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The Importance of Registering Intellectual Property Transfers
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 registration or recordal of the transfer form an important part of notifying the public of who owns the patent rights.
In Canada, the main section of the Patent Act dealing with the registration of assignments of whole or part rights in a patent or application is section 49. Importantly, subsection 49(4) indicates that an assignment is void against subsequent assignees unless the transfer is recorded. While case law [1] has held that this only renders the assignment void as between the first assignee and subsequent assignees, the public notice function of registration is not to be overlooked. Lastly, if a transfer request is made by the applicant or patentee of record, the applicant or patentee does not need to file a copy of the assignment or change of name document. Such documentary evidence will only be required if the request is made by the transferee of the patent or patent application.
Recording the transfer of a patent or patent application with the Canadian Intellectual Property Office (CIPO) is relatively simple and is subject to a $100 governmental fee (as of 2023). Again, no documentation of the transfer needs to be furnished if the request to record the transfer is made by the owner. If registration of the supporting documentation is desired, an additional $100 fee applies.
Note that although the documentation is not required by CIPO, it is nonetheless important to ensure the terms of a transfer are properly documented. If you’re preparing to transfer your intellectual property rights, consider speaking with a member of our team about an intellectual property assignment agreement. A properly drafted assignment agreement will leave little to no room for debate as to who owns what, as of when and under what conditions. A poorly drafted assignment agreement on the other hand may fail to transfer all of the intended rights, fail to properly identify the transferee and transferor or may otherwise be ambiguous or ineffective.
Industrial Design Transfers
The Industrial Design Act also includes virtually identical provisions governing the transfer of rights. A written request to record or register a transfer must include the name and the postal address of the transferee and the requisite fee. As of 2023, the requisite fee is $100. The applicant or any person authorized by the applicant (e.g., an agent) may make such a request. It is important for a transferee to register a transfer of an industrial design with CIPO, otherwise, the unregistered transfer will be void against a subsequent registered transfer. Note however, that any transfers of ownership for Hague Industrial Design applications or registrations must be recorded with WIPO. CIPO will, however, accept and make available to the public, copies of licences and security agreements for Hague applications and registrations.
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 simplify subsequent 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 may result in a loss of distinctiveness (i.e., a loss of the trademark’s ability to distinguish the goods and services in association with which it is used from those of others).
Like transfers of patents, transfers of trademarks will be recorded at the transferor’s request without evidence of the transfer. If the transferee is the one to request the recordal, they will need to furnish such evidence.
Transfers of Unregistered Trademarks
The transfer of unregistered trademarks, while also governed by the Trademark Act, cannot be recorded with CIPO as rights to unregistered trademarks 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 copyright are not always registered. As such, there is not always a place to record a transfer of those rights. Where a copyright registration exists, however, the Copyright Branch of CIPO will record a transfer of rights against the registration. Unlike the registration of transfers of patents and applications for patents, CIPO requires evidence of an assignment or licence of copyright to formally register the same.
The Canadian Copyright Act, like the Patent Act and Trademarks Act, contains a provision indicating that an unregistered transfer is void against subsequent transferees unless registered.
Note, further, that authors of original creative works are the first owners of copyright in those works as well as the owners of moral rights in the works – moral rights, however, cannot be assigned, they can only be waived by their owners.
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 related to the transferor assigning the same rights again to other assignees.
If you would like our help with a transfer of intellectual property rights, contact us for a complimentary and confidential initial telephone appointment with a member of our team.
