Two Texas businesses may work together to develop a new product, process or technology. Both may provide employees, equipment or funding to complete the project. However, once they create something valuable, questions about patent ownership can arise.
A company may seek a patent for an invention it developed with another business. Still, the right to own that patent depends on who invented it and what agreements the businesses have in place.
Who has the right to own the patent?
Federal patent law governs patent ownership in Texas, which allows multiple people to qualify as joint inventors if they contribute to the invention.
However, inventors do not need to contribute equally. One person may develop the main concept while another helps create an important feature.
Patent ownership is a separate issue. Inventors generally hold the initial rights, but they can transfer those rights to their employers through written agreements.
As a result, two businesses may jointly own a patent if their employees contributed to the invention and properly transferred their rights.
What happens when businesses share ownership?
Joint ownership can create problems when businesses have different plans for the invention.
That’s because each patent owner generally has the right to use or sell the invention without the other owner’s permission, unless an agreement states otherwise.
For example, a Texas manufacturer may develop new equipment with a technology company. If both businesses own the patent, either may be able to license the invention to a competitor without sharing the profits.
To avoid such disputes, businesses should create a written agreement that addresses:
- Who will own the patent
- Who will pay application and maintenance costs
- How the businesses will share licensing income
- Who can license or sell patent rights
- How they will handle future improvements
These terms can help both companies understand their rights before disagreements arise. They can also prevent confusion over who controls the invention and how each business can benefit from it.
How can businesses protect their patent rights?
Before starting a joint project, Texas businesses should review their contracts and confirm who will own any resulting inventions. They should also document each inventor’s contributions and secure the necessary ownership transfers.
A patent attorney can help businesses review these agreements and identify possible ownership disputes. Early legal guidance may also help both companies protect their investments while continuing to work together.