Home > Legal > Questions & Answers > Patent Application > I' m pursuing a patent on a reflective coating, is the patent done in just my name? financial backer have his name on as well?
I' m pursuing a patent on a reflective coating, is the patent done in just my name? financial backer have his name on as well?
We developed this product and the financer of the product wants his name on the patent as well. Is that ok or does it have to be processed with just he developers name and then assigned to the financer?
in the US, patents are grated to individuals who invented the *claimed* invention. While it makes no difference who is named first, only those people who contributed to what is actually in the claims section of the patent can be listed as inventors. If the financial backer is concerned, assign the rights to the patent application upfront, and later update the assignment with the application number once the application is filed. listing someone who is not an inventor can invalidate the patent.
When you say "wants his name on the patent" you should distinguish between patent inventorship and patent ownership. If the inventors listed on a patent are not correct (either over inclusive or under inclusive) the patent can later be invalidated. An inventor can be anyone that contributed either to the conception of the invention or the reduction to practice. Typically a financer would not be an inventor unless he contributed some knowledge or effort that made the invention work.
Ownership is a different story. A patent can be owned by multiple individuals or a corporate entity by transferring ownership from the inventors through an assignment. This is typically what financers are looking for, as they want their financial investment protected by some ownership of the patent. A patent attorney can prepare a simple assignment that transfers rights in the manner you are looking for.
Your investor may not know that his royalties can be taxable to him at capital gains rates, rather than as ordinary income. To achieve he must receive a transfer of an undivided interest in all rights to the patent from "any holder" of the patent. The transfer must take place "prior to the actual reduction to practice of the invention." Inventors typically want to reserve some rights, such as foreign rights or rights to pracitice only in a particular field of use. This is fatal. An interest in ALL rights must be transferred to obtain this tax benefit. By the way capital gains treatment may be obtained whether a patent application is ever filed or a patent issued. See I.R.C. 1235
B. Keith Martin
km@high-techlawyer 805-965-4100
