Patent Purchase Agreement

Below is a comprehensive template for a Patent Purchase Agreement, which formalizes the sale and transfer of patent rights from the seller to the buyer. This agreement is tailored to include essential provisions, optional clauses, and examples to address common scenarios.

Patent Purchase Agreement

This Patent Purchase Agreement (“Agreement”) is made and entered into on [DATE] by and between:

Seller: [NAME], a company/individual organized under the laws of [JURISDICTION], with its principal place of business at [ADDRESS].
Buyer: [NAME], a company/individual organized under the laws of [JURISDICTION], with its principal place of business at [ADDRESS].

The Seller and Buyer are collectively referred to as the “Parties” and individually as a “Party.”

1. Definitions

1.1. Patents:
The term “Patents” refers to the patents and patent applications listed in Exhibit A, including all rights, titles, and interests, as well as any continuations, divisionals, continuations-in-part, reissues, reexaminations, or extensions thereof.

1.2. Purchase Price:
The total amount to be paid by the Buyer for the transfer of the Patents, as defined in Section 3.

1.3. Effective Date:
The date on which this Agreement becomes effective, as specified above.

2. Transfer of Rights

2.1. Assignment of Patents:
The Seller agrees to sell, assign, and transfer to the Buyer all rights, titles, and interests in the Patents, including:

• The right to exclude others from making, using, or selling the patented invention.
• Any income, royalties, or damages arising from past, present, or future infringements.

2.2. Delivery of Documentation:
The Seller shall deliver to the Buyer:

• Copies of all patent certificates, applications, and prosecution files.
• Documentation of any existing licenses, assignments, or encumbrances related to the Patents.

3. Purchase Price and Payment Terms

3.1. Purchase Price:
The Buyer agrees to pay the Seller a total sum of [AMOUNT] (“Purchase Price”), payable as follows:

• [E.g., 50% upon execution of this Agreement].
• [E.g., 50% upon completion of the transfer process].

3.2. Payment Method:
All payments shall be made via [e.g., bank transfer] to the Seller’s designated account.

Optional Clause – Milestone Payments:
The Purchase Price shall be paid in installments upon achieving specific milestones:

• [E.g., €50,000 upon the approval of Patent Application No. [123456]].

4. Representations and Warranties

4.1. Seller Warranties:
The Seller represents and warrants that:

• The Seller is the sole owner of the Patents and has the authority to transfer them.
• The Patents are free from liens, encumbrances, or third-party claims.
• To the Seller’s knowledge, the Patents do not infringe any third-party rights.
• All maintenance fees and other charges related to the Patents have been paid and are current.

4.2. Buyer Warranties:
The Buyer represents and warrants that:

• The Buyer has the financial capacity to fulfill its obligations under this Agreement.
• The Buyer will comply with all applicable laws in its use and enforcement of the Patents.

Example of Relevant Case Law: Aaron v. Quick Realty Co., 410 F.2d 1228 (7th Cir. 1969)
Warranties concerning ownership and freedom from encumbrances are crucial to ensure a valid transfer.

5. Confidentiality

5.1. Both Parties agree to keep the terms of this Agreement confidential, except as required by law or necessary for enforcement or regulatory compliance.

6. Indemnification

6.1. Seller Indemnification:
The Seller agrees to indemnify and hold harmless the Buyer against claims or damages arising from:

• Allegations of ownership disputes or defects in title.
• Past infringements of third-party rights.

6.2. Buyer Indemnification:
The Buyer agrees to indemnify and hold harmless the Seller against claims arising from:

• The Buyer’s use or enforcement of the Patents after the Effective Date.

7. Closing and Transfer Process

7.1. Execution of Assignment:
At the closing, the Seller shall execute and deliver an Assignment Agreement in the form attached as Exhibit B.

7.2. Recordation:
The Buyer shall be responsible for recording the assignment with the relevant patent offices, including [e.g., USPTO, EPO, DPMA].

7.3. Costs:
The Parties agree that [e.g., the Buyer shall bear all costs associated with recording the assignment].

8. Dispute Resolution

8.1. Governing Law:
This Agreement shall be governed by the laws of [JURISDICTION].

8.2. Arbitration:
Disputes arising under this Agreement shall be resolved through binding arbitration under the rules of [e.g., ICC] with the venue in [CITY].

9. Termination

9.1. Termination by Agreement:
This Agreement may be terminated by mutual written consent of both Parties.

9.2. Termination for Breach:
Either Party may terminate this Agreement upon [e.g., 30 days] written notice if the other Party materially breaches its obligations and fails to cure the breach within the notice period.

10. Miscellaneous

10.1. Entire Agreement:
This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements.

10.2. Force Majeure:
Neither Party shall be liable for delays or failure to perform caused by events beyond their reasonable control.

10.3. Amendments:
Amendments to this Agreement must be made in writing and signed by both Parties.

Exhibit A – List of Patents

• Patent No. [123456]: [Title/Description].
• Patent Application No. [7891011]: [Title/Description].

Exhibit B – Assignment Agreement

The attached Assignment Agreement formalizes the transfer of ownership from the Seller to the Buyer, in compliance with applicable laws and regulations.

Best Practices for Patent Purchase Agreements

Verify Patent Ownership:
Conduct due diligence to confirm that the Seller has clear title to the Patents.

Review Encumbrances:
Investigate whether the Patents are subject to existing licenses, liens, or co-ownership arrangements.

Tailor Warranties:
Ensure that the Seller provides robust warranties about ownership, validity, and freedom from encumbrances.

Address Maintenance Obligations:
Specify who is responsible for paying future maintenance fees.

Record Assignments Promptly:
Timely recordation with patent offices is critical to enforce ownership rights.