Joint Ownership
Patents & Technology
LES A&T Conference Call
28 August 2013
by
D. Patrick O’Reilley
Rights of Joint Owners of Patents
• United States
– Absent contract provision, each joint owner may exploit or license the
patent without accounting to other joint owners (35 U.S.C. §262)
• May grant immunity from suit by other owner
– Schering v. Roussel, 104 F.3d 341 (Fed. Cir. 1997)
• Need not share license royalties
– May not Grant Exclusive License
• Although may grant exclusive as to owner’s interest
– No standing to sue for infringement without willing cooperation of all joint
owners
• All owners indispensable for suit
– Lucent Techs., Inc. v. Gateway, Inc., 543 F.3d 710 (Fed. Cir. 2008)
– Israel Bio-Eng’g Project v. Amgen, Inc., 475 F.3d 1256 (Fed. Cir. 2007)
• May not compel joinder of other owners
– Ethicon v. U.S. Surgical, 135 F.3d 1456 (Fed. Cir. 1997)
– But see dissent re Rule 19
• Except by contract
2
Rights of Joint Owners of Patents
• Outside United States
– Varies
• Right to exploit with obligation to share with other owners
• No right to exploit without permission of other owners
• Right to assign without permission but no right to license
– See Article 73(3) of the Japanese Patent Law; Section
36(3) Patents Act 1977 (UK); Section 16(2) Patents Act
1990 (Australia); Forget v. Specialty Tools of Canada,
Inc., (1995) 62 CPR (3d) 537 (Canada); Chinese Patent
Act, Article 15 (2009).
– Contractual permission to exploit without accounting
necessary for worldwide joint ownership
Joint Ownership of Technology
• Rights in unpatented technology arise from possession, use
in business and relative secrecy – not ownership
– Another may possess and use same technology – if lawfully
acquired and relatively secret, two possessors but they are not
joint owners
• Rights against third parties arise from theft,
misappropriation or confidential relationship
– Theft from one possessor gives cause of action to that possessor
but no cause to other possessor
• Transfer of technology from possessor to licensed
possessor creates two possessors – not joint owners
– Relative secrecy contractually imposed
– If exclusive license, licensor possessor must refrain from use or
disclosure
Arrangements That May Result
in Joint Ownership
• Any agreement where parties work together
– Joint R&D
– Collaboration
– Consulting
– Co-development
– Contract manufacturing
– Supply
– Employment
• When hiring an inventor
Allocation of Ownership
• Agreements need to allocate ownership Traditional -- allocation by
employment of inventors or creators/discoverers
• Under what law is inventorship determined ( usually US)
• Inherently provides for joint ownership but not inevitable
• Conceived or reduced to practice during performance
–
–
Employee 1 conceives before agreement and employee 2 reduces to practice during agreement – jointly owned
even though employee 1 did nothing under agreement
See Lucent Technologies, Inc. v. Gateway, Inc. 543 F.3d 710 (Fed. Cir. 2008); Israel Bio-Eng’g Project v. Amgen,
Inc., 475 F.3d 1256 (Fed. Cir. 2007)
• Unpatentable technology is created or discovered
–
When do you know it is unpatentable? Allocation for inventions and technology should be the same since
invention may later become mere technology or vice versa
– May allocate ownership to one party with license back to other party
• Used to anticipate work by one will be prior art to another
–
Avoids required public disclosure of agreement and terminal disclaimed under 35 USC 103(c)(2)
• License back can be exclusive in defined field – standing to enforce issue
• Also could assign all to separate entity (holding company) - complicated
– May allocate by field of interest
• Requires defined fields and must allow for overlap or outside both
–
May allocate some but often results in joint ownership
– Unpatented technology allocated by possession and right to use
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• Allocation may be by application or field
• Right to use may be restricted by contract
• Both parties must hold in confidence for benefit of other party
Consequences of Joint Ownership
• Agreement must address consequences of joint ownership
– Control & cost share in prosecution of patents
• Control of claims controls inventorship & ownership
– Absent contractually required cooperation, neither owner may
enforce
• “Cooperation” means join in action brought by one owner for past
infringement. Does not preclude one owner granting license
– Schering v. Roussel, 104 F.3d 341 (Fed. Cir. 1997)
– May need to deal with freedom to license
• If competitors require mutual approval, antitrust potential
• Also, difficult to agree when inventions unkown
• Anticipate jointly-owned foreign patents
– Each owner expressly grants the other owners the right to
exploit without accounting