Question Q194 National Group: United Kingdom Title: The ... - AIPPI

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The law does distinguish between all forms of co-ownership as being either ownership as a ‘tenant in common’ or as a ‘joint tenant.’ The principal difference between these two forms concerns the rules relating to survivorship. Under joint tenancy, if one co-owner were to die, then his share automatically would be distributed amongst the remainder co-owners; while in contrast under tenancy in common, if one co-owner dies, then his share devolves in accordance with his testimonial wishes, or if there is no will, then in accordance with the rules of intestacy. Typically, IPRs jointly owned in a commercial context would be held as a tenancy in common, but occasionally this might not occur, e.g. husband and wife scenarios, and maybe for certain types of confidential information (e.g. personal as opposed to technical). The UK law also permits for the legal and equitable titles to a right to be owned by different people. For example, if there is a binding agreement to assign a right, but that agreement has not yet been executed, or the execution was flawed so that there was a failure to transfer the right in question, this could lead to co-ownership of the legal and equitable rights being held by different persons until the title is untied back in one person. We do not propose to take consideration of the position of partnerships that own an IPR as a partnership asset. Such assets being subject to rules of partnership deeds and the rules in the Partnership Act 1890; in particular, the operation of section 5, whereby permission granted by one partner binds his fellow partners. There is no strict legal definition of co-ownership governing IPR. The concepts applicable arise from UK property law generally. Under UK law, all intellectual property rights (IPRs) have their own framework either under statute or common law. The principal IPRs available in the UK are: Registered Rights: Patents (UK and EP designating the UK) Registered Designs (UK and Community) Registered Trade Marks (UK and Community) Equitable right – unregistered: Confidential Information (excluding official secrets, which are governed by the Official Secrets Act 1989) Unregistered Rights: Unregistered Designs (UK and Community) Passing Off Copyright Co-owners may regulate their ownership by contract. As a general rule, contract overrides the statutory provisions, save for the obvious exceptions like illegality. For an overview of these IPRs and the rights and definitions of co-owners we would refer the reader to the answer provided by the UK to question 194 at the Singapore ExCo 2007. 2) A large debate, during the Singapore EXCO, took place with regard to the notion of the exploitation of an IP right.
More specifically, the groups were highly divided on the issue of outsourcing or subcontracting the exploitation of an IP right. This question, particularly important in case of patents, relates particularly to the problem of subcontracting when a co-owner of the patent who, in principle, and at least according to the position expressed by AIPPI in its 2007 Singapore Resolution, has the personal right to exploit his own part of the patent, specifically by manufacturing and selling the goods or processes covered by the patent, needs to subcontract partially or totally the manufacturing of the product covered by the patent. No common position could be achieved by the Singapore EXCO in 2007 on the question if the right to exploit the patent should also cover the right to subcontract, specifically the manufacturing of all or part of the invention being the subject matter of the patent. Therefore, the groups are invited to present the solutions of their national laws on this specific point. We would refer the reader to the answer provided by the UK to question 194 at the Singapore ExCo 2007 for the position in the UK on the rights of co-owners to exploit, and the ability to licence their rights. Under the UK law outsourcing or subcontracting would be done by operation of a licence. As this question raises specific concern as to patents we respond in detail on the position regarding patents in the UK: Patents are governed by the Patents Act 1977. Other than by agreement to the contrary, those who are jointly granted a patent, are each entitled to an equal undivided share in the patent (section 36(1)) and to work the invention for their own benefit without accounting to the others (section 36(2)). Therefore co-owners are free to agree amongst themselves how to work their patent, and only fall back on the Patents Act when there is no agreement. Pursuant to section 36(2)(a) & (b) of Patents Act 1977; where two or more persons are proprietors of a patent, then, subject to the Act and any agreement to the contrary each of them shall be entitled, by himself or his agents, to do in respect of the invention concerned, for his own benefit and without the consent of or the need to account to the other or others, any act which would apart from this subsection …, amount to an infringement of the patent concerned. At common law one co-owner cannot prevent any other co-owner from working the invention, see Steers v Rogers [1893] AC 232. However, at common law, one coowner acting alone could not give a licence binding the other co-owner(s), although there appears to be no authority directly on the point. A co-owner of a patent may not grant a licence under the patent without the consent of the other owners (section 36(3)) Henry Bros (Magherafelt) Ltd. v. Ministry of Defence [1997] RPC 693. Another person may supply a co-owner of a patent with an essential element for the working of the invention, and such supply will not amount to an infringement of the patent (section 36(4)). If a co-owner disposes of a patented product to any person, then that person (and any other person claiming through him) is entitled to deal with the product in the same way as if it had been disposed of by a sole registered proprietor (section 36(5)). The UK group also wished to draw attention to the fact that our law differs from the USA in these matters. Therefore a sub-contractor, when acting as agent to a co-owner of a patent exploiting their IPR is acceptable, save where a licence is necessary for the use of said sub-contractor. Likewise in out-sourcing, if no licence is required it is acceptable in principle, but the UK believes such arrangements will typically require a licence. Should a licence be required, and it be refused by one co-owner as against another which frustrates the ability to work the invention, then an application to the Comptroller of Patents can be made to resolve the dispute between the co-
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Question Q194 National Group: United Kingdom Title: The ... - AIPPI

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