A recently-acquired client is one of three inventors of a device that received a U.S. patent. She asked me whether she can freely license to an LLC owned by two of the inventors the right to manufacture products covered by the license. I replied “yes” – here’s why.
35 U.S.C. Section 262 says:
In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.
In other words, each of the co-inventors, who jointly own the patent, can exploit the patent as she sees fit – and she need not share any profits with the other patent owners.
Furthermore, each inventor can assign or license to third parties her non-exclusive right to exploit the patent, thus my client can grant to her LLC a license to manufacture products covered by the patent without financial obligation to the other inventors.
Please note that this is different from situations involving jointly-owned copyrights, where profits earned by one owner must be shared with the others (see I’m One of Several Authors – Who Owns the Copyright?).
Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.