<PAGE>   1
                                                                 EXHIBIT 10.3(b)


                  PATENT, TRADEMARK AND TRADE SECRET ASSIGNMENT

               This Patent, Trademark and Trade Secret Assignment (the
"Assignment") is made and entered into this 28th day of October, 1999 (the
"Effective Date") by and between, Stone Container Corporation, a Delaware
corporation (the "Assignor"), and S&G Packaging Company, L.L.C., a Delaware
limited liability company (the "Assignee").

               WHEREAS, on the date hereof, Assignor has entered into a
Securities Purchase Agreement (the "Purchase Agreement") with Gaylord Container
Corporation ("Gaylord") pursuant to which, among other things, Gaylord has
agreed to purchase all of Assignor's ownership interests in Assignee; and

               WHEREAS, in furtherance of the transaction contemplated by the
Purchase Agreement, Assignee wishes to acquire and Assignor wishes to assign to
Assignee, all of Assignor's right, title and interest in and to: (a) the
Proprietary Rights (as that term is defined in the Purchase Agreement) licensed
to Assignee pursuant to the License Agreement dated July 12, 1996, by and
between Assignor and Assignee (the "License Agreement"); (b) any and all of the
improvements, and/or additions to the Proprietary Rights as described in Section
7.5 of the License Agreement (the "Improvements"); and (c) any and all of the
(i) United States patents and patent applications identified and set forth on
Exhibit A, all other patents, patent applications and inventions (whether
patentable or not) that the Assignee has used, that the Assignee is currently
using or that cover products or services that the Assignee has offered in the
past or is currently offering or that are currently in development, with respect
to Assignee's retail bag business, including its grocery bag and sack,
merchandise bag and fast food bag businesses (collectively


<PAGE>   2


the "Business"), and all improvements and/or additions to any of the foregoing,
and all foreign counterparts thereof (collectively the "Patents"), (ii) the
trademarks, the United States trademark registrations and applications for
registration, and the unregistered trademarks, all as identified and set forth
on Exhibit A, and all variations thereof, and all other trademarks that the
Assignee has used, that the Assignee is currently using or that cover products
or services that the Assignee has offered in the past or is currently offering
or that are currently in development, with respect to the Business, and all
corresponding foreign rights (collectively the "Marks"), and the goodwill of the
business associated therewith, and (iii) the trade secrets, confidential
business information and know-how that the Assignee has used, that the Assignee
is currently using or that cover products or services that the Assignee has
offered in the past or is currently offering or that are currently in
development, with respect to the Business (collectively the "Trade Secrets").

               NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Assignor and Assignee, each
intending to be legally bound, hereby agree as follows:

               1. Assignor does hereby sell, assign, transfer and set over to
Assignee all of its right, title and interest in and to (a) the Proprietary
Rights licensed to Assignee pursuant to Paragraph 3.1 of the License Agreement,
(b) the Improvements, and (c) the Patents (including any patents that may issue
thereon, and any continuations, divisions, continuations-in-part, reissues,
reexaminations, extensions and including the subject matter of all claims which
may be obtained therefrom), the Marks (together with the goodwill of the
business in connection with which the Marks are used, and all registrations and
applications therefor, including any renewals and extensions of the
registrations that are or may be secured under the laws of the United States



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<PAGE>   3


and all foreign countries, now or hereafter in effect) and the Trade Secrets,
all for Assignee's own use and enjoyment, and for the use and enjoyment of
Assignee's successors, assigns or other legal representatives, as fully and
entirely as the same would have been held and enjoyed by Assignor if this
Assignment had not been made; together with all income, royalties, damages or
payments due or payable as of the date hereof or thereafter, including, without
limitation, all claims for damages by reason of past, present or future
infringement or other unauthorized use of the rights assigned hereunder, with
the right to sue for, and collect the same for Assignee's own use and enjoyment
and for the use and enjoyment of its successors, assigns or other legal
representatives.

               2. Assignor authorizes the Commissioner of Patents and Trademarks
of the United States or, in the case of the several states in the United States
or countries outside the United States, the analogous individual or agency
responsible for patents, trademarks, service marks, trade/assumed names, to
record, as applicable, Assignee as owner of the rights assigned hereunder,
including any variations thereof, for the sole use and enjoyment of Assignee,
its successors, assigns or other legal representatives.

               3. Assignor hereby represents and warrants that its right, title
and interest in and to the rights assigned hereunder are free and clear of any
liens and encumbrances, that it has full right to assign all its interests
therein, and that it has not executed and will not execute any agreement or
other instrument in conflict herewith.

               4. Assignor shall provide to Assignee, its successors, assigns or
other legal representatives, cooperation and assistance at Assignee's request
and expense (including the execution and delivery of any and all affidavits,
declarations, oaths, samples, exhibits, specimens



                                      -3-
<PAGE>   4

and other documentation as may be reasonably required): (a) in the preparation
and prosecution of any application for registration or any application for
renewal of a registration covering, as applicable, any of the rights assigned
hereunder; (b) in the prosecution or defense of any interference, opposition,
reexamination, reissue, infringement or other proceedings that may arise in
connection with any of the rights assigned hereunder, as applicable, including,
but not limited to, testifying as to any facts relating to such rights; (c) in
obtaining any additional patent or trademark protection, as applicable, for the
rights assigned hereunder that Assignee reasonably may deem appropriate that may
be secured under the laws now or hereafter in effect in the United States or any
other country; and (d) in the implementation or perfection of this Assignment.

               5. Assignor grants to Kirkland & Ellis the authority and power to
insert on this instrument any further information that may be necessary or
desirable for purposes of recordation in the United States Patent & Trademark
Office or the patent or trademark office of any foreign country.


                                    * * * * *















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<PAGE>   5


               IN TESTIMONY WHEREOF, the parties hereto have caused this
Assignment to be signed and executed by the undersigned officers thereunto duly
authorized this 28th day of October, 1999.



S&G PACKAGING COMPANY, L.L.C.         STONE CONTAINER CORPORATION


Name: /s/ Thomas Cadden               Name: /s/ Leslie Ledrer
      -------------------------             ------------------------------------
Title: President                      Title: V.P., Secretary and General Counsel
       ------------------------              -----------------------------------



(Notarized)


















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<PAGE>   6



                                    EXHIBIT A

PATENTS:

<TABLE>
<CAPTION>
COUNTRY               U.S. PATENT NO.       ISSUE DATE                      TITLE
-------               --------------        ----------                      -----
<S>                   <C>                   <C>                <C>
United States         5,857,672             Jan. 12, 1999      Apparatus for Rotating
                                                               Substantially Flat Articles

United States         5,860,646             Jan. 19, 1999      Apparatus for Rotating
                                                               Substantially Flat Articles
                                                               (continuation of 5,857,672)

United States         5,816,993             Oct. 6, 1998       Apparatus and Method for
                                                               Attaching Carrying Handles to
                                                               Bags

United States         5,795,280             Aug. 18, 1998      Apparatus for the
                                                               Registration of Printed
                                                               Matter During the Manufacture
                                                               of Bags
</TABLE>


TRADEMARKS:

<TABLE>
<CAPTION>
MARK                            REG. NO.                       REG. DATE
----                            --------                       ---------
<S>                             <C>                            <C>
BREAKAWAY                       1,258,530                      November 22, 1983

GOOD NEWS BAG                   1,655,544                      September 3, 1991; cancelled
                                                               ss.8 March 9, 1998

THE HANDLER                     None                           None
</TABLE>






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