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Co-owning patents vs. co-owning software: what’s the difference?

By 2Market Information, Inc.
Published: May 22nd, 2013

In a recent blog post, Alan Bentley, who heads the Center for Technology Transfer & Commercialization at Vanderbilt University, unravels the legal implications of when two separate parties jointly own a patent.

Namely, if one of the owners were to non-exclusively license the innovation to a company, must it share the resulting proceeds with its co-owner? The answer is no; in such an agreement, most anything goes so long as neither co-owner restricts the ability of the other to act on the patent. An exclusive license to a third party, for example, would not fly, unless both owners agree to do so.

Co-owning software is a bit more complicated. This is because, unlike patents, software copyrights obey what is called the “rule of co-ownership of chattel.” While co-owners of a patent can go on to create separate products that are distinct from each other and belong to separate markets, software co-owners have only one product to copy and sell. If a customer purchases the software from one co-owner, chances are they will not give business to the other.

“Therefore,” Bentley points out, “it would be fundamentally unfair for the first entity to keep the entirety of the royalty it earns under its license, and it is obligated to share the royalties that it receives with its co-owner.” This is true even in the absence of a contract between the two parties, though the terms are certainly negotiable.

Source: Vanderbilt University CTTC

Posted under: Tech Transfer e-News

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