On 13 August 1813, Thomas Jefferson wrote a letter to Isaac McPherson which stated.
If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me
That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property
Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody. Accordingly, it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea. In some other countries it is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices.
As referred to in the extract, as ideas and the intellectual property which is derived from them are, by their very nature, intangible, the legal ownership of such rights is often more complex than physical property. As Thomas Jefferson wrote, the exclusive rights which the law attaches to intellectual property are very beneficial. As a result, the law of intellectual property and by virtue of its nature, its ownership as property, has existed in many jurisdictions, particularly England, for centuries. Consequently, the current law on the ownership of intellectual property in England is well established. As Thomas Jefferson identified, once intellectual property is made public, it is known to all. As a result, claiming ownership of intellectual property and enjoying the benefits of ownership of such rights is a key issue.
The purpose of this article is not to explore whether intellectual property should be capable of ownership, but rather exploring the key risks and common pitfalls which IP rights holders and legal advisors should be aware of so as to ensure a rights holder is able to enjoy the full benefit of their IP.
The Ownership of Intellectual Property
Although the various different types of intellectual property rights are often treated collectively under the umbrella of "intellectual property", under English law, the ownership of each of the different types of intellectual property law is governed by separate statute or common law rules. As a general starting point, intellectual property rights are personal property and this is reflected in the statutes governing each of the different forms of intellectual property. By way of an example, section 30(1) of the Patents Act 1977 states that "any patent or application for a patent is personal property" and section 22 of the Trade Marks Act states that "a registered trade mark is personal property".
When considering the ownership of intellectual property, the first point to consider for each of the intellectual property rights is who is the first owner of the intellectual property right in question. Again, the law for each of the intellectual property rights needs to be considered separately.
With regard to patents, the rules setting out eligibility for first ownership are set out in section 7(2) of the Patents Act 1977. In short, the inventor, being the actual deviser of the invention, is eligible to be the owner of a granted patent. This is, however, subject to any agreement to the contrary, for example, the contractual relationship between an employee and an employer.
The law governing registered designs is similar pursuant to section 2 of the Registered Designs Act 1949; the author, that being the person who creates the design, is the original proprietor of the design. Pursuant to section 3(3) of the Registered Designs Act 1949, an application for a registered design is to be made by the person claiming to be the design owner.
In relation to trade marks, the owner of a trade mark is the applicant for the trade mark registration. This is a procedural question regarding the trade mark application itself. Although ownership of a trade mark is governed by the application process, an applicant for a registered trade mark needs to ensure that it is not filed in bad faith. For example, an employee who applies for a trade mark based upon a new brand which they have been working on for their employer is liable to have their trade mark invalidated for being in breach of the absolute grounds as set out in section 3 of the Trade Marks Act 1994.
Finally, in respect of copyright, in accordance with section 11(1) of the Copyright, Designs and Patents Act 1988, the author of a work is the first owner of the arising copyright. As with designs, the author is the person who creates the work. The Copyright, Designs and Patents Act 1988 contains similar rules for UK unregistered designs which are set out at section 215 and state that the designer is the first owner.
The legal position in respect of first ownership is important to bear in mind when considering the ownership of intellectual property. First ownership is relevant in a number of scenarios, for example the enforcement of intellectual property and the acquisition of intellectual property. Therefore, establishing a clear chain of title is important.
Altering the Default Statutory Position
Once the first ownership of intellectual property rights has been established, consideration must be given as to whether the statutory position of first ownership has been altered and a new owner established. There are a number of scenarios when the statutory position is altered which rights holders and advisors need to be mindful of.
Under English law, as a general rule, intellectual property which is generated by employees is owned by their employer. This presumption favors the employer and is in my view, beneficial to the functioning of business generally. There are, however, a number of exemptions and rules which advisors need to be mindful of. As with the rules on first ownership, the various statutes governing the rules for the intellectual property rights are set out in each of the intellectual property statutes.
Firstly, in respect of patents, section 39 of the Patents Act 1977 sets out the rules governing the ownership of employee-generated inventions. It is a common pitfall to assume that all patentable inventions which are derived from employees are automatically owned by the employers. However, compared to the other intellectual property statues, the law in relation to employee-owned inventions includes a number of nuances. The starting point is section 39(1) of the Patents Act 1977 which states that an invention made by an employee shall belong to the employer provided that "it was made in the course of the normal duties of the employee or in the course of duties falling outside his normal duties, but specifically assigned to him" or the invention was made in the employee's course of duties and at the time of making the invention the employee had a "special obligation to further the interests of the employer's undertaking". Although the statutory position favors the employer, it is readily foreseeable that an invention may be created by an employee outside of the above requirements. The typical example when considering the application of this statutory provision is an invention created by an employee outside of working hours, at home and applicable to a different sector. In this scenario, an employee could quite rightly claim that the invention and therefore right to apply for a patent would vest with them alone. Therefore, advisors should be mindful of these exceptions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.