Have you recently been involved in a transaction resulting in a change in IP ownership? Has this change yet been registered with national IP offices to make it legally watertight?
Despite a change in ownership needing to be registered in order to give full effect to interests, many companies often choose to defer these updates, potentially until a more convenient time. Although such a decision may seem desirable, the requirement that ownership changes are filed immediately are imposed with good reason, and failing to manage these changes promptly can have disadvantageous effects on business.
However, do not fret if you have not managed a change in IP ownership immediately, there are still steps that can be taken to ensure that the transaction is recorded and the risks to business are minimised.
Why does it need to be done immediately?
Before exploring the courses of action for filing the change in ownership, it is worthwhile to clarify why such immediate management is necessary.
Assignees in a transaction have an obvious interest in ensuring that changes to IP ownership are managed immediately – without such a change their proprietary interest may not be recognised. Indeed, a third party who is unaware of the transaction can potentially attain a right in the IP asset and take free of the new owner’s interest, if this ownership is not registered.
National IP offices also have issue with inconsistent IP records, and can choose to file office actions if a failure to manage a change in IP ownership promptly leads to inaccurate records. Moreover, discrepancies in the records of IP can lead to difficulties with existing license agreements and royalty payments.
What to do?
If none of the above issues has yet been encountered by the delayed change, then there is still time to successfully file it. Provided that the ownership change is still filed as soon as possible it will still be fully effective.
In doing this, it is always advisable to first seek the advice of IP professionals, such as Brandstock, who have expertise in recordals. The process of managing a change in IP ownership may appear straightforward, but has the potential to be complex and time consuming. Consulting with external service providers who have an extensive knowledge of the processes involved in such a change will prove beneficial.
When looking to file a change in ownership, you must first identify which IP assets are involved in the transaction. Although it may appear an obvious task, clearly outlining the IP assets involved is the first box to check in managing an ownership change.
Secondly, you must identify the territories in which the change is to be registered. Any territories in which the IP is registered will need to have the details updated. However, areas in which the IP is active should be prioritised. Active territories are those in which there are ongoing legal proceedings or other events involving the IP.
When filing a change in ownership, it is prudent to be aware of any relevant deadlines and associated fees. Many territories impose timeframes within which these changes must be filed – missing these deadlines will not necessarily mean that the change can no longer be filed, but may mean that late fees are incurred. These late fees are not usually substantial, but can amount to unnecessary expenses.
Atop these potential late fees, official fees are usually charged for filing a change in IP ownership. When filing the change with national IP offices, you will invariably be required to pay fees for every change you file.
These fees will be paid when the documents for filing the change have been completed and submitted to the relevant national IP offices. When managing a change in IP ownership, you must therefore ensure that all relevant documents have been completed and submitted successfully, and that all associated fees have been paid.
As every IP office uses different documents and systems for filing these changes, you must adhere to their unique requirements. Failure to adhere to individual requirements may mean that the application to file the change is completed inaccurately and may be denied.
Ensuring that you identify the IP assets and territories to be prioritised, correctly file any necessary documentation and pay any required fees will lead to a successfully managed change in IP ownership. Given the potential complexities of these steps however, it is again advised that companies looking to manage a change in ownership seek professional assistance in doing so, as the potential ramifications of an inaccurately managed transaction can be disastrous.