International report - Unregistered IP rights may have significant consequences for interested parties 29 Nov 17
Registered IP rights can be highly valuable assets, but their creation, development, exploitation and acquisition require significant time, effort and investment. Having successfully acquired, licensed or taken security over registered IP rights, new rights holders often fail to register their transactions at a national IP office, which can have significant consequences for interested parties – including the potential loss of rights – and complicate future dealings involving those rights.
This report outlines types of registerable transaction in the United Kingdom and key reasons for recording those transactions at the UK Intellectual Property Office (UKIPO).
Types of registerable transaction
Not all transactions involving IP rights are registerable and registrability will vary from country to country. In the United Kingdom, the types of transaction that can be registered at the UKIPO include:
- assignments – transfers of legal title to registered IP rights from one entity (assignor) to another (assignee);
- grant or assignment of a licence – lawful permission to do something that would otherwise be prohibited (eg, permission to use a third party’s IP rights); and
- grant of a security interest – such as using a registered IP right as security for a loan.
Key reasons for recording registerable transactions at UKIPO
While there is no statutory obligation to record registerable transactions at the UKIPO, rights holders are advised to do so as soon as possible after the transaction for the following reasons.
Notice to third parties
Under English law, a party acquiring rights in registered intellectual property will be unaffected by any earlier transactions unless it knew about them at the time of the acquisition. Registering a transaction at the UKIPO is deemed to put third parties on notice of holders' rights. For example, if party B acquired a UK patent from party A and the assignment was not recorded at the UKIPO, and party C subsequently acquired the same patent from A without notice of B’s interest, C would retain ownership of the patent. However, had B registered its acquisition of the patent at the UKIPO before the patent was sold to C, C would have been bound by B’s earlier rights.
Therefore, in order to protect rights in registered intellectual property against third parties, relevant transactions must be registered at the UKIPO.
Cost recovery in the event of infringement proceedings
In patent and registered trademark infringement proceedings before UK courts, successful claimants will normally be awarded costs (ie, losing parties must pay some or all of the successful claimant’s legal costs). However, if the patent or registered trademark has been assigned or exclusively licensed to the claimant, costs and expenses are recoverable only from the date on which the assignment or licence was registered.
Therefore, if a new owner or exclusive licensee of a patent or registered trademark wishes to bring infringement proceedings in the United Kingdom, the relevant assignment or licence should be recorded at the UKIPO before infringement proceedings commence, ideally within six months of the transaction date.
Potential time and cost savings
Assuming that the relevant IP rights assignment agreement, licence or other documentation is in order, recording registerable transactions at the UKIPO is (in theory) straightforward. However, earlier registerable transactions or other changes affecting registered IP rights (eg, names and addresses) commonly go unrecorded, making the national register out of date. Therefore, it is necessary to locate all relevant documentation (eg, confirmatory assignments, certified copies of official company documents and powers of attorney) and perfect the chain of title before the most recent registerable transaction can be recorded. The more out of date the register, the more complicated, time consuming and expensive this process can become, particularly if parties higher up the chain of title have since been dissolved or have gone into administration.
While it may seem like an unnecessary administrative burden, maintaining up-to-date national registers on an incremental basis each time a registerable transaction or other change occurs can save time and money in the long run.
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