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I’m co-developing my product – so who owns the IP?

In the absence of any agreement, where two or more people jointly produce a copyright work or design or invent something, they will generally be joint owners of the resulting intellectual property (IP). They may own it in equal or unequal shares. The nature of the ownership will depend on the facts (in particular any relevant contracts), and the type of IP involved.

Joint ownership is complicated, and may stop either or both owners from using their IP as they would want to. The rules dealing with co-ownership are different in different countries and for different types of IP, but for example in the UK if a copyright work is jointly authored by two people, they will be joint owners in the copyright. Neither person will be able to license the copyright work without the other’s consent, although in most cases co-owners will be able to assign their interest to a third party.

Such issues can be resolved where the parties have a clear agreement which sets out their rights in relation to the IP. Therefore, to avoid confusion and ensure everyone understands in advance how the IP is to be treated, it is highly advisable to agree who will own the IP (and in what shares if it is to be jointly owned), and what rights each party will have to exploit and bring claims based on the IP, and to record this in writing. The agreement should set out the rights and obligations of each of the parties in detail, and should address any future works jointly created.

Given the issues raised by joint ownership, a popular option is for one party to have ownership of the IP, granting the other a licence to exploit it. The licence should record details such as whether it is revocable, the scope of the rights granted, whether any royalties are due under it, and when it should come to an end.

In other circumstances it may be appropriate for the parties to jointly set up a separate company to own the IP and licence it back to each of them. This might be suitable where neither party will accept the other having ownership of the IP.