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Joint Ownership Patents & Technology

Joint Ownership Patents & Technology. LES A&T Conference Call 28 August 2013 by D. Patrick O’Reilley. Rights of Joint Owners of Patents. United States Absent contract provision, each joint owner may exploit or license the patent without accounting to other joint owners (35 U.S.C. §262)

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Joint Ownership Patents & Technology

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  1. Joint OwnershipPatents & Technology LES A&T Conference Call28 August 2013 by D. Patrick O’Reilley

  2. Rights of Joint Owners of Patents • United States • Absent contract provision, each joint owner may exploit or license the patent without accounting to other joint owners (35 U.S.C. §262) • May grant immunity from suit by other owner • Schering v. Roussel, 104 F.3d 341 (Fed. Cir. 1997) • Need not share license royalties • May not Grant Exclusive License • Although may grant exclusive as to owner’s interest • No standing to sue for infringement without willing cooperation of all joint owners • All owners indispensable for suit • Lucent Techs., Inc. v. Gateway, Inc., 543 F.3d 710 (Fed. Cir. 2008) • Israel Bio-Eng’g Project v. Amgen, Inc., 475 F.3d 1256 (Fed. Cir. 2007) • May not compel joinder of other owners • Ethicon v. U.S. Surgical, 135 F.3d 1456 (Fed. Cir. 1997) • But see dissent re Rule 19 • Except by contract

  3. Rights of Joint Owners of Patents • Outside United States • Varies • Right to exploit with obligation to share with other owners • No right to exploit without permission of other owners • Right to assign without permission but no right to license • See Article 73(3) of the Japanese Patent Law; Section 36(3) Patents Act 1977 (UK); Section 16(2) Patents Act 1990 (Australia); Forget v. Specialty Tools of Canada, Inc., (1995) 62 CPR (3d) 537 (Canada); Chinese Patent Act, Article 15 (2009). • Contractual permission to exploit without accounting necessary for worldwide joint ownership

  4. Joint Ownership of Technology • Rights in unpatented technology arise from possession, use in business and relative secrecy – not ownership • Another may possess and use same technology – if lawfully acquired and relatively secret, two possessors but they are not joint owners • Rights against third parties arise from theft, misappropriation or confidential relationship • Theft from one possessor gives cause of action to that possessor but no cause to other possessor • Transfer of technology from possessor to licensed possessor creates two possessors – not joint owners • Relative secrecy contractually imposed • If exclusive license, licensor possessor must refrain from use or disclosure

  5. Arrangements That May Result in Joint Ownership • Any agreement where parties work together • Joint R&D • Collaboration • Consulting • Co-development • Contract manufacturing • Supply • Employment • When hiring an inventor

  6. Allocation of Ownership • Agreements need to allocate ownership Traditional -- allocation by employment of inventors or creators/discoverers • Under what law is inventorship determined ( usually US) • Inherently provides for joint ownership but not inevitable • Conceived or reduced to practice during performance • Employee 1 conceives before agreement and employee 2 reduces to practice during agreement – jointly owned even though employee 1 did nothing under agreement • See Lucent Technologies, Inc. v. Gateway, Inc. 543 F.3d 710 (Fed. Cir. 2008); Israel Bio-Eng’g Project v. Amgen, Inc., 475 F.3d 1256 (Fed. Cir. 2007) • Unpatentable technology is created or discovered • When do you know it is unpatentable? Allocation for inventions and technology should be the same since invention may later become mere technology or vice versa • May allocate ownership to one party with license back to other party • Used to anticipate work by one will be prior art to another • Avoids required public disclosure of agreement and terminal disclaimed under 35 USC 103(c)(2) • License back can be exclusive in defined field – standing to enforce issue • Also could assign all to separate entity (holding company) - complicated • May allocate by field of interest • Requires defined fields and must allow for overlap or outside both • May allocate some but often results in joint ownership • Unpatented technology allocated by possession and right to use • Allocation may be by application or field • Right to use may be restricted by contract • Both parties must hold in confidence for benefit of other party

  7. Consequences of Joint Ownership • Agreement must address consequences of joint ownership • Control & cost share in prosecution of patents • Control of claims controls inventorship & ownership • Absent contractually required cooperation, neither owner may enforce • “Cooperation” means join in action brought by one owner for past infringement. Does not preclude one owner granting license • Schering v. Roussel, 104 F.3d 341 (Fed. Cir. 1997) • May need to deal with freedom to license • If competitors require mutual approval, antitrust potential • Also, difficult to agree when inventions unkown • Anticipate jointly-owned foreign patents • Each owner expressly grants the other owners the right to exploit without accounting

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