Patent Transfer and the Bundle of Rights
72 Pages Posted: 14 Dec 2016 Last revised: 11 Nov 2017
Date Written: December 1, 2016
When patents subject to a license agreement are transferred, to what extent do the benefits and burdens of the license agreement run with the patent? Courts have stated that those aspects of the agreement relating to “actual use” of the patent or invention are encumbrances running with the transferred patent. But this doctrinal test is not consistently applied and is not up to the task of clearly and consistently delineating the extent to which patent license agreements run with transferred patents. The question is one of separating an in personam license agreement from the agreement’s effects on underlying in rem intellectual property rights.
Conceptualizing the patent as a bundle of Hohfeldian Rights to exclude, this article proposes a more coherent framework for analyzing the extent to which actions by a prior patent owner run with a transferred patent to affect the rights of subsequent owners. The patent owner, through a license agreement or other actions such as selling a patented article, may exchange sticks in the bundle for other forms of value, thus diminishing the size of the in rem bundle of rights. When a patent is transferred, what is transferred is whatever remains in the in rem patent bundle, while the in personam contract remains between the two signatories. The broader contribution of this article is in exploring how Hohfeld’s platform can usefully aid in the analysis of complex doctrinal issues in patent law, particularly issues that arise from the transfer of patents.
Keywords: license, bundle, Hohfeld, trolls, LOT, exhaustion, laches, in rem, FRAND
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