CMS Expert Guide to transferring IP rights

In recent years, IP rights have become an increasingly important asset not only for R&D and technology based companies but also for consumer product manufacturers and life sciences companies, for example, as well as many other types of business of varying size. This is evidenced by a growing number of patent and trademark applications, registered designs, supplementary protection certificates, semiconductor protection, plant varieties and the like. 

We have observed that IP rights often comprise the core assets in large M&A transactions, with huge patent and trademark portfolios being transferred from one company to another. They can also be at the centre of disputes and change hands as part of a settlement or court order. IP rights enable their owner to earn revenue from licence fees and can be pledged to creditors. The transfer of such rights needs to be effected in a secure and efficient manner.

In all these cases it may become necessary to record the change in ownership or granting of rights in the public registry, mostly with national patent offices, the EUIPO or WIPO. Sometimes the change or granting is not effective in the absence of such a so-called “recordal”, whereas in other cases a recordal merely serves a declaratory function. The rules as well as the required formalities differ depending on the type of IP right and the nature of the change; they also, of course, vary between jurisdictions. When the transfer of large portfolios in particular is concerned, it can be very time consuming to investigate all the various rules governing the transfer of IP rights.

This guide provides a high-level overview of the recordal of assignments, licences and pledges of patents and trademarks.

Is a recordal required for the transfer or granting of rights to become effective?