Sometimes you may wish to apply for (or to own) an intellectual property right (e.g., patent, registered trade mark or registered design) together with one or more people. This is perfectly possible but can cause complications if certain matters are not made clear at the outset. The purpose of this page is to outline some of the issues that can arise.
Relationship between co-owners
Firstly, you should be aware that the co-owners of the rights can agree amongst themselves any arrangement of ownership and division of rights and responsibilities that they wish. However, as with most agreements, it is of course better if these matters are set down in writing at the outset.
Often shared ownership arrangements arise out of joint research and development projects. It is not unusual for multiple parties to participate in and contribute their respective skills and know-how to those projects which result in the creation of patentable inventions and other intellectual property rights. In these cases, it is customary for the collaboration itself to be governed by a research and development agreement and to set out the terms on which the parties intend to share the intellectual property rights. However, this is not always the case. Our legal team can advise on this and assist with the drafting of any necessary agreements.If the co-owners do not agree any arrangement, the law in the UK provides a "default" position under section 36 of the Patents Act 1997. This provides that, unless agreed otherwise, where a patent or registered trade mark is granted to more than one applicant, each applicant (co-owner) has an equal undivided share in it. This means:
- Each co-owner is entitled to use the rights without needing the consent of the other co-owners, i.e., if you fall out with your co-owners they will be able to carry on using the rights without needing your agreement. This can be particularly dangerous in the question of a trade mark and may lead to invalidation of the trade mark registration. (It is also important to note that this provision does not guarantee that use of the rights does not infringe the rights of third parties).
- None of the co-owners may grant a licence, or assign or mortgage their share of the rights, without the consent of all the other co-owners. Therefore, if one co-owner wishes to use the rights by licensing a third party, it is important to reach agreement on this.
- Where one or more of the co-owners are individuals, their share of the rights will devolve to his or her personal representatives on their death, and not to the other co-owners.
These comments apply equally to patent applications, patents, trade mark applications and registered trade marks. The law does not set out any "default" position for registered designs or other rights and it is therefore even more important that written agreement is reached in such cases. Even if the "default" arrangement set out above is acceptable to all co-owners, there are other matters on which the co-owners should reach written agreement to avoid disputes in the future. For example, an agreement between co-owners should define the responsibility for paying renewal fees, suing infringers, and resisting revocation of the rights by others, together with responsibility for the costs involved.
Relationship with Mewburn Ellis
Where an application or right is to be owned by more than one person, we prefer to act for only one of the co-owners involved. This is to avoid possible conflict of interest problems if the co-owners should fall out in the future. In cases of this kind, we will require all the co-owners to sign an acknowledgement, agreeing that we are acting for only one party who will be our client.
The acknowledgement also specifies that we need only write to our client and we will only take instructions from our client. This is to enable us to obtain clear instructions on an urgent basis when necessary, and to avoid us getting conflicting instructions from different co-owners. Of course, the co-owners may include arrangements for taking decisions and sharing costs between themselves in their co-ownership agreement.
Please talk to Mewburn Ellis LLP if you need more information on this topic.
This information is simplified and must not be taken as definitive statement of the law or practice.