The Risk of Joint Ownership in Patents – And Why It’s a Trap. Episode 157

Let’s talk about why joint ownership of a patent can cause some serious problems, and how you can avoid stepping into that trap.

What Joint Ownership Actually Means

Here’s the setup: If two or more people are listed as inventors on a patent—and they don’t put a written agreement in place—they’re legally considered joint owners. And under U.S. law, that means each owner has full, independent rights to the entire patent.

That includes the right to license it, sell it, use it, or commercialize it—all without the other’s permission. They don’t even have to tell you. And they definitely don’t have to split the money.

Worse? If you want to sue someone for patent infringement, you can’t do it without the other co-owner joining in. One holdout, and you’re stuck watching your rights go unenforced.

A Real-World Example: Schering v. Roussel-UCLAF

Let’s bring this to life with a real case: Schering Corp. v. Roussel-UCLAF.

Schering and Roussel co-owned a patent related to prostate cancer treatment. They had even signed a “cooperation” agreement saying if either wanted to sue an infringer, the other would offer “reasonable assistance.”

All sounds very reasonable—until Schering sued a company named Zeneca for infringement… only to discover that Roussel had quietly granted Zeneca a license to the patent. And under joint ownership law? That license was perfectly valid. Schering’s entire lawsuit crumbled.

They argued that Roussel had violated their agreement, but the court said that unless the agreement specifically restricted Roussel from licensing, there was no breach of patent law—just maybe a breach of contract.

So Schering didn’t get to enforce its patent, and Roussel’s license to a competitor stood strong.

Surprise: You Might End Up Owning a Patent with a Stranger

Now here’s a scenario that catches a lot of people off guard: let’s say your co-owner sells their share of the patent to someone else—maybe even someone you don’t want to work with.

Guess what? You now co-own a patent with them. And there’s nothing in patent law that stops that sale—even if you had an agreement that said they couldn’t assign without your permission.

That agreement might be enforceable under contract law, meaning you can sue your former co-owner for breaching your deal—but it doesn’t undo the assignment. The new person still legally owns the patent. You just get the joy of litigating after the fact.

What Can You Do About It?

Now, you can try to protect yourself with tools like reversion clauses or conditional assignments.

Those tools can work, but here’s the reality: they require tight contract drafting, and even then, you might still need to litigate to enforce them. And courts don’t always love automatic reversions unless they’re crystal clear.  So while these are useful backup plans, the best strategy is to avoid uncontrolled joint ownership entirely in the first place.

The Risks of Joint Ownership (Even When Things Start Friendly)

You might be thinking, “That’s fine for them, but I trust my co-inventor.” And hey, maybe you do. But relationships change, people leave companies, startups pivot—and when that happens, joint ownership can quickly become a liability. Here’s why:

1.     Licensing Confusion – Your co-owner can license the patent without your input, even to your competitor.

2.     Enforcement Paralysis – You can’t sue infringers unless everyone agrees. One silent partner? No lawsuit.

3.     No Revenue Sharing Rules – Your co-owner can profit off the patent without giving you a cent.

4.     Investor Aversion – VCs and acquirers don’t like murky ownership. It creates friction, delays, and valuation headaches.

What Should You Do Instead?

There are smarter ways to handle multi-inventor scenarios. Here are a few of my go-to recommendations:

·       Get assignments up front – If there are multiple inventors, assign everything to one entity—like the company. This consolidates rights and avoids conflicts later.

·       Use clear collaboration agreements – If you’re working with external partners, contractors, or consultants, get it in writing. Spell out who owns what and how the patent rights will be handled.

·       Draft a joint ownership agreement – If joint ownership is unavoidable, this is your next best step. You can limit each owner’s ability to license or sell, require consent for enforcement, and define revenue sharing.

·       Assign to a neutral holding entity – For long-term projects or multiple contributors, consider assigning the patent to an LLC or other jointly owned entity with bylaws that govern decision-making.

The goal here is to keep control of your patent clear and centralized—not fractured across people who may not share your business goals.

Final Thoughts

So if you’re developing something valuable—get ahead of it. Assign the rights, structure your agreements, and don’t leave things to chance. Because once it’s on paper and publicly recorded, the law doesn’t care how friendly you used to be.