By Julie Nixon
With large corporations cutting back on their R+D budgets and collaborating with SMEs, issues inevitably arise as to which party owns any invention and intellectual property resulting from the collaboration, and which party commercialises the results. Joint ownership of IP rights has become quite commonplace because joint ownership is perceived to be a “fair” solution in situations involving multiple parties. However it is worth noting that jointly owned IP can raise potential issues between the parties, and not only does intellectual property law governing jointly owned IP vary between jurisdictions, but it can also vary according to the particular type of IP involved. In this blog I will focus on joint IP in respect of patents and copyright, the two forms of IP most commonly generated through collaboration.
Jointly Owned Patents
In the UK, the Patents Act 1977 addresses the “default” position of the rights of co-owners. The Act states that, subject to an agreement to the contrary, each co-owner shall be entitled to an equal undivided share of the patent and have the right to exploit the patent itself, but the co-owner must obtain the other owner’s consent to amend or revoke the patent, to grant a license under the patent or to assign their share of the patent.
Other matters which are not covered in the Act and should be considered so that co-owners avoid disputes in the future are, for example, which party has the responsibility for paying renewal fees and which party deals with infringement of the patent.
Jointly Owned Copyright
The Copyright, Designs and Patents Act 1988 governs the default position for jointly owned copyright in the UK. Jointly owned copyright can arise, for example, where parties collaborate to produce software. However unlike the default position with patents, when a co-owner wishes to exploit the jointly owned copyright work, permission from the other owner of the copyright is always required. Should all permissions not be given, then an infringement of copyright could occur. All collaborators in a joint ownership of copyright must also agree to a work being licensed but permission is not required for a joint owner to assign their share of the copyright work.
Alternatives to Joint Ownership of IP
It is worth noting that instead of owning IP jointly, the parties can allocate ownership to one party with the IP licensed to the other party. This may not seem appealing to the licensee at the outset, but the license can be drafted so the licensee receives all the benefits from the IP it requires, often without the burden of prosecution or enforcement costs. The parties can also allocate ownership of IP in relation to what each party brings to the collaboration, or based on a party's commercial field of use.
Intellectual property ownership should be discussed ideally before any work is created as part of a collaboration. If intellectual property created is to be jointly owned, to create legal certainty it is prudent for the parties to agree detailed terms regarding exploitation, transferring, enforcing and licensing of the IP by a written contract. Relying on the default provisions provided by statute can be potentially disastrous where the parties collaborating have different expectations on how the joint IP is to be used.