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Patents: Licensee Assignability

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Can a Patent Licensee freely Assign their License to Others?

 

No, most states recognize that patent licenses are personal to the licensee (i.e. person allowed to use the patent under the license) and cannot be freely assigned to others.  In other words, if a person gives you a license to their patent, you cannot sell or transfer that license to anyone else without the patent holder's consent.

 

Are there any Exceptions to this Rule?

 

Yes.  The most notable exception is if assignment is written into the licensing contract.  This is usually indicated by "assigns" or any other words that extend the license to a licensee's successors.  A court may also allow assignment of a license if both the licensor and the licensee intended to make the license assignable. 

For example, suppose patent holder A enters into a patent licensing contract with company B that doesn't include an assignment provision.  Now suppose B is bought out by C, yet A does nothing when C starts using the patent.  Some courts may allow an assignment of B's license to C, based on A's failure to take action.

In most cases, courts will look into individual circumstances to determine whether or not assignment can be implied (i.e. assumed from other facts) from a patent licensing contract.

 

What Kinds of Circumstances Affect an Implied Assignment?

 

When determining whether to allow assignment of a patent license, a court may pay special attention to the following factors:

  • The uniqueness and nature of the patent itself
  • Relationship between licensee and the patent holder (e.g. manufacturer/developer, seller/reseller, etc.)
  • Prior dealings and history between the licensor and the patent holder
  • Licensee's obligations under the patent license
  • Nature of the assignment (i.e. was the assignment sold, passed down, or acquired through merger?)
  • Potential harm to patent holder if patent license is allowed to be assigned

 

How Can a Lawyer Help Me?

 

If you have a patent license that you would like to sell or transfer, you should contact a patent attorney to learn about your available options.  A lawyer can review the terms under your patent licensing contract, and help determine whether a court is likely to allow assignment of your license. 

If you a patent holder whose patent license to a third party was assigned without your consent, an attorney can help you obtain an injunction and prevent the unauthorized use of your patent.

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 10-04-2016 01:50 PM PDT

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