Joint ownership (co-ownership)

Joint owners can act without the consent of the other owners

When two or more people share in ownership rights of an invention, it is said to be joint ownership.  Joint ownership can occur at least by: joint inventorship of  a patent; assignment; or  will.

It is important to understand that:

In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.[i]

For example, an owner can sign a non-exclusive license with a 3rd party and not share the revenue with the other joint owners.  

ü  It is normally a good idea for joint inventors to enter into some type of joint ownership agreement, or business arrangement (e.g., LLC or S-Corp) so that agreements can be made related to ownership and commercializing  the invention.

One way the joint owners can protect their interest is to agree to a joint ownership agreement with all other joint owners of the invention. Also, the consent of all joint owners are required to  an assignment of rights in the invention.

Joint ownership agreement

A joint ownership agreement can help prevent arguments between joint inventors. Joint ownership agreements can cover many areas such as:

• share % of revenue, expenses and ownership

• how decisions are made - for example what decision require 100% approval or simple majority approval. Moreover, what process is used if agreement can't e reached (e.g., mediation, arbitration, flip coin, etc). Also what decisions types need what decision process. For example,

·         decisions of how to hire to  prepare a patent application and how the patent applications are prosecuted.

·         decisions of contracts with 3rd parties to make, license, use, market, distribute or sell the invention.

·         decisions of hiring law firm for legal actions against infringers

·         Liabilities and Indemnities -     A joint owner or licensee could be exposed to having a claim brought against them.  Parties in a Joint ownership, where one party may be able to independently use, make, sell, license  etc.,  the  invention, should consider requesting indemnity for any claims arising from the practicing of the  invention by the other joint owners.

·         Future Improvements - revenue, expense and sharing -  determine if improvements are assigned back to all co-owners and if revenues and expenses from improvements are also shared.

·         Good faith in dealing with each other

·         Choice of law

2008-03-30