Who Owns Your IP?

intellectual property protection

Intellectual Property Protection

Intellectual Property Protection and Intellectual property rights (IP Rights) establish the right of control over an innovation, whether it be a book, a painting or an invention. Intellectual property protection and the rights attached to IP can be allocated in a number of ways, principally by:

  • sole ownership
  • joint ownership, or
  • by contract or licence (not discussed in this article).

When only one person or entity is involved in generating new IP, designating the ownership of this IP is generally straightforward – it is fully owned by the one person or entity.

But what happens when there are two or more entities are involved in generating new IP? Ideally, the parties involved would have a contractual agreement covering IP sharing arrangements before commencing the project.  If they have not, ownership disputes between partners could result in costly and time consuming court litigation.  

Joint ownership of IP often arises when there is co-development of IP. This can involve all forms of IP, such as patents, copyright, trade marks and even trade secrets.  To have rights to ownership the co-developers’ contribution does not need to be equal to that of other parties involved. The contribution must be something that the other parties have not contemplated or considered and it must lead to an improvement or change to the innovation that would not have occurred if the contribution was not made.  

Joint ownership is also established via contractual arrangements that exist between two parties. The rights provided to the original developers over the innovation, may be transferred or assigned to a third party via contract.

When discussing IP joint ownership agreements, the proportion owned by each person should be considered as the split does not have to be equally divided.  If the equity is not specified in the agreement, it is is generally split equally between the parties.  The key factor to remember is that irrespective of the proportion of ownership given to a party,  each owner will have the same rights over the control of the innovation.

While joint owners have equal rights to the development and exploitation of the innovation, any contractual agreement developed between joint owners should consider the following aspects:-

  1. Can a joint owner exploit the jointly owned intellectual property? For example, is the other joint owner’s consent required? Is there any obligation for one party to pay royalties or other fees to the other party?
  2. Can a joint owner grant a license of the jointly owned intellectual property to another person? Is the other joint owner’s consent required? How will the royalties generated from the license be split?
  3. Can a joint owner assign its share of the jointly owned intellectual property to another person or is the other owner’s consent required?

To not address these issues in a joint ownership agreement, or to have no agreement in place at all, the risk is that neither owner will economically benefit from the IP generated.

If you would like to talk about agreements for intellectual property protection or have an agreement reviewed, contact us to fully understand what you can protect.