All you need to know about the rights of joint owners of IP (intellectual property)

1. Introduction

We have been witnessing more companies and organizations forming strategic alliances or innovative joint ventures, thereby increasing joint proprietorship of IP (intellectual property) a common sight. Joint ownership has been perceived as an accurate solution whenever multiple parties are involved. Nonetheless, such collaborations are not simple. Without the nitty-gritty of such associations, it can be detrimental. Here we will try understanding Intellectual Property Rights for businesses in terms of IP ownership when the parties collaborate on innovative projects or carry out research and development and become joint owners of such resulting IP. 

The WIPO defines IP as the creation of the mind, like inventions, artistic or literary works, symbols, designs, names, and images used in commerce. The law safeguards many IPs. The legally protected IP allows people to receive legal recognition and reap financial benefits from their creation or invention. It is also crucial for the country’s economic development due to its significance of mind as represented by IP wields tremendous power. It is because the owners of this property are provided several prerogatives to know, by law, and to control what is being done to their property as it is a product of their own human labor, mind, judgment, skill, and efforts.

2. Jointly owned IPR.

It can be defined as two or more parties having shared proprietorship and control of the very same IPR. This means that all the decisions concerning the disposal of IPR have to be made by parties involved together, and by extension, such exploitation or disposal of rights has to be done as per the clause of the contract to avoid any legal or complications dispute. For instance, the clause can be put in place limiting the rights of parties to license or sub-license IP sans the written consent of other parties. Another example of limiting covenants could be to restrict disclosure to rivals.

Joint ownership might look like a suitable solution when parties have worked together in a way that it becomes tough for them to divide each other’s efforts concerning resultant output, the mistake of not giving a thorough consideration as to how their jointly created IP would be owned, exploited, and organized can prove damning as there will be practical difficulties and legal disputes in the whole process of commercialization of IP. That’s why It is recommended that parties not depend on default legal position and sign an express agreement on joint ownership of IP. It contains worldwide rights, and regulations of all parties are crucial as and when the same IP is to be protected at multiple jurisdictions.

3. Joint owners of IP and their rights in India.

Trademark.

When two or more legal entities act as owners of a mark having TM registration, either for the joint entity created by them or to share and promulgate the goods and services given jointly by them, they are referred to as the joint owners of the trademark. Quantification of rights will not be possible in such case against any joint owner; only financial outcome upon utilization of such joint-owned mark is allowed to be quantified according to T&Cs agreed by them in the contract.

Section 24 of the trademark act, 1999 states that the joint proprietorship of a trademark is a mutually stated agreement betwixt the parties to hold the mark together; nonetheless, neither of them has the power to be the complete owner of the mark.

Section 18 of the said Act states that while entering into joint proprietorship, either applicant must have a principal place of business in India. If that is not possible, then it would be compulsory for them to have their address for service in India to get registered.

4. Patents.

Section 50 of the patents act, 1970, while deals with patent co-owner’s rights, which states that unless there is a contract to the opposite, joint owners are entitled to an equal and undivided share. Also, the patent’s joint owner is free to exploit and retain the profit of the patent, sans sharing profits with other owners as per section 50 (2). Nonetheless, the joint owner cannot assign its joint proprietorship interest sans the consent of another joint owner or allocate exclusive license of patent sans consent of another joint owner as per section 50(3).

Section 51 of the said Act empowers the controller to give directives to joint owners of patents concerning the sale or lease of licenses and so forth of patents. This means that one or more joint parties might approach the controller seeking directives to one or more other joint parties to agree for licensing as per section 51(1) if they have not done earlier in their private negotiations.

5. Copyright.

According to the copyright act, 1957, joint authors are co-owners of the work created by them. They hold no exclusive rights to use such work, and they will have to take sanctions from other co-owners. Section 2(z) defines the work of joint authorship as produced by collab of two or more authors in which the contribution of one author is not different from others. Section 13(2) states that in joint authorship of a work, the condition related to copyright in this subsection will be satisfied by all the authors of the work.

6. In conclusion.

With the rapid advancement in the world, we will witness a threshold of interdependence and trust in several fields of business. The joint proprietorship of IP is one such area; when utilized judiciously by giving full consideration to the statutory rights and contractual responsibility imposed on each other, it can be very lucrative for both the involved parties.

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