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The Importance of Registering Intellectual Property Transfers

For many owners of intellectual property rights, the transferable nature of these rights greatly enhances their value. Their transferable nature allows these rights to be sold, licenced, bequeathed, and used as collateral.

If you are contemplating accepting or granting a transfer of intellectual property rights, one thing to keep in mind is the importance of registering or recording that transfer with the appropriate government office. Whether buying rights, obtaining a licence, or otherwise receiving a transfer of intellectual property rights, failure to register your rights may bring the validity of your acquisition into question.

Patent Right Transfers

In many jurisdictions, registration of an assignment or licence from a first owner to a buyer is not mandatory. However, failure to register could mean that the buyer's rights cannot be enforced against a third party if the first owner enters into an incompatible arrangement with a third party without that third party being aware of the rights granted to the buyer. Accordingly, in most jurisdictions registrations or recordals of the transfer form an important part of notifying the public of who owns the patent rights.

In Canada, the main sections of the Patent Act dealing with the registration of assignments of whole or part rights are sections 49 to 51. Importantly, section 51 indicates that an assignment is void against subsequent assignees unless the assignment is registered. While case law [1] has held that this only renders the assignment void as between the first assignee and subsequent assignees, it is clear that the public notice function of registration is not to be lightly disregarded.

Industrial Design Transfers

The Industrial Design Act similarly includes provisions regarding the transfer of rights, particularly at section 13. Such provisions are likely to be interpreted similarly to the Patent Act provisions referred to above.

Transfers of Registered Trademarks

The Trade-marks Act sets out that registered trademarks may be transferred separately from the goodwill accumulated by the business. While a transfer does not have to be recorded by CIPO and will be recognized if it was made in good faith between the assignor and assignee, as with the transfer of patent rights, recordal can ease further transfers and protect a transferee from competing third party interests by notifying the public of the transfer.

Trademarks may also be transferred for only a subset of a registered set of goods and services or may permit the use of the mark by multiple users. Where a trademark is split or shared in such a manner, consideration should be given to whether the resulting trademarks conflict or whether use by multiple users results in a loss of distinctiveness.

Transfers of Unregistered Trademarks

The transfer of unregistered trademarks, while also governed by the Trademark Act, cannot be recorded with CIPO as they are established by common law and no trademark registration exists against which a transfer can be recorded. If the unregistered trademark is recorded as a business name or other trade name owned by the transferee, steps should be taken to change the ownership of the registered business name.

Transfers of Copyright

Likely trademark rights, rights to a copyright are not always registered. As such, there is not always a place to record a transfer of those rights. However, where a copyright registration exists, the Copyright Branch of the Canadian Intellectual Property Office will record a transfer of rights against the registration.

Conclusion

The registration or recordal of transferred intellectual property rights is often an important part of the transfer process. Where registration or recordal is available for an intellectual property right, it is often advisable to register a transfer as soon as possible to notify the public and to preclude issues with the transferor assigning the same rights again to other assignees.

[1] Apotex Inc. v. Wellcome Foundation Ltd., [2001] 1 FC 495.