In the last instalment of our series setting out best practice for the transfer of IP ownership, we looked at potential pitfalls and problems to solve during the transfer of IP assets. In this article, Novagraaf’s Tom Farrand outlines five steps for recording the change of ownership of a registered IP portfolio.

As we have written previously, planning is crucial to the transfer of IP portfolios. As with the transfer of ownership of real property, there is a significant difference between agreeing to transfer and the completion of formal change of ownership. The latter requires compliance with formal procedures across multiple jurisdictions and often with multiple authorities – an often complicated and time-consuming task. The recommended underlying process set out below will help to smooth the process and minimise the stress for in-house teams.

Step 1: Transfer of ownership and responsibility

The purchasing company should have a schedule of registered IP rights and pending applications. It is vital that this includes information relating to upcoming deadlines, e.g. renewals, oppositions etc. The vendor should notify its own IP team plus all external agents and advisors that responsibility as of a certain date passes to the purchaser, and the purchaser’s agents and advisors. There needs to be a through round of communication to all relevant parties to ensure that the change of responsibility is understood.

Step 2: Checking information; entering information

The purchaser and its agents/representatives should take steps to verify that the information with which they have been provided is correct and reflects the present state of the official record in every jurisdiction. This should be done by evaluating the IP assets in question: identify the countries where they are registered; assess the chain of title and identify integrity issues; and select foreign agents in each country to carry out the work on their behalf.

In order to adhere to the strict formalities that exist in many jurisdictions, it’s important that IP transactions, such as transfers of ownership or changes against the official record, must not only be notified to the appropriate patent and trademark offices in a timely manner, but also managed and stored appropriately within the organisation itself.

In order to build an IP recordal management programme to deliver this, companies need to first understand and identify the complexity, the dangers and the requisite levels of expertise needed to manage the work successfully. This will vary depending on: the number of countries across a portfolio; the number of changes of ownership that need to be updated; the presence of multiple owners within a given portfolio; any uncertainty about the current status of official ownership records; the need to update the chain of title before recordals can be made; and the number of foreign agents in the same country that are engaged in (and therefore need to be managed through) the process.

Step 3: Confirming documentary requirements

Take local advice in each and every jurisdiction where rights are to be transferred. Requirements vary from country to country, and local practice and rules can be rather fluid. Likewise, requirements within a single jurisdiction can be different for different types of IP; don’t assume that a single document will suffice for all IP.

Bear in mind that documents will often require the signature of both the old and new owners. Logistically, it is simpler to have a single signing session for each party with a complete set of documents signed in one session.

Documents typically required are:

  • Confirmatory Assignment
  • Certificate of Incorporation
  • Power of Attorney

In many jurisdictions, notarial certifications and legalisation stamps will also need to be obtained and applied. Supporting material may also need to be supplied, e.g. evidentiary documentation and Power of Attorney documents. Arrange for these documents to be signed in the presence of a notary and factor in time for the additional preparation depending on the laws of each country involved. Those that require legalisation should be sent promptly to the relevant authorities (embassies and consulates).

Step 4: Tracking progress and updating internal records

The completed forms will normally accompany an application form and fee by which the application to record the change of ownership is formally recorded. This will mostly be carried out by local agents/representatives acting under the authority of a power of attorney. Agents should be instructed in order of priority, and time factored into chase them for timely responses and to update internal responses as and when responses are received.

The speed with which the local authorities process applications to record changes vary enormously from a few days to, in the most extreme cases, several years. The purchaser’s IP team needs to keep track of this, and to maintain internal records to reflect the status and up-to-date details.

Step 5: Recordal complete

Confirmation of the recordal of the change of ownership will come from the authorities in each jurisdiction by way of certificate or some other formal communication. Make sure you receive all confirmations of the updates by monitoring the files. Updated recordals should be registered as receipts, and you’ll need to check and address errors and omissions with agents as they arrive. You also need to factor in time needed to manage foreign agent invoices, the updating of internal records and the budgeting and costs for staff time, among other things.

Don’t underestimate the task

The work involved in post-transaction recordal of changes of ownership of IP rights requires a blend of skill and knowledge; for example, you need expertise in international IP administration; you need access to, or knowledge of, the current international rules and documentary requirements for filing ownership changes; and you need to manage competing deadlines and multiple lines of communication. Importantly, you also need access to a knowledgeable network of local representatives in all jurisdictions where IP rights are held.

Accordingly, it is sound practice to use an expert team that can safely and cost-effectively manage such a project through to completion. If you choose to utilise internal resources, consider their qualifications and existing workloads; if you choose to recruit outside support, try to balance experience, expertise and cost. Although the process is complicated, it is easy to manage if the correct support is in place.