Best Practice for Joint Ownership of Patent in Taiwan

published on 11 Oct 2016
 

Joint ownership of technological achievements is a popular topic attracting the interest of many fields of industry. An invention with more market value is often the fruit of collaboration between academic institutes and industries by means of joint development or co-investment.   Moreover, following the accelerating pace of globalization, it has become more commonly seen that a successful new product originates from the collaborative contribution of technical experts from different parts of the world. Entering a clearly drafted joint development agreement that defines each party’s privileges and obligations regarding a resulting invention is thus a necessary topic for discussion before commencing any form of cooperation. Hereby we introduce how the patent law regulates a joint ownership of an invention in order to provide guidance for best practices.

Definition of Co-Inventorship

The Patent Act does not specifically define what may constitute a joint ownership of patent or the right to apply for the same. In practice, a person who has substantial contribution to technical features of the resulting invention, for at least one claim, can be named as an inventor to a subsequent patent application. Particularly, such a person having “substantial contribution” means one who engages in the conception of a specific and achievable technical means, which possess a technical effect to resolve a given technical problem (IP Court judgment No. 104-CPA-4). A person who merely assists in operating experiments or tests is not considered as an inventor (IP Court judgment No. 102-CPA-23). Meanwhile, how each individual share of patent ownership is distributed is a contractual matter and should be subject to the joint owners. When the ownership for each joint owner cannot be distinctively identified, it will be presumed that each joint owner has equal share of the ownership.¹

The Exercise of Joint Patent Rights

The Patent Act provides several imperative regulations as to exercising rights under an effective joint ownership for patents:

Firstly, each joint patent owner has the right to exploit the patent without the consent or compensation that may be due to the other joint owners. However, there is a limitation for the disposal of his/her share of the right. Namely a joint owner cannot license exclusively or non-exclusively, assign, entrust, set up a pledge, or abandon the entirety of the patent without unanimous consent from all joint owners.² Said consent does not necessarily follow a strict formality, it can be either expressive or implied. Particularly, consent does not have to be made concurrently with the occurrence of any disposal event. Consent is valid even being made in advance as an undertaking or retroactively as recognition of the disposal. In some precedent cases valid consent was derived from a majority decision which all joint owners agreed in advance regarding how to exercise the patent rights. It could also be derived from a designated representative or a plurality of representatives whom all joint owners have appointed.

Next, a joint owner’s share of the patent right cannot be assigned, entrusted, or established for a pledge, without unanimous consent from all other joint owners.³ This provision was so legislated to avoid resulting in an even more complicated co-ownership relationship for a patent. On the other hand, a joint patent owner’s abandonment of his/her own share, on the contrary, does not require unanimous consent from other co-owners. The abandoned share will be allotted to other joint owners in proportion. Whereas a joint owner cannot license the entirety of the patent right to others without other joint owners’ consent, it remains a legal question whether he or she can license his or her own share of the patent right. Although the Patent Act does not expressively stipulate the co-owner’s act of licensing, the legislative rationale has indicated the legislator’s position that consent from all co-owners is still required:

“The share of each patent co-owner exists abstractly in the entirety of the patent right. As such there is no specific portion of share, it makes no difference from licensing one’s own portion to licensing the entirety of the patent right.”

In the event where a patent infringement is likely, any joint owner may independently institute a law suit against the infringers to cease and prevent the infringement. In terms of the monetary damages, a co-owner can either claim damages proportionally according to his or her own share, or claim the entire damage amount paid to all joint-owners on behalf of all joint owners.

Pursuant to Article 12 of the Patent Act, “[where the ownership of an invention] is jointly owned, the patent application related thereto shall be filed by all the joint owners.⁴ ” As a remedy available for a true co-inventor who fails to be named as one of the joint owners upon filing, said co-inventor is entitled to a declaratory judgment requesting the court to confirm that the applicants are not the true owners to file for the patent. In the meantime, the true co-inventor may invalidate the already issued patent on the same grounds of incorrect ownership within two years from its issuance.⁵ If the declaratory judgment is in favor of the co-inventor, a request may be made to the Taiwan IP Office (TIPO) for a corresponding disposition to the pending invalidation proceeding. Within two months from TIPO’s decision revoking the patent, the correct owners may file application covering the same invention to enjoy the same filing date. As expected that the substantive patentability for the same patent has been previously examined, the examination process will mainly entail change of ownership to reflect the true owners, and therefore the new application will normally be granted quickly.⁶

In summary, joint-ownership is a rather complicated legal relationship and many disputes may arise therefrom. It is always recommended that the interest parties shall enter into a collaborative agreement as a fundamental guidance before the contracted parties contribute their works. When there is no agreement or the agreement is silent in a particular issue, relevant rules as prescribed in the Patent Act and the Civil Code, as well as the judicial interpretation, shall prevail and be applied as default rules to resolve disputes. 

for any questions relating to this topic, please contact us at cjchen@tsailee.com.tw