While electronic signatures are not a new phenomenon, we have seen an uptick in their popularity due to the coronavirus pandemic. This alert is focused on obtaining valid signatures for patent assignments and declarations in the U.S.; however, the general takeaways are points to keep in mind when dealing with any type of contract that may require an electronic signature.
Electronic signatures are governed by federal and/or state law and, in most circumstances, are afforded the same legal effect as would otherwise be afforded to handwritten signatures. Under both federal and state law, electronic signatures have generally been defined as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” UETA §2(8); 15 U.S.C. §7006. Similar to patent assignments, which require that the instrument of transfer be unambiguous and show a clear and unmistakable intent to part with the patent, the intent of the parties is also the driving force behind enforceability of documents signed with electronic signatures. As long as parties intend to effect assignment with an electronic signature, the electronic signature should be sufficient for the assignment to be valid. That said, “wet” handwritten signatures remain the gold standard and should still be used whenever possible (especially when filing in certain non-U.S. countries).
The United States Patent and Trademark Office (USPTO) also has its own set of regulations governing signature requirements for documents filed with it, which can be found at 34 C.F.R. §1.4. The three accepted signature types include (1) wet handwritten signatures, (2) S-signatures, and (3) graphic representations of a handwritten signature or of an S-signature. At the USPTO, electronic signatures normally do not apply to correspondence and payments under 37 C.F.R. §1.4(e)(1) and (2); however, in its March 19 Handwritten Signature Notice, the USPTO indicated that the requirement for original handwritten signatures is temporarily being waived.
The main provisions governing electronic signatures include (1) the federally enacted Electronic Signatures in Global and National Commerce Act (ESIGN Act) and (2) the Uniform Electronic Transactions Act (UETA). A majority of states have adopted the UETA, which — in a number of contractual transactions — gives the same legal effect to electronic signatures as would otherwise be afforded to handwritten signatures. States that have adopted the UETA may impose amendments or include additional provisions within the state regulations. Based on a sample-size review, such amendments have not appeared to have an impact on the effect of electronic signatures on documents such as patent assignments.
States that have not adopted the UETA (Illinois, New York, and Washington) have enacted their own laws governing the legal effect of electronic signatures. The ESIGN Act is a federal legislation that also protects the enforceability of electronic signatures that are used in transactions that are in or affect interstate or foreign commerce, which is broad enough to cover patent assignments. The ESIGN Act pre-empts any inconsistent state law, with the exception that if a state already adopted the UETA without any inconsistent amendments, the ESIGN Act does not pre-empt the UETA enactment.
The governing laws of the states that have not enacted the UETA include the Electronic Commerce Security Act in Illinois (under the Illinois Compiled Statutes or ILCS) (codified as 5 ILCS 175) and the Electronic Signatures and Records Act in New York (ESRA) (codified as N.Y. State Tech. § 302). In 2019, Washington State repealed its electronic signature statute and presently defers to the provisions of the ESIGN Act.
As with any contract, including patent assignments, a conflict-of-law dispute can arise. To mitigate against this, a choice-of-law clause can be included in the provisions of the contract (i.e., in the assignment). Delaware is a popular choice because of the number of companies incorporated under its laws. As an added bonus, however, Delaware has adopted the UETA with minor amendments, making its electronic signature regulations fairly clear and uncomplicated. In the absence of such a clause, and in case of a dispute, the conflict would be resolved according to the state court’s choice-of-law provisions, such as the most-significant relationship test or the doctrine of lex loci contractus, i.e., the law of the state where the contract was made.
Electronic signatures versus digital signatures
Because the UETA distinguishes between electronic signatures and digital signatures, it is worth pointing out the difference. The core difference between electronic signatures and digital signatures is that an electronic signature is a legal concept adopted by a person with the intent to sign a record, while a digital signature is an encryption/decryption technology that secures the data associated with an electronic signature to associate the data with a certain person and help verify the authenticity of the signature later. Adobe Sign and DocuSign are two examples of digital signature platforms. The UETA explicitly notes that it is not a digital signature statute, and certain states, such as California, have separate regulations governing digital signatures. The UETA also notes that, “[t]o the extent that a State has a Digital Signature Law, the UETA is designed to support and compliment that statute.”
Digital signatures will suffice where electronic signatures are necessary; however, the opposite may not be true if the added security afforded by digital signatures is required (e.g., by state law). When in doubt, first check whether any relevant state law speaks to the issue, and second, opt for digital signatures available through platforms like Adobe and DocuSign.
As noted above, the USPTO has its own set of regulations governing signature requirements, found under 34 C.F.R. § 1.4(d)(1)–(3), applying only to USPTO documents, such as inventor oaths or declarations. The three accepted signature types are: (1) wet handwritten signatures, (2) an S-signature (e.g., /name/), and (3) a graphic representation of a handwritten signature or of an S-signature when using the USPTO’s electronic filing system (EFS). Wet handwritten signatures are the gold standard, but if one cannot be obtained, then an S-signature can be used (even on an inventor declaration).
When using S-signatures, it is important that the signor personally type their name into the document him- or herself. Also, it is advisable to maintain a record of the correspondence related to the S-signature–signed document (i.e., backup), because S-signatures cannot be facially analyzed for origin the way handwritten signatures can be. Additional requirements for the S-signature include making sure that it has only letters, Arabic numerals, or both, as well as appropriate spaces and punctuation.
When the first two options are not available, a graphic representation such as an electronic signature can be used. According to one source at the USPTO, signatures completed with a stylus or finger on a phone, tablet, or computer would fall under this third category and should be accepted.
The authors of this alert have been notified that USPTO guidance on the electronic signature issue is forthcoming; therefore, the best course of action remains to use wet handwritten signatures and then S-signatures with backup.
Gold standard—wet handwritten signature
While electronic signatures are becoming more commonplace, the most foolproof way to ensure that a signature is valid and accepted is to advise clients to print the document, sign it by hand, and scan it.
Intent of the signatory
If a client wishes to proceed with an electronic signature, counsel has to confirm with the client his or her intent to effect the signature electronically throughout the signature-gathering process, which may include adding a provision in the patent assignment itself and/or explicitly spelling this out in e-mails and communications, which should then be saved in the practitioner’s records.
- Sample language: By signing below, whether as (i) a wet ink signature, (ii) an electronic signature, and/or (iii) a digital signature, I/we indicate our intent to effect this Assignment document.
Intent of the parties to the transaction
In addition to the signatory, the parties to the transaction also have to consent to transacting electronically. While no formal agreement is required, circumstances must show that both parties are in agreement. To that end, it is advisable to include a clause in the contract — for example, a patent assignment — that explicitly expresses the parties’ intent to give electronic signatures the necessary legal effect.
- Sample language: We have agreed to and do hereby agree to conduct this Assignment transaction by electronic means.
To prevent a conflict-of-laws dispute down the road, it is advisable to include a choice-of-law clause in the patent assignment itself. Delaware is a popular choice with corporations by default and, as an added bonus, has adopted the UETA with little to no additional amendments.
- Sample language: This Assignment shall be exclusively governed by and shall be construed in accordance with the laws of the State of Delaware without regard or reference to any conflict-of-laws rules or principles that might refer the governance or the construction of this Assignment to the laws of another jurisdiction.
For USPTO documents, wet handwritten signatures are preferred. If opting for the S-signature, it is important that the individual whose signature appears between the slashes types their name themself. It is also advisable to maintain a record of the e-mail communications to provide clear evidence of who signed the document with the S-signature. Finally, electronic signatures made via stylus or finger on a phone, tablet, or computer are probably allowable under 34 C.F.R. §1.4(d)(3). However, because USPTO guidance on this issue is still forthcoming, counsel is advised to proceed with caution and to follow up with a wet handwritten signature when possible.