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 (4), (5), (6), and (7).
A patent purchase agreement is a contract–it’ll need to include consideration to ensure that it’s a valid one, i.e., you’ll need to illustrate a bargained-for exchange. You’ll be receiving an assignment to the patent assets. In exchange, include the purchase price or any applicable backend arrangement to the seller.
(5) Assignment Provisions
The assignment is what transfers to you full right and title to the assets.
Include a clause that the inventor is transferring full right, title, and interest to the assets and, for past, present, and future infringement, the right to sue, collect damages, and seek injunctive relief. This latter clause will ensure you have a right to collect damages and other necessary remedies going forward, and for the past statutory six-year look-back period.
(6) Assignment Exhibit
Include an exhibit specifically earmarked for an assignment document. Have this exhibit executed and notarized by the seller. This exhibit should include just the assignment and no other contract terms –you’ll use this exhibit to record the assignment with the patent office, after the purchase.
(7) Other Deliverables
Have the seller deliver all documents evidencing conception and reduction to practice of the patented invention—include this as a requirement prior to closing.
Prior to the AIA’s first-to-file rule, these documents could help establish an earlier priority date, to overcome certain prior art references. While this isn’t applicable with patents subject to the AIA first-to-file rule, you’ll nevertheless need these documents, as you’ll need to eventually turn them over in litigation.
And if the prior owner created or sold any products or services embodying the patented invention, have the seller deliver representative samples of marketing materials such as brochures, advertisements, product packages, etc. These documents can help establish compliance with any applicable marking provisions.
And if such products or services exist, consider if it would further your campaign goals (e.g., tell your story) to also have copies of design schematics, testing documents, manufacturing documents, etc.