Full question:
If a patent license agreement has no stipulation or reference at all as to the Licensor's ability to transfer or assign the agreement, can the Licensor assign the agreement to a third party without the Licensee's approval and notification? Specifically, as an individual I hold a patent license agreement and I recently formed an LLC in which I am the sole owner. I would like to transfer or assign the patent license agreement to my LLC.
- Category: Intellectual Property
- Date:
- State: Florida
Answer:
A nonexclusive license typically allows the licensee to practice the invention or authorize others to do so on behalf of the licensee. It is normally not transferable by assignment to any other party. A person may not assign a nonexclusive patent license to a third party, absent consent of the licensor, because federal patent law precludes the holder of a nonexclusive license from assigning it. CFLC, 89 F.3d, at 679; see also Commissioner v. Sunnen, 333 U.S. 591, 609, 68 S. Ct. 715, 724-35 (1948).
In CFLC, the licensee tried to assign a nonexclusive patent license to a buyer unrelated to the debtor. The patent licensor objected on the basis that Section 365(c) of the Bankruptcy Code prevented the assignment, because applicable federal common law precludes the assignment of nonexclusive patent licenses. The Ninth Circuit agreed with the licensor that federal patent law was "applicable law" under Section 365(c) and that under federal patent law, nonexclusive licensees may not assign patent licenses without the licensor's consent. CFLC, 89 F.3d at 679.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
