The difficulties of ... made easy by Patricia

Part 1. Selling or acquiring patent portfolios or legal documents.

As a patent paralegal I saw many legal documents to transfer patent portfolios cause hick-ups. As straightforward as it may seem, many do not fit well, when used outside of the original jurisdiction. “Company A sells to Company B patents numbers 1,2,3!” You have the document made out and signed by both parties and you should be good to go. Drawn up bearing in mind national legislation and legal habits, but not having been checked abroad, these may result in serious delays in obtaining ownership of the patent portfolio, as additional documents become required, that again need signing and legalization. I suggest to look at this beforehand and make up documents suitable for Europe.We can advize you how to avoid delay caused by rejection by the European Patent Office.


Part 2. Acquisition of Patent Portfolios and Due Diligence

A transaction like the purchase of a patent portfolio tends to take place in turmoil. Strategy and finance issues need addressing. Negotiations at top-level executives teams, opportunities and time constraints take their toll. When the deal is done, the lawyers come in. Somewhere a Due Diligence needs to safeguard that this portfolio is what is claimed. You want to check what you are paying for and that you can realize your goals for this acquisition. Your inhouse team may have the expertise, but does it have the time?

We may help with a speedy, but thorough investigation preparing a status overview, ensure that all deadlines in pending and granted cases are met and new deadlines are set. We outline the pending issues that need resolving before finalizing the deal. Make sure new applications you pay for, do not lapse before transfer! It is important to assess the value of the content of the portfolio as business opportunities of the technology, but at the same time a report on administrative proceeding status may give you peace of mind when you do the deal.


Part 3 - Acquisition of Patent Portfolio’s - type of transaction

Due Diligence investigation aims to ascertain that if you acquire a portfolio, you get what you are paying for. Before going into a Due Diligence process, it is worthwhile to consider the reason for the transaction and the circumstances. Is it merely an organizational change of the existing proprietor, e.g. a name change, so the acquisition is more of an internal process? Or is the portfolio transferred to you, by assignment? Is there a merger between two partners, formerly independent from one another? Does the register require that first changes of address are to be recorded, before any other changes can be filed? Deeds of Pledges may be registered, that could bring other parties into the process.

Two things need to be clear upfront: what is the type of transaction that caused the need to change the data in the register? And are the data as registered up to date and accurate according to events in the past? You might want to ask the current holder to make appropriate updates or corrections to the portfolio before finalizing the current transaction.


Part 4 - Acquisition of patent portfolios - Check your annuities

Monitoring annuities is a tedious task. At the same time you have the chance to check which patents need to stay alive or not. Different payment dates and costs apply in different countries and regions, so real attention is required. In Europe, annuities are paid before a patent is granted. If final payment deadlines are missed your patent will go abandoned. Most corporations with large IP portfolios outsource annuity payments to safeguard the annuities are properly monitored. However, when acquiring a large patent portfolio, you have to investigate whether these rights to be acquired are properly handled, specifically during the transit period when you are integrating and updating the administration. You would not want your rights to go abandoned before the transaction is finalized.


Part 5. Change of name or address

A change of applicant’s name will be entered on request in the European Patent Register concerning a pending European patent application. The name change can not contain or relate to a modification of the legal identity of the applicant, as the EPO shall consider this to be handled as an assignment. Relevant evidence enabling the EPO to verify the change of name must be provided by submitting an official extract of the Register of the Chamber of Commerce that documents the change of name. You may also submit a copy of the Deed of change of the Statutory name of the applicant. A change of address does not require such evidence. When changes are registered after the EP grant date, please notice that in some European countries you may be able to use the EPO Form 2544 for having the change registered. However in some countries the documents providing evidence have to be filed at the National Patent Office as well.


Part 6. Acquisition of patent portfolios – Assignments

Failure in registering the correct applicant name in the EPO register can result in a loss of the IP Right. Should you need to invoke patent rights against an infringer, your right must be registered in the correct name. If the applicant name is not correct, this right is not valid vis-à-vis a third party. A substantial transaction, as the purchase of a patent portfolio, should include a check on possible 'incorrect applicants’, in order to have these sign additional documents. Registration of an assignment for multiple applications, instead of a single one per case and applicant, may prevent avoidable extra costs and substantial delays in transfer of the portfolio.
Furthermore, the European Patent Office has become more strict with regard to assignment documents. Assignments require signatures of all parties involved, i.e. assignor and assignee, and specific demands apply for these signatories to be allowed before the EPO.
We can assist you in reviewing your IP Portfolio, should you require a speedy but thorough investigation.


Part 7. Acquisition of Patent Portfolio’s – Mergers and acquisitions

A merger is the combination of two companies, that form a new company using one corporate name. In an acquisition (takeover) one company acquires the shares of the target company.

Whatever the motives of such a consolidation are, implications for the IP Portfolio’s need consideration. Are the portfolio’s complimentary to each other? Is overlap in protection present, making substantial cost-savings attainable, by abandoning superfluous IP rights? Integration of IP rights should result in stronger protection of commercial interests. A new IP portfolio strategy may include moving all IP to an existing or new IP holding company, to optimize the benefits of a consolidated IP ownership. Whatever the strategy, substantive IP Portfolio’s require a thorough investigation into the titles, ownership, validity, strength and commercial relevance before a new strategy can be executed. We are happy to assist in reviewing IP to increase the commercial value of the consolidation and optimize cost.

Part 8. Acquisition of Patent Portfolio’s – Pledging and Licensing

A patent may be used as collateral for a loan, like a house for a mortgage. So most Pledges are concluded with banks.
Patents can also be licensed: the patent holder agrees to a third party to use the patent. The patent owner remains the registered applicant but e.g. does not need to invest into marketing the innovation and receives royalty payments from the Licensee. Before pledging or licensing, do specifically agree on the duration of the applicable period and who is responsible for monitoring and payment of the annuities during said period. It occurs that this is not decided on so one party thinks the other is in charge and a Pledge or License becomes invalid as the patent lapses.
It is also important to register a Pledge or License in all applicable countries, as another party becomes involved and the register must show this. Finally registrations of a pledge or license should be withdrawn as soon as they expire.

Part 9. Acquisition of Patent Portfolio’s – Notarization and legalization

The European Patent Office accepts copies of official documents and does not require official documents to be authenticated, notarized or legalized. However, please be aware that when acquiring an IP portfolio and having your firm registered as applicant, some national and/or regional Patent Offices will require originally signed or notarized documents and even authentication by Apostille or legalization. For those countries that are a party to the The Hague Apostille Convention it means that official documents are legalized by an Apostille stamp only, which reduces the legalization chain and costs involved considerably.
For those countries that are not a part of the The Hague Apostille convention and that require legalization, the chain of legalization is more complicated. The documents first need to be submitted to the Law Courts, subsequently to the Ministry of Foreign Affairs and as a last step to the designated Consulate. Please take into account, upon acquiring any IP portfolio, that additional costs for notarization, Apostille and especially legalization can be quite significant.

Part 10. Acquisition of Patent - Portfolio’s - Signatories

For all documents used for registering a change of ownership at the European Patent Office (EPO) it is very important that the officers involved are entitled to sign in the eyes of the EPO. Where the parties involved are legal entities a document may, in general, be signed by any person who is legally authorized to sign on behalf of that entity. Job titles that are without a doubt acceptable to the EPO are: director, CEO, president, vice president, company secretary. This entitlement of a person signing on behalf of a legal entity is not checked by the EPO, except if EPO sees reason to assume that the person signing would not be authorized. That may happen if one or more signatories do not have a job title as afore-mentioned.
To solve this deficiency the documents either need to be re-signed by someone else who can provide a job-title satisfactory for the EPO or evidence needs to be provided showing that the original signatory carries sufficient authority. So check beforehand that official documents are signed by officers carrying titles that prove acceptable for EPO and save time and money on your way to official registration.

We can assist you in reviewing your IP Portfolio. Should you have any questions or are you interested in how AIPEX can help you, please contact me at patricia.rutten@aipex.eu .

Best regards, 
Patricia Rutten
Manager IP Portfolio AIPEX