Grants of Rights to Third Parties – Intellectual Property – Patents

A patent may be shared between two or more people. However, under section 36 of the Patents Act 1977 (“the Act”), each proprietor may use the patent for his or her own benefit without the consent of or taking into account the other proprietors; however, if a proprietor wishes to licence the patent, he or she must either obtain consent from the other proprietors or apply to the comptroller for permanent permission. Get the facts about Trademarks you can try this out.
The partnership between the joint proprietors of a patent for producing a form of drinks cooler fell apart in Paxman v Hughes [2005] EWHC 2240 (Pat). Mr Paxman and Mr Hughes were both directors of Trim Cool Limited, a company they founded to manufacture a cooler in compliance with the patent.
The inventor, Mr. Paxman, demanded that the comptroller issue an order allowing third parties to produce and sell drinks coolers under the patent. Mr Hughes objected to the proposal, claiming that the comptroller lacked authority to issue the requested order for the following reasons:

? the order involved extra-territorial authority, which was not within the comptroller’s jurisdiction;? the comptroller had no jurisdiction to authorise a co-proprietor to issue commercial licences to third parties against the wishes of another co-proprietor under s.36 and s.37 of the Act; and? Mr Paxman’s fiduciary responsibilities as a company director precluded him from pursuing this order.
The case was dismissed because the order requested was in violation of Mr Paxman’s duties as a company owner. Mr Paxman lodged an appeal, arguing that the hearing officer’s conclusions were wrong.

On appeal, it was determined that:? Mr Paxman was seeking the order as the inventor seeking to commercialise the invention;? Mr Paxman was not applying in his capacity as a company owner, and hence was not infringing on his fiduciary duties;? the comptroller had the authority to enable the applicant to issue a licence to a third party under s.37 of the Act; and? the comptroller had wide discretion in deciding on restrictions that would protect the other proprietor.

Comment: This case shows how co-ownership of intellectual property rights can trigger issues. As a result, it’s a good idea to have a formal agreement that sets out the rights of co-owners.