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Suppose company A and company B jointly own the rights of a patent, and that this patent results from the work collaboration between inventor 1 (from company A) and inventors 2, 3 (from company B). Also suppose that both company A and B have internal rules to pay 30% of the revenues generated by patents to the inventors.

By the US patent laws, it seems that one of the companies, for example company A, could independently license the patent to a third company and not share its profits with company B. And that seems to be considered one of the perils of joint owning a patent.

My first question is: if company A licenses the patent to a third company, although it is not required to give any money to company B, is company A required by law to pay the inventors 2 and 3 (so all inventors get 10%)? Or company A could give the 30% of revenue to inventor 1 and pay nothing to inventors 2, 3 since they are employed by company B?

The question below assumes companies A and B are still in the preparation phase for a joint patent submission.

My second question is: assuming company A wants to delay the patent application process or, simply, decided that it does not want to submit the patent based on the joint work. Could company B go ahead with the submission by paying all costs by itself provided that it got the signature from inventor 1 (from company A)? In other words, what I want to know is if one company could intentionally block the other company from attempting to get patent rights on a joint invention. In regards to licensing the patent rights, in the US, I know one company can act independent from the other company, but I am wondering if this is also true for the patent application process.

Thank you,

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  • I suspect your first question is off topic for this site. Although related to patenting, it is really about licensing and contracts which are off topic. You might try the Law SE site. I suspect the answer is related to whatever the contractual agreement is between the two companies.
    – Eric S ♦
    Feb 22, 2021 at 14:20
  • Thank you for your comment. I thought there would be any federal law or state law in the US (like in some other countries) that would guarantee that an inventor get paid a reasonable remuneration from his/her company if it has benefited from the IP. Based on your reply, it seems that this is a contractual thing between the companies that are collaborating.
    – Roberto
    Feb 25, 2021 at 15:41
  • Companies are never inventors. If a patent is "owned" by a company it is because they've been assigned ownership. There are laws which govern what happens when a patent has multiple inventors and no other assignees. I'm not a lawyer so I wouldn't want to relate that specifically. Perhaps others would be able to authoritatively relate that.
    – Eric S ♦
    Feb 25, 2021 at 16:47

1 Answer 1

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Your basic assumptions is flat wrong in any realistic case. Yes, in the case of joint inventors they have separate ability to practice and license the invention with no need to coordinate or transfer money between them. Not a practical commercial situation, but that is the law. However, the joint inventorship rules can be overcome by a contract between the parties.

In your case, each of the inventors has assigned their rights to their respective companies and with 100% likelihood in real life, there is a company-to-company contract governing their joint ownership so the question about payments to inventors does not come up. Normally the project would have been started under a joint R&D agreement that would have set out the rules they agreed to abide by in patenting.

If they have disagreements as to the prosecution of one or more patents under their (presumed) agreement they will need to look to the terms of that contract and/or sue each other. Not patent law but contract law.

If you insist on a hypothetical where there is no agreement between the companies, they do have separate rights to license and it is a very, very, very unlikely case and definitely not within the scope of this site.

One point of patent law that might be relevant is that each side, barring any agreement otherwise, can file for patents that only have claims to things specifically with conceptual contributions exclusively from their side, if there any such claims possible.

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  • Thank you for your thoughtful answer. I imagined that there would be any federal or state law in the US that would protect the inventor even when the IP was assigned to the employer. In other words, a law that would guarantee that the inventor gets paid a reasonable remuneration in case the IP generates any revenue. I understand (and find it reasonable) that companies that jointly own an IP right could license it to a third company and not share money with each other... That is, if company A finds a licensee for the IP and company B doesn't, company A gets all the revenues... Pretty fair since
    – Roberto
    Feb 26, 2021 at 0:41
  • (continuing) since company B didn't do anything. What seems unfair is that in the absence of law, there is not guarantee that the inventor from company B will ever get any reward despite his/her invention has generated profits to company A. To remedy that, if I understood you correctly, both companies would need to fill this void in patent law with a contract law that would either: (1) force all joint owners (companies) to share license revenues regardless of which company found the licensee. Then, each company would reward its employee (the inventor) based on its internal rules; or (2) force
    – Roberto
    Feb 26, 2021 at 0:58
  • (continuing) force all joint owners (companies) to directly pay the inventors regardless of each company the inventor belongs to. Is my understanding correct?
    – Roberto
    Feb 26, 2021 at 0:58
  • Companies would be crazy to agree to a joint ownership the way co-inventors have a joint ownership. They could undercut each other and neither could not grant field of use exclusivity to any third party. It is not a realistic situation. It is NOT a reasonable arrangement. In the U.S. freedom to contract is paramount and there will be not law that requires payment to an inventor other than whatever they negotiated. Typically zero.
    – George White ♦
    Feb 26, 2021 at 1:34
  • Thank you for your reply. It seems that it is not customary for American companies to reward its employees (inventors) with a percentage of its revenue coming from licensing. I am guessing that if instead of companies, the joint owners were universities or governmental research labs, clause (1) or (2) written above would be more acceptable in a contract between these institutions? Thank you.
    – Roberto
    Feb 27, 2021 at 4:27

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