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Purchasing a Patent – Patent Purchase Agreements (Part 1 of 3)

When purchasing a patent asset, your patent purchase agreement will need to cover a number of terms, to ensure you’ll have everything you need at the time of purchase, and that you won’t need to go back to the seller at a later point.

Examples of such terms include (1) proper and complete patent listings; (2) provisions ensuring inventor cooperation; (3) built-in due-diligence windows, if needed; (4) explicitly-recited consideration; (5) properly recited assignment-provisions; (6) an assignment exhibit; (7) other relevant deliverables; and (8) appropriate seller representations and warranties.

In this post, I’ll be discussing (1), (2), and (3).

(1) Proper and Complete Patent Listings

For every patent asset you intend to purchase, include all related parents, continuations, continuations-in-part, divisionals, reissues, reexaminations, and all foreign patents and applications (I’ll discuss patent-family issues in another post). 

Never purchase a patent asset without the entire family.  In the event the family includes a terminal disclaimer (a clause indicating that the patents are enforceable only when the patents are commonly owned), you’ll need to ensure that all patents are included in the patent list.

Regarding terminal disclaimers, include a clause indicating that if the patent list is inadvertently missing a related patent, it is automatically and retroactively transferred and included in the patent purchase agreement, as of the effective date of the patent purchase agreement. 

This retroactive ownership of any missing patents will ensure common-control requirements, for any patents subject to a terminal disclaimer (I’ll discuss more about terminal disclaimers in another post).

(2) Inventor Cooperation

Inventor cooperation is critical for you campaign.  Nothing derails a campaign faster than an inventor testifying against the properness or legitimacy of your campaign. 

If it takes an agreed-upon hourly rate or a backend arrangement, include inventor-cooperation terms (e.g., providing documents, deposition, or trial testimony) in the patent purchase agreement or separate consulting agreement.  

(3) Due-Diligence Windows

For patent acquisitions that require heavy resources for due diligence, it helps to lock in the contract before investing the resources.  You can build in a due-diligence window (e.g., 30 to 60 days) in which to conduct your research, prior to close of the contract.

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