Joint-ownership of patents inhibits licensing deals

Joint ownership of patents can be a major stumbling block to licensing deals being negotiated across international borders. In most countries the joint ownership of intellectual property legally prevents any of the joint owners licensing their interest in the jointly owned patent without the consent of the others (Japan: Article 73(3) The Patent Law; UK: Section 36(3) Patents Act 1977; Australia: Section 16(2) Patents Act 1990), Canada: Forget v. Specialty Tools of Canada Inc (1995) 62 CPR (3d) 537). A joint patent owner, however, does not need consent to exploit the invention themselves and does not need to account for any profits it makes from it. By contrast, in the United States an owner of a joint patent can license their interest in a patent without the consent of the other owners and do not have to account to them for any royalties or payments received as a result of the license (Schnack v. Applied Arts Corporation 278 N.W. 117 Mich 434). In the US neither party can grant an exclusive license to the joint patent without the consent of the other. With no standard set of rules on joint ownership of patents, it is easy to see how negotiations for licensing deals taking place on a global scale can become long and protracted.

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