Patent Assignment and Licensing

1. Patent Assignment and
Licensing

2. Patent Assignment
• Although the term ‘assignment of patent’ is not defined in the Indian Patents Act
of 1970, patent assignment is like a permanent deal of IP between two parties.
• An assignment agreement is a legally binding contract that transfers all or part of
the ownership rights of a patent from the assignor (the current patent holder) to the
assignee (the new rights holder).
• The assignee then has the exclusive right to prevent others from making, using,
selling, or offering to sell the invention, including the right to sue anyone who
infringes on the patent.

3. • To be valid, a patent assignment must be properly documented by an IP
lawyer, signed by the parties involved, and registered according to Section 19
of the Patent Act.
• Patent assignments are of three kinds
• (i) legal;
• (ii) equitable; and
• (iii) mortgages.

4. (i) Legal Assignment -
• A legal assignment is the formal transfer of patent rights from the assignor
(the original patent owner) to the assignee (the new patent owner).
• The assignee then enters their name as the patent owner in government
records. Such an assignment is typically executed through a deed, and once
the process is completed, the assignee gains full ownership rights to the
patent.

5. (ii) Equitable Assignment -
• Any form or agreement that includes a letter stating that the assignor has agreed to
share a certain portion of the patent rights with the assignee is termed an equitable
assignment of the patent.
• Unlike in legal assignment, the assignee cannot enter his/her name into the official
government records as a patent owner but can notify the patent office of their
interest in the patent.
• Equitable assignments may involve sharing specific benefits or profits from the
patent, but the assignee does not gain complete ownership rights as in a legal
assignment

6. • An agreement where the patent owner transfers the patent rights either
wholly or partly to the assignee in return for a lump-sum payment of royalty.
• Once the assignor repays the sum to an assignee, the patent owner gains
back the patent rights to the mortgaged property.
• Even in this assignment, the assignee's name is not entered as a patent owner
in government records but is mentioned as a mortgagee, reflecting their
interest in the patent.

7. Patent Licensing
• Licensing is a permission-based arrangement wherein the patent owner
(licensor) grants rights to another party (licensee) to use the patented
technology under predefined terms. Unlike assignment, ownership remains
with the licensor.
• Patent Act section 70 allows a patentee to grant a license through a
contractual agreement to allow the licensee to make, use, or exercise the
invention. The licensor and licensee sign the contract which certifies the
shared use of IP rights (in part or whole) for mutually agreed payments (i.e.,
royalties).

8. Types
• 1. Exclusive License Agreement:
• An agreement that gives a grant of exclusive rights to the licensee (the person or
entity receiving the license) by the licensor (the patent holder), to use the patented
invention; excluding all others (including the patentee) to exploit, use, or license the
invention to anyone else during the term of the agreement.
• The rights can be divided and assigned, restrained entirely, or in part. The patent
holder retains ownership of the patent, but only the licensee holds exclusive rights
for the agreed-upon scope. The simplest instances of exclusive licensing agreements
are copyright, trademarks, and patent licenses

9. 2. Non-exclusive License Agreement:
• A license agreement in which the licensee can exploit the patented invention,
but not exclusively. Under this arrangement, the patent holder may exploit
the invention himself and can grant licenses to multiple parties, including the
licensee, for the same invention for the length of the agreement entered into.