Key Takeaways:

  • Joint patent ownership arises when multiple parties own a single patent, and each can license, use, make, or sell the invention.
  • Patent ownership initially belongs to the inventor but can be transferred through a written Patent Assignment.
  • Joint ownership can complicate licensing because any owner may grant non-exclusive licenses without others’ consent.
  • Employment and contractor agreements should clearly define patent ownership to avoid disputes.
  • Maintaining clear chain of title with the USPTO is critical to enforce patent rights and attract licensees or buyers.

Joint patent ownership occurs when more than one person can claim ownership over a single patent. Each joint patent owner has rights pertaining to licensing, selling, and using the patented item in question.

What Is Joint Patent Ownership

When multiple people can claim ownership over a single patent, it can be said that they have what is known as "joint patent ownership." Each owner has rights that allow them to do the following with the patented item in question:

  • License
  • Make
  • Sell
  • Use

When it comes to concerns associated with joint patent ownership, the most significant is that of licensing. This is due to the fact that every joint owner has the legal right to grant a non-exclusive license to any person or entity that they choose to, without having to get permission from the other patent owners. Joint ownership of patents can get quite messy given that there is no single patent owner with the ability to grant exclusive licenses or prevent the others from granting licenses of their own. In fact, when a patent has multiple owners, its very value can be diminished in the perspective of potential buyers and licensees.

Because patent ownership begins with the inventor, according to United States patent laws, issues pertaining to joint intellectual property ownership happens more frequently when dealing with patents that have more than one inventor. It's important to take steps early in the life cycle of an invention to transfer each inventor's patent rights to a legal entity, such as a company, using a written Patent Assignment, if at all possible.

A fully signed copy of this Patent Assignment, which identifies each patent or patent application, should be kept on record with the United States Patent and Trademark Office to provide a solid notice regarding the chain of title for the invention in question to the general public.

Challenges and Risks of Joint Patent Ownership

Joint patent ownership may seem straightforward, but it often presents significant risks and complications for inventors and businesses:

  • Licensing Complications: Each joint owner can independently grant non-exclusive licenses without needing the other owners’ approval. This can reduce the patent’s market value because a potential licensee may not secure exclusive rights.
  • Enforcement Issues: Enforcing a patent for infringement usually requires the consent and participation of all joint owners. If one owner refuses to cooperate, it can delay or block litigation entirely.
  • Diminished Value for Sale: Because any joint owner can freely license the patent, third parties are often hesitant to purchase or invest in a jointly owned patent.
  • Dispute Risks: Disagreements about strategy, enforcement, or commercialization can lead to costly disputes and even litigation among co-owners.

To mitigate these risks, inventors often assign their rights to a single entity, like a company, which then manages licensing, enforcement, and commercialization centrally.

Basics of Patent Ownership

Owning a patent on an invention or innovation is important because the patent owner is given specific rights pertaining to the patented item. Under normal circumstances, patent rights remain with the inventor until they are transferred to another person or (more commonly) a legal entity, by way of a written Patent Assignment. This is true even in cases where an employee creates an invention for their employer, in most cases.

It's a good idea to establish who owns the item to be patented before filing an application to patent the item with the United States Patent and Trademark Office to avoid any potential issues in the future. Patent owners can take the following actions once they have patent rights:

  • License the rights to use the patented items and collect royalties for its use
  • Sell their patent rights to another person or entity
  • Pursue legal action in the event that patent infringement has occurred
  • Manufacture the patented item
  • Sell the patented item
  • Use the patented item

It's worth noting that, even if you're the inventor of a patented item, if you do not own the patent on that item, you have none of the rights listed above.

In the United States, the rights pertaining to a patent are established under federal law, but ownership of the patent in question is actually determined by your local state laws. Although the state ultimately has the final say in who owns a patent, changes in the patent's ownership are kept on record with the United States Patent and Trademark Office to provide the public with notice regarding who can claim ownership of the patent in question.

A lot of people are confused when it comes to patent inventorship and patent ownership and believe that these are one and the same. In fact, they are not. A person might be the inventor of a patented item, but have no access to the patent rights associated with the item in question, particularly in cases in which the inventor assigns their rights to a third party, such as their employer. Additionally, a person or business entity might own patent rights on an item even though they are not responsible for inventing it, such as when an employee who invented an item assigns their patent rights to their employer.

Distinguishing Inventorship from Ownership

A critical concept in patent law is that inventorship and ownership are not the same:

  • Inventorship:
    • Determined under federal law, based on who contributed to the conception of the claimed invention.
    • Multiple inventors can exist, and each must be named correctly to maintain patent validity.
  • Ownership:
    • Determined under state property law, often through employment contracts, corporate policies, or written assignments.
    • An inventor may not own the patent if they have assigned their rights to another party.

Understanding this distinction is essential to avoid disputes, ensure enforceability, and properly license or sell patent rights.

How Patent Ownership Is Transferred

Patent ownership typically starts with the inventor but can be transferred to another person or entity through a written assignment. Proper assignment and recordation are essential for maintaining clear ownership and protecting patent rights:

  1. Patent Assignment Agreement:
    • A legally binding document where the inventor transfers rights to another party (often an employer or corporate entity).
    • Should identify the specific patent or patent application and be signed by the assigning party.
  2. Recording with the USPTO:
    • Recording the assignment provides public notice of the chain of title, which helps protect against ownership disputes and is critical for enforcement.
    • If a patent is sold or licensed later, clear recordation makes due diligence easier for investors or buyers.
  3. Employer and Contractor Considerations:
    • Employees often must assign rights to inventions created within the scope of employment.
    • Contractors should sign agreements before work begins, because without a written assignment, they may retain patent rights.

Failure to execute and record assignments can lead to lost enforcement rights or disputes over who can license or sell the patent.

Frequently Asked Questions

1. Can a joint patent owner license the patent without others’ consent? Yes. Any joint patent owner can grant a non-exclusive license without permission from the other owners.

2. How do I transfer patent ownership to my company? Use a written Patent Assignment and record it with the USPTO to establish a clear chain of title.

3. What is the difference between inventorship and ownership? Inventorship is about who created the invention; ownership is about who holds the legal rights to the patent.

4. Why is joint patent ownership risky? Because it can complicate licensing, enforcement, and sales—each co-owner can license independently, and all must agree to sue infringers.

5. Do I need to record patent assignments with the USPTO? Yes. Recording provides public notice of ownership and protects against future disputes or challenges to your rights.

If you need help with joint patent ownership, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.