Joint Ownership Patents & Technology - PowerPoint Presentation

Joint OwnershipPatents & 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)May grant immunity from suit by other ownerSchering 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 interestNo standing to sue for infringement without willing cooperation of all joint ownersAll owners indispensable for suitLucent 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 ownersEthicon v. U.S. Surgical, 135 F.3d 1456 (Fed. Cir. 1997)But see dissent re Rule 19Except by contract 2

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 ownersRight to assign without permission but no right to licenseSee 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

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 relationshipTheft from one possessor gives cause of action to that possessor but no cause to other possessorTransfer of technology from possessor to licensed possessor creates two possessors – not joint ownersRelative secrecy contractually imposedIf exclusive license, licensor possessor must refrain from use or disclosure

Arrangements That May Result in Joint Ownership Any agreement where parties work together Joint R&D CollaborationConsultingCo-developmentContract manufacturingSupplyEmploymentWhen hiring an inventor

Allocation of Ownership Agreements need to allocate ownership Traditional -- allocation by employment of inventors or creators/discoverersUnder what law is inventorship determined ( usually US)Inherently provides for joint ownership but not inevitableConceived or reduced to practice during performanceEmployee 1 conceives before agreement and employee 2 reduces to practice during agreement – jointly owned even though employee 1 did nothing under agreementSee 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 discoveredWhen do you know it is unpatentable? Allocation for inventions and technology should be the same since invention may later become mere technology or vice versaMay allocate ownership to one party with license back to other partyUsed to anticipate work by one will be prior art to anotherAvoids 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 issueAlso could assign all to separate entity (holding company) - complicatedMay allocate by field of interestRequires defined fields and must allow for overlap or outside bothMay 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 6

Consequences of Joint Ownership Agreement must address consequences of joint ownership Control & cost share in prosecution of patents Control of claims controls inventorship & ownershipAbsent 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 licenseSchering v. Roussel, 104 F.3d 341 (Fed. Cir. 1997) May need to deal with freedom to licenseIf competitors require mutual approval, antitrust potentialAlso, difficult to agree when inventions unkownAnticipate jointly-owned foreign patentsEach owner expressly grants the other owners the right to exploit without accounting