February 18, 2016, 09:30 AM 1
In 2013, according to World Intellectual Property Organization (WIPO), the top five patent offices accounted for 81% of the world’s total 2.5M patent application filings. This “top five” consisted of China, Japan, Korea, the United States and the European Patent Office (EPO). Digging deeper, roughly 75% of the patent applications granted by the EPO are validated by applicants in the following “top three” jurisdictions: France, Germany and the United Kingdom.
Accepting, arguendo, that these top seven patent filing jurisdictions also represent the world’s top global destinations or sources for collaboration (i.e., R&D) activity, we now look at the default law (i.e., in the absence of any agreement by the parties to the contrary) of joint IP ownership with respect to directly exploiting (i.e., “working” or using it internally), indirectly exploiting (i.e., non-exclusively licensing), enforcing and accounting of profits in these seven jurisdictions:
| Jurisdiction | Patent | Copyright | Trade Secret |
| USA | Each co-owner may independently exploit, without consent of, and without accounting to, the other co-owners (see 35 U.S.C. Sec. 262). |
While there is no statutory provision, the courts generally allow a co-owner to sue independently.
Each co-owner may independently enforce, and any compensation will be distributed reasonably among the co-owners.
Each co-owner may independently enforce.
However, it is case-by-case whether a co-owner may license it without consent or accounting profits to the other co-owners.
Each co-owner may independently enforce.
Each co-owner may independently enforce.
Each co-owner may independently enforce, but any compensation will be distributed reasonably among the co-owners.
Each co-owner may enforce independently with prior notice to other co-owners.
Must obtain consent of all co-owners before a co-owner may file an enforcement action.
Each co-owner may indirectly exploit only with the consent of the other co-owners, but without any accounting.
Must join all co-owners in enforcement actions.
Each co-owner may independently enforce.
common law breach of confidence action is available.
As one can see, the laws are varied. There is not even harmonization of joint IP ownership among the individual countries within the European Union! So, what law governs a particular collaboration agreement which includes a joint IP ownership clause? The law specified in the relevant agreement’s “choice of law” clause in the ever-present “Miscellaneous” section of the agreement? The law of the jurisdiction where the joint IP under consideration was created? The law of the jurisdiction where IP rights for the joint IP under consideration are actually applied for or registered? And, to further complicate matters, when patent applications are filed in multiple jurisdictions for a single joint IP asset, will not each joint owner’s rights be subject to such multiple jurisdictions’ laws? The answers are not always clear and can certainly be expensive to figure out after-the-fact! And, this is even before you get to the issues of forum and dispute resolution mechanisms.
Some Sample Joint IP Ownership Clauses
Here are sample joint IP clauses for giving effect to a collaboration agreement’s joint IP ownership scheme. While not perfect, the provided language at least forces IP practitioners to begin to address the all too often forgotten consequences and mechanics of joint IP ownership identified above.
Conclusion
The popular media’s reports of the demise of IP rights (especially patents) are premature and greatly exaggerated. IP remains valuable to enterprises of all sizes and types. Further, the notion of open innovation, which reflects not only the social nature of man but today’s technological reality, is here to stay. As a result, IP law practitioners will continue to be called draft, review and negotiate collaboration-type agreements where business, engineering and other legal personnel will continue to insist on the “fairness” of joint IP ownership. Such insistence should always be met with skepticism for its need. And, when such joint IP ownership is unavoidable, its consequences and mechanics must be addressed. In sum: If you must do it, don’t half-a$$ it!
This article reflects the author’s current personal views and should not necessarily be attributed to his current or former employers, or their respective clients or customers. The author would like thank James Cross, Young-Wook Ha, Ira Hatton, Esther H. Lim, John M. Neclerio, Akihiko Okuno, Michael Ray, Denis Schertenleib and Liina Tonisson for their assistance in completing the summary law table included herein. The “dual light bulb” picture, modified by the author, is used courtesy of Ramon Vullings.
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