What Rights do Co-Owners of a Patent have?

Jurisdiction – USA and India

USA – Co-owners[1] of a patent are allowed to individually exercise all rights attached to the patent even without obtaining permission of the other co-owners.

As per 35 U.S. Code § 262, in the absence of a contrary agreement, each co-owner of the patent may perform the following acts without the consent of the other owners –

  • Make the patented invention;
  • Use the patented invention;
  • Offer to sell the patented invention;
  • Sell the invention within the United States;
  • Import the invention into the United States.

While filing infringement suits

An infringement suit can only be filed if all the co-owners have agreed to join the suit (Willingham Star Cutter Company v. B Lawton, para. 17). If one or more co-owners do not voluntarily join other co-owners in an infringement suit, the others cannot institute an infringement action (Schering Corporation v. Roussel Uclaf SA). The co-owners may, however, sign an agreement to the contrary.

Co-owners cannot be forced to join the suit. As per Ethicon, Inc. v. United States Surgical Corporation, there are two exceptions to this proposition –

  1. When a co-owner of the patent has granted an exclusive license, he must permit the licensee to sue in his name because he “stands in a relationship of trust to his licensee.”
  2. If a co-owner waives his right to refuse to join the suit through an agreement, the suing co-owners can force him to join the suit against the infringers.

Due to its apparent unfairness,[2] this remains a controversial issue.

While licensing the co-owned patent

Any of the co-owners can license the patent to third parties without requiring consent from the other co-owners (Willingham). A third party can obtain a license for the patent simply by obtaining it from one of the co-owners.

Co-ownership over individual claims

Irrespective of the contribution to the claims in the patent, each co-owner owns the entirety of the patent as if he had been a true joint inventor of all the claims (Ethicon).

India – Each co-owner is entitled to an equal undivided share in the patent unless they have an agreement to the contrary (section 50(1)).

Suit for infringement – Without having to obtain consent from the other co-owners, each co-owner has the right to prevent third parties from making, using, offering for sale, selling or importing in India –

  • The patented product, in case of a product patent; or,
  • The product obtained directly from the by the patented process, in case of a process patent (section 50(2) read with section 48).

Contrary to the position in the U.S., co-owners in India are allowed to sue third parties for infringement even without the other co-owners joining the suit or consenting to the same.

License – A co-owner cannot grant a license under the patent without the consent of the other co-owners (section 50(3)).

Sale to third party – If a patented article is sold by one of the co-owners, the purchaser gets a legitimate right to the article bought by him (section 50(4)). This provision protects the interests of bona fide buyers.

Refusal by a co-owner to grant consent

If a co-owner is unable to obtain the consent of the other co-owner(s) for any act prescribed in section 50, then he/she can apply to the Controller of Patents to direct the other co-owner(s) to act in accordance with the section (section 51(1)).

E.g. If co-owner “B” refuses to allow co-owner “A” to grant a license in the favour of a third party, co-owner “A” can make an application to the Controller to allow the license to be granted.

The Controller shall give the co-owners the opportunity to be heard before giving any directions (section 51(3)).

Additional sources

Read this article on rights of co-owners in other countries such as U.K., Australia and Japan.

Detailed discussion of Indian position available here.

Image from here.

[1] Also known as “joint owners.”

[2] As was held in Willingham, “The nature of a patent is such that co-owners are at the mercy of each other.”


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s