Q: My partner and I work on our invention in the evenings in my garage. He is one of my oldest friends. We haven't patented it as we want to see whether we can get the invention to work properly first. However recently I have suspected he may be wanting to continue work on it alone. Which of us owns the rights at the moment and what rights do joint owners have if it is a joint invention?
A: If you collaborate with anyone it is best to draw up a simple agreement between you early on so everything is clear. Suggest to him that as things are going well to avoid misunderstandings later you want to agree some simple terms with him about who owns the rights, who pays or decides about patents, what decisions must be taken jointly and what happens if you want to split up and requiring each of you to keep the invention secret.
However at the moment you have no written agreement so much depends on what types of intellectual property rights, if any there are so far. If one of you applies for a patent which should be jointly owned or be owned by the other then under s8 of the Patents Act 1977 you can apply for a declaration of the true owner. Take legal advice. If you both apply then s36 sets out the rights of co-owners. Unless you agree to the contrary you are entitled to equal undivided shares of the patent. Each of you can use the patent without consent from the other. However you may not grant a licence or assign the patent without the consent of the co-owner. You are allowed to agree provisions different from this if you choose. If your invention is protected by copyright or design right then you will need to examine the rules in those areas. However in all cases you can agree a different arrangement than that set out in the statutes and that is the best course of action.
Inventors Legal Problems
Related further reading by Susan Singleton...
Editors Note: These articles first appeared as Susan Singleton's very popular column in Inventors World magazine.
Due to the changing nature of the law, Susan has fully updated them for 2015.
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Q: I have written a computer program which I know is protected by copyright. I am also a software programmer in my main job and I work through a limited company which contracts my services to clients. Who owns the copyright in the program I have written and what licences do I need?
A: Are you an employee of the limited company you run? Not all directors are employees of the company they work for. Some receive a salary and tax and National Insurance contributions are deducted under PAYE and they have a service agreement. If that is the case and you wrote this program in the course of your employment then the limited company will automatically own the copyright. However, if you are not an employee or you wrote the program outside the course of your employment then you will own the copyright. If you want the company to own it then all you need is a short one page assignment deed which you should sign transferring the copyright to the company. You should seek tax advice before making the transfer.
As for licences if you own the rights but your limited company will be licensing the program to clients then you need a simple licence agreement between you and the company giving the company a right to grant sub-licences to customers. Make sure you do not do any deals until licence terms have been agreed.
Q: I could not afford to pay for patenting all over the world so applied in the UK only. Now I see my invention is being used in Germany. What can I do to stop this?
A: Your UK patent gives you rights in this country only so you can stop the German company importing products which infringe your patent into the UK. However you cannot stop his activities in Germany. Generally you are given a period of 12 months only in which to decide whether to register abroad after making your UK patent application. So in one sense it is better to patent later when you know you have people who want to exploit your invention, who may help pay for foreign patents. On the other hand the sooner you patent the better so you obtain an earlier priority date and get in before the competition.
Q: We have a UK trade mark for our product which we sell in the UK and the USA. We have one exclusive distributor in the UK. Recently the exclusive distributor contacted us to say that our US distributor is importing in to the UK and undercutting him. Can we enforce our intellectual property rights to stop him?
A: The first point is that importing without consent is normally infringement of trade mark under the Trade Marks Act 1994. However if you have put the product on the market in the EU or EEA (the EU plus Norway, Liechtenstein and Iceland) you cannot stop someone buying in one of those countries and shipping the product back to the UK. This is because there is a single European market and you are not allowed to divide it up. You can always stop counterfeit or pirated products however. If the import is from outside of Europe even if the goods are your genuine product as marketed in the US you are entitled to prevent the import. This area of law, called international exhaustion of rights, is not entirely clear so you would be wise to consult a solicitor. In one EU case called Silhouette and another Tesco / Levi's the Court of Justice of the EU held that the EU trade mark owner could prevent its own products being imported from outside the EU into the EU as there was only a single market in the EU and not over the whole world.
The law differs slightly between the different IP rights too because some have harmonised legislation such as trade marks in the trade marks directive and others do not such as the area of patents.
The American Supreme Court in 2013 in Wiley held otherwise and said copyright protected books could be imported into the US when put on the market by the EU publisher for a foreign market. The EU decisions make things difficult for the international parallel importer of products. However every time you propose to create barriers to entry to a market or grant an exclusive licence or right take legal advice from a competition lawyer as in the EU there are strict rules in this field. For example most bans on exports of products between EU states are void and could lead to heavy European Commission fines. With a huge increase on internet selling it is increasingly important to take advice from intellectual property and competition law solicitors such as the writer on these issues of free movement of goods and exhaustion of rights/parallel imports.
"What can I do to stop this?"