Jointly Owned Inventions and Patents

Difficulties can arise with respect to jointly owned inventions and patents if a written agreement is not in place which specifies the rights and responsibilities of the respective joint owners.  Do not rely on oral understandings or ignore the matter of joint ownership.

Joint inventions typically arise in one of two ways.  In one instance joint ownership can arise for an invention made by two or more persons.  If there is no obligation to assign the invention to a single entity, such as the employer of the inventors, ownership of the jointly made invention is jointly held by the two or more inventors.  In another instance, joint inventions can arise when two or more companies or other organizations work together on a project.  For example, a university and research sponsor may collaborate on a development project, or two or more parties may collaborate on a joint development project.  In the absence of an agreement between the parties to the joint activity, inventions and patents resulting from the joint project are jointly owned by the parties.  By statute (35 U.S.C.§261, 262), each co-owner of a joint invention or patent can act independently of the others and without accounting to the others.  The result of such potential independent action can often thwart the effective utilization or licensing of the jointly owned technology and associated inventions and patents.

It is therefore essential to have a written agreement between the joint owners which sets forth rights and responsibilities of each of the parties.  Such an agreement should specify respective ownership interests, responsibility for control of patent filing, prosecution and maintenance activities, sharing of patent expenses, sharing of royalty or other income, management of licensing or other transactions in respect of the jointly owned intellectual property and management of litigation relating to the joint intellectual property.  In the absence of an appropriate agreement, each owner could compete with the other co-owners and attempt to separately license or exploit the invention.  In addition, no co-owner has any obligation to account to any of the other co-owners with respect to the sharing of income from the jointly owned invention, or otherwise.

Ownership of an invention and any resulting patent is a matter of state law and any dispute regarding ownership would be a matter for resolution by state court action, unless there is diversity or other federal court jurisdiction.  Such disputes often involve interpretation of  an agreement to assign invention rights, interpretation of a consulting agreement under which an invention arose, or interpretation of an employment agreement under which an invention is said to have arisen.

A further issue relating to a jointly owned patent arises if there is to be litigation alleging infringement of the joint patent..  All co-owners must jointly sue the infringing party.  An agreement among the co-owners may specify that one party can manage such litigation although the other co-owners must usually be named as parties to suit jurisdictional requirements.

Bottom line – have a written agreement with all co-owners.