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What are the implications of the joint ownership of a patent?

Unless the joint owners of a patent agree otherwise, the law provides they have equal shares in the patent and can exploit it for their own benefit without accounting to each other. However, 1 owner cannot grant a licence under the patent, or assign an interest in it, without the consent of the other owner.

Now let's consider the case of 2 joint owners who collaborated on a project and expected their relationship, because it was based on joint ownership, to be joint, mutual, and with equal benefits.

They either:

  1. had no agreement governing their joint ownership rights, or
  2. had an agreement, but were silent on their respective joint ownership rights.

That being the case, the law will step in to provide a default position on 3 critical questions:

1Can a joint owner of a patent exploit the patent without the consent of the other joint owner, and without accounting to the other joint owner for any of the profits from doing so?Yes
2Can a joint owner of a patent assign its interest in the patent without the consent of the other joint owner?No
3Can a joint owner of a patent grant a licence of the patent without the consent of the other joint owner?No

One joint owner is a large company ('L') with manufacturing, marketing and selling capability.

The other joint owner has a small family company ('S') without that manufacturing, marketing and selling capability.

They can both exploit the patent and retain the profits, without accounting to the other for those profits.

L has the capability to do so, but S does not.

S asks L for permission for S to grant a licence to another person, but because that would result in L having a competitor to contend with, L declines.

S and L expected their joint ownership relationship to be one of joint and mutual equal benefits.

But practically, L has all the benefits of ownership, and S has none.

The lesson is that it is not desirable to be silent on these issues of exploitation, assignment and licensing, but rather, to specifically address them, and for a joint ownership agreement to regulate in an agreed manner the respective rights of the joint owners in relation to these 3 critical questions.