IP is not just a right, it is an important business asset.
Because patents are closely tied to a company's technological advantage, transfers of patent rights often arise during its operations.
However, a patent transfer is not just a process that is completed by writing a contract.
Advance checks should cover registration of the transfer, ownership and encumbrances, and the scope of rights being assigned.
This article explains key patent-assignment procedures that businesses should understand when managing IP assets.
What is a patent assignment?
The transfer of patent rights means the transfer of the patent rights held by the existing right holder to another person or entity.
Common forms include:
- Assignment of a granted patent
- Transfer of rights in a pending application
- Transfer of a partial ownership interest
- Inheritance or succession of rights by merger
In particular, the procedure and preparation documents may vary depending on whether you have a registered patent or a pending application.
Four common situations requiring a patent transfer
The patent right transfer is not just a change of name, it is a legal process in which a company’s core technology assets move. It happens mainly in the following business situations.
1. Incorporation or conversion to a corporation
This is the case of moving the patent held in the name of the representative to the newly established corporation. Many start-ups and early-stage companies apply for a representative personal name first, so the process of filing with a corporate name may be necessary in advance of attracting investment or expanding the business.
2. Investment and M&A
During the investment review process, the actual status of the patent right is important. If a patent is in the name of an individual or if the rights relationship is unclear, it can have a negative impact on the corporate value assessment, which is why IP asset clearance is often done before the investment.
3. Allocation of jointly developed IP
Depending on the contribution after the joint research and development project, there is often a situation where the patent shares are cleared or the rights are transferred to one side.
In particular, a joint right relationship is likely to lead to a dispute during future licensing or technology transfer processes, so clear clearance is important in advance.
4. Reorganize IP assets between affiliates
There are cases where you may be reassigning a patent portfolio between a group company in the process of reorganizing a business structure or integrating an organization. Recently, there has been an increase in the strategy of managing IP as a separate entity.
Checks before transferring patent rights
Transitioning patent rights may seem like a simple administrative process, but one small mistake can lead to future disputes or investment risks. Therefore, it is advisable to review the facts below in advance.
1 Verification of rights.
First, you need to make sure that the patent exists.
- Whether a co-owner exists
- Existing exclusive or non-exclusive licenses
- Existing security interests
- Attachments or disputes
For a co-owned patent, review the agreement and the other co-owners' rights before determining whether and how an interest can be transferred.
2. Consistency between the agreement and the registration
An assignment agreement may cover rights that are inadvertently omitted from the subsequent transfer registration. The two must be checked for consistency.
If there is a discrepancy between the scope of the contract and the scope of the registration, it may be a problem in future technical transactions or disputes.
3. Completion of transfer registration
The fact that you have signed a patent contract does not mean that the transfer of rights is legally complete.
For an assignment of a granted Korean patent, registration of the transfer is generally required for the transfer to take effect. Do not overlook this step after signing the agreement.
Patent Transfer Procedures
A patent transfer generally proceeds as follows.
STEP 1. Write a transfer agreement
The assignor and assignee agree on the transfer and execute an assignment agreement.
The contract typically includes the following:
- The agreement should identify the patent number and invention title, the scope and price of the transfer, the parties' details, and their signatures or seals.
In particular, it is important to clearly state whether it is a partial share transfer or a transfer of all rights.
STEP 2. Application for registration of rights transfer at the Korean Intellectual Property Office
After signing the contract, apply for registration of transfer of rights to the Korean Intellectual Property Office.
At this stage, a correction process may occur if submission documents are missing or have formatting issues.
STEP 3. Rights transfer registration completed
Once the patent office examination is completed, the transfer of rights is registered.
It usually takes a few days to two weeks to process, but it may vary depending on the status of the documents and whether or not they have been corrected.
After registration of the transfer, the assignee is recorded as the patent owner.
Documents and costs for a patent transfer
- Required Documents
Generally, the documents below are required.
① Rights transfer registration application form
② Transfer agreement or transfer certificate
③ Transferor’s seal certificate (within 6 months from the date of issuance)
④ Consent form, where a co-owner's consent is required
- registration fee
Professional fees: Vary by firm.
Government fee (per case):
- Registration fee: 40,000 won
- Local tax: 21,600 won
- Stamp duty: Stamp duty varies depending on the transfer price in the contract.
A patent transfer is not just an administrative process, it is an important legal process that directly connects to a company’s core technology assets.
Especially when it comes to attracting investment, M&A, co-development, corporate transformation, etc., the organization of rights relations can have a direct impact on corporate values.
Manage the process systematically, from drafting the agreement and reviewing ownership to registering the transfer and maintaining the resulting rights.
If you need a review of patent rights, transfer of patent, transfer of patent name, please proceed safely with an experienced professional.
This article reflects the information available when it was published. Contact us to discuss your circumstances.