When parties collaborate on creative initiatives or R&D, complicated issues about ownership of any generated IP emerge. Joint ownership of intellectual property may seem to be a simple and equitable solution if parties have collaborated and cannot separate the outcome of their efforts.
However, when parties fail to carefully explore how their jointly developed intellectual property will be owned, organized, and utilized, legal dangers, practical challenges, and barriers to full commercialization arise. In the great majority of circumstances, parties should enter into an affirmative agreement establishing joint ownership of intellectual property rather than relying on the default legal status.
How can joint Intellectual Property ownership occur?
Co-ownership of intellectual property may occur in two distinct ways:
- An agreement may state that the parties shall jointly hold intellectual property, regardless of whether they were co-authors, co-inventors, or co-creators.
- The parties may collaborate on the production of intellectual property, in which case they are referred to as joint authors, joint inventors, or joint creators.
You should know: Infringement of Intellectual Property
What issues should be addressed in a joint ownership agreement?
Occasionally, parties enter into an agreement to share intellectual property rights but do not further regulate their joint ownership relationship.
If shared ownership is to be agreed upon, the agreement must also cover the following three points:
- Is it possible for a joint owner to profit from a jointly held intellectual property?
- Can a joint owner provide another person with a license to the jointly held intellectual property?
- Can a joint owner transfer its portion of jointly held intellectual property to another person only with the other joint owner's approval or without the other joint owner?
If no agreement addresses these issues, the joint owners will be governed by the many and possibly contradictory laws that govern joint ownership. Therefore, it is always advisable to address the three questions above specifically in your agreement so that jointly owned intellectual property is regulated in the manner agreed upon by the joint owners. Rather than the sometimes unpredictable and disadvantageous manner in which the law regulates jointly owned intellectual property.
You must read: How Intellectual Property Rights are Assigned in UAE
Proportion of ownership
The ownership proportions owned by the joint owners are another issue that should carefully be addressed in an agreement. If the parties do not state a joint ownership percentage, it is assumed that they are equal joint owners.
Joint owners, on the other hand, do not necessarily aim to be equal joint owners. Sometimes one person contributes more than the other (money, resources, or inventive ideas), which may explain an unequal ownership percentage. In such an instance, it is critical to explain the joint ownership share or how it will be calculated to prevent the assumption that it is equal.
What are the consequences of joint Patent ownership?
The law states that each joint owner possesses an equal portion of the invention and may use it for their gain without answering to one another unless the joint owners of a patent agree differently. However, without the approval of the other owner, one owner cannot give a license or transfer any interest in the patent.
Article 1152 of the UAE Civil Transactions Act defines joint ownership as follows: "Without prejudice to the provisions governing each heir's inheritance share, if two people acquire one or more objects for any reason other than ownership without determining the share for each of them, they shall be co-owners and the shares shall be divided equally between them, unless evidence to the contrary is produced."
What are the implications of ownership of Copyright in Joint Works?
When two or more authors collaborate to combine their contributions into inseparable or interdependent pieces, the work is referred to as a "joint work," and the authors are regarded as joint copyright owners. The most prevalent collaborative work is when two or more writers contribute to a book or article.
According to Article 27 of Federal Law No. 7 of 2002 Concerning Copyrights and Neighboring Rights, the author of the literary or musical portion of the work has the right to publish his share in a manner different from how the joint work was published unless otherwise agreed in writing.
What are the implications of ownership of Trademark in Joint Works?
Yes, it is possible to trademark a product that is co-owned. Multiple parties may possess a trademark. Two or more persons may register for the Trademark jointly if they intend to achieve joint ownership. In joint ownership, the relationship between the joint owners is such that both individuals and organizations utilize the Trademark together, but neither is the sole owner. The Trademark should be registered in the name of both parties.
In the UAE, Joint applicants for Trademark registration is possible provided that all applicants must sign the Power of Attorney, which is notarized and legalized up to the UAE Consulate. However, in the case of joint ventures, consideration should be made to who owns the Trademark that the joint venture will utilize. The Trademark to be used may be held by one of the partners. However, the partners should agree explicitly on who will have the Trademark or jointly own it. The Joint Venture Agreement should explicitly specify each party's rights and what will happen to the Trademark when the joint venture is dissolved.
It is advisable to sign co-ownership agreements to carry out terms and circumstances controlling the relationship between the joint owners regarding usage and enforcement of the trademarks.
Also you need to know: New DIFC Law on Intellectual Property
The purpose of this article is to provide a general overview of the subject. Startups should assess the kinds of intellectual property that may affect their company and strategically consider patents, Trademark, and copyright protection. Your intellectual property (IP) may be your most important asset as a new business. Our IP expert at HHS Lawyers and Legal Consultants can help you identify and protect your IP rights right from the registration of your IP.
For more information on joint ownership of IP, don't hesitate to contact us today.