There are certain recurring forms of agreement in the IP world that remain a bit of a mystery to me. Perhaps none is more puzzling than the so-called "confirmatory assignment." For my sins, perhaps, after a long hiatus, I encountered several versions of confirmatory assignment over the last month.
This got me to thinking about the why and what of a confirmatory assignment, assuming that the putative confirmation relates to an unwritten assignment of rights that took place at an earlier point in time. So what are my difficulties with a confirmatory assignment? Let me mention the following:
1. Depending upon the applicable IP rights and related law of contract of the jurisdiction, to what extent can an unwritten agreement validly assign IP rights?Any readers with thoughts about these questions are urged to share them.
2. Assuming that an unwritten assigment is valid, what is the evidentiary showing that is required?
3. Can one record an unwritten assignment on, e.g., the appropriate patent or trade mark registry? If so, what proof is required?
4. Is the evidentiary showing different in connection with establishing the validity of the assignment in the context of a transaction?
5. How can a purchaser receive sufficient comfort about the validity of the assignment, or is it a matter of risk allocation depending upon the positon of the parties?
6. Does the standard of evidence to establish an unwritten assignment differ once again in the context of a court proceeding?
7. Does the standard of evidence to establish an unwritten assignment differ yet again iin the context of taxation?
8. Is a confirmatory assignment a form of ratification?
9. If it not a form of ratification, what is the proper legal characterization for the agreement?
10. In light of all of the foregoing, does the confirmatory assignment confer any benefit to the parties, other evidentiary or substantive?
Failure to comply with rights-specific legal requirements in the assignment or transfer of intellectual property – whether in the context of an acquisition or the transfer of specific property – can lead to costly, and sometimes irrevocable, mistakes. This QuickCounsel provides a brief overview of some of the requirements for the assignment and transfer of specific intellectual property rights in Canada, whether pursuant to an acquisition or whether in the context of assignment of specific property.
An inventor may assign the rights to his invention and the right to apply for a patent therefore. The owner of a patent (or the application therefore) can also assign the patent (or the patent application), in whole or in part. Assignments of patents and rights therein should be by way of written instrument. (See Section 50(1) of the Patent Act.)
All assignments, grants, or conveyances of an exclusive right under a patent must be registered in the Canadian Intellectual Property Office ("CIPO"). (See Section 50(2) of the Patent Act). As a recorded patent assignment has priority over a prior unrecorded assignment, it is also important to record assignments of patents promptly. (See Section 51 of the Patent Act.)
Along with the patent and the invention(s) claimed therein, the owner of a patent can assign the right to file for additional patents and the right to file divisional applications, along with his rights in reissues, re-examinations, disclaimers, and the right to bring proceedings to recover damages for infringement. Such additional rights should be specifically identified in the assignment documentation if it is intended that they be assigned.
A patent will issue in the name of the inventor identified in the application unless an assignment of the application to a new owner is filed in the CIPO prior to payment of the final fee. As it can become difficult to secure assignments from inventors as time passes, inventor assignments should be obtained (and filed) as soon as possible after an application has been filed.
A co-owner of a patent can assign his entire ownership interest in the patent (but not a portion thereof) without the consent of the other co-owner(s). However, a co-owner of a patent cannot grant a valid license to a third party without the consent of the other co-owner(s).
The mere fact that an employee created an invention during the course of his/her employment does not necessarily mean that the employer owns the invention. In the absence of a written agreement, a court will consider a number of factors, including whether the employee was employed for the express purpose of inventing or innovating, to determine who owns an invention created by an employee. It is strongly advised that businesses enter into written agreements with employees and contractors for the assignment of all intellectual property created during their course of employment or during the performance of services.
To be registrable, patent assignments must include an affidavit of execution or other proof establishing that the owner has duly executed the document. (See Section 50(3) of the Patent Act.) An affidavit of execution signed by a witness or signature of a witness on the assignment is generally acceptable. After issuance, both the assignee and assignor must execute and be a witness to any document assigning a patent.
Trade-marks (both registered and unregistered) are assignable in Canada by way of written instrument or otherwise. Rights in a trade-mark can be assigned in whole or in part, including assignment in part for use in association with some or all of the goods and services in association with which the mark is used or has been registered. (See Section 48(1) of the Trade-marks Act.) Assignments that purport to assign the right to use the same trade-mark in association with the same goods and services in different parts of the country are not permitted.
Canadian law does not require that trade-marks be assigned with the goodwill associated with the mark, nor is there any prohibition against assigning applications filed on the basis of proposed use. (See Section 48(1) of the Trade-marks Act.)
As a trade-mark can be held to be non-distinctive if rights to use the same mark are exercised by two or more persons concurrently, care must be taken to ensure that partial assignments or assignments without goodwill do not result in situations where both assignor and assignee continue to be perceived as owners of the mark. (See Section 48(2) of the Trade-marks Act.) A license agreement that includes provisions for control of the character and quality of the goods and services offered by the assignor in association with the mark should be entered into between the assignee and assignor if the assignor wishes to continue to use the mark.
While the Trade-marks Act does not require recordation of assignments, it is recommended that assignments and all changes in title be recorded promptly. The Registrar will record an assignment upon being furnished with: satisfactory evidence of the transfer; the information sufficient to identify the new owner of the application/registration; and payment of the required fee.
Assignments of associated trade-marks, or those owned by a single owner that are identified by the CIPO to be confusingly similar with each other, will only be recorded by the CIPO if all associated registrations (and applications) are assigned concurrently. A search of the Register can help determine whether there are registrations or applications associated with an assigned property.
The owner of copyright in a work may assign his right in whole or in part, or fully or subject to limitations. (See Section 13(4) and 13(5) of the Copyright Act.) The owner of copyright in a work may also divide his rights between different owners, territories, mediums, and markets. The owner of copyright in a work may also assign his rights for the entire term of the copyright or for any other part thereof.
No assignment or grant of interest in copyright is valid unless it is in writing and signed by the owner of the right (or by his duly authorized agent). (See Section 13(4) of the Copyright Act.) While recordation of copyright assignments is not mandatory, the Copyright Act provides that a registered assignment of copyright takes precedence over a previous unregistered assignment. Recent case law raises some doubt, however, as how this provision is actually applied.
Assignment of a work in which copyright subsists does not, in itself, constitute assignment of the copyright in such work or the moral rights of the author of the work. Absent a written agreement, the courts will look to the intention of the parties if there is any uncertainty as to whether copyright in a work has been assigned along with the work itself.
"Work for hire" is not a concept recognized in Canadian copyright law. Section 13(3) of the Copyright Act provides that absent an agreement to the contrary, an employer is deemed to own the copyright in works created by its employees during the course of their employment. However, the employer is not deemed to be the author of the work. Absent an agreement to the contrary, an external consultant or service provider will be the first owner of the copyright in works he creates.
Section 14(1) of the Copyright Act provides where the author of a work is the first owner of the copyright therein, ownership of the copyright shall revert to the estate of the author 25 years after the author's death (regardless of any assignment to the contrary). Works created by employees during the course of their employment are not affected by this provision as an employer is deemed to be the first owner of works created by its employees during the course of their employment.
Moral rights, namely the rights of an author or creator of a work to the integrity of his work and the right to be identified as the creator of the work, may not be assigned but may be waived in whole or in part. (See Section 14.1(2) of the Copyright Act.)
There are few formalities required for the recordation of assignments of intellectual property rights in the CIPO. There are no prescribed forms of assignment. While the CIPO provides electronic forms for assignment of trade-marks and copyright, the use thereof is not mandatory.
The CIPO will record assignments forwarded for recordation so long as the documentation submitted in respect of the request complies with the requirements set out in the applicable legislation and the required fees are paid. The CIPO charges a fee to record an assignment against each registration/application for registration listed in an assignment document.
Original documents are not required for recordation. The CIPO accepts copies of executed assignment documents for filing. No notarization or legalization of assignment documentation is required by the CIPO for recordation of an assignment or transfer. If the document is in a language other than English or French, however, a translation of the document must be filed.
It is important to ensure that the name of the assignor listed in any documentation filed to record the assignment is the same as the name of the owner of the assigned property in the CIPO records. The CIPO will not record an assignment if the party identified in the document as the assignor is not the party identified as the owner of the property in the CIPO.
It is also important to ensure that assignment documents clearly identify the property and rights being assigned. Registered rights, including applications, should be identified by title and number. Documents that do not refer to specific property will be insufficient for recordation of the assignment in the CIPO and may require the execution of further confirmatory assignments.
An assignment of intellectual property can be effective as of the date of execution of the assignment agreement, or as of an earlier date. Nunc pro tunc and confirmatory assignments are recognized by the CIPO and will be recorded provided that the agreement sets out the effective date of the assignment. The CIPO accepts redacted documentation, provided that all required information to record the assignment is provided.
No Power of Attorney documentation is required for a Canadian agent to file assignment documentation in the CIPO. It is necessary, however, the assignee of any registered rights retain a qualifying representative for service in accordance with relevant legislation and regulations.
For the purpose of recordation in the CIPO, a merger is treated as a change of name. The CIPO will record mergers provided that official documentation issued by the relevant government authority confirming the new name of the continuing entity is provided. A translation of the document should also be provided if the document is in a language other than English or French.
The proper assignment or transfer of intellectual property in Canada requires an appreciation and understanding of the particular requirements for assignment of each type of property. To ensure smooth commercial transactions, in-house counsel should be aware of the different rules affecting patents, trade-marks, and copyrights as well as the regulations related to recording assignments or transfers. This QuickCounsel provides an overview of the differing legal treatment of intellectual property and the processes necessary to record an assignment or transfer.Published on September 2, 2011