Patent Infringement in Joint Ventures

Jul 152024

Early on in a joint venture, it could appear appealing to consent to shared ownership of any intellectual property generated during the venture. However, there might be a lot of challenges with this kind of arrangement when it comes to enforcement, commercial exploitation, and termination. These include matters pertaining to rights distribution, responsibility delegation, and wind-down. Apart from these broad issues related to action coordination, there are plenty of joint-ownership concerns that are particular to different types of intellectual property. Since there are risks of patent infringement in the joint agreements, we will discuss those possible risks and concerns in this article. The patent attorney India can also give you clear insights regarding the possible risks.

Joint agreements in Patents

One advantage of having a patent is that it gives the owner the exclusive authority to prevent third parties from using the invention they have filed for. In many ways, joint ownership of a patent erodes its exclusivity. When an inventorship challenge arises later in the partnership, co-ownership of patents may result from a relatively minor contribution to the patent. Before a dispute emerges, co-venturers should proactively agree on patent co-ownership concerns. This is easier to do before inventions have a clear commercial value.

Licensing

It is not possible to provide an exclusive license to utilize a patent without the consent of all joint owners; nevertheless, each joint owner may separately grant a non-exclusive license pertaining to the patent’s rights. In connection with this, co-ownership of patent rights permits each owner to make commercial use of the rights independently of the other owners. (Laws and regulations in each country govern patent rights; the treatment of jointly produced patent rights varies greatly throughout nations.)

In practice, this means that when a potential licensee plays one off the other to get the best deal, joint patent owners may compete with one another. This dynamic can sabotage or undermine attempts to make money off of the underlying discoveries. A situation like this could also work against the advantages of creating derivative intellectual property, hindering future innovation and hindering related financial gains.

Enforcement

In other words, co-ownership of patent rights empowers one owner to prevent other owners from suing infringers by declining to join such a suit. A co-owner wishing to pursue a patent infringement claim with the help of a patent attorney in India must join all other co-owners. Instead of interfering in the litigation, a co-owner may, in fact, choose to license the patent to an alleged infringer or threaten to do so. By pursuing both simultaneously in an attempt to start a bidding war, the co-owner could thereby open up two potential channels via which they could obtain exclusive benefit from the jointly owned patent.

Issues with Patent Infringement in Joint Ventures

The above-mentioned issues are usually not just “legal details” that co-venturers can afford to ignore or only touch the surface of. In many joint ventures, the members’ and joint venture’s ownership, use, and function of intellectual property (IP) are essential components of the business and value proposition of the JV.

Regardless of how complex the actual or perceived IP arrangements are, avoiding or delaying the problem is likely to lead to longer, more unpleasant negotiations between or among co-venturers, and choosing “joint ownership” as a cheap, easy fix is almost guaranteed to cause issues for all parties.

Early in the creation process, co-venturers that take the time to carefully examine and handle their own and the JV’s intellectual property (IP) put themselves in a better position to build a profitable joint venture and eventually recoup their resource commitments.