Transfer of patent rights — assignment and licensing — Intellectual Property Rights I Notes

Transfer of patent rights — assignment and licensing

A patent is property, and like any property it can be sold, mortgaged or rented out. But because a patent can be jointly owned, one co-owner cannot simply sell “his share” — a rule that trips up many exam problems.

The modes of transfer

A patent may be transferred in three main ways (Chapter XVI, ss.68–70):

A. Assignment

An assignment transfers ownership of the patent (wholly or partly) from the patentee (assignor) to another (assignee). It may be absolute or partial (e.g. limited to a territory). To be valid it must be in writing and registered with the Controller (s.68) — an oral assignment is ineffective.

B. Licensing

A licence does not transfer ownership; it permits another to work the patent while the patentee retains title. Licences may be:

exclusive — only the licensee (even to the exclusion of the patentee) may work it;
non-exclusive — the patentee may licence several people; or
compulsory (ss.84, 92) — granted by the Controller in the public interest, against the patentee’s wishes.

A licence too must be in writing and registered (s.68).

C. Co-ownership — the crucial rule (s.50)

Where a patent is owned by two or more persons, each co-owner is entitled to an equal undivided share and may work the invention for his own benefit without accounting to the others. But — and this is the exam point — a co-owner cannot assign his share, or grant a licence, without the consent of the other co-owner(s) (s.50(3)). A unilateral assignment is invalid.

By contrast, a sole patentee may licence to as many companies as he wishes (non-exclusive licences), because there is no co-owner whose consent is needed.

Patents Act, 1970, s.68: “An assignment of a patent or of a share in a patent, a mortgage, licence or the creation of any other interest in a patent shall not be valid unless the same were in writing and the agreement between the parties concerned is reduced to the form of a document embodying all the terms and conditions… and duly executed.”

Patents Act, 1970, s.50(3): “a licence shall not be granted and a share shall not be assigned by one of two or more persons registered as grantee or proprietor of a patent except with the consent of the other person or persons.”

In Simple Terms: Assignment sells the patent; a licence rents it. Both must be in writing and registered. If a patent has co-owners, none of them can sell his share or licence it without the others’ consent — but a single owner can licence to as many firms as he likes.

🧩 WORKED EXAMPLE — the co-owner’s share

Facts. A patent is jointly owned by X and Y. X assigns his share to a third party Z without Y’s consent.

Rule. s.50(3) — a co-owner may not assign his share without the other co-owner’s consent.

Apply. X assigned without Y’s consent. The assignment is therefore invalid.

Decoy. The fact that X may freely use the invention himself (s.50(2)) does not mean he may assign it; using and assigning are different rights.

Conclusion. The assignment to Z is void for want of Y’s consent.

flowchart TD
    TR["Transfer of patent"]:::root
    TR --> AS["Assignment — transfers ownership (s.68, writing + registration)"]:::leaf
    TR --> LI["Licence — permits use, owner keeps title"]:::leaf
    LI --> EX["Exclusive / non-exclusive"]:::leaf
    LI --> CM["Compulsory (ss.84, 92)"]:::leaf
    TR --> CO{"Co-owned patent?"}
    CO -->|"Yes"| CON["Need co-owner's consent to assign/licence (s.50)"]:::leaf
    CO -->|"No"| FREE["Sole owner may licence freely"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;

Case Laws

V.B. Mohammed Ibrahim v Alfred Schafranek (1960) — clarified inventorship and the standing to deal with (assign/licence) a patent.
Natco Pharma v Bayer Corporation (2012) — illustrates the compulsory (involuntary) licence as a statutory mode of transfer standing apart from voluntary assignment/licensing.

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