Co-Ownership of Technology… Diversity of Legal Regimes

By: Dr. Nida’ N. Goussous
Talal Abu-Ghazaleh Legal

In a globalized world with open borders which rendered the technology to be the production of inventors who belong to different “legal jurisdictions”, such technology will be subject to co-ownership which will be governed; either by a certain legal regime to which one of the co-owners belongs or by an agreement.

It is the case where the subject matter of the co-owned technology is a patented invention and the agreement over the owners’ co-rights is absent. The patent co-ownership accordingly will be governed by local laws of one of the patent’s co-owners.

Awareness of the legal regime which will govern the relationship between co-owners of a patented technology is a crucial issue to be taken into consideration due to diversity between different legal systems in this context.

Ownership of a patent grants its owner the full authority to exploit his invention-subject matter of the patent- in all acceptable legal actions such as licensing, mortgaging, and selling. Co-ownership of a patent is the case where the patented invention is owned by more than one person, whether the same are the original owners thereof or owned the patent on a later stage.

Each co-owner of a jointly held patent can make, use, sell and license the patented technology. Licensing can be the main concern in the case of a jointly owned patent since each co-owner can grant a non-exclusive licenses without having to obtain the consent of other joint-owners under certain jurisdictions. Joint patent ownership can create a messy situation where no single patent owner has the ability to grant an exclusive license or stop others from licensing the patent. Such a situation might diminish the value of the patented technology.

By exploring various legal regimes in this respect, one can find that the approach differs from one to another whereas some request the consent of all co-owners to exploit the co-owned patented technology, while other do not.

The U.S. Patent Act provides for the right of each co-owner to exploit the patent independently without obtaining the consent of other co-owners including licensing and shall bear no responsibility to share any royalty revenues therewith. 

The Chinese Patent Law complies with the U.S. Patent Act in this regard, though the co-owner must account profits to other co-owners in case of independent exploitation.
The Japanese Patent Law provides that co-owners may not license a co-patented technology without obtaining the consent of other co-owners.

French and German Legislators adopted the same trend in this regard, whereas the co-owners of a co-owned patented technology may not license without the consent of other co-owners, but may independently use the invention, with equitable compensation to other co-owners.

Jordanian and Egyptian legislation conform in this regard, whereas the co-owner of the patented technology cannot grant licenses without obtaining the consent of other co-owners. However, other actions of exploitation such as selling, mortgaging are allowed to be done independently. 

In the UAE, the Federal Law pertaining to the Industrial Regulation and Protection of Patents, Industrial Drawings and Designs provides that owners of a co-owned patented technology may not individually grant licenses to others for using the invention, though other acts are acceptable to be done independently. 

In light of the different legal regimes and an open world with Technology Transfer all over the globe, it is not possible to conclude deals in the different fields of technology without the advice of legal specialists in these domains, in an aim to reach a satisfying agreement between patents co-owners through which rights and obligations are determined clearly and precisely.

In this contest, our Company provides the service of agreements’ drafting for all purposes in the different domains of technology by our legal and technical team of specialists in these domains.