If someone does not have rights to a patent, they cannot sue for infringement of that patent. Of course, patents can be assigned (or transferred) from one person or entity to another. Under 35 U.S.C. 261, “Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing.” But what if the assignment was never signed by the conveyor? Does the Plaintiff have standing to sue?
In Schwendimann v. Arkwright Advanced Coating, Inc. a case which was filed in 2011, the Court of Appeals for the Federal Circuit wrestled with just this point. The Plaintiff sued for patent infringement on three patents, but the Defendant argued that the Plaintiff did not have standing to sue for at least one of them because the patent had not been “officially” assigned to her. In the case, the Plaintiff was one of two inventors who had assigned her rights to a company for whom she worked. When the company developed financial difficulties, there was an agreement that the company would re-assign its rights in the patent applications back to the Plaintiff for defined consideration, but the company’s representative had not signed a relevant transfer document (or assignment) before the document was recorded with the Patent Office.
A question raised in this case was, in light of the defective assignment, whether the unsigned assignment is adequate for the Plaintiff to have standing to sue. To answer this question, the court concluded that it merely needed to answer the question of whether the unsigned assignment met the requirement of “a writing” under 35 U.S.C. 261 and was actually executed (albeit in a defective writing). That is, does the document serve as an “instrument in writing”, even though it was not signed?
The court concluded that the unsigned assignment was adequate to transfer ownership. It applied local contract law (in this case, Minnesota), noting that the question of who has legal title falls under state law, even though patent law is exclusively federal law, not state law. That is, the requirement for a writing is Federal law, but whether the writing conformed to a transfer of rights is in state law.
The Court found that it was undisputed that there was intent to transfer and subsequent performance by at least one party, and therefore there was a valid agreement to transfer under Minnesota law. The agreement was found to be defective but correctable, and there was a written instrument. So the case can proceed.
Importantly, this case demonstrates that small errors can result in unnecessary and lengthy litigation issues. It took about 9 years for this issue to make it to an Appeals Court opinion, and the case remains unsettled. The lesson from this case is that it is important to resolve assignment issues as soon as possible to offset the possibility seen in this case.