PowerPoint Presentation describing the unintended consequences on patentability and licensing of technologies that can result from unplanned, or even planned collaborations, when there is more than one inventor/owner of a technology

2. UNINTENDED CONSEQUENCES OF
JOINT PATENT OWNERSHIP
MODERATOR-
Rodney L. Sparks, J.D. Ph.D.
PANEL-
Marie Kerbeshian, Ph.D.
Michelle Booden, Ph.D.
Tom Boyce, J.D., Ph.D.

3. UNINTENDED CONSEQUENCES OF JOINT
PATENT OWNERSHIP
Outline
General Background Provided on:
Patent Ownership
Patent Prosecution and Litigation
Licensing
Foreign Laws
Panel Discussion
Recommendations for proactive measures
Recommendations for

4. Rodney L. Sparks, J.D., Ph.D.- Senior
Biotechnology Patent Counsel, University of Virginia
Licensing & Ventures Group
Marie Kerbeshian, Ph.D.- V.P. of Technology
Commercialization, Indiana University
Michelle Booden, Ph.D.- Associate Director, Office
of Technology Development , Salk Institute
Tom Boyce, J.D., Ph.D.- Partner, Chemistry and
Life Sciences, PIZZEYS, Patent and Trademark
Attorneys, Australia and NZ

5. Joint Ownership
• Joint ownership impacts a variety of licensing
and patent issues.
• When there is joint inventorship or joint
ownership of a patent with another entity,
there are many potential negative
ramifications as to:
• licensing, ability to enforce a patent by
infringement litigation, as well as potential
negative impact during patent prosecution.

6. Joint Ownership
• There are two ways for an organization to
become a joint owner of a patent or
technology:
–Intentionally (by collaborative
agreement, CREATE Act, CRADA, etc.)
–By accident, such as by a collaboration
that occurred w/o prior agreements in
place (potential fatal impact on patents
and litigation)

7. Joint Owners
35 U.S.C. § 261 Ownership; assignment
Subject to the provisions of this title, patents shall
have the attributes of personal property.
Applications for patent, patents, or any interest
therein, shall be assignable in law by an instrument
in writing. The applicant, patentee, or his assigns or
legal representatives may in like manner grant and
convey an exclusive right under his application for
patent, or patents, to the whole or any specified
part of the United States.

8. Joint Owners
35 U.S.C. § 261 Ownership; assignment.
Subject to the provisions of this title, patents shall have
the attributes of personal property.
Applications for patent, patents, or any interest therein,
shall be assignable in law by an instrument in writing.
The applicant, patentee, or his assigns or legal
representatives may in like manner grant and convey an
exclusive right under his application for patent, or
patents, to the whole or any specified part of the
United States.

9. Joint Owners
35 U.S.C. § 261 Ownership; assignment., cont.
A certificate of acknowledgment under the hand and
official seal of a person authorized to administer oaths
within the United States, or, in a foreign country, of a
diplomatic or consular officer of the United States or an
officer authorized to administer oaths whose authority is
proved by a certificate of a diplomatic or consular officer
of the United States, or apostille of an official designated
by a foreign country which, by treaty or convention,
accords like effect to apostilles of designated officials in
the United States, shall be prima facie evidence of the
execution of an assignment, grant, or conveyance of a
patent or application for patent.

10. Joint Owners
35 U.S.C. § 261 Ownership; assignment., cont.
An assignment, grant, or conveyance shall be void as
against any subsequent purchaser or mortgagee for a
valuable consideration, without notice, unless it is
recorded in the Patent and Trademark Office within
three months from its date or prior to the date of such
subsequent purchase or mortgage.
(note that based on 35 U.S.C. § § 116 and 261
inventors are considered to be owners, unless and until
they assign, either impliedly or explicitly)

11. Ownership Without Assignment
The Federal Circuit has found that assignment
requirements can exist even in the absence of a signed
contract. As a result, a collaboration between two
unrelated institutions raises issues as to ownership.
Unless there is an agreement to the contrary, the
rights of the several joint assignees of a patent are
governed under 35 U.S.C. § 262 (i.e., inventorship
equals ownership until, or if, assignment occurs).

12. Joint Owners
35 U.S.C. § 262 Joint owners.
In the absence of any agreement to the contrary,
each of the joint owners of a patent may make, use,
offer to sell, or sell the patented invention within
the United States, or import the patented invention
into the United States, without the consent of and
without accounting to the other owners.

13. Joint Ownership Issues
Most entities do not plan properly and when
confronted with joint ownership do not appreciate all
the potential future ramifications, even when entering
an agreement with the other co-owner(s).
Inter-Institutional Agreements are not always well
thought out.

14. Expert Statements On Joint Ownership:
-“The only thing worse than being a Joint Owner is being a
Joint Owner with your Licensee!”
John Breen, J.D., Ph.D., Patent Atty., (seconded by
Rodney Sparks; all in favor say aye)
-“Being a sole owner is advantageous!”
Alan Bentley, M.S., Asst. Vice Chancellor, Center for
Technology Transfer and Commercialization,
Vanderbilt University.
-“Facing the danger”- Stanley H. Lieberstein, Esq.
-“A trap for the unwary”- Wendell R. Guffey, Esq.

15. Joint Ownership:
Effects on Patent Prosecution
1. The parties may not agree as to how to
prosecute, which claim groups to elect,
whether to file divisionals, when to amend,
how to amend, etc.
2. Cited prior art can be fatal if the ownership
is not the same for the art and the
application.

16. Joint Ownership:
Effects on Patent Prosecution, con’t.
3. Double Patenting-
The nonstatutory obviousness-type double patenting
rejection is based on a judicially created doctrine
grounded in public policy so as to prevent the
unjustified or improper timewise extension of the
“right to exclude” granted by a patent and to prevent
possible harassment by multiple assignees.

17. Double Patenting, con’t.
Remedy-
If an argument cannot be made to overcome the
art, then the only cure for an obviousness-type
double patenting is to file a terminal disclaimer.
Problem-
A terminal disclaimer cannot be filed if the
ownership of the art and application is not
identical (FATAL- cannot overcome the rejection)

18. Double Patenting, con’t.
“Common Ownership” is the phrase used when dealing with prior art
and terminal disclaimers. (see MPEP 706)
706.02(l)(2) Establishing Common Ownership or Joint Research
Agreement [R-6]- In order to be disqualified as prior art under 35
U.S.C. 103(c), the subject matter which would otherwise be prior art
to the claimed invention and the claimed invention must be
commonly owned, or subject to an obligation of assignment to a
same person, at the time the claimed invention was made or be
subject to a joint research agreement at the time the invention was
made. See MPEP § 706.02(l) for **>rejections under 35 U.S.C. 103
based on prior art under 35 U.S.C. 102(f) or 102(g) and< prior art
disqualified under 35 U.S.C. 103(c) in applications granted as patents
prior to December 10, 2004. See MPEP § 706.02(l)(1) for
**>rejections under 35 U.S.C. 103 based on prior art under 35 U.S.C.
102(e), 102(f) or 102(g) and< prior art disqualified under 35 U.S.C.
103(c).

19. Double Patenting, con’t.
The term "commonly owned" is intended to mean that
the subject matter which would otherwise be prior art to
the claimed invention and the claimed invention are
entirely or wholly owned by the same person/entity at the
time the claimed invention was made.
If the person/entity owned less than 100 percent of the
subject matter which would otherwise be prior art to the
claimed invention, or less than 100 percent of the claimed
invention, then common ownership would not exist.

20. Commonly Owned con’t.
Therefore, common ownership requires that
the person/entity own 100 percent of the prior art
subject matter and 100 percent of the claimed
invention.
The patent law requirement for common
ownership at the time the claimed invention was
made is intended to preclude obtaining ownership
of subject matter after the claimed invention was
made in order to disqualify that subject matter as
prior art against the claimed invention.

21. Effect of Co-Ownership on
Patent Litigation
35 U.S.C. § 281 Remedy for infringement of
patent.
A patentee shall have remedy by civil action
for infringement of his patent.

22. Remedy for Patent Infringement
Co-Ownership “Standing” Issues- Is the patent owner a
co-owner suing alone?
All co-owners must bring suit together –a single co-
owner suing lacks standing (FATAL)
Examples: Lucent Techs., Inc. v. Gateway, Inc., 543 F.3d 710,
722 (Fed. Cir. 2008) (because patent owner had co-owner,
district court granted JMOL on lack of standing overturning
jury verdict of $1.5 billion- was affirmed); also Univ.
Pittsburgh v. Varian (Fed. Cir. 2009) (co-owner Carnegie
Mellon was inadvertently left off)- the case was tossed for
lack of standing

23. Ownership and Licensing Issues
• The Federal Circuit has found that assignment
requirements can exist even in the absence of a signed
contract. As a result, a collaboration between two
unrelated institutions raises issues as to ownership.
• Unless there is an agreement to the contrary, the rights
of the several joint assignees of a patent are governed
under 35 U.S.C. § 262.
• This means that one co-owner (or co-inventors) can sell
the invention without having to pay anything to other co-
owners (or co-inventors). Similarly, one co-owner can
grant a license to a company without the consent of the
other co-owners and without having to give the other co-
owners a share of the license royalties (but license is non-
exclusive)

24. Ownership and Licensing Issues
•
It is important for an institution that has outside
collaborations to consider ownership issues (and
licensing terms) carefully, particularly when the
institution is seeking to license technology arising
from such collaborations.
This is especially true if the licensee or potential
licensee is a co-owner, because if the licensee/co-
owner terminates the license agreement or does not
take a license agreement, they are free to use or
license the product on their own unless there is an
agreement to the contrary.

25. Ownership and Licensing Issues, cont.
•• Additionally, a potential licensee may be less likely to
take a license, or may offer a much lower royalty, if another
co-owner has the ability to use or license the same
technology to a competitor. Therefore, these problems
should be avoided if possible, such as by not collaborating
unless a research agreement or contractual arrangement is
made in advance.
• International rights can be effected because some
countries require all owners to consent to any licensing
agreement and/or to assigning rights.

26. Ownership and Licensing Issues, cont.
Summary-
- Potential loss of bargaining power
- One co-owner may freely grant a license without the
consent of the other co-owners
- One co-owner (or co-inventors) can sell the invention
without having to pay anything to any other co-owner (or
co-inventor)
- Loss of ability to grant any kind of license in some
countries without approval of co-owners
- Apprehension by potential licensees

27. Policies to Consider
Do we own it?
Work from previous employer?
PI transplant may bring research program over
Possible joint inventorship (university or industry)
If joint with industry, we don’t file
Offer to joint holder, then put in-abeyance
If joint with another non-profit, seek IIA
Who leads?
How many owners?
What’s dilution (UC San Diego)

28. Curing Joint Ownership Issues
Some issues can be cured after joint ownership arises,
and some can only be cured/prevented if proactive
measures are taken; therefore-
Avoid or Cure Joint Ownership Problems (Avoiding
Disaster)

29. Curing Joint Ownership Issues
Possible Approaches-
A. Carve out the inventive contributions into separate
patent applications to limit the overlap of claim ownership.
B. Eliminate the material contributed by the other party
C. Determine if the others are really inventors; if not, do
not add them and there is no joint ownership issue.
Remember that you must name the correct inventors
D. Assign the Inventions to One Party in a Collaboration
Agreement or License (best) or in an Agreement once the
issues arises

30. Panel Discussion- Co-ownership
- Licensing Terms to Avoid Co-Ownership or Co-
Ownership Issues
- Collaboration Agreements
- Methods for Handling Patent Applications
When Co-ownership Was Unexpected
- Foreign Rights and Responsibilities
- Horror Stories (and some successes)
- Why the University of Virginia has never had
any of these problems

33. bb