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Blog | How to avoid buying a worthless patent | EP&C Patent Attorneys

How to avoid buying a worthless patentA woman from California recently missed out on 26 million dollars. She had forgotten to take her winning lottery ticket out of her jeans before washing them. She subsequently tried to glue the pieces together, but the lottery was merciless. The woman missed out on millions because she was unable to provide sufficient proof that she was the winner. Why am I telling you this? Because something similar can happen when you transfer intellectual property and forget to take one essential step. In that case too, there is not a great deal you can do to rectify the situation.

Transfer of intellectual property rights

Intellectual property rights do not have to stay in the same hands forever. They can be transferred. For example, when the inventor sells the innovation to your company so that you can use it for commercial purposes. Intellectual property is also frequently transferred in the event of a merger or takeover. So it is not uncommon. And it seems quite straightforward: the old owner reaches an agreement with the new owner; a fee is paid and the intellectual property changes hands. It is as simple as that. However, it is important not to forget one crucial step: to transfer the priority right.

Priority right

Let's start with a brief explanation of a priority right. When an inventor has invented something, he obviously does not want others to claim that they invented it at some point in the future. For this reason, the first step in protecting an invention involves claiming the priority date. This establishes that the inventor filed an application for a unique solution on that date. Anyone who comes up with the same idea after that date will then be out of the running. The inventor who filed the application first has the priority right. In other words: he has the winning lottery ticket in his hands.

Transfer of a priority right

Now this is the important bit: when you acquire this inventor's patent, it is important that you also acquire the priority right. That way, you won't miss out on a lot of money, like the woman in the example, because you are unable to protect the patent. When you acquire an intellectual property right, you acquire the patent and can prove that you are the owner of the patent. However you are not able to prove when the invention was made. So if you acquire a patent from an inventor, you do not automatically also acquire the priority right. The consequences of this become clear when you file a subsequent application for your brand new innovation. The examining body will look at your name, and at the name of the person with the priority right and say the names are not the same, you do not have the priority right. The new owner of the patent can then still submit a patent application. However that application will then only state the filing date and not the priority date. After all, the priority right, i.e. the date of the first filing, has not been acquired. If the initial inventor has published the details of the innovation in the meantime, for example, then the invention will be lost. After all, the subsequent application will no longer be novel!

How do you avoid buying a pig in a poke?

This situation can fairly simply be avoided by drawing up a contract with the inventor in which he specifically states that he is transferring his priority right to your company. The date of signing is very important in this. A priority right is only valid for one year and you only have one year after claiming the priority date to continue the patent by means of a subsequent application. If you take over a patent in the priority year, you must therefore make sure that you record the priority right in that year.

A small disclaimer: the simple transfer of the priority right is valid when only one application's priority is invoked or when only two parties are involved in the transfer. Sometimes, for example, there are several parties involved or several priority applications are included in a subsequent application. In that case, they must all be transferred to the receiving party who then files the subsequent application.
In the case of more complex patent portfolios, it is therefore advisable to engage a patent attorney to transfer the priority right.

If you have any questions about the transfer of intellectual property, priority rights or patents in general, please feel free to contact me, I will be happy to share my thoughts with you.