Technology: Beware of Joint Ownership of IP Between Alliance Partners

Joint ownership can be fraught with unintended consequences.

Technology and protectable intellectual property have become more and more central to business success and competitive advantage. As such, in the negotiation of strategic alliances and development agreements, the ownership and use of intellectual property created during the relationship can become a hot topic. Frequently someone will suggest a solution: Both parties should jointly own the IP. This is almost always a bad idea.

This article will describe how joint ownership works, illustrate the problems and unintended consequences, and provide some suggested alternatives. We will focus primarily on patents and copyrights, and to some degree on trade secrets.

You can see from the above that each joint owner will be at the mercy of the others. Some call this a "race to the bottom" because it is easy to grant licenses and reap the proceeds, but hard to sue infringers that are misusing the IP.

Example Problem #2: Differing treatment under U.S. law for exploiting patents and copyrights


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Mark Malven

Mark Malven is the leader of the technology transactions practice at Dykema Gossett PLLC and immediate past chair of the IT Law Section of the...

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