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Author Topic: Disqualifying reference through 103(c) commonly owned  (Read 934 times)

still_learnin

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103(c) allows an applicant to disqualify a 102(e) reference that is, at the time of the invention, [paraphrasing] commonly owned or subject to obligation of common assignment.

How do subsidiaries or holding companies figure into this? Suppose
  • reference is owned by MegaCorp
  • application is owned by Acme
  • Acme is wholly owned by MegaCorp

On its face, it would seem these are not commonly owned: MegaCorp is a different entity than Acme. But does the wholly-owned relationship change things, allowing the reference to be disqualified?

MPEP 706.02(l)(2) has a subsidiary example which suggests that the reference could be disqualified under these facts. But it's not quite on point, so I wanted to solicit opinions.
« Last Edit: 06-28-12 at 11:27 am by still_learnin »
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Oh, Crud

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Re: Disqualifying reference through 103(c) commonly owned
« Reply #1 on: 06-28-12 at 02:05 pm »

103(c) allows an applicant to disqualify a 102(e) reference that is, at the time of the invention, [paraphrasing] commonly owned or subject to obligation of common assignment.

How do subsidiaries or holding companies figure into this? Suppose
  • reference is owned by MegaCorp
  • application is owned by Acme
  • Acme is wholly owned by MegaCorp

On its face, it would seem these are not commonly owned: MegaCorp is a different entity than Acme. But does the wholly-owned relationship change things, allowing the reference to be disqualified?

MPEP 706.02(l)(2) has a subsidiary example which suggests that the reference could be disqualified under these facts. But it's not quite on point, so I wanted to solicit opinions.


I was surprised when I reviewed the MPEP section you mention.  My knee jerk reaction on first reading your post was that you're hosed.

But looking at the MPEP, it seems to deal in terms of ultimate ownership, rather than individual assignment status.  For example, that first "Subsidiary" example given just blithely assumes that because Corp A and Corp B are both wholly owned subs of ParentCo, that ParentCo owns all their inventions.  No mention is given to the idea that CorpA may routinely assign its inventions to CorpA (and similar for CorpB).

So I'd say just make your best arguments on the basis of that example in the MPEP and see what happens.

That, and, have a little discussion with Chief Counsel at MegaCorp to convince him that all inventions by Mega and all of its subsidiaries should be assigned to a single holding entity also (once formed) to be held by Mega.  Then the holding corp licenses Mega the beneficial use of all the IP, and Mega then downlicenses same to the subs.

That's the way the big boys usually play the game....

P.S.  Are you sure that Acme is really owned (and wholly owned) by MegaCorp?  It's not at all unusual to see an ownership string like, Acme is held 60% by MegaCorp, 10% by MegaFinanceInc, 10% by MegaHoldingsPtysLtd (Australia) (and etc.)... ....often times few but the highest officers of an Acme are aware of the actual ownership of their own company.  Meanwhile, it turns out that while MegaFinanceInc is 100% owned by MegaCorp, MegaHoldingsPtysLtd (Australia) is held 50% by MegaCorp, and 50% by UnileverPLC, so it turns out that Acme is not actually (eventually) wholly owned by MegaCorp.
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still_learnin

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Re: Disqualifying reference through 103(c) commonly owned
« Reply #2 on: 06-30-12 at 04:50 pm »

But looking at the MPEP, it seems to deal in terms of ultimate ownership, rather than individual assignment status.  For example, that first "Subsidiary" example given just blithely assumes that because Corp A and Corp B are both wholly owned subs of ParentCo, that ParentCo owns all their inventions.  No mention is given to the idea that CorpA may routinely assign its inventions to CorpA (and similar for CorpB).

I do wish the MPEP clearly stated that ParentCo has common ownership despite the fact that inventors at its subsidiaries CorpA and CorpB are required to assign to CorpA and CorpB respectively. That would make it more clear that the 103(c) exception is rooted in ultimate ownership. As written, it merely hints that what really matters is ultimate ownership.

That, and, have a little discussion with Chief Counsel at MegaCorp to convince him that all inventions by Mega and all of its subsidiaries should be assigned to a single holding entity also (once formed) to be held by Mega.  Then the holding corp licenses Mega the beneficial use of all the IP, and Mega then downlicenses same to the subs.

In my situation, MegaCorp has indeed created a holding entity, and going forward all IP is assigned to HoldingCo. My facts arise because at the time of the invention of the application I'm prosecuting, the reference had not yet been assigned to HoldingCo.
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