Joint Ownership Of Intellectual Property: Who Can Use, License Or Sell It?

Intellectual property (IP) doesn't always belong to one person or business. Sometimes, two or more parties share ownership of the same invention, brand, software or other creative work.

At first, that might seem fairly straightforward. If two business partners own something equally, you'd probably expect them to have equal rights over it.

However, joint ownership doesn't necessarily mean each owner has complete freedom to use, license or sell the IP independently.

Under UK law, the rules can vary depending on the type of intellectual property involved. This can become particularly important when one owner wants to pursue a commercial opportunity, the parties disagree about how the IP should be used or someone decides to leave the arrangement.

So, what can joint IP owners actually do, and when do they need the other owners' permission?

Can Two People Or Businesses Jointly Own IP In The UK?

Yes, two or more individuals or businesses can legally own the same intellectual property. This is generally known as joint ownership or co-ownership.

Joint ownership can arise in several ways. Two people might jointly create a copyright-protected work, two businesses might agree to share ownership of an invention, or an existing owner might transfer part of their IP rights to another party.

However, working together doesn't automatically make everyone a joint owner.

For example, under the Copyright, Designs and Patents Act 1988, joint authorship generally involves two or more people collaborating on a work where their contributions aren't distinct from one another. If each person creates a separate, identifiable work, the ownership position may be different.

It's also possible for businesses to become joint copyright owners through an assignment, even if they didn't personally create the original work. Employment arrangements and existing contracts can affect ownership too.

Another distinction worth understanding is the difference between jointly owning IP and jointly owning a company. If two founders each hold 50% of a company's shares, the company may still own all the IP, rather than the founders owning it personally.

In the UK, some rights, such as copyright, generally arise automatically when an eligible work is created. Others, such as patents and registered trade marks, require registration to obtain their respective registered rights.

The important thing is establishing exactly which rights are being shared and who legally owns them.

What Rights Do Joint IP Owners Have Under UK Law?

One of the more important aspects of joint ownership is that different types of IP come with different legal rights.

For example, jointly owning copyright in software doesn't necessarily give you the same freedom to use it as jointly owning a patent or registered trade mark.

Copyright

Under section 173 of the Copyright, Designs and Patents Act 1988, where copyright is jointly owned, permission to carry out an act requiring the copyright owner's licence generally requires the consent of all joint owners.

This means one owner generally cannot independently authorise another business to reproduce, distribute or otherwise exploit the jointly owned work without the necessary permission, unless an agreement or legal exception allows it.

Joint authors may also have separate moral rights, such as rights relating to attribution, which are distinct from copyright ownership.

Patents

Joint patent ownership operates differently.

Under section 36 of the Patents Act 1977, joint patent owners generally hold equal, undivided shares unless they've agreed otherwise.

Each owner can ordinarily exploit the patented invention independently for their own benefit, without requiring the other owners' consent or sharing profits from that use.

However, granting a patent licence, transferring an ownership interest or making certain changes to the patent generally requires the other owners' approval, subject to the applicable statutory provisions and any agreement.

Registered Trade Marks

Under section 23 of the Trade Marks Act 1994, each joint registered owner can generally use the trade mark independently for their own benefit without needing the other owners' consent or accounting for profits, unless they've agreed otherwise.

However, licensing the trade mark to someone else or transferring or charging an ownership share generally requires consent.

This distinction is particularly important for businesses sharing a brand. Even where independent use is legally permitted, the parties may still need to consider brand consistency and how their respective activities affect the trade mark.

Design Rights

The UK recognises both registered designs and certain unregistered design rights, which have different legal frameworks.

For jointly owned UK unregistered design rights, section 258 of the Copyright, Designs and Patents Act 1988 provides that permission requiring the design right owner's licence generally requires the consent of all joint owners.

Registered designs are governed by the Registered Designs Act 1949. The rights of co-owners, including their ability to use, license or transfer an interest, need to be considered under that framework and any existing agreements.

Businesses jointly developing products shouldn't assume that the rules for patents or registered trade marks automatically apply to their design rights.

Why Does This Matter In Practice?

Say two businesses jointly own a registered trade mark used for a product they've developed.

One wants to start selling the product through its own distribution channels, while the other wants to give an unrelated manufacturer permission to use the same trade mark.

Although both businesses own the mark, those activities are treated differently.

A joint owner may generally use the registered trade mark independently, but granting a licence to the manufacturer would ordinarily require the other owner's consent.

Similarly, one owner generally cannot prevent the other from exercising their permitted independent-use rights simply because they disagree with the commercial decision. Any contractual restrictions and other applicable laws would still need to be considered.

This illustrates why ownership percentages alone don't necessarily determine who controls the IP.

Can One Joint Owner License Or Transfer Their Share Of The IP?

There's an important difference between using IP yourself, allowing someone else to use it and transferring your ownership rights.

An IP Licence Agreement gives another party permission to use intellectual property under agreed conditions while ownership remains with the existing owner or owners.

An assignment transfers ownership rights instead.

For joint owners, these transactions can involve different legal requirements. The fact that someone is entitled to use an IP asset independently doesn't necessarily mean they're authorised to grant a third party the same rights.

This can affect commercial opportunities. A business might receive an attractive offer to license jointly owned technology, but still be unable to proceed without the required approval.

The financial arrangements also deserve attention.

For example, joint owners of UK patents and registered trade marks can generally benefit from their own permitted use without accounting to the others, subject to any agreement to the contrary.

This means equal ownership doesn't automatically guarantee equal commercial returns.

Income from jointly approved licensing arrangements may need to be addressed separately, particularly where the parties expect to share fees or royalties.

What Happens If Joint IP Owners Cannot Agree?

Disagreements between joint owners aren't always about who owns the intellectual property. Sometimes, both parties agree on ownership but have different ideas about what should happen next.

One business might want to license a jointly owned brand more widely, while the other is concerned about how that could affect its reputation. Or one owner might want to sell their interest while the other prefers to maintain the existing arrangement.

Whether either party can proceed independently depends on the rights involved.

Where an action legally requires consent, withholding that approval may prevent the proposed transaction from going ahead. However, a disagreement doesn't automatically give one owner the right to stop the other from exercising rights they're independently entitled to use.

For certain patent disputes, section 37 of the Patents Act 1977 allows questions concerning entitlement or interests in patents to be referred to the Comptroller, who has powers to make certain orders. However, this isn't a general procedure for resolving every commercial deadlock.

The available options will depend on the nature of the dispute, the IP involved and any agreements between the owners.

For businesses, having clear decision-making arrangements can make these situations easier to manage, particularly where important transactions require more than one owner's approval.

Can A Joint IP Owner Leave Or Sell Their Interest?

Ending a business relationship doesn't automatically bring joint ownership of intellectual property to an end.

For example, two businesses might stop collaborating on a product but continue to hold rights in the underlying IP.

One might want to keep using it independently, while the other prefers to sell its share or obtain exclusive ownership.

What happens next will depend on the nature of the IP and any existing arrangements.

Some ownership interests cannot be transferred freely without the other owners' consent. Where a transfer is agreed, an appropriately drafted IP Assignment Deed can help document the rights being transferred and the terms of the transaction, subject to applicable legal formalities.

An owner leaving the arrangement also doesn't necessarily lose their existing IP rights. If the remaining business needs exclusive ownership, the parties may have to negotiate a buyout or another arrangement.

Existing licences can complicate matters further. If customers or third parties already have permission to use the IP, ending the business relationship won't necessarily terminate those rights.

These issues can become particularly important when seeking investment or selling a business, as prospective buyers or investors may want certainty about whether the business owns its essential IP or shares control with another party.

What Should Joint IP Owners Agree In Writing?

Although UK law provides default rules for certain jointly owned IP rights, those rules won't necessarily reflect how the parties want their commercial relationship to operate.

A written agreement can establish what each owner is permitted to do independently, which decisions require joint approval and how income generated from the IP will be shared.

It should also address responsibility for protecting and maintaining the IP.

For example, where a registered trade mark is jointly owned, one co-owner may bring infringement proceedings, but section 23 of the Trade Marks Act 1994 generally requires the other co-owners to be joined in the proceedings unless the court gives permission otherwise.

Arrangements covering enforcement decisions, legal costs and responsibility for maintaining registrations can therefore be useful.

The agreement should also consider what happens if the IP is developed further. If one party creates improvements to jointly owned software or technology, ownership of those improvements won't necessarily follow the original arrangement automatically.

Finally, the parties should consider how disagreements and exits will be handled, including whether one owner can buy out another and what happens to existing commercial rights.

Is Joint Ownership Always The Best Option?

Not necessarily.

In some circumstances, having one business own the IP while granting another a licence to use it may provide clearer control over commercial decisions.

Alternatively, the parties might establish a company that owns the IP, with the founders holding shares in that company.

Neither approach is automatically better. The most suitable arrangement depends on how the IP will be used, who needs control over it and the parties' longer-term business plans.

Need Help With Jointly Owned Intellectual Property?

Sharing ownership of intellectual property can work well, but it's important to understand what each owner can do and how the arrangement will operate in practice.

Whether you're considering joint ownership or reviewing an existing arrangement, getting clear on ownership, licensing and decision-making rights early can help avoid complications later.

If you'd like help with this, you can reach us on 0808 134 7754 or team@sprintlaw.co.uk for a free, no-obligations chat.