USPTO Proposes Rule Change for Patent Ownership

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On Wednesday, March 26, 2014, the United States Patent and Trademark Office (USPTO) held a public hearing at Hastings College of Law in San Francisco on its proposed change to disclosure of patent ownership.  The proposed rule would require that all attributable owners of a patent be disclosed.  Currently this disclosure is voluntary.  These additional owners could be title owners or anyone who can enforce patent rights in court.

This disclosure would be made when a patent application is submitted.  Any subsequent ownership transfer or grant of an exclusive license would also have to be reported with 90 days.  Otherwise the patent would be abandoned.  A patent would also be abandoned if an exclusive licensee refuses to disclose its individual owners.

This proposed rule change comes as the Executive branch is looking to crack down on patent trolls, companies which do not manufacture products but instead exist to enforce licenses.  This goal was been stressed by President Obama and by many intellectual property legal experts.  In fact, many parties at the hearing where support of the rule change.

However, some patent attorneys fear mandating the publicity of an exclusive license will discourage the practice.  They are also reluctant to support a rule change that can result in patent abandonment.  There are also concerns for small businesses.  If all owners need to be disclosed, then even small investors would need to be disclosed like family members and friends.  This can be incredibly burdensome.

The USPTO will take all these concerns into consideration.  It may also investigate the potential burden the proposed rule would have on small businesses.  At this point in time, the fate of the rule change is uncertain and patent lawyers will need to keep abreast of any new developments.