignee is recorded in the assignment records of the Office ( e.g., reel and frame number).

( 2 ) If the submission is by an assignee of less than the entire right, title and interest ( e.g., more than one assignee exists) the Office may refuse to accept the submission as an establishment of ownership unless:

( i ) Each assignee establishes the extent (by percentage) of its ownership interest, so as to account for the entire right, title and interest in the application or patent by all parties including inventors; or

( ii ) Each assignee submits a statement identifying the parties including inventors who together own the entire right, title and interest and stating that all the identified parties own the entire right, title and interest.

( 3 ) If two or more purported assignees file conflicting statements under paragraph (c)(1) of this section, the Director will determine which, if any, purported assignee will be permitted to control prosecution of the application.

( d ) The submission establishing ownership under paragraph (b) or (c) of this section must show that the person signing the submission is a person authorized to act on behalf of the assignee by:

( 1 ) Including a statement that the person signing the submission is authorized to act on behalf of the assignee;

( 2 ) Being signed by a person having apparent authority to sign on behalf of the assignee; or

( 3 ) For patent matters only, being signed by a practitioner of record.

[ 77 FR 48825 , Aug. 14, 2012]

Issuance to Assignee

§ 3.81 issue of patent to assignee..

( a ) With payment of the issue fee: An application may issue in the name of the assignee consistent with the application's assignment where a request for such issuance is submitted with payment of the issue fee, provided the assignment has been previously recorded in the Office. If the assignment has not been previously recorded, the request must state that the document has been filed for recordation as set forth in § 3.11 .

( b ) After payment of the issue fee: Any request for issuance of an application in the name of the assignee submitted after the date of payment of the issue fee, and any request for a patent to be corrected to state the name of the assignee, must state that the assignment was submitted for recordation as set forth in § 3.11 before issuance of the patent, and must include a request for a certificate of correction under § 1.323 of this chapter (accompanied by the fee set forth in § 1.20(a) ) and the processing fee set forth in § 1.17(i) of this chapter .

( c ) Partial assignees.

( 1 ) If one or more assignee, together with one or more inventor, holds the entire right, title, and interest in the application, the patent may issue in the names of the assignee and the inventor.

( 2 ) If multiple assignees hold the entire right, title, and interest to the exclusion of all the inventors, the patent may issue in the names of the multiple assignees.

§ 3.85 Issue of registration to assignee.

The certificate of registration may be issued to the assignee of the applicant, or in a new name of the applicant, provided that the party files a written request in the trademark application by the time the application is being prepared for issuance of the certificate of registration, and the appropriate document is recorded in the Office. If the assignment or name change document has not been recorded in the Office, then the written request must state that the document has been filed for recordation. The address of the assignee must be made of record in the application file.

Part 6 is placed in the separate grouping of parts pertaining to trademarks regulations.

Part 7 is placed in the separate grouping of parts pertaining to trademarks regulations.

Part 1 is placed in the separate grouping of parts pertaining to patents regulations.

Part 3 pertaining to both patents and trademarks is placed in the grouping pertaining to patents regulations.

Part 4 is placed in the separate grouping of parts pertaining to patents regulations.

Part 5 is placed in the separate grouping of parts pertaining to patents regulations.

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A license is a grant (assignment) to the licensee of various licensed rights.  The situation can be further obscured by the fact that one can assign the licensed rights from one entity to another.  Thus, the first recordation of a license may be recorded as a “license,” while the assignment of those same licensed rights to another entity may be recorded as an “assignment.”  The only way to really understand the situation is to review the actual documents, which are all readily available from the recordation branch of the patent office.

Note that the patent office sometimes refers to licenses as a species of assignment.  That is correct, because one is assigning license rights.

Not necessarily.  Assignments are only needed if you are contractually obligated, by employment or otherwise, to make the assignment.

An important corollary is that an inventor can merely license his patent rights to a company that is exploiting the invention, and keep title to those rights in his own name.  Investors are usually unhappy with that arrangement, but there can be significant advantages.  One major advantage is that the patent holder is a “necessary and indispensable” to any litigation over patent validity.  Any competitor trying to invalidate the patent must file the action in the district where the inventor resides.

Assignments of provisionals have substantially the same pros and cons as assigning formal utility and design applications.  See the previous FAQ.

Since there are costs attending the handling and recording of assignments, many inventors and companies prefer to hold off on assigning provisional applications until filing of the corresponding formal (utility or PCT) applications.  That is a dangerous strategy.  In the interim between filing the provisional and the formal applications, there are all sorts of unfortunate events that can make later assignments difficult or impossible, including death or disability of an inventor, reluctance of an inventor to file an assignment due to a separation from a company, or divorce.

It is not technically necessary to re-file assignments for divisional or straight continuation applications.  A properly worded prior assignment recorded against the original application is automatically effective because the assignment recorded against the parent application gives the assignee rights to the subject matter common to both applications.

In the case of a substitute or continuation-in-part application, a prior assignment of the original application is not applied to the substitute or continuation-in-part application because the assignment recorded against the original application gives the assignee rights to only the subject matter common to both applications.  Substitute or continuation-in-part applications require the recordation of a new assignment if they are to be issued to an assignee.

Absolutely.  Indeed, it is a very common occurrence that an inventor will assign his invention to a company, and then the company will re-assign the rights after the patent issues.

Assignment is technically free, but it costs about $100 ($40 in filing costs and about $60 in paralegal time) to record the assignment at the U.S. patent office.

Note that the office charges US$ 40 for each patent or patent application listed on the recorda­tion form.  Thus, if an assignment references a family of 5 patent applications, the recorda­tion fee is US$ 200.  Of course paralegal charges would also apply, and possibly attorney time.

Under U.S. law, assignments must be recorded to be effective as against third parties who do not have actual knowledge of the assignment.  The statute is similar to recording statutes used for recording real property.  Thus, although there is no requirement to record an assignment, it is foolish not to do so.

Note that absent some unusual circumstance, patent assignments do not have to be notarized for use within the United States.

Preparing assignments is usually a simple matter of filling in the blanks of a form.  Assignment forms (inventor to company and company to company) and guidelines for preparing such forms can be found in  Strategic Patenting .

Note also that it is important to clearly identify whether the document being recorded is an assignment, license, or other document.  The recording branch does not generally read the documents to verify the content.

The Patent office will proceed as if the signature had been procured from the inventor, but only after establishing that the entity pursuing the application has colorable rights, and only after establishing that the inventor cannot be reached.  Thus, the patent office will need a copy of the employee agreement, assignment, or other documentary evidence establishing those rights.

In the case of a deceased inventor, the patent office will insist upon a statement from the executor of the estate, or an heir if probate is finished.  Where the inventor refuses to sign, or cannot be found, the patent office will insist upon seeing the letters, emails and faxes sent to the inventor, and will need a declaration from the person trying to make contact.

One simply records a certificate of name change or other formal document with the USPTO, using the assignment recordation form.

In foreign countries, name changes can be a real problem, and can cost anywhere from several hundred to a thousand dollars (mostly in attorneys fees).

It depends on the wording of the assignment and the recordation laws of the foreign countries.  Most assignments transfer all rights, title, and interest to U.S. patents and applications, and to corresponding foreign patents and applications.  Even so, the assignments might not be legally effective in a given country until the assignment is recorded in that country.

Some countries insist on a specific assignment that expressly lists that country. Canada, for example, typically requires its own assignments.

Patent infringement damages accrue in some countries only from the date the assignment was actually recorded at the relevant patent office.  Thus, delay in registering can cost a patent holder dearly in reduced patent infringement damages.

The main disadvantage to recording assignments is that many countries (including most or all of Europe) consider assignment of a patent or application to be a taxable transfer, and charge VAT (Value Added Tax) on the estimated value of the application or patent.  Since the value is often low in the early days, and can rise considerably during the life of the patent, the disadvantage of recordation can be mitigated by registering early.

Assignments records at the USPTO are available for  public inspection , but only for patents and published applications.  One can search by reel/frame number, patent or publication number, and assignor or assignee name.

The underlying documents are not available for download, but can be ordered from the assignment branch.  Paper mail requests can take months, but faxed requests are usually filled within a day or two.

No.  One should never rely upon the designation of “assignee” as set forth on the face of a patent.  First, the patent office obtains the “assignment” information directly from the issue fee transmittal form, and there is no verification whatsoever that such information is, or even ever was, correct.  The entry could well have been an error on the part of an attorney, paralegal, or secretary, and the issue fee transmittal form even warns that designation of an assignee of that form does not, in and of itself, affect an assignment.  Second, the patent is never altered after it is published.  Information that was correct at one point in time may well be superseded down the road.  Third, even if the “assignee” information is correct, one cannot know from the face of the patent what rights were assigned.  It might well be that only licensed rights were assigned, or that such rights are subject to a reversion.

Yes. But there can be real problems with multiple owners of a patent. Unless there is some other agreement restricting what an entity can do with its ownership interest, a co-owner of any portion of a patent, (whether 99% or 1% or .0001%), can make use of the patent however they want.  For example, a .0001% owner of a patent could license out its rights, and keep 100% of the license fee.  Absent an agreement to the contrary, there is no duty of a co-owner of the patent to share license fees with any of the other co-owners.

One of the big problems with two entities owning portions of a given patent is that the two entities can compete with each other with respect to license fees. For example, if co-owner A offers to license the patent rights for 7%, co-owner B might choose to undercut the previous offer by offering to license the same rights for 5%.  But then co-owner A comes back and offers to license the rights for 2%. Pretty soon the value of the license rights goes to zero.  Also, if co-owner A gets upset with co-owner B, co-owner A could unilaterally abandon the patent, which would make it worthless to everyone.

Even if co-owners agree to share license fees 50-50, there can be problems.  For example, co-owner A could decide to license out its patent rights for one dollar a year to a licensee that co-owner A owns, has an interest in, or perhaps has a relative with an interest in.  Of course co-owner A would be happy to share $0.50 of its annual license fee with co-owner B, but co-owner B would be pretty upset.

Still further, if there is a chain of patents, for example with a parent and a child patent in the same family, the ownership of both patents has to remain to the same at all times.  If, for example, both a parent patent and a child patent are 100% owned by A, assignment of some or all of the child patent to B will immediately invalidate the child patent.  Even if such an assignment is made, and the parties realize the mistake, reassigning the child patent back A would not cure the mistake. The child patent would remain abandoned.

Bottom line, co-ownership of a patent is really problematic.

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How (and Why) to File a Provisional Patent Application

May 25, 2021 | Hot Topics

By: The Michelson Institute for Intellectual Property

Executive Editor: Stephen Key, Cofounder of inventRight

Provisional Patent Basics

In 1994, the Patent Act of 1952 was amended to offer inventors the option of filing a provisional patent application (PPA) first. While there is no such thing as a “provisional patent,” the PPA process provides a number of benefits for aspiring patent holders:

• PPAs establish an earlier priority filing date to lock in your intellectual property rights.
• Provisional applications are simpler and cheaper to file than non-provisional applications.
• While assessing your invention’s commercial potential, you can label your invention and associated marketing material “patent pending” before fully committing to the patent application process.
• PPAs protect your invention while you are still working out the details for a non-provisional patent.
• PPAs put the public, including the competition, on notice that you are in the process of getting a patent.

In this post, we’ll discuss why provisional patent applications are useful and explain what the PPA process entails. First, let’s break down the definition of a provisional patent application.

What is a Provisional Patent Application?

Put simply, a provisional patent application is a reasonable first step on the path to securing an official patent . Not subject to examination , the PPA is a cheaper and simpler application that will enable you to claim “patent pending” for your invention while still making tweaks. It’s important to note that PPAs do not automatically turn into an official patent, in fact, you must file a nonprovisional patent application (NPA) within 12 months of your PPA to secure patent rights. 

(After filing a nonprovisional patent application, inventors also secure the right to label their invention “patent pending.” This creates a gray area, to the extent that by labeling your invention “patent pending,” it is not immediately obvious whether you have simply filed a PPA or invested in a nonprovisional patent application.)

Your PPA should describe your invention as completely as your NPA. A sloppy provisional application will not adequately protect your intellectual property (IP) rights, defeating the purpose of the PPA. A careless PPA could also be used against you when you file an NPA, as the examiner might conclude that you did not have a complete invention at the time your PPA was filed. 

At this point, you may be wondering, “ What makes a solid provisional patent application ?” 

In a nutshell, your PPA should thoroughly explain the various components of your invention, how it operates, and how it will be used . It also pays to consider whether your invention can be used or constructed in more than one way. Including variations in your PPA helps deter others from attempting to work around your IP. Think of this strategy as trying to protect the innovation as well as the invention. If you are knowledgeable about the manufacturing processes and/or materials that could be used to produce your invention, this type of information can also have value.

The more questions you are able to anticipate and answer in your PPA, the better protected your invention will be.

What Should You Include in Your Provisional Patent Application?

You will also want to include drawings of your invention with the PPA, though you will still receive a filing date in the absence of drawings. High-quality drawings help explain your invention and show that you have a complete working concept. They also give your PPA more perceived value in the event that you present it to a potential investor or licensee. Including numerous drawings can also help protect you from having to refile your application. Inadvertently missed something in the written disclosure portion of your application? If it’s included in a drawing, it may still be covered. The old adage that a drawing is “worth 1,000 words” is true in the case of PPAs. 

To ensure your PPA has value, make sure that you take the time to truly understand your invention’s point of difference in the marketplace and from the prior art. Research similar existing products available for sale using Google Shopping and Google Images. Use Google Patents or the USPTO’s database to thoroughly dig into the prior art. Is your invention truly new and novel? Think of yourself as a detective who is trying to learn everything you can from inventions that have already been patented. (Prior art is not limited to patents, however.) Later on, if you decide to follow through and file an NPA, prior art may be used as evidence to prevent you from being issued a patent. 

The U.S. Patent and Trademark Office (USPTO) recommends that you file “any drawings necessary for the understanding of the invention” to comply with 35 U.S.C. §113 . You cannot introduce a drawing that explains your invention after you have already filed your PPA . If, for whatever reason, you need to change your PPA, you will have to file another PPA altogether – which will change your priority filing date .

Why Provisional Applications are a Smart Strategy for Inventors

One of the most important aspects of filing a PPA is getting an early priority filing date. The United States is a “ first to file ” country – so obtaining a patent is often a race against the clock. By filing a provisional application, you can establish an early filing date and secure your IP rights against others who may be working on similar inventions. 

With a PPA, you can protect your invention even before you are fully ready to file a non-provisional application, giving you extra time to improve your invention’s commercial viability. Better yet, the earlier filing date afforded by a PPA does not start the patent term clock. Once you receive an official patent, the 20-year patent term begins, but you can protect your invention for an additional year with the PPA. 

Secondly, the process of drafting a PPA will help you define your invention and identify potential weaknesses to strengthen during the 12-month “patent pending” period. If you opt to file the PPA without the assistance of an attorney, the information you gain during the process may help you save time and money if you need to retain an attorney to help with your non-provisional application.

Think Ahead with Your Provisional Application

If you decide to work with an attorney, seek out one who specializes in the field of your invention. To help them do the best job possible, supply them with your marketing material and your point of difference as it relates to both products on the market and the prior art. Building a working prototype and sharing it with your attorney is another way of strengthening your PPA.

As you get to know the strengths and weaknesses of your invention, you can take steps to improve your design and fortify your business strategy. 

Speaking of business strategy, a professional PPA can also inspire more confidence in your design. If potential licensees see that you have a complete design and are knowledgeable enough to protect your IP with a PPA, they tend to feel more secure supporting your concept. In fact, startups that file early PPAs often raise the most money – giving you the funds to improve your design and market your invention. Including workarounds, variations, manufacturing processes, and materials in your PPA gives investors and potential licensees a sense of security that you have done your homework. In effect, you have provided them with a roadmap.   

Finally, a provisional application protects your invention from theft. If your idea is cutting-edge, others will try to create competing inventions. A PPA is one of the best ways to keep others from stealing the core components of your design – giving you an edge in your respective market.

What Does Filing a Provisional Patent Application Entail?

The USPTO website provides detailed information about the steps and requirements for filing a PPA. Technically, you can file a PPA on your own, without the assistance of an attorney. However, it may be wise to at least consult with a patent attorney before you submit your provisional application. Especially if your invention is complex or there is a strong possibility your patent will be challenged – an attorney’s advice could be invaluable. 

While there are fewer formal requirements to file a PPA (compared to an NPA), the USPTO still cautions applicants to consider and follow their rules. You can find USPTO’s rules, filing requirements, and requisite forms on the Provisional Application page . PPAs can be filed electronically and do not require a formal claim, oath, or any prior art statements. Filing fees are affordable but differ based on the size and type of your entity ($70 for micro entities; $140 for small entities; and $280 for large entities at the time this article is published). Most inventors will only need to pay the $70 filing fee because individuals, small businesses with 500 or less employees, universities, and 501(c)(3) nonprofits all qualify as micro entities.

Learn More about Provisional Patent Applications

For more information about drafting a PPA, we recommend checking out Stephen Key’s article, “ How to Write a Provisional Patent Application That Has Value .” 

You can also learn more about protecting your intellectual property with our free digital ebook, “ The Intangible Advantage .” 

 Please note: Stephen Key is an expert at intellectual property from a business perspective. He is not and has never been a patent attorney. 

Disclaimer: Nothing in this article shall be construed as legal advice, or as creating an attorney/client relationship.

Download the Free Infographic Below

Continue on to  Part 9  of this blog series. For more in-depth information on trademarks, check out the free online course Intellectual Property: Inventors, Entrepreneurs, Creators .

The Michelson Institute for Intellectual Property, an initiative of the Michelson 20MM Foundation, provides access to empowering IP education for budding inventors and entrepreneurs. Michelson 20MM was founded thanks to the generous support of renowned spinal surgeon Dr. Gary K. Michelson and Alya Michelson. To learn more, visit 20mm.org .

how much time it takes for a PPA to be issued or granted, after filing ? Internet says it takes 4 weeks. I filed a PPA 6 weeks ago. but nothing happened yet. what should i do? When i check application status, through public pair, and enter my application number and click search, it says “Sorry, the entered Application Number “abcxyz” is not available. The number may have been incorrectly typed, or assigned to an application that is not yet available for public inspection.” what should i do? Thanks for your time.

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IP Law Bulletin

In the United States, where an inventor must assign ownership of patent rights to his or her employer or another company, he or she signs an assignment document that can be recorded at the United States Patent and Trademark Office. This document is often executed early in the pendency of the application and can control ownership rights of the U.S. application, any later-filed "children" U.S. applications, and foreign applications such as Patent Cooperation Treaty (PCT) applications. However, due to differences between U.S. and European law, the assignment may not be sufficient in Europe—and errors cannot be fixed retroactively.

In Europe,  an assignment of a patent application must be in writing and "shall require the signature of the parties to the contract." (Emphasis added.) Thus, according to European law, which was highlighted in a Board of Appeals of the European Patent Office (EPO) on November 14, 2006 , both the assignor and the assignee must sign the assignment document. While contract law in the U.S. and in a number of other countries consider a contract signed by the conveying party to be valid for this type of one-way conveyance, this is not true everywhere in Europe. In many parts of Europe, contract law requires that both parties sign for all conveyances. Thus, an assignment signed only by the inventor may not be effective in countries such as Great Britain and France.

Another concern addressed by the assignment document is the claim to priority. In Europe, a patent owner must have actual ownership of a priority right when making claim to it . This priority right is distinct from the ownership right and can be transferred separately. Thus, the transfer of a right to priority must be spelled out in the assignment. If, for example, a PCT application claims priority to an earlier-filed U.S. application, the claim must be made by the identical legal person who filed the earlier priority application or a successor in title. This identity or relationship must be valid at the time the PCT application is filed. Where a U.S. priority document is filed in the name of the inventors and the PCT application is filed in the name of the owner, there must be an assignment from the inventors to the owner prior to the filing of the PCT application. This can be particularly problematic when a provisional application is used as a priority document. The provisional application never becomes a patent and does not need to be assigned. Thus, assignments are often only executed after a non-provisional application is filed. While problems with valid claims to priority should be eased under the America Invents Act (AIA) because U.S. applications can now be filed in the name of the owner instead of the inventor , care should be taken to ascertain a proper right to claim priority particularly if there is any difference in the identity of the applicant.

As a practice tip, practitioners should make sure all assignments are signed and dated before the PCT filing date and are signed by both the assignee and assignor. If this cannot be done, or if the right to claim priority is at all uncertain, practitioners should file the PCT application in the name of the "person" who filed the priority application and provide any correction later. Practitioners should also make sure that the assignment specifies the priority application(s) with particularity, includes an assignment of the right to claim priority, and make sure each signature is either witnessed or notarized. These measures should be taken to prevent complications in various jurisdictions, such as some countries in Europe.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.

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Best Practices for filing a US provisional patent application

In this article I will describe what I think are Best Practices for filing of US provisional patent applications.  

I will emphasize that this article is not about Best Practices for drafting US provisional patent applications. The assumption for the purposes of this article is that the provisional patent application has already been drafted and now what is being discussed is how to get it filed.

The two main points of this article are:

• Set up an alert so that you are monitoring the status of the application in DAS.
• Obtain a Certificate of Availability in DAS and save the Certificate to your file server.
• Make sure that your provisional is filed with an appropriate Applicant for purposes of Article 4 of the Paris Convention.

I will discuss these points in some detail.

Making sure the application will be available in DAS and PDX. At the time that the application is being filed, you may not be in a position to predict whether the application will later be asked to serve as a priority application. I suggest that in general unless you have some strong reason to think that it is extremely unlikely that the application will serve as a priority application, it is better to proceed so that you are prepared for the possibility that the application at least might serve as a priority application. As such, it will be good to make sure the application is available to the DAS and PDX systems.

There are several different ways to make the provisional application to be available to DAS/PDX.

One way, perhaps the simplest way, is to use a USPTO-provided ADS (application data sheet) such as Form PTO/AIA/014 . The ADS contains language that by default authorizes the USPTO to release the application to PDX/DAS (unless you take the step of checking a box that opts out of PDX and DAS). This ADS needs to be in the first EFS-Web session that is filed for the provisional application (meaning the filing in which you learn for the first time what your application number is).

This can be your choice of the fillable PDF form or can be the online web-based ADS in EFS-Web.

A potential drawback to the use of Form PTO/AIA/014 is that you might feel compelled to provide more information to the USPTO about the inventors than is required by the law and rules. It is recalled that the law and rules require the filer to disclose only the city and state (or country) of residence of each inventor. In particular the law and rules do not require that a mailing address or citizenship of the inventor be provided. Form PTO/AIA/014, however, purports to require that the inventor’s mailing address be provided. My suggestion is to bypass this by providing merely a period in the “address” field. This tricks the validation of the form into thinking that an address was provided, while avoiding the need to provide unnecessary information on the form.

Suppose that the application has already been filed and that only now are you attending to the need to make the provisional application available to PDX/DAS. This might happen for any of the following reasons:

• the application was filed using a provisional cover sheet (which does not provide the authorization for PDX/DAS);  or
• the application was filed using an ADS but the ADS was created in a word processor (and failed to provide the authorization);  or
• the application was filed using Form PTO/AIA/014 but the filer failed to provide the ADS in the first EFS-Web session .

In any of these situations, the application will very likely not have been made available to PDX/DAS, and thus you will need to make it available to PDX/DAS. The way to do this is to file Form PTO/SB/39 .

Once you have gotten the application filed in a way that should be available to PDX/DAS, the Best Practice is to make sure that the application does actually become available to PDX/DAS. This calls for the following steps.

First, watch to see that the Transaction History in PAIR says “Applicants have given acceptable permission for participating foreign”. In a recent case this happened on July 23, 2018.

Then watch to see that the Transaction History in PAIR says “Application ready for PDX access by participating foreign offices”. In the recent case just mentioned, this took four days, with this status appearing on July 27, 2018.

You would be forgiven for assuming that if the Transaction History says “Application ready for PDX access by participating foreign offices” then of course surely the application will be ready for PDX access by participating foreign offices. Unfortunately, this is not how things work at the USPTO. The way things really work at the USPTO is that when TH says “Application ready for PDX access by participating foreign offices”, this really means “Real Soon Now in a few days the application will be ready for PDX access by participating foreign offices”. If you check DAS to see if the application is available, you will be told:

The priority application number X is not registered. Please be advised that the United State Patent and Trademark Office started as of March 18, 2013 a new DAS registration procedure. You are invited to contact the USPTOs EBC (Electronic Business Center) at 1-866-217-9197 to register your priority document in the WIPO Digital Access Service.

Eventually, maybe in another day or two, the USPTO will actually get around to making the application “ready for access”.  In the recent case just mentioned, this took one more day, with the application actually being ready for access on July 28, 2018.

Anyway so eventually your application will be available to you in the DAS system. You will be able to “add tracking” in DAS. To do this, go to your workbench and click on “add tracking”. Then select the “IP right” which will be “patent”. Enter the “priority number” starting with a two-digit Office code (in this case “US”) followed by the application number. Note that you can actually copy and paste this from PAIR, for example “62/701,975” including the virgule and the comma. DAS will trim out the virgule and the comma.

Having successfully carried out the “add tracking” in DAS, the next step is to download a Certificate of Availability from DAS.  Save it in your file server for this provisional application.

The big payoffs from following these Best Practices are as follows.

Improved data validations when filing a PCT application.   Best Practice for filing a PCT application is, of course, to use ePCT to generate the Request.  ePCT will validate your priority application and filing date by looking it up in DAS.  If a year ago you planned ahead and made sure the provisional application was available to DAS, then this validation will work and you can be quite confident you did not screw up the priority claim in the Request.

Availability of the priority application for purposes of e-filing in RO/IB.   Many sophisticated PCT filers routinely file in RO/IB rather than in their local Receiving Office.  There are many advantages to the use of RO/IB which will be the subject of a separate blog article.  The point here is that if you are in RO/IB you will want to use DAS to obtain the certified copies of the priority applications, and if you made sure your priority applications were available in DAS, then you can proceed very smoothly in RO/IB.

Availability of DAS if you use a Paris path to file outside of the US.   Most filers use PCT to file outside of the US, but sometimes it makes sense to use a Paris path.  In such a case, your standard procedure should include providing a copy of the Certificate of Availability to non-US counsel so that there will be no doubt that DAS can be employed to provide the certified copies of the priority documents.

Applicant for purposes of Paris Article 4.   The remaining Best Practice issue for filing of US provisionals is to make sure to do the filing in such a way that the correct applicant is designated from the filing date.  It is not a best practice for the applicant to be the inventors, and yet the filer who proceeds with a mere Provisional Cover Sheet will achieve exactly that unhappy result.

The things to keep in mind are:

• Article 4 of Paris requires that the applicant in the second application (for example a PCT application) must be the “same applicant” as in the priority application (or a “successor in title”).   The initialism ( not acronym ) is SAOSIT.
• Some Offices around the world have held TYFNIL that a failure to straighten out any SAOSIT problem  chronologically prior to the filing of the second application will mean that the priority claim was defective  ab initio .
• In the US if you fail to pay attention to designating a non-inventor applicant, the result will be that the applicant is the inventors (which is almost certainly not what you actually want).

Use of the Provisional Cover Sheet is not a Best Practice.

A first reason that use of the Provisional Cover Sheet is not a Best Practice is that the Provisional Cover sheet (USPTO’s standard form) fails to designate a non-inventor applicant.  This virtually guarantees problems TYFNIL with the SAOSIT issue.

A second reason that use of the Provisional Cover Sheet is not a Best Practice is that the Provisional Cover sheet (USPTO’s standard form) fails to provide access for the application to PDX and DAS.

What do you consider to be Best Practices for filing of US provisional applications?  Do you agree or disagree with what I wrote here?  Please post a comment below.

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11 replies to “best practices for filing a us provisional patent application”.

If the PPA is filed with inventors as applicant, but then after the original filing date, but before the filing of a PCT claiming priority to the PPA, an assignment of the PPA from the inventors to the Applicant of the PCT is executed and recorded with the USPTO, does that create a problem with SAOSIT? Isn’t the Applicant of the PCT a successor in title of the PPA?

I agree that using the ADS naming the same applicant is better, but there are circumstances when that just isn’t legitimate, such as the inventors not being under obligation to assign and not able (or not willing) to execute the assignment before the PPA must be filed to meet a bar date.

Bruce —

That ends up being a question of the foreign law of the country that issues the end result patent, and their laws for establishing and recognizing priority. Whatever that country is, I have no license to opine.

But on first principles, “assignee” and “applicant” are two different things. The PTO treats them as entirely separate. I wouldn’t count on anyone in any other country having benevolent myopia to overlook the difference.

You don’t need consent from the inventors to correctly designate “applicant” on a Day One ADS. And boy does it save headaches down the line.

Carl, would you also consider it to be a “best practice” for provisional applications to expressly abandon each provisional application shortly after filing the provisional, in the event that one decides not to rely on the first-filed provisional but instead decides to rely on a second-filed provisional application for purposes of calculating the 12-month deadline for filing a non-provisional and/or PCT and/or Paris Convention application? It is my understanding that the 12-month deadline must be calculated from the “first filed” provisional application, but in some circumstances it may be best to calculate that 12-month deadline from a “second filed” provisional application (for example, perhaps the “second-filed” provisional may include more information/data that increases one’s confidence in compliance with the enablement or written description requirement).

Thank you for posting!

For me personally, I find it super scary to expressly abandon any patent application. I squirm to imagine giving up a filing date. If one does as you describe, a whole new 12 months’ worth of prior art becomes available to the Examiner whose job it is to cite that art against your (now later filed) patent application.

Having said that, I am aware that there are some technology areas (for example some pharma areas) where this “serial abandonment” approach is routine. The company identifies some molecule, files a provisional naming it, and then after 11 months has not yet figured out what the molecule is good for. So maybe they do the express abandonment and file a new provisional, this time hoping that during the next 11 months they will figure out what it is good for, and then file a non-provisional (probably a PCT) directed to that use of the molecule.

Yes such a company becomes vulnerable to an extra 11 months’ worth of potential prior art, but maybe they think they will get lucky and there won’t be any such prior art.

Get those assignements and record them. A year form now, one or more of the inventors may have left the company and then it is REALLY hard to get an assignment. (Or, when I was at Cantor Fitzgerald, we had a lot of patent applications where we couldn’t get signatures because the inventors were dead.) A provisional is a real patent application. Treat it like one.

Since 37 CFR 1.51 states that a “complete provisional cover sheet” must include “the name of the U.S. Government agency and Government contract number (if the invention was made by an agency of the U.S. Government or under a contract with an agency of the U.S. Government)” and an ADS does not provide an entry where the government support information may be specified, what do you suggest filing for provisiional applications made with government support?

Let’s talk it through.

If there is a government interest, the filer is obligated to spill the beans about this in the body of the patent application itself . MPEP ¶ 310. Merely providing the provisional cover sheet that you mentioned is no help at all toward complying with this requirement.

I have described good and sufficient reasons why a filer of a provisional application would almost certainly be remiss to have failed to provide an ADS. That’s just the way it is. What I said is that in my view what is to be avoided is using a provisional cover sheet to the exclusion of using an ADS . If you feel you need to provide a provisional cover sheet in addition to providing an ADS, then so be it. But again, keep in mind that even if you do provide the provisional cover sheet in addition to providing the ADS, this still fails to satisfy MPEP ¶ 310 which requires that the spilling of the beans take place in the body of the patent application.

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How long does it typically take for the USPTO to get to the stage where PAIR says “Applicants have given acceptable permission for participating foreign offices”?

Two provisional patent applications I filed a month ago still do not have this notification.

Did you give acceptable permission?

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Provisional Patent Vs Full Patent - assignment to employer

The company I worked for, filed 2 provisionals for my invention - I was listed as the sole inventor, and I signed assignment forms.

Those provisionals were converted to full patents, earlier this year, but I didn't signed assignment forms, and the company terminated me. So technically do I "own" the patents since I didn't assign the patents? Or does the provisional assignment carry over?

p.s. my employment letter makes no mention of any IP assignment

• provisional-application

2 Answers 2

I'm not an attorney and it sounds like you need one. If the "full" applications did not add new matter to the provisional's content then signing away one can be signing away both.

What state/country you are in will make a difference. A factor that may be involved is that the new AIA patent law has made it easier for employers to file on your invention without you signing anything. That is for employees with an obligation to assign. Also the papers you signed related to the provisionals might have been more expansive than you think. Signing the documents could have included anything that came from them.

If it is a US application and it has been published you can look the whole record up on USPTO Public PAIR. Who signed what and when.

• The full patent has significant modifications. –  Mikos Commented Aug 30, 2013 at 0:38

The only way to answer your question is to read the assignments you signed. An assignment of patent rights is a form of contract, so contract law applies. What rights did you assign to your employer? Typical assignments cover "full and exclusive right to the invention described in patent application titled blah blah filed on blah blah blah". There may also be an assignment of other patent applications filed in the US or throughout the world. The assignment may also cover divisional, continuation, or reissue applications.

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How To File A Provisional Patent In 2024

Updated: Aug 6, 2022, 10:53pm

If you’ve invented something new, you’ll want to protect your work. But filing for a patent can take time and can get costly. Instead of filing for a patent outright, file for a provisional patent that gives you 12 months to determine the commercial viability of your invention. This will allow you to use the “patent pending” label while you pitch and market your item. Here’s what you need to know about filing a provisional patent.

What is a Provisional Patent?

The provisional patent has been around since June of 1995. It is offered by the United States Patent and Trademark Office (USPTO) to give inventors a low-cost option for filing in the U.S. It also gives U.S. applicants parity with foreign applicants under the GATT Uruguay Round Agreements, which set the groundwork for tariffs and trade for 123 countries.

Provisional patents are legal documents filed with the USPTO to establish an early filing date of an invention. In order for its provisions to extend beyond the 12 months of the provisional patent, you must file for a nonprovisional patent. This 12-month period can’t be extended, so if you miss filing the nonprovisional patent in the designated timeframe, you’ll no longer have any patent protection for your invention.

Benefits and Disadvantages

The United States awards patent rights to the first person to file a patent application for a particular invention. The key advantage of the provisional patent is that it allows inventors to secure their position as “first to file” by submitting a simplified application. Unlike a nonprovisional patent, a provisional patent application doesn’t require a claim. The claim defines the invention you want to protect. Because a provisional patent doesn’t include a claim, it’s simpler to prepare and doesn’t alert competitors to the exact invention you’re protecting. This gives inventors time to test and refine an idea without worrying that someone else will be the first to file a patent application.

Not having to write a claim means that many provisional patent applications don’t need an attorney, so inventors can complete their own application. This saves on costs since you don’t have to pay legal fees, just the filing fee that ranges from $75 to $300 per application. Once you file the provisional patent application, you can describe your invention as “patent pending” for 12 months. These are all key benefits to going the route of the provisional patent.

The disadvantage is that no patent will be issued from a provisional patent. The application serves as a placeholder while you prepare and submit your nonprovisional patent application. This means you’re tacking on a cost that wouldn’t otherwise be there if you went right to the nonprovisional patent application. This can create a false sense of protection since there is no guarantee that a patent will get issued when you complete the remaining paperwork.

When To Consider Filing

Since the provisional patent has limited protection and will never get an official patent issued, you may wonder when and why to use it. The idea behind using a provisional patent is that you want to secure your position as the first one to file for your patent, and then quickly move into the production and distribution of your product. You want to have pitch sessions and maybe seek investment capital into your idea. You don’t want to sit and wait for a patent to get issued, which can take up to 22 months.

By filing the provisional patent, you protect your idea immediately while you complete the nonprovisional paperwork. This gives you the protection provided by “patent pending” noted on all materials related to your product.

How To Apply for a Provisional Patent

To start the application, you need to complete USPTO Form SB-16 , which is the Provisional Application for Patent Cover Sheet. This sheet lists the names of the inventors, the title of the invention and notes the address for correspondence. It also has a disclosure to complete and requires a signature.

With the application, you will include:

• Application Data Sheet
• Drawings of the invention
• Specification (description of the invention)

You can submit your application online or by mail. The standard filing fee is $300. Small entities pay $150 while micro entities pay only $75 for the provisional patent. A small entity has no more than 500 employees. Micro entities are small entities that aren’t named on more than four utility patents and have a gross income that doesn’t exceed three times the median household income for the preceding year.

Frequently Asked Questions

Can i reinstate my provisional patent if it expires.

The USPTO allows you to file a grantable petition with a statement of the delay in filing the nonprovisional application. The reason must be unintentional and must be done within 14 months from the filing of the provisional patent application, giving you a two-month extension.

How do I format a provisional patent?

Once you have the cover sheet, you will want to include all supplemental information that describes the patent. This includes a detailed description of the invention, illustrations of the invention and text that describes the illustrations. Documents submitted electronically should be in PDF format.

How long does a patent last?

Once approval is granted, a patent lasts 20 years from when it was filed.

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Kimberlee Leonard has 22 years of experience as a freelance writer. Her work has been featured on US News and World Report, Business.com and Fit Small Business. She brings practical experience as a business owner and insurance agent to her role as a small business writer.

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Why should i file a provisional patent application, what info do i need to provide to file a provisional application.

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Frequently Asked Questions: Provisional Patent Applications

What is a provisional patent application?

Under US patent law, a provisional patent application (“ provisional application ”) is a document that is filed at the United States Patent and Trademark Office (USPTO) to establish an invention’s “priority date” – that is, to show that an applicant adequately possessed the invention described in the provisional application as of the provisional application’s filing date. To be most effective, a provisional application should describe the invention in enough detail for someone of ordinary skill in the art to make and use the invention without undue experimentation. A provisional application does not get examined by the USPTO, so it is the applicant’s responsibility to ensure that it adequately describes the invention. If the provisional application does not describe the invention thoroughly enough, then it may not be sufficient to establish a priority date for patent claims directed to the invention that are ultimately filed and examined in the US and/or abroad.

Why should I consider filing a provisional application?

A provisional application can be an expedient and relatively inexpensive way to establish a priority date for prospective worldwide patent rights covering an invention without affecting the term of those rights.

When should I consider filing a provisional application?

• Before any public disclosure of the invention (e.g., a conference presentation, poster session, department seminar, paper publication and/or public announcement);
• Before a meeting with sponsors, collaborators, competitors, and/or investors; and/or
• When the inventors have reduced their invention to practice (or have a good plan for how to reduce their invention to practice), but plan to continue working on the invention over the next year.

What should a provisional patent application include?

A provisional application may include a variety of materials (e.g., text, figures, graphs, charts, and/or photographs) that describe the invention as well as how to make and use it. A provisional application should explicitly answer the following questions:

• What is the invention?
• How is the invention made?
• How is the invention used?

US patent law requires the provisional application to include comprehensive answers to these questions in order to establish a priority date for the invention. These legal requirements are called the “written description” and “enablement” requirements and they also apply to U.S. nonprovisional applications.

TIP: Ask the inventors for all materials that describe/support their work on the invention. These may include, by way of example, theses, manuscripts, “Supplementary Materials” sections of journal papers, computer code (preferably with comments), laboratory notebooks, emails, invention disclosure forms, and/or presentations.

TIP: Confirm that the invention being disclosed is actually new.

Should a provisional application include patent “claims”?

Legally, a granted patent claim defines the invention for which an applicant has enforceable rights (e.g., the right to prevent others from making, using, or selling the claimed subject matter without permission).  Claims are granted by the USPTO in nonprovisional applications, which are examined by patent examiners for utility, novelty, nonobviousness, as well as compliance with the written description and enablement requirements.

Provisional applications, on the other hand, are not examined, and thus there is no requirement to include claims. Nevertheless, including claims in a provisional application can provide several benefits. First, including claims the provisional application can provide the benefit of an earlier “priority date” for the later-filed nonprovisional application and the claims that will eventually be examined in the nonprovisional application. Second, considering claim scope early in the provisional application drafting process can be a useful exercise for shaping the legal definition of the invention. Third, the claim drafting process can emphasize the subject matter that should be described in detail in the specification of the provisional application in order to meet the “written description” and “enablement” requirements.

TIP: Including even a modest number of claims in a provisional application can help focus the drafting effort and may provide stronger priority benefits for any follow-on nonprovisional and/or foreign applications.

Who should be named as an inventor on a provisional application?

Under US law, an inventor is anyone who “contributes to the conception” (e.g., the complete mental embodiment) of at least one claim. In contrast, someone who has only reduced the inventive material to practice (without making any conceptual contribution) should not be named as an inventor. Inventorship is not necessarily the same as authorship of an academic paper.

Who owns the invention?

Under U.S. law, patent rights accrue to the inventors. However, most inventors are obligated to assign their patent rights to their employers by virtue of their employment agreements or institutional intellectual property policies.

Similarly, an inventor employed elsewhere, such as a contractor or collaborator, may be obligated to assign his or her patent rights to his or her employer.

Thus, if the provisional application names inventors from two entities who are each obligated to assign their rights to their respective entities, then both entities may have undivided ownership interest in the provisional application.

TIP: Because patent claims can inform the inventorship (and the ownership) of a provisional application, this is another good reason to include patent claims in a provisional application.

TIP: Obtain and record assignments from the inventors as soon as possible after a provisional application is filed. This ensures that the assignee is entitled to file continuing and PCT applications claiming priority to the provisional applications, grant licenses, etc.; and it also eliminates potential uncertainty regarding ownership that could arise in diligence or litigation.

Where was the invention made?

If the invention was invented in another country, it might be necessary to obtain a foreign filing license from the other country’s patent office before filing a U.S. provisional application. In some cases, it might be appropriate to file a patent application in the other country first, then file a U.S. nonprovisional application that claims priority to the foreign patent application.

In addition, if the invention was invented elsewhere (e.g., at another company or institution, either in the U.S. or abroad), another entity may have patent rights in the invention, for example, because its employees are inventors or because it provided facilities or services to the inventor(s).

TIP: For cases involving inventors from another entity, consider executing a license or joint research agreement with the other entity to reduce the risk of dispute regarding ownership and control of jointly developed intellectual property.

When do I have to “convert” my provisional application?

An applicant must “convert” the provisional application by filing a nonprovisional application and/or foreign patent applications within one year of the provisional application’s filing date. Of course, an applicant can always file a nonprovisional and/or foreign application before the one year anniversary of the provisional application’s filing date. Doing so will start the examination process sooner and will also begin the term of any patent that might issue from the nonprovisional and/or foreign application.

Can I file more than one provisional application for the same invention?

Yes. An applicant can file as many provisional applications as desired for a single invention during the one year “life span” of the first provisional application.

TIP: For on-going projects, it often makes sense to file multiple provisional applications, where each provisional application represents an additional advance and/or milestone. Doing so can provide the earliest possible priority date for each advance. The concepts disclosed in these multiple provisional applications can be filed in a nonprovisional and/or foreign patent application claiming priority to each provisional application prior to the expiration of the first provisional application in the series.

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Don’t Cut Corners… Consider Assigning That Provisional Patent Application

Reason #1: A Deceased Inventor

If an inventor named on a provisional patent application dies before an assignment is executed, the inventor’s legal representative (executor, administrator, etc.) may take actions on behalf of the deceased inventor.  If the deceased inventor had an agreement to assign with his employer, ownership is more straightforward, but the employer still must deal with the legal representative.  If no agreement to assign has been executed, the situation can become more difficult and can impact ownership and even prosecution of any subsequent utility patent application or foreign applications. All of this can be avoided if the provisional patent application is assigned when filed.

Reason #2: The Inventor Who Loses Mental Capacity

An inventor who becomes mentally incompetent due to mental illness or other circumstances can create a myriad of problems with a pending patent application. An assignment executed prior to the mental illness allows the assignee to take actions without an assertion of ownership by the inventor, and also establishes clear title without the necessity of signatures later on.

Reason #3: A Hostile or Missing Inventor

Should an inventor leave the company he or she may no longer be willing to sign papers, including assignment documents. The employee may be disgruntled or simply not interested in signing papers. In addition, an inventor may move and not provide a forwarding address, or otherwise be missing.  Contact with an inventor can become important during subsequent prosecution, for example.  Dealing with hostile or missing inventors can create problems for your company’s intellectual property. Knowing that an inventor has transferred ownership to your company through an assignment alleviates many of these potential problems.

Reason #4: A Green Light for Continued Investment

If all inventors named on a provisional patent application have assigned their rights to your company, ownership is clear and trouble free. This equates to a green light to continue investing in research and development, knowing that future investments made in the subject technology are free and clear of ownership issues.  Without clear title to a patent application, provisional or otherwise, any investments made in the technology will be to the benefit of not only the company, but also to any named inventors until such time as they assign ownership. With all of the uncertainty associated with the development of any new technology, the simple task of executing an assignment at least avoids one facet of uncertainty – that of ownership.

Reason #5: A Clear Chain of Title for an Acquisition

Should your company be acquired, or should you spin off a division, a product line, or even a patent or patent portfolio, the purchaser will demand that there is a clear and unambiguous chain of title for the technology or business being purchased. The purchaser will require many things including title documents, certifications, files, and similar paperwork, all of which are intended to ensure that what is being purchased has a clean title. It is not at all uncommon for a purchaser of an issued patent to insist on executed and recorded assignments for any underlying provisional patent application, even if that provisional patent application has long since expired. If the inventors on that long expired provisional are no longer with your company, it can be difficult and sometimes impossible to obtain signatures for an assignment. Either the inventors can’t be located, or they have no motivation to execute an assignment because they are no longer with your company. Either way, you can save yourself a lot of work and aggravation if that provisional is assigned right away.

Reason #6: Better License Agreements

Should you license a subsequent patent or patent portfolio, the licensee will want to know that there is clear title to all intellectual property, including provisional applications. If a licensee plans to not only pay an ongoing license fee, but also invest in the tooling, marketing and production capabilities necessary to build and sell the product they have licensed from you, they certainly want to ensure that there will be no ownership issues that could prompt a third party to in any way jeopardize their business initiatives and investments.

  Reason #7: PCT and Foreign Entitlements

The United States requires that the applicant on all patent applications is the inventor or inventors.  This is not so in most foreign countries.  Most foreign countries, as well as the provisions of the Patent Cooperation Treaty (PCT) 3 , allow the applicant to be a company or other legal entity. This enables a company to take actions and direct prosecution of the foreign applications, and can be beneficial to the company who employs the inventors and is paying for the patent applications. In order to name a company or other legal entity in a PCT application, the PCT Request must establish the right of the applicant, in this case a company or legal entity, to apply for and be granted a patent. Further, to claim priority to an earlier patent application such as a United States Provisional Patent Application, the Applicant must prove that they are entitled to make this priority claim. The most common way to establish rights of an applicant to file and be granted a patent, and also establish rights to make a priority claim, is by referencing an assignment from the inventors to the company.  Without an assignment of a provisional patent application, it is difficult or impossible to establish these rights.

Reason #8: Establish Ownership Early

Businesses should perfect their ownership rights on a timely basis.  This means provisional patent applications that reflect the work and assets of a company should be assigned to the company right away. This lays the groundwork for a solid and clean intellectual property asset base that can yield positive financial returns. Delays in establishing ownership by way of properly prepared and executed assignments can turn out to be very costly to take care of at a later date when inventors have left the company or otherwise become unavailable. If the technology is important to your business, you should take actions not only to protect it by way of a patent application or applications, but you should also take actions necessary to establish and secure ownership right away.

• The Limited Monopoly March 2006. “Have Brain, Will Invent: Who Owns Your Inventions?”
• The Limited Monopoly June 2009. “Weaknesses of the “Quick and Dirty” Provisional Patent Application”.
• The Limited Monopoly November 2007. “Filing International Patent Applications- Tuning In To The Patent Cooperation Treaty.”

Authors Robert D. Gunderman P.E. (Patent Technologies, LLC www.patentechnologies.com ) and John M. Hammond P.E. (Patent Innovations, LLC www.patent-innovations.com) are both registered patent agents and licensed professional engineers.  They offer several courses that qualify for PDH credits.  More information can be found at www.patenteducation.com .     Copyright 2011 Robert Gunderman, Jr. and John Hammond.

Note:  This short article is intended only to provide cursory background information, and is not intended to be legal advice.  No client relationship with the authors is in any way established by this article.

         For a PDF download of this article or to print a copy , click here →

Categories: Ownership Rights , Patent Fundamentals , Provisional Patent Applications

Tagged as: assignment , Patent , patent application , patent assignment , Patent Preparation , patent prosecution , Patent protection , patent service , Patents , provisional application , provisional patent application

ROBERT D. GUNDERMAN P.E.

Mr. Gunderman has 30+ years of engineering related work experience, and is the President of Patent Technologies, LLC, a patent law firm with headquarters in the Lennox Tech [more...]

JOHN M HAMMOND P.E.

Mr. Hammond is a licensed Patent Agent, the President of Patent Innovations LLC and a licensed Professional Engineer. He has 23 years of work experience in product design [...}

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Zimmer v. Insall: The Power of Arbitration Agreements in Patent Royalty Disputes

by Dennis Crouch

In the recent case of Zimmer Biomet Holdings, Inc. v. Insall , No. 23-1888 (7th Cir.  July 12, 2024), the Seventh Circuit affirmed an arbitration award requiring Zimmer to continue paying royalties to the estate of Dr. John Insall even after the expiration of the underlying patents.  This decision highlights the significant deference afforded to arbitration agreements and the limited ability of courts to vacate arbitral awards, even when they conflict with Supreme Court precedent.

The key precedents underlying the dispute in Zimmer v. Insall are Brulotte v. Thys Co. , 379 U.S. 29 (1964) and Kimble v. Marvel Entertainment, LLC , 576 U.S. 446 (2015). In Brulotte , the Supreme Court held that “a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se .” This rule, known as the Brulotte rule, has faced criticism over the years for being economically irrational and inflexible. The Supreme Court directly revisited the rule in Kimble, but ultimately chose to uphold the rule based on stare decisis . However, the Court also clarified that “post-expiration royalties are allowable so long as tied to a non-patent right—even when closely related to a patent.” This left open the possibility for parties to structure royalty agreements to survive patent expiration, as long as the post-expiration royalties are non-separably grounded in a peppercorn of non-patent rights.

• Read the Decision: Zimmer v. Insall

The dispute in Zimmer v. Insall centered around a series of agreements between Zimmer and Dr. John Insall related to knee replacement technology. The original 1991 agreement provided for Zimmer to pay royalties to Insall based on the sale of products covered by Insall’s patents. Subsequent amendments in 1994 and 1998 modified the royalty provisions.

The original agreement defined the covered products according to patent scope, but in 1998, the parties included a statement that that 1% royalty would be calculated on “sales of the NexGen Knee and all subsequently developed articles, devices or components marketed by Zimmer as part of the NexGen Knee family of knee components”

Although Zimmer continues to sell the NexGen Knee products, it stopped stopped paying royalties in 2018 after the last Insall patent expired.  Zimmer argued that Brulotte rendered any post-expiration royalties unenforceable. The parties submitted the dispute to arbitration as required by their agreement. The arbitration panel sided with Insall’s estate, finding that the 1998 amendments had “untied” the royalties from Insall’s patents and created a “new royalty provision untied and no longer dependent on Insall’s patents, products, or technology.”

Zimmer then sought to vacate the arbitration award in federal court, arguing that it violated the public policy established in Brulotte and Kimble . The district court rejected Zimmer’s arguments and confirmed the award.

On appeal, the Seventh Circuit emphasized the extremely limited scope of judicial review of arbitration awards under the Federal Arbitration Act (FAA). Citing precedents like United Paperworkers v. Misco , 484 U.S. 29 (1987), the court noted that it could not reconsider the merits of an award even if the arbitrators made factual or legal errors in interpreting a contract.  Generally, an arbitration award cannot be appealed.

The key potentially applicable exception is a public policy exception, which allows a court to vacate an arbitral award if the award itself violates “some explicit public policy that is well defined and dominant.” Quoting W.R. Grace & Co. v. Rubber Workers , 461 U.S. 757 (1983). However, in evaluating whether an award violates public policy, a court is bound by the arbitrators’ interpretation of the underlying contract.

Here, the critical question was whether the royalties owed under the agreement were based on Insall’s patent rights (and thus unenforceable under Brulotte ) or on some non-patent right (and thus potentially permissible under Kimble ). The arbitration panel examined the contractual language and extrinsic evidence, including statements from Zimmer’s own witnesses and counsel, and concluded that 1998 amendments to the contract altered the royalty agreement so that it was no  longer based on products using Insall’s patented technology and instead was based upon NexGen marketing.

The Seventh Circuit held that this interpretation of the agreement was squarely within the arbitrators’ unreviewable authority. “An arbitration clause delegates interpretive power to the arbitrators. We do not ask whether they read the contractual language correctly; it is enough that they tried to apply the contract that the parties signed.” Am. Zurich Ins. Co. v. Sun Holdings, Inc. , 103 F.4th 475, 477 (7th Cir. 2024). Given the panel’s finding that the post-1998 royalties were not based on any patent rights, the award could not violate the public policy of Brulotte and Kimble .

Zimmer argued that that the focus should be on “why Zimmer paid a royalty.” — and the answer is clear, to license the patents. And, under Brulotte and Kimble , royalties “for post-expiration use of a patent” violate public policy.  As discussed, on appeal, the Seventh Circuit did not directly evaluate the merits of this interpretation. Instead, it emphasized that the arbitrator had a different interpretation of the contract and that interpretation is not directly appealable.

Zimmer v. Insall reinforces a few principles: Courts will afford great deference to arbitrators’ contract interpretations, even when they implicate patent law issues. As long as the arbitrators are arguably interpreting the contract, a court will not second-guess their reading. As explained in Kimble , royalties grounded in both patent and non-patent rights can survive patent expiration. Finally, I want to recognize that is a case where the arbitration agreement favored the patentee, whereas patent licensees are the ones that would more traditionally seek an arbitration agreement. (Although in the IP space, this has always been more balanced than in the consumer sphere).

10 thoughts on “ Zimmer v. Insall: The Power of Arbitration Agreements in Patent Royalty Disputes ”

Well, Zimmer’s competitors can now practice the invention since the patents are now expired, and Zimmer can give the middle finger to the estate and say they’re getting out of the business and say “Congrats! You killed the goose that laid the golden egg!”

What is it about this comment which you think readers of Patently-O would find offensive? Thanks for your report!

This is correct. Zimmer has to pay royalties to Dr. Insall’s heirs in perpetuity as long as it sells its NexGen Knee system, but Zimmer’s competitors can make a competing product and not pay a cent.

The one upside for Zimmer is that the royalty rate paid to Insall’s heirs is 1%, which is unlikely to place Zimmer at such a competitive disadvantage to force it out of the market. The patents expired in 2018, and Zimmer is still selling the NexGen Knee system to this day.

Doesn’t this fall under patent misuse as an antitrust violation—which would be independently illegal? I know it’s not a per se rule anymore. I seem to remember something from law school on this

OT, but this is a good summary of the overturning of Chevron. link to youtube.com

Although the patent issues are (somewhat) interesting, this seems more like a case regarding the importance of language in contract drafting – Contracts 101 for law school students. The fact that the original contract tied the contract to the patent rights but then later removed it (and tied it to a product instead) seems to be clear evidence that the two issues are separate and distinct from one another. Two very different terms should not be construed to mean the same thing when the parties have distinguished them from one another in such a manner.

I don’t know what arguments were made, but I would have argued that specifically identifying the NextGen Knee eliminated any doubt as to what products were covered by the patents. Furthermore, Kimble allows post-expiration royalties only where there are “non-patents rights ” involved (e.g., trade secrets, know-how, etc.). What “non-patent rights” are involved with the post-expiration sales of the NextGen Knee?

Re; “What “non-patent rights” are involved with the post[-patent]-expiration sales of the NextGen Knee?” [Who owned the trademark?] Yes, and is this arbitrated “all .. articles, devices or components marketed by Zimmer as part of the NexGen Knee family of knee components” “license royalty” required to be paid in perpetuity? [Since Dr. Zimmer is dead, so is any contractual technical assistance agreement from him that also might have legally supported a royalty continuation.]

> Re; “What “non-patent rights” are involved with the post[-patent]- > expiration sales of the NextGen Knee?”

Paul, I don’t think there were any, but this is kind of irrelevant to the decision.

The Seventh Circuit decision, quoting the arbitration decision, stated that “[t]he 1998 Agreement text separates Insall’s royalty rights from anything based on patents or technology.” The arbitration panel basically interpreted the 1998 amendment as a bare obligation to pay royalties forever, without regard to any license to patents or other IP. And once the 1998 amendment was interpreted as untethering the royalty payments from the patents, the decisions in Brulotte and Kimble no longer applied.

Now, interpreting the 1998 amendment as basically creating a royalty payment obligation tied to absolutely nothing, seems questionable on its face. Zimmer obviously did not agree to continue paying royalties in 1998 out of the goodness of its heart–of course its royalty payments were predicated on the patents, which at the time of had two decades of term remaining. Most courts would have interpreted the 1998 amendment as merely changing the way patent royalties were calculated under the parties’ longstanding patent license.

But this is a lesson in the dangers of arbitration; you basically give up any kind of meaningful appellate review. It is thus not surprising that you sometimes see arbitration decisions that defy common sense and violate established legal principles, because arbitrators know they can do whatever they want without any kind of appellate review.

Yes, “basically creating [an endless] royalty payment obligation tied to absolutely nothing, seems questionable on its face.” Which leads to wondering if it raises sufficient public policy reasons to trigger that exception to enforcement of that arbitration obligation? As Dennis noted, “..if the award itself violates ‘some explicit public policy that is well defined and dominant.’ Quoting W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757 (1983).”

The court directly addressed this issue, but found that “Zimmer has no path to victory.” The problem was the arbitrator’s express finding that the 1998 amendment was uncoupled to a license of rights under now-expired patents. That finding, which the appellate court cannot review under the FAA, killed Zimmer’s public policy argument. This is because even if Zimmer agrees to pay Insall royalties until the end of time, those payments do not violate Brulotte and Kimble because they were not (according to the arbitration panel) tied to now-expired patents. It is possible the arbitrators deliberately structured their ruling around this threshold contract interpretation (in which one of the arbitrators dissented), as it sidestepped the public policy argument and made the award essentially unreviewable.

If this was an appeal of a court ruling, I think an appellate court would have had no problem saying that the panel’s threshold interpretation of the 1998 amendment was incorrect. But once you get into arbitration, you pretty much give up the right to obtain meaningful review of this type of issue.

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