Beware of rights of co-owners in joint research agreements

tugowarWhen entering into a joint research agreement with a prospective partner, it’s tempting to agree that both parties will jointly own any patent rights arising from the collaboration. This approach can be quite problematic once valuable patent rights are acquired. Unless the rights of each party are clearly detailed in the agreement, several complications can arise which can affect the value of the respective patent rights.

In the United States, 35 USC 262 states that in the absence of an agreement to the contrary, each joint owner of a patent may make, use and sell the patented invention without the permission of or the need to account to the other joint owners. Case law has extended this provision so that each co-owner may also license the invention without recourse to the others. This effectively precludes the grant of an exclusive license in cases of joint ownership unless all the joint owners agree not to grant any further licenses or to practice the invention themselves. In addition, one co-owner has the right to impede the other co-owner’s ability to sue infringers by refusing to voluntarily join in such a suit. As such, the refusal to join in suit against an infringer can result in the de facto grant of a license even without positive action.

Minor contributions matter
It is important to note that under U.S. law, a co-inventor of a single patent claim is considered a co-owner of the entire patent unless that co-inventor has assigned his or her rights to someone else. Accordingly, inventors of seemingly minor aspects of the invention that later end up as claimed elements in a patent may be entitled to widespread rights to control how the patent is licensed.

Be Aware of Community Property Laws
It should also be noted that in states such as California and Texas where community property laws apply, there may be joint ownership of an invention created during a marriage and any patent arising from—even if only one spouse is in fact an inventor.  Where an inventor may be subject to such a law, it is a good idea to make sure that the non-inventing spouse agrees that the patent should not be regarded as community property or agrees to any transfer of rights that may occur.

Co-ownership applies to the whole patent
It is not possible for one to divide ownership between different claims. Consequently if some subject matter of a patent is invented within the terms of a collaboration agreement but some is invented by only one party, in the absence of an agreement to the contrary, the entire patent will be jointly owned, even though the subject matter of some of the claims could have formed the subject matter of a separate patent to which one party was entitled to exclusive ownership.

In view of the strong rights that co-inventors have in the United States, it is important that parties to joint research agreements carefully consider what is desired before collaboration begins. Careful planning at the outset of the relationship can avoid problems once patent rights are established.

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