In a Federal Register Notice issued November 23, 2011, the USPTO announced that it is considering collecting more information on patent ownership. Although the Notice is titled “Request for Comments on Eliciting More Complete Assignment Information,” the intent appears to be to require applicants to update the USPTO on any changes in ownership at specific stages of prosecution and with maintenance fee payments. The USPTO believes that having complete and current patent ownership information will offer several public benefits, but seems to acknowledge that it may not have the authority to require applicants to provide this information. It seeks public input on this and other issues by January 23, 2011.

Public Benefits Of Complete and Current Patent Ownership Information

The Federal Register Notice outlines several possible public benefits of having more complete and current patent ownership information:

  • The public would have a more comprehensive understanding of what patent rights being issued by the United States are being held and maintained by various entities.
  • The financial markets would have more complete information about the valuable assets being generated and held by companies.
  • Patenting inventors and manufacturers would better understand the competitive environment in which they are operating, allowing them to better allocate their own research and development resources, and more efficiently obtain licenses and accurately value patent portfolios and patent estates that they may seek to acquire.

USPTO Authority To Require Patent Ownership Information

The Federal Register Notice cites its general powers under 35 USC § 2(a)(2) as the basis for its authority to require patent ownership information:

(a) IN GENERAL.- The United States Patent and Trademark Office, subject to the policy direction of the Secretary of Commerce-(1) shall be responsible for the granting and issuing of patents and the registration of trademarks; and
(2) shall be responsible for disseminating to the public information with respect to patents and trademarks.

Patent ownership is directly addressed in 35 USC § 261, but that statute does not require applicants or patent owners to notify the USPTO of any patent ownership information.

The Federal Register Notice refers to amendments to 35 USC § 118 made by the America Invents Act as “requir[ing] that applicants update assignee information at the time of allowance,” but the cited statute pertains only to applications filed by someone other than the inventor:

A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent. A person who otherwise shows sufficient proprietary interest in the matter may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties. If the Director grants a patent on an application filed under this section by a person other than the inventor, the patent shall be granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient.

(This change to § 118 takes effect September 16, 2012.)

Does the fact that there is no statutory requirement to provide ownership information to the USPTO indicate that Congress did not confer this authority to the USPTO?

Changes Under Consideration

As set forth in the Federal Register Notice, the USPTO is considering requiring applicants to provide ownership information at the following stages of prosecution:

  1. At the time of application filing.
  2. After filing, in time for inclusion on the patent application publication (by amending 37 CFR § 1.215(b)).
  3. After filing, when any new ownership rights cause the application or patent to gain or lose entitlement to small entity status (by amending 37 CFR § 1.27(g)).

The USPTO also is considering amending 37 CFR § 3.81 to require that the application issue in the name of the assignee or assignees as of the date of payment of the issue fee. (Currently, this is an option but not a requirement.)

The USPTO also is considering offering discounted maintenance fees if the patent ownership information is confirmed or updated around the time a maintenance fee is paid.

Specific Comments Requested

The Federal Register Notice solicits specific comments on the following points:

  1. Is there any reason that the mandatory disclosure of any assignee or assignees should not take place at the time of application filing?
  2. Would it be in the public interest for the USPTO to obtain from applicants updated identification of the assignee at the time of allowance, e.g. in response to the Notice of Allowance? Are there limitations on the USPTO’s rights and powers to require the reporting of such information?
  3. Would it be in the public interest for the USPTO to obtain from applicants updated identification of the assignee during prosecution of the application? Are there limitations on the USPTO’s rights and powers to require the reporting of such information? Should the USPTO consider requiring the identification of assignment changes after filing date for inclusion on the patent application publication (PGPub)? At what time should changes be recorded relative to the assignment, and what are the appropriate consequences of non-compliance?
  4. Would it be in the public interest for the USPTO to obtain from applicants updated identification of the assignee after issue of the patent? Are there limitations on the USPTO’s rights and powers to require the reporting of such information? At what time should such identification be made to the Office relative to a change? Should the USPTO consider requiring the identification of assignment changes during the maintenance period of the patent right, i.e., after grant, but prior to patent expiration? What are the appropriate consequences of non-compliance?
  5. To accomplish adequate and timely recording, are changes to Agency regulations necessary? What are the most effective and appropriate means for the USPTO to provide the public with a timely and accurate record of the assignment of patent rights and the assignee?
  6. Would it help the USPTO’s goal of collecting more updated assignment information if 37 CFR 1.27(g)(2) were amended to require identification of any new ownership rights that caused the application or issued patent to lose entitlement to small entity status?
  7. Given the passage of the America Invents Act, is it proper for the Office to provide for financial incentives for disclosure of assignment information by way of discounts in fee payments? For example, would it be more likely for patentees to update assignment information and record assignment documents on in-force patents if a maintenance-fee discount were available in return? What are the appropriate consequences for failure to provide accurate information when accepting such a discount?
  8. In order to provide a more complete record for transactional purposes, what changes do you recommend that USPTO make in its requirements or incentives relating to the disclosure of assignment information during the patent application process and for issued in-force patents?

Truth Or Consequences?

While the proposed requirements may not seem burdensome in the abstract, they could impose significant burdens in practice. Indeed, while the Federal Register Notice outlines only a few specific stages of prosecution where updated information would be required, it also states that it is considering changes to require updates “within each communication to the Office by the representative of the applicant during patent prosecution.” Moreover, although the Federal Register Notice refers to requiring “identification” of ownership information, the “public benefit” goals only would be served if this information is indexed in a searchable database, such as the USPTO’s assignment records database. This suggests that the USPTO will require at each time point indicated a recordable, executed document reflecting any ownership change. Any requirement for an executed document will increase administrative burdens and costs, even without taking into account the USPTO’s recordation fees.

The proposed requirement to provide “timely” updates during prosecution of any ownership changes that impact the right to claim small entity status is particularly problematic. If such information must be provided at the time a response is filed, any difficulty in obtaining, verifying or documenting the information could jeopardize the ability to satisfy the response deadline. Moreover, as recognized in the Federal Register Notice, license agreements can impact small entity status. Parties may have legitimate business reasons for maintaining license agreements in confidence, and these interests should not be overruled by a general goal of “disseminating . . . information” to the public.

The proposed requirement to provide updated information with the issue fee payment also could be problematic, because the issue fee deadline is not extendable.

It is difficult to fully assess this proposal without knowing the possible consequences for non-compliance that the USPTO is contemplating.  On the one hand, making updated ownership information an absolute requirement would be unacceptable, particularly if executed documents are required. On the other hand, making updated ownership information optional would not change the status quo, or serve the USPTO’s goals of having complete and current patent ownership information.

As noted above, the USPTO invites public comments by January 23, 2011, which can be sent to the email or postal mail addresses set forth in the Federal Register Notice.