Intellectual Property and Collaborative Research
Released: 2005-08-16T00:00:00

The Role of Collaborative Research in Technological Innovation

Technological development has increasingly resulted from cooperative ventures formedbetween and among the private sector, universities, and government entities. (12) Several developments inthe modern research environment have contributed to this trend towards collaboration. One factoris the growth of the communications networks, including the Internet, which collectively have madecollaboration over long distances much easier. (13)

The growing complexity of modern technology has ramifications upon the cost of conductingresearch, the specialization of researchers, and the ability to innovate. Cooperation may benefit firmsby allowing them to share risks and costs. High technology research is often expensive, and manyfirms have found limited associations with other entities more cost effective than hiring neededexpertise on a permanent basis. Coupled with reported declines in public financing, cost increaseshave also encouraged academic researchers to find new sources of financial support. (14)

The extreme complexity of many modern technologies has also led to the growingspecialization of individual researchers. Because few persons are able to master numeroussophisticated and ever-advancing scientific fields, breakthroughs at the frontiers of scientificknowledge increasingly depend upon interdisciplinary research. (15) Trends for individualresearchers are also reflected within the institutions in which they operate. Even elite, multinationalenterprises may lack the expertise to perform cutting-edge research on their own. They may insteadturn to government laboratories, universities, or other entities in order to gain access to expertise andequipment not readily available elsewhere. (16)

Congress has also endeavored to create an environment conducive to research associationsbetween and among public, private, and non-profit entities. Among the legislative initiatives in thisarea is the National Cooperative Research Act, (17) which aimed to encourage companies to undertake joint researchthrough clarifications of the antitrust laws. The Bayh-Dole Act allowed universities, nonprofitinstitutions, and small businesses to obtain title to patents on inventions resulting fromgovernment-funded research. (18) The Stevenson-Wydler Act contained provisions concerningassignment of title to inventions arising from collaborative work between federal laboratories andoutside cooperating parties where no direct federal funding is involved. (19) In addition, Congress hasprovided tax and other incentives to stimulate joint research projects. (20)

Although supporters of collaborative research cite its numerous potential advantages, someobservers have voiced concerns over this trend. First, collaboration may effectively reduce thenumber of researchers working on a particular problem. In the manner of an anticompetitivecorporate merger, a joint venture may potentially slow the pace of industrial research. (21)

Second, experience demonstrates that joint ventures may be employed to facilitate cartels andother collusive behavior. In particular, as a collaborative research and development project may callfor close, continuing cooperation between two firms, such an arrangement may ultimately decreasethe participants' willingness to act as vigorous rivals in the marketplace. (22) Third, joint ventures mayreduce competition by excluding or hampering outsiders from access to technology or otherresources that are essential to participate in a particular market. (23)

Finally, some commentators have viewed government support for particular joint venturesas particularly problematic. Such support has been characterized as "picking winners and losers" inthe marketplace. (24) Others believe that the government has consistently been a poor judge of selecting projects to awardwith federal funding. (25) Despite these concerns, there can be little doubt that collaborative efforts form a significantcomponent of research and development projects in the United States. (26)

Patent Law Fundamentals

Joint research sometimes leads to technological breakthroughs that in turn may be subjectto patent protection. This report next reviews both the innovation policies that shape patent lawdoctrines, as well as the practical workings of the patent system as applied to collaborative research.

Patents and Innovation Policy

The patent system is intended to promote the production and dissemination of technologicalinformation. Many commentators have argued that the patent system is necessary to encourageindividuals to engage in inventive activity. (27) Proponents of this view reason that, absent a patent system,inventions could easily be duplicated by free riders, who would have incurred no cost to develop andperfect the technology involved, and who could thus undersell the original inventor. The resultinginability of inventors to capitalize on their inventions would lead to an environment where too fewinventions are made. By providing individuals with exclusive rights in their inventions for a limitedtime, the patent system allows inventors to realize the profits from their inventions.

The courts have also suggested that absent a patent law, individuals would favor maintainingtheir inventions as trade secrets so that competitors could not exploit them. (28) Trade secrets do not enrichthe collective knowledge of society, however, nor do they discourage others from engaging induplicative research. The patent system attempts to avoid these inefficiencies by requiring inventorsto consent to the disclosure of their inventions in issued patent instruments. (29)

There are still other explanations for the patent laws. For instance, the Patent Act of1952 (30) is thought bysupporters to stimulate technological advancement by inducing individuals to "invent around"patented technology. Issued patent instruments may point the way for others to developimprovements, exploit new markets or discover new applications for the patented technology. (31) The patent system mayencourage patentees to exploit their proprietary technologies during the term of the patent. Proponents believe the protection provided by a patent's proprietary rights increases the likelihooda firm will continue to refine, produce and market the patented technology. (32) Finally, the patent law hasbeen identified as a facilitator of markets. Absent patent rights, an inventor may have scant tangibleassets to sell or license, and even less ability to police the conduct of a contracting party. Byreducing a licensee's opportunistic possibilities, the patent system lowers transaction costs and makestechnology-based transactions more feasible. (33)

The patent system has nonetheless attracted a great number of critics. Some assert that thepatent system is unnecessary due to market forces that already suffice to create an optimal level ofinvention. The desire to gain a lead time advantage over competitors may well provide sufficientinducement to invent without the need for further incentives. (34) Some commentatorsobserve that successful inventors are sometimes transformed into complacent, established enterprisesthat use patents to suppress the innovations of others. (35) Others assert that the inventions that have fueled some of ourmost dynamic industries, such as early biotechnologies and computer software, arose at a time whenpatent rights were unavailable or uncertain. (36)

While these various justifications and criticisms have differing degrees of intuitive appeal,none of them has been empirically validated. No conclusive study broadly demonstrates that we getmore useful inventive activity with patents than we would without them. The justifications andcriticisms of the patent system therefore remain open to challenge. (37)

Patent Acquisition and Enforcement

In order to obtain patent protection, innovative individuals and firms must prepare and submitapplications to the U.S. Patent and Trademark Office ("USPTO"). (38) USPTO officials, knownas examiners, then assess whether the application merits the award of a patent. (39) The patent acquisitionprocess is commonly known as "prosecution." (40)

Under the Patent Act of 1952, (41) a patent application must include a specification that socompletely describes the invention that skilled artisans are able to practice it without undueexperimentation. This requirement is referred to as "enablement." The patent specification mustalso provide information upon the "best mode" known to the inventor of practicing theinvention. (42)

The Patent Act also requires that applicants draft at least one claim that particularly pointsout and distinctly claims the subject matter that they regard as their invention. (43) In practice most patentapplications contain multiple claims. Each claim sets out a distinct proprietary interest that thepatent applicant asserts for himself.

While reviewing a submitted application, the examiner will determine whether the claimedinvention fulfills certain substantive standards set by the patent statute. Two of the most importantpatentability criteria are novelty and nonobviousness . To be judged novel, the claimed inventionmust not be fully anticipated by a prior patent, publication or other knowledge within the publicdomain. (44) The sumof these earlier materials, which document state-of-the-art knowledge that is accessible to the public,is termed the "prior art." To meet the standard of nonobviousness, an invention must not have beenreadily within the ordinary skills of a competent artisan based upon the teachings of the priorart. (45)

Should the USPTO allow the application to issue as a granted patent, the owner or ownersof the patent obtain the right to exclude others from making, using, selling, offering to sell, orimporting into the United States the claimed invention. (46) Each inventor named in the patent is presumed to be itsowner. (47) If the patenthas multiple owners, each joint owner is presumed to own an undivided interest in the entire patent,and each may exploit the patented invention without the need to obtain permission from any otherjoint owner. As the Patent Act states:

In the absence of any agreement to the contrary, eachof the joint owners of a patent may make, use, offer to sell, or sell the patented invention in theUnited States, or import the patented invention into the United States, without the consent of andwithout accounting to the other owners. (48)

This ownership arrangement is formally known as a "tenancy-in-common." (49)

The term of the patent is ordinarily set at 20 years from the date the patent application wasfiled. (50) Patent titletherefore provides inventors with limited periods of exclusivity in which they may practice theirinventions, or license others to do so. Patent owners bear responsibility for monitoring theircompetitors to determine whether they are using the patented invention or not. Patent owners whowish to compel others to observe their intellectual property rights must usually commence litigationin the federal district courts. The U.S. Court of Appeals for the Federal Circuit ("Federal Circuit")possesses exclusive national jurisdiction over most patent appeals from the district courts, (51) while the U.S. SupremeCourt possesses discretionary authority to review cases decided by the Federal Circuit. (52)

Federal Legislation Impacting Collaborative Research and the Patent System

The Patent Law Amendments Act of 1984

Prior to 1984, the patent statutes did not include express provisions that stated the legalstandards for inventorship. This situation resulted in judicial holdings that, in the view of someobservers, were not conducive to collaborative research. For example, some courts required that anindividual contribute to the subject matter of each claim within a patent in order to qualify as a jointinventor. (53) Beingexcluded from inventorship leads to the result that the individual would also not be considered anowner of the patent. Before 1984, some commentators believed this result led to an atmosphere ofcaution among potential joint researchers. (54) Under such a rule, entities that made significant contributionsto a research project could nonetheless be denied the rewards of patent ownership, due merely toimprecisions or strategic decision-making during the drafting of the patent's claims. (55)

Concerns also arose that the patent law's standard of joint inventorship was not keeping pacewith conditions in modern industrial research laboratories. State-of-the-art research often involvesnumerous individuals who make different levels of contribution to a project, sometimes sporadicallyand over a long period of time. Some observers believed the requirement that each named inventormake a contribution to the subject matter of every claim was unrealistic in view of these industrialconditions. As explained by Gerald J. Mossinghoff, then the Commissioner of Patents andTrademarks:

Complying with this requirement is sometimes difficultand at times impossible. Scientists or researchers in an organization often work on a particularaspect or embodiment of the invention, or on only a portion of the invention, while others work ondifferent aspects, embodiments or portions. Scientists are continually added to a research team,while other scientists leave the team. Concepts and development plans generated throughbrainstorming cannot always be accurately attributed. The preparation of patent applications . . .nevertheless requires the attorney to determine the inventorship of each claim . . . . Adequateprotection for an invention may require the filing of several applications to cover the separatecontributions to all of its aspects. (56)

By enacting the Patent Law Amendments Act of 1984, Congress responded to both of theseissues. As amended by the 1984 legislation, section 116 of the Patent Act stipulates that individualsmay be joint inventors "even though (1) they did not physically work together or at the same time,(2) each did not make the same type or amount of contribution, or (3) each did not make acontribution to the subject matter of every claim of the patent." (57) This language mirrors thatof an earlier judicial opinion, Monsanto Co. v. Kamp . (58) In that case the U.S. District Court for the District of Columbiaconsidered whether the defendants, Kamp and Jahn, had appropriately been named as inventors ona patent claiming a polyethylene-lined plastic bottle. In finding the two were properly consideredjoint inventors, the court explained:

A joint invention is the product of collaboration of theinventive endeavors of two or more persons working toward the same end and producing aninvention by their aggregate efforts. To constitute a joint invention, it is necessary that each of theinventors work on the same subject matter and make some contribution to the inventive thought andto the final result. Each needs to perform but a part of the task if an invention emerges from all ofthe steps taken together. It is not necessary that the entire inventive concept should occur to each ofthe joint inventors, or that the two should physically work on the project together. One may take astep at one time, the other an approach at different times. One may do more of the experimentalwork while the other makes suggestions from time to time. The fact that each of the inventors playsa different role and that the contribution of one may not be as great as that of another, does notdetract from the fact that the invention is joint, if each makes some original contribution, thoughpartial, to the final solution of the problem. (59)

The 1984 amendments also provided legislative mechanisms for correcting the identity ofthe inventors listed on a patent. Traditionally, the incorrect naming of inventors had significantconsequences for the validity of the patent. (60) Either the improper addition of a person who was not in fact aninventor, which is termed "misjoinder" in patent parlance, or the failure to name a correct inventor,which is termed "nonjoinder," were strict grounds for patent invalidity. (61)

This longstanding patent law doctrine was believed to clash with the needs of contemporaryindustry. With the increasingly collaborative nature of research came larger teams of researchers,which in turn increased the possibility of mistakes in the identification of inventors. The patent law'sdraconian sanction for the misnaming of inventors, coupled with the absence of mechanisms forcorrecting mistakes, were believed to be ill-suited for modern conditions.

The Patent Law Amendments Act of 1984 provided a response to this situation by retainingthe rule that identifying the correct inventor or inventors is a condition of patentability. (62) However, this legislationallowed for the correction of both nonjoinder and misjoinder errors. (63) As codified in Â§ 256 ofthe Patent Act, the USPTO may issue a certificate correcting inventorship so long as these errorsarose without deceptive intent. Section 256 also allows for courts to issue orders requiring theUSPTO to correct the listing of inventors on a particular patent. (64)

The 1984 legislation also amended the definition of "prior art" to exclude certain "in-house"knowledge--known to members of a collaborative research team but not to the general public--fromqualifying as "prior art" under the Patent Act. (65) Congress confirmed and slightly broadened this exemption whenit enacted the American Inventors Protection Act of 1999. (66) Due to this legislation,in-house information may not be cited against patent applications filed by joint researchers, at leastfor purposes of patent law's nonobviousness requirement. (67) This provision is currently codified at Â§ 103(c)(1) of Title 35,United States Code.

A review of the history of this legislation may aid understanding of this rather technicalprovision. Congress enacted the 1984 and 1999 statutes in response to the judicial opinion in In reBass. (68) In that case,three joint inventors, Bass, Jenkins, and Horvat, applied for a patent on an air control system forcarding machines. Their application was rejected because, in the view of the USPTO and the courtof appeals, the invention it claimed would have been obvious in view of the "prior art." (69) However, the prior artdemonstrating the obviousness of the invention in part consisted of two U.S. patents: one grantedto Bass and Horvat, and another issued to Jenkins. (70)

The correspondence of inventor surnames between the application and the prior art patentswas not a coincidence--the prior art patents had been granted to the same Bass and Horvat, in the onecase, and the same Jenkins in the other, as were seeking the new patent. This meant that theseinventors' own earlier work had been cited against them to establish obviousness. Ordinarily, thepatent statute makes it clear that an inventor's own prior inventive efforts may not anticipate her ownsubsequent patent application. (71) However, the Bass court reasoned that an opposite approach waspermissible because of a traditional patent law principle that treats each new combination of jointinventors as a distinct "inventive entity." This rule applies even where these combinations shareindividual inventors.

Under the "inventive entity" rule, the team of Bass, Jenkins and Horvat is considered adifferent inventive entity than the team of just Bass and Horvat. Each group of natural personsessentially acquires its own legal identity; they, as a whole, constitute "the inventor" of thattechnology. On this view, the two prior art patents at issue in the Bass litigation were, as matter oflegal technicality, the work of a different "inventor" from the one seeking the present patent, and thusrelevant prior art. (72)

Concerns arose that the holding in In re Bass was not conducive to joint research. Largeresearch institutions may employ numerous technologists to engage in collaborative research anddevelopment efforts, and there may be a constant shifting in the composition of inventive teamsworking on different projects. Applying the rule of In re Bass in this setting could lead to a denialof patent rights even if only a slight change in personnel occurred. In a particularly fertile andinteractive corporate research department, inventors could find themselves unable to obtain patentsdue to "in-house" rejections for obviousness based upon efforts by their peers, and even in part bythemselves. (73)

Congress intended Â§ 103(c)(1) to solve the problem highlighted in In re Bass by exemptingcertain prior art from the obviousness analysis in joint research and development settings. Section103(c)(1) is a narrowly worded provision, however. Generally speaking, if a reference is availablenot merely in-house, but in fact to the public at large, then it may still be used to defeat the patentor patent application. (74)

The CREATE Act

The 108th Congress enacted additional legislation that expanded the existing exemption forin-house research. The Cooperative Research and Technology Enhancement (CREATE) Act, (75) signed by President Bushon December 10, 2004, was enacted in response to a decision of the Court of Appeals for the FederalCircuit, Oddzon Products, Inc. v. Just Toys, Inc. (76) The Oddzon decision held that certain in-house research,potentially performed by one of a group of collaborative researchers, constituted prior art and couldpotentially be patent-defeating. (77) Congress intended that the CREATE Act, which was codifiedat 35 U.S.C. Â§ 103(c)(2) and (3), would stimulate joint research by eliminating this source of priorart from the nonobviousness inquiry.

The CREATE Act operates by extending the circumstances under which the 35 U.S.C. Â§103(c)(1) exemption applies. In particular, when a claimed invention resulted from joint researchbetween two or more entities, the CREATE Act excludes certain prior art developed by one of theresearchers from the nonobviousness analysis if:

the claimed invention was made by or on behalf of parties to a joint researchagreement that was in effect on or before the date the claimed invention wasmade;

the claimed invention was made as a result of activities undertaken within thescope of the joint research agreement; and

the application for patent for the claimed invention discloses or is amended todisclose the names of the parties to the joint research agreement. (78)

The term "joint research agreement" is defined as "a written contract, grant, or cooperative agreemententered into by two or more persons or entities for the performance of experimental, developmental,or research work in the field of the claimed invention." (79) The CREATE Act applies to any patent, including a reissuepatent, granted on or after December 10, 2004. (80)

As explained by the House Committee on the Judiciary, "the CREATE Act provides a simplemeans of extending the 'safe harbor' provisions of current law that treats inventions of a commonowner similarly to inventions made by a single person." (81) Under this legislation, inventions generated throughcollaborative research are treated as if they were made by a single individual, or subject to anobligation of assignment to the same individual, if a joint research agreement has been reached priorto the development of the invention. This legal fiction in turn allows joint researchers to takeadvantage of the prior art exemption under Section 103(c)(1) of the Patent Act. (82)

Current Issues

Congressional amendments to the Patent Act of 1952 in 1984, 1999, and 2004 have clarifiedand refined the legal standards governing collaborative research. In the view of some observers,however, additional concerns exist with respect to the governing patent law standards. This reportconsiders two of these issues: the standard of inventorship itself, as well as the property rulesregulating joint ownership of patents.

Standards of Joint Inventorship

The 1984 amendments to the Patent Act stipulated that individuals may be joint inventors"even though (1) they did not physically work together or at the same time, (2) each did not makethe same type or amount of contribution, or (3) each did not make a contribution to the subject matterof every claim of the patent." (83) It can be appreciated that this language offers a negativedefinition--that is to say, the statute identifies certain conditions that do not disqualify an individualfrom being considered an inventor. But this provision does not affirmatively specify the level oftechnical contribution needed to allow an individual to rise to the level of an inventor, and thereforebe named on the patent instrument. (84)

Some commentators believe that the lack of an affirmative statutory definition ofinventorship contributes to the difficulties of determining, under certain factual situations, whethera particular individual qualifies as an inventor. Of course, since the inventors named on a patent arepresumptively its owners, this determination has very significant practical consequences forcollaborative research projects. Suppose, for example, that two firms each provide one of theiremployees to work on a joint research project. Suppose further that the project results in a patentedinvention, but only one of the employees is considered to be an inventor that can be named on thepatent. In that situation, unless the two firms have stipulated otherwise via contract, then only oneof the firms will own the patent. If the other firm practices the patented invention, its formerresearch partner would be able to bring charges of infringement against it. (85)

Although no specific statutory language defines which individuals may be considered a jointinventor, a number of judicial opinions concerning inventorship disputes provide some guidance toindustry. Most patent law experts agree that at least some basic principles regarding jointinventorship are clear from the case law. As summarized by the Federal Circuit:

All that is required is that the [joint inventor] (1)contribute in some significant manner to the conception or reduction to practice of the invention; (2)make a contribution to the claimed invention that is not insignificant in quantity, when thatcontribution is measured against the dimension of the full invention, and (3) do more than merelyexplain to the real inventors well-known concepts and/or the current state of the art. (86)

Some examples illustrate this standard. Suppose, for example, that a laboratory technician merelyfollows the instructions of a chemist in order to synthesize a new compound. Because he made noinventive contribution to the project himself, he would not be judged a joint inventor. (87) On the other hand,suppose that the chemist had the general idea of the properties of a desirable new compound, but hadno idea how to actually make that compound. Through research, the laboratory technician developsthe new techniques needed to formulate the compound. In such a case, the chemist and thelaboratory technicians would likely be judged joint inventors. (88)

Beyond this basic guidance, however, the determination of contested patent inventorship hasbeen deemed highly fact specific, with results varying on a case-by-case basis. (89) At least one court appearsto agree with this assessment. As one trial court stated:

The exact parameters of what constitutes jointinventorship are quite difficult to define. It is one of the muddiest concepts in the muddy metaphysicsof the patent law. On the one hand, it is reasonably clear that a person who has merely followedinstructions of another in performing experiments is not a co-inventor of the object to which thoseexperiments are directed. To claim inventorship is to claim at least some role in the final conceptionof that which is sought to be patented. Perhaps one need not be able to point to a specific componentas one's sole idea, but one must be able to say that without his contribution to the final conception,it would have been less-less efficient, less simple, less economical, less something of benefit. (90)

To the extent that these criticisms are accurate, they may have negative implications forcollaborative research. One commentator explains:

Given the minimal and rather vague, thus unpredictable,standards for determining inventorship, the current state of the law fosters uncertainty andapprehension regarding the contributions of various researchers or team members participating inthe inventive process. In recent years, a claim of joint inventorship has become an attractive optionfor disgruntled scientists suing either their former research partners or former employers. Likewise,defendants accused of infringement might endeavor to find an unnamed, overlooked and minorcontributor to defeat a claim of infringement. . . . Thus, the very purpose of the 1984 amendmentshas been turned on its ear--refurbished Â§ 116, designed to encourage team research, may now beimpeding it. (91)

As a result, some commentators have called for more specific legislative guidance on thejoint inventorship standard. One possible reform would be to stipulate a clear rule, or possibly a listof factors that courts should consider, with respect to joint inventorship. This legislation could bebased upon such factors as the amount of contribution made by each putative joint inventor, therelationship between these individuals, the overall size of the inventive entity, and the technologicalfield of the invention. (92)

On the other hand, fashioning a workable standard of joint inventorship might prove verydifficult. Collaborative research occurs between a number of differently situated actors, includingsophisticated multinational enterprises, universities, government laboratories, and individuals, in avariety of settings. (93) As a result, identifying which individuals deserve to be named as joint inventors may inherently callfor a detailed review of the circumstances of individual cases. Articulating a single rule to governall of these situations could potentially lead to unjust results in particular factual settings. (94)

In addition, collaborative researchers possess some ability to protect their interests in thissituation. A joint researcher could, through a contract established in advance, stipulate that shouldhe not be entitled to be named as an inventor in any patents that result from a cooperative effort, heis nonetheless entitled to be licensed or assigned an interest in those patents. As a result, even wherea joint researcher is not entitled to be named as an inventor under the standards established by thepatent law, he could nonetheless enjoy the patent-based rewards that result from a collaborativeproject. Given the ability of joint researchers to "contract around" the patent statute's inventorshipstandards, changes to current rules may not be a high priority for Congress.

Consequences of Joint Ownership

A second point of concern relates to the legal consequences of joint ownership. As discussedpreviously, if more than one individual qualifies as an inventor of a particular patented invention,then these individuals are deemed to be "joint owners" who hold the patent as"tenants-in-common." (95) Under this legal arrangement, each joint owner owns an undivided interest in the entire property. Further, each joint owner may exploit the patent without requiring consent from the others. (96)

Suppose, for example, that Firm A and Firm B engaged in a joint research project. Among the results of that project was a patent that named employees from both Firm A andFirm B as inventors. In turn, those inventors had previously assigned their rights in theirpatented inventions to their employers.

In this hypothetical, Firm A can use the patented invention without regard to Firm B'sinterests, and vice-versa. Neither firm could prevent the other from exploiting the patentedinvention, nor could one claim a share of any proceeds that the other firm earns. Similarly,one firm could freely license or sell its patent rights to another without interference from theother.

It should be noted that there are two important exceptions to the general rule that ajoint owner of a patent may exploit the patented invention without regard to others. First,joint owners of a patent can always change their relationship by express agreement. Thetenancy-in-common arrangement applies only as a default in the event the owners have notordered their affairs otherwise, through contract. (97)

In addition, joint owners of a patent are required to cooperate before bringing a patentinfringement suit in federal court. 35 U.S.C. Â§ 281 states that "A patentee shall have remedyby civil action for infringement of his patent." (98) Courts have interpreted this language as requiring theagreement of each of a patent's joint owners in order to enforce the patent throughinfringement litigation. Therefore, although one joint owner can manufacture, sell, licenseor otherwise exploit a patented invention without regard to the other joint owners, permissionof the other joint owners must be had prior to commencing an infringement suit.

In light of the usual rule governing a tenancy-in-common relationship, however, somecommentators have observed that joint owners of a patent are at each other's mercy. (99) The policy basisfor this rule appears to be premised upon creating the maximum opportunity for the patentedtechnology to be exploited in the marketplace. (100) For example, suppose that three different individualsare joint owners of a patent. Under the default rule established by the patent statute, anyonewho wishes to sell the patented invention need only obtain a license from any one of theowners. If the rule were otherwise, procuring a license from all three owners might be morecostly and difficult. The tenancy-in-common relationship also prevents one of many jointowners from a patent from "holding up" the entire transaction by demanding additionalroyalties or other consideration. (101)

Some commentators believe that the tenancy-in-common rule may lead to some unjustoutcomes in joint research settings, however. (102) Following 1984 amendments to the patent statute, anindividual may be named as an inventor even though he did not make the same type oramount of contribution as other inventors, or he did not make a contribution to the subjectmatter of every claim of the patent. (103) However, once an individual is a named inventor ona patent, he is deemed to be a joint owner of the entire patent instrument. Thesecircumstances may cause him to be considered an owner of many claims to which he madeno contribution.

This scenario was brought to light by a 1998 decision of the Court of Appeals for theFederal Circuit, Ethicon, Inc. v. United States Surgical Corp. (104) Here, a Dr.Yoon was named as the inventor of a patent relating to surgical tools. Along with hislicensee, Ethicon, Yoon brought an infringement suit against U.S. Surgical. U.S. Surgicalsubsequently learned that Choi, an electronics technician, had collaborated with Yoon andmade some contributions to the patented invention. U.S. Surgical then promptly obtained alicense from Choi and then asked the court to name Choi as a co-inventor of the patent-in-suit. Due to this license, if Choi qualified as a co-inventor, U.S. Surgical would be considered anauthorized licensee and be able to preempt the lawsuit altogether.

U.S. Surgical's strategy ultimately proved successful. The district judge ruled thatChoi was a co-inventor of two of the 55 claims of the patent-in-suit and therefore was a jointowner of the entire patent. (105) Following an appeal, the Federal Circuit affirmed. TheCourt of Appeals cited a number of circumstantial factors that supported the conclusion thatChoi had contributed to two of the asserted patent's claims. Among other factors, Yoon's needfor a person with electronics expertise, the length of time they worked together, the absenceof pay to Choi, and the similarity between the diagrams in the patent and the drawings inChoi's notebook each suggested that Yoon and Choi should be considered jointinventors. (106)

One of the Federal Circuit judges, Judge Pauline Newman, issued a dissenting opinionin the case. Her opinion expressed concern that Choi, who had been shown to have made acontribution to only two of the 55 claims of the patent-in-suit, was now deemed an owner ofthe entire patent. Judge Newman observed that prior to the 1984 amendments to 35 U.S.C.Â§ 116, Choi would not have been considered a joint inventor because he had not contributedto each of the patent's claims. She interpreted Â§ 116 as merely permitting the naming ofadditional persons as inventors on a patent instrument.

Judge Newman further explained that being named as an inventor should notnecessarily result in full status as a co-owner because the concepts of joint inventorship andjoint ownership are conceptually distinct. In her view, ownership rights in a patent are basedon the notion that both inventors had shared equally in developing the invention. In suchcircumstances, a "joint tenancy" system where each inventor owns an undivided share of theentire patent is appropriate. According to Judge Newman, given the 1984 changes to the lawof joint inventorship, the law of joint patent ownership deserved reassessment. (107)

Subsequent commentary has largely been sympathetic to the views of the dissentingopinion in Ethicon v. U.S. Surgical . Some observers believe that it is inappropriate to"transpose pre-1984 concepts of joint ownership into the new post-1984 inventorship law .. . ." (108) Inparticular, a broad conception of joint inventorship, in combination with atenancy-in-common ownership paradigm, may allow a joint inventor to enjoy economicrewards that are not commensurate with his contribution to the patent. Believing that thissituation "frustrates the purpose of patent law," observers have called for legislative reformsso that courts can "fashion more equitable and economically efficient" distributions ofpatent-based rewards. (109)

A number of alternatives to the patent law's current tenancy-in-common rules exist. In the copyright law, for example, each joint owner of a copyrighted work is free to exerciseany of the rights of a copyright owner without the permission of the other joint owners, andmay also license others to exercise those rights as well. However, each joint owner must paya proportional share of any profits she realizes to the other owners. (110) In theory, asimilar arrangement could be dictated for joint patent owners as well.

Another possibility would be to consider ownership issues on a claim-by-claim basis,rather than a patent-by-patent basis. Put differently, courts could determine whether a putativejoint inventor contributed to the subject matter of the specific claim at issue in a particularlitigation. This approach would contrast with the current law, which inquires whether theputative inventor made a contribution to any one of the claims in the asserted patent. (111)

Yet another approach would be to attempt to apportion each owner's interest in apatent based upon the extent of his technical contribution to the claimed subject matter. Current law awards each joint owner an equal interest in the patent. It would be theoreticallypossible for courts to make more particularized determinations of the relative merits of eachinventor's contribution. This rule could result, for example, in one joint owner being awardeda 70% share in the patent, while the other joint owner received a 30% share.

Other patent ownership arrangements, similar to those discussed above, may bepossible. (112) In weighing the desirability of any alternative to the current regime, one factor to beconsidered is ease of judicial administration. To the extent that these proposals would involvemore difficult determinations than the current tenancy-in-common standard, they are likelyto increase the complexity and uncertainty of patent litigation. (113) Anotherconcern may be diminution of the incentives of one joint owner to commercialize the patentedinvention. Even if one joint owner does not require the permission of others to exploit apatented invention in the marketplace, her incentives to do so may be diminished if she mustpay a share of her profits to the other joint owners. (114)

In addition, the patent statute's tenancy-in-common relationship is effectively a defaultrule. Under current law, firms may account for any perceived shortcomings of thetenancy-in-common principle by reaching an agreement in advance that stipulates analternative ownership relationship. As with the patent statute's standards for jointinventorship, (115) the established ability of collaborative researchers to"contract around" the patent statute may suggest that legal reform in this area is not acompelling need.

Concluding Observations

Although amendments to the patent statute have clarified rules pertaining tocooperative research and development endeavors, concerns about the standards of jointinventorship and joint ownership persist. These topics represent relatively technical aspectsof the patent law. They are nonetheless subjects that have been the subject of legislativereform over the past two decades, and that are of undoubted importance to collaborativeresearch. Although legislation currently before the 109th Congress proposes many reforms tothe patent statute, (116) this proposal would retain rather than refine existingrules with respect to joint inventorship and joint ownership. As technologies and marketscontinue to advance, striking a balance between encouraging cooperation among researchers,while maintaining sufficient patent-based exclusivities to encourage innovation in the firstinstance, will continue to be in the public interest.