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«Report Q194 in the name of the United Kingdom Group by Stephen BENNET, Daniel BROOK, Trevor COOK, Barbara COOKSON, Ian COATES, Michael EDENBOROUGH, ...»

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United Kingdom

Royaume–Uni

Vereinigtes Königreich

Report Q194

in the name of the United Kingdom Group

by Stephen BENNET, Daniel BROOK, Trevor COOK, Barbara COOKSON,

Ian COATES, Michael EDENBOROUGH, Paul HARRIS, Nicholas MACFARLANE,

Richard MILLER, Gareth MORGAN, Ben CLOSSICK THOMSON,

James TUMBRIDGE, Jan VLECK, Richard WILLOUGHBY

The Impact of Co–Ownership of

Intellectual Property Rights on their Exploitation

Questions

I) The current substantive law

1) Groups are invited to indicate whether, in their countries, the statute of co–ownership of IP rights is uniformly organised or if each IP right has its own regulation concerning co– ownership, particularly as far as their exploitation is concerned.

What options are left for co–owners to regulate their co–ownership relationship: are the statutory rules mandatory, or do they apply only in case of the absence of a contractual regulation of co–ownership between the parties?

At the outset of this answer, the Group wish to note six general points.

First, only the principal IPRs have been considered, therefore, for example, moral rights, supplemental protection certificates, semi–conductor topography, performer rights and plant varieties have not been mentioned.

Second, for registered rights, commonly the rights are granted to the person who is identified on the register as the proprietor, regardless of whether or not that person is actually the current owner, because (for example) an assignment has not yet been recorded. No account of that has been taken in this response.

Third, under UK law, it is possible for the legal and equitable titles to a right to be owned by different people; for example, if there is a binding agreement to assign a right, but that agreement has not yet been executed, or the execution was flawed so that there was a failure to transfer the right in question.

Fourth, under UK law, co–ownership may take one of two forms, namely joint tenancy and tenancy–in–common. The principal difference between these two forms concerns the rules relating to survivorship. Under the former (i.e. joint tenancy), if one co–owner were to die, then his share automatically would be distributed amongst the remainder co–owners; while in contrast under the latter, if one co–owner dies, then his share devolves in accordance with his testimonial wishes, or if there is no will, then in accordance with the rules of intestacy. Typically, any IPRs jointly owned in a commercial context would be held as a tenancy–in–common, but occasionally this might not occur, e.g. husband and wife scenarios, and maybe for certain types of confidential information (e.g. personal as opposed to technical).

Fifth, no consideration is taken of the position of partnerships that own an IPR as a partnership asset. Partnerships are governed by the Partnership Act 1890. In particular, by the operation of section 5, permission granted by one partner binds his fellow partners.

Sixth, different IPRs use differing terminology such as owner or proprietor, and the term most associated with a given right is the one used.

Under UK law, all intellectual property rights (IPRs) have their own framework either under

statute or common law. The principal IPRs available in the UK are:

Registered Rights – Patents (UK and EP designating the UK) – Registered Designs (UK and Community) – Registered Trade Marks (UK) and Community) Equitable right – unregistered – Confidential Information (excluding official secrets, which are governed by the Official Secrets Act 1989) Unregistered Rights – Unregistered Designs (UK and Community) – Passing Off – Copyright Co–owners may regulate their ownership by contract. As a general rule, contract overrides the statutory provisions, save for the obvious exceptions like illegality.

Each IPR is now considered in turn:

Patents Patents are governed by the Patents Act 1977. Other than by agreement to the contrary, those who are jointly granted a patent are each entitled: to an equal undivided share in the patent (section 36(1)), and to work the invention for their own benefit without accounting to the others (section 36(2)). Therefore co–owners are free to agree amongst themselves how to work their patent, and only fall back on the Patents Act when there is no agreement.

At common law one co–owner could not prevent any other co–owner from working the invention, see Steers v Rogers [1893] AC 232. However, at common law, one co–owner acting alone could not give a licence binding the other co–owner(s), although there appears to be no authority directly on the point.

A co–owner may not grant a licence under the patent without the consent of the other owners (section 36(3)). Another person may supply a co–owner of a patent with an essential element for the working of the invention, and such supply will not amount to an infringement of the patent (section 36(4)). If a co–owner disposes of a patented product to any person, then that person (and any other person claiming through him) is entitled to deal with the product in the same way as if it had been disposed of by a sole registered proprietor (section 36(5)).

One co–owner can sue for infringement of the patent (section 66) but must join his fellow co–owners, either as co–claimants or as defendants. However, where a co–owner joined as a defendant takes no part in the proceeding they shall not be liable for costs (section 66(2)).





Apart from an agreement to the contrary, no assignment or mortgage can be made of the share of any co–owner without the consent of all other co–owners (section 36(3)). Further, apart from an agreement to the contrary, one co–owner may not without the consent of the others amend the specification of the patent or request the patent be revoked.

The Comptroller of Patents has the power to make orders as between co–owners (section 37).

The case of Hughes v Paxman [2006] EWCA Civ 818, demonstrates the Court’s willingness to intervene in disputes between co–owners.

UK Designs (Registered and Unregistered) Registered Designs are governed by the Registered Designs Act 1949 (which has been very substantially amended). The author of the design is the first proprietor. Where a design is computer–generated, the person responsible for making ‘arrangements necessary for the creation’ by the computer to create the design, is the author (section 2).

The Registered Designs Act 1949 does not set out the rights of co–owners. There is, therefore, no specific provision for joint authors/proprietors; however, it is clearly envisaged as a possibility. For example, section 19 (which is concerned with the registration of an assignment) mentions co–proprietors. In addition, in the notes accompanying Form DF2A, which has to be submitted for the registration of a design, there is mention of joint owners. Further, section 44 (which provides definitions for use within the Act), defines the proprietor as ‘the person or persons’ entered in the register of designs as proprietor of the design, therefore clearly recognising multiple owners.

As a working assumption, it can be assumed that the law governing co–owned registered designs is the same as for co–owned unregistered designs (Copyright Designs & Patents Act 1988). Co–owners of unregistered designs require the consent of all the other owners in order to deal with the design (Sections 222, 226 and 259).

As with copyright (CDPA section 173), UK unregistered design right has similar provisions: for example, where different persons are entitled to different aspects of design right in a work, the owner who has power to deal with the work is the person who is entitled to the aspect of the design relevant for that purpose (section 258). Further, where design right (or any aspect of design right) is owned by more than one person jointly, references to the owner are to all the owners, so that a licence of the design requires all owners to agree.

Community Designs (Registered and Unregistered) The Community Design Regulation 6/2002 is the source of law governing the Community Design. The designer of a Community Design is the owner, and a design which is produced by two or more people vests in all the designers jointly (CDR Art 14).

Dealing with a Community Design is governed by the national law of the relevant member

state, determined by:

1) the holder’s seat or domicile; or

2) where the holder has their establishment Where there are joint holders and two or more fall into 1 or 2 above, the relevant state is the member state of the first mentioned holder on the register. If the holders are not in a member state then Spanish law applies, as the seat of OHIM.

UK Trade Marks Trade Marks are governed by the Trade Marks Act 1994. The Trade Mark Act is express as regards co–ownership: a registered trade mark granted to two or more persons jointly entitles each of them, subject to any agreement to the contrary, to an equal undivided share in the registered trade mark (section 23(1)). By this section joint owners hold the trade mark as tenants–in–common, meaning they each own an equally–transferable share.

Further, subject to any agreement to the contrary, each co–proprietor is entitled, by himself or his agents, to do for his own benefit and without the consent of or the need to account to the other or others, any act which would otherwise amount to an infringement of the registered trade mark (section 23(3)).

A co–proprietor may not without consent of the others grant a licence (section 23(4)(a)), or assign or charge their share in the trade mark (section 23(4)(b)).

Infringement proceedings may be brought by any co–proprietor, but they may not, without the leave of the court, proceed with the action unless the others are either joined as a claimant or added as a defendant. A co–proprietor who is thus added as a defendant shall not be made liable for any costs in the action unless he takes part in the proceedings (section 23(5)).

Interlocutory relief may be granted on the application of a single co–proprietor.

There is an added complication with co–ownership of trade marks, because a trade mark is a ‘guarantee of origin’. Therefore, if two owners exploit the mark independently the trade mark may risk revocation, because it would be liable to mislead the public as to the origin of the goods or services.

Community Trade Marks The Community Trade Mark Regulation (EC) No. 40/94 is the source of law governing the Community Trade Mark. Four articles make specific reference to joint–proprietorship, they are;

– Article 16: Dealing with Community trade marks as national trade marks – Article 21: Insolvency proceedings – Article 49: Surrender – Article 70: Persons who are entitled to bring an action for infringement A Community trade mark is an object of property that must be dealt with in its entirety for the whole area of the Community. It can be treated as a national trade mark registered in the

Member State in which, according to the Register of Community Trade Marks:

a) the proprietor has his seat or his domicile on the relevant date; or

b) where subparagraph a) does not apply, the proprietor has an establishment on the relevant date.

If two or more persons are mentioned in the Register of Community Trade Marks as joint proprietors, the domicile of the first listed is the relevant member state. If the holders are not in a member state, then Spanish law applies as the seat of OHIM.

A Community Trade Mark may be surrendered by written declaration by the proprietor, though there is no specific mention of how a dispute between proprietors over surrender would be resolved. It is expected that the proprietor in favour of maintaining the right would win.

It is noted that licensees also have specific rights to be informed of decisions such as surrender, however, for the purposes of this question no specific discussion of the rights of licensees will occur.

Article 70 permits a joint proprietor to claim compensation on behalf of persons who have authority to use the mark where they have sustained damage in consequence of unauthorized use of the mark.

Confidential Information Confidential information is based on the equitable duty of confidence, and is not governed by its own statutory regime. However, there is some statutory recognition of this IPR. The Copyright Designs and Patents Act 1988 section 171 specifically confirms that nothing in that section affects any rule of equity relating to breaches of trust and confidence. The joint owners are free to conclude what rights each has to the use of the information between themselves.

Joint owners can each use the confidential information independently (Murray Yorkshire Fund [1997] EWCA Civ 2958), though presumably a joint owner can restrain another co–owner from disseminating the ‘confidential information’, as failure to do so could render the information ‘public’, and so destroy the confidence.

Copyright Copyright is governed by the Copyright Designs and Patents Act 1988.

All co–owners of a copyright work must consent to the use of the work, following the case of Cescinsky v George Routledge & Sons [1916] 2 KB 325. Though, there are slight variations on the general rule, for example; the case of Powell v Head (1879) 12 Ch D 686, held that the purported grant of a licence to perform a play by one of several co–owners of the copyright therein did not affect the rights of the other co–owners. Section 173 provides that, where different persons are entitled to different aspects of copyright in a work, the copyright owner who has power to deal with the work is the person who is entitled to the aspect of copyright relevant for that purpose. Further, where copyright (or any aspect of copyright) is owned by more than one person jointly, references to the copyright owner are to all the owners, so that a licence of the copyright requires all owners to agree. Thus, one joint owner may not reproduce the work or grant licences to others to reproduce it without the consent of the other joint owner or owners, but he may by himself take proceedings for infringement.

Further it is worth noting that when considering copyright there are differences between the author and the commissioner, as commissioning a work does not necessarily lead to ownership of the work.



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