Contrary to what some might believe, intellectual property does not necessarily have to be owned by just one person or entity. If multiple parties contribute to the creation of any patent, copyright, or trademark, each of the parties will have the right to be regarded as its owners. Joint ownership of any intellectual property is usually backed by a formal agreement.
However, joint ownership of intellectual property should be avoided whenever possible. This is because the proper protection of a trademark, copyright, or patent can be hindered through joint ownership. There are also many other problems which may arise through joint ownership of any intellectual property but would be avoided through a single entity’s ownership of it.
Negative Effects of Joint Ownership of Patents
When a single person or entity owns a patent, the patent’s owner gains the right to deny others permission to use the related invention in the way that they desire. However, patents which are jointly owned do not provide their owners with this same right.
A jointly-owned patent names multiple inventors and is not linked to any agreement which deals with ownership issues. Each owner of a patent which is jointly owned could potentially sell, license, or make use of the patent in ways of which other joint owners would disapprove. If there is a need to enforce patent rights through legal action, every owner is required to participate before the lawsuit may become active. Even one holdout will prevent any legal action from occurring.
In addition, exclusive licenses cannot be granted to any third party unless all owners reach a unanimous decision. Unanimous decisions are fairly rare in reality. The inability to grant exclusive licenses is a highly negative outcome because the granting of licenses can be an important generator of revenue.
Negative Effects of Joint Ownership of Copyrights
When multiple authors jointly create a copyrightable work and file for a corresponding copyright, the copyright may name all authors as the copyright’s joint owners. Joint copyright owners might assume that their relationship provides equal benefits to each of them; however, this is not usually the case. Joint ownership of a copyright greatly restricts the intellectual property rights of all owners.
The joint owner of a copyright is permitted to reproduce a copyrighted work without the consent of other joint owners; when a joint owner does so, other owners’ intellectual property rights will be inhibited. As is the case with a patent, joint owners of a copyright may not provide any third party with exclusive licenses unless every owner agrees to do so. Many publishers of copyrighted works insist on exclusive licensing rights before they proceed with distributing the works in question.
Joint owners of a copyright can also find it more difficult to defend their intellectual property rights. This is more likely to be the case when one or more joint owners abruptly abandons any existing agreement and might subsequently commit an act of infringement against the rights of these other joint owners. Joint ownership of a copyright is not even easy to obtain. Many who have contributed towards the development and creation of a copyrightable product have not been granted a role as a joint owner of the copyright.
Negative Effects of Joint Ownership of Trademarks
At its most basic level, the joint ownership of a trademark reduces its efficacy. This is because the trademark in question will have its key attribute of source identification compromised. Additionally, it is a legal requirement for trademark owners to monitor the quality of any trademarked product or service which they or their licensees supply. This monitoring of quality can be difficult because owners are likely to apply different standards.
It is also relatively easy for a joint owner of a trademark to lose ownership of it. If an intellectual property court rules that all parties involved have not made proper use of the trademark, those which have not may lose ownership over it. The failure of all owners to coordinate and set coherent quality standards for the trademark might also cause a court to regard the trademark as one which has been abandoned.
This article is brought to you by Exy Intellectual Property Malaysia and Singapore.