The Perils of Co-ownership of Intellectual Property


When parties are negotiating a new business deal – maybe an investment, joint-venture, research or a pilot project – they often agree to joint ownership of the resulting intellectual property, as an easy starting point.  Let’s look at one case involving trade-marks. 

Trade-mark law in Canada is clear that each trade-mark should have one owner.  That means one company, one person, one entity can own the mark… or, if there are two people who co-own a trade-mark, they must apply to register the mark as a partnership.  In JAG Flocomponents N.A. c. Archmetal Industries Corporation, 2010 FC 627 (2010), two companies entered into a contract in which they agreed to co-ownership of the mark FUSION. This flowed from the catch-all clause in their agreement that: “Any new products, designs, patents, inventions, calculations, and other intellectual property which arise directly or indirectly pursuant to or in consequence of this agreement shall be deemed to [sic] equally owned by the parties hereto.”  The FUSION mark was part of the “other intellectual property” caught by the agreement.

After a falling-out, one company registered the FUSION mark in its own name.  After a court battle over ownership, the court decided that the registration should be expunged. Since the parties agreed to co-ownership of the mark, the trade-mark application by one party rendered the registration invalid. 

Lessons for business?

  • Beware of catch-all “joint ownership” clauses, as they should be carefully considered. Should any of the intellectual property be jointly owned? And if so, think through the implications of each situation. Important rights will flow from jointly owned patents or trade-marks, for example.
  • As a practice point, a material misrepresentation in a trade-mark application (in this case, that little detail about joint ownership was left out) can result in expungement of the mark.  

Calgary – 09:00 

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