Chandler, AZ asked in Patents (Intellectual Property) for Arizona

Q: What is the difference in a disclaimer of rights to a us patent and a transfer of ownership to an llc.

My husband is applying for a patent and my in-laws are funding it. I do not get along with my in-laws and they want me to sign a disclaimer of rights or they won't help. They say it's just a formality for the patent application and llc. I think its a way to cut me off from any future profit that it can make. Not sure if i should sign it.

1 Lawyer Answer
Peter D. Mlynek
Peter D. Mlynek
  • Patents Lawyer
  • Moorestown, NJ

A: This really has to do with inheritance rights. I've never encountered it in my practice as a patent attorney. And yes, it sounds like they want to cut you off from any future profit.

I am not suggesting that they are somehow evil people that try to cut off their daughter in law. They may have a legitimate concern. For example, if they are investing money in your husband's venture, they want to make sure that they are paid back on their investment, and that your husband does not simply take the profit out and share it with you instead of paying them first. I think that you can appreciate their concern, even though I realize that you have your feelings hurt, because it is not very polite for family members to be drafting legal documents against each other.

There are better ways of them handling their legitimate concerns than having their DIL sign legal papers against herself. For example, they can set up a company (an LLC, for example) naming themselves the owners, and have your husband assign the patent application to the company. You'd likely not have any rights to it in case of a divorce or a death of your husband if the company is in their name. I am not sure if your husband would go for that, but I don't know the details of their situation. Alternatively, your husband and your in-laws may agree that the first $500K profit from the patent will go to them, and the rest they will split with your husband. There are a number of ways of doing this.

But, in the end, I think that you and your family need to be fair about it and to make everyone happy. What is the point of making lots of money if one makes other family members miserable? You do need to do something to address the in-laws' legitimate concerns, but at the same time, you want to be sure not to be totally cut off from your husband's future profits.

You should talk about this to a wills & estates lawyer (or a divorce lawyer) in your state, and NOT a patent attorney. Although the property that they want to cut you off from is a patent, it is simply a property just like a car, an old masters oil painting, or a stock portfolio, which the will & estates lawyer will understand.

Good luck with your new venture!

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