The co-ownership of a French patent

As technology evolves, innovation is increasingly collaborative. It is now common for several parties to contribute to the same invention, each bringing distinct technical or financial input. Recent developments highlight the importance of putting clear contractual arrangements in place to protect industrial innovation and prevent disputes — both between co-owners and in relation to third parties.

However, the legal regime governing joint ownership of a French patent remains relatively unfamiliar to many businesses. This article outlines the default rules that apply under French law and explains why carefully drafted agreements are essential.

Understanding patent co-ownership under French law

Patent co-ownership may be defined as a situation in which two or more persons (whether individuals or legal entities) hold undivided shares in the same industrial property right. Co-ownership may arise from a joint application, a transfer of shares, a research agreement, a succession, or another legal mechanism.

It should be distinguished from joint inventorship (co-paternité or co-titularité), which concerns the recognition of individuals who contributed to the technical conception of the invention. Joint inventorship does not automatically determine how ownership shares are allocated.

Under French law, the framework for patent co-ownership is set out in Articles L. 613-29 to L. 613-32 of the French Intellectual Property Code, as interpreted by case law. This regime is not mandatory public policy. It applies in the absence of a contrary agreement and therefore operates as a default system governing the rights and obligations of co-owners.

The default regime under the French intellectual property code

In principle, each co-owner may exploit the invention for their own benefit. Where one co-owner exploits the patent, and another does not, the exploiting party must pay fair compensation to the “passive” co-owner, unless otherwise agreed. If no agreement is reached, the court will determine the amount payable. For this reason, financial arrangements — commonly referred to as royalties — should be clearly defined in a contract.

If co-owners choose not to exploit the invention themselves, they may grant a non-exclusive licence to a third party. However, the law imposes a strict pre-emption mechanism designed to protect the other co-owners. The proposed licence must be notified to them, together with an offer to sell the relevant patent share at a stated price. The other co-owner(s) then have three months to oppose the licence by purchasing that share. Granting a licence to a third party, therefore, requires careful planning.

An exclusive licence may only be granted with the unanimous consent of all co-owners. If consent is not obtained, the licence will be unenforceable against the non-consenting co-owner(s), and liability may arise.

Each co-owner is also entitled to bring infringement proceedings independently. However, they must notify the other co-owners so that they may join the action if they wish. Collective action is possible but not compulsory. Each co-owner, therefore, plays a potential role in enforcing and defending the patent.

Co-ownership will normally end upon expiry of the patent. However, a co-owner may choose to exit earlier by abandoning their share or transferring it to a third party.

The contractual framework for co-ownership of a French patent

Although the default regime under the French Intellectual Property Code is clear and workable, it remains relatively general. In practice, it is often advisable to put in place a bespoke co-ownership agreement.

Ideally, such an agreement should be negotiated before filing the patent application or addressed in preliminary documentation such as a letter of intent or collaboration agreement.

The parties are free to depart from the default provisions of Articles L. 613-29 to L. 613-31. In matters of patent co-ownership, contractual freedom is the principle. It is therefore prudent to tailor the allocation of rights and obligations to reflect the commercial reality of the project.

In our view, the following issues should, at a minimum, be addressed in any co-ownership agreement (règlement de co-propriété sur brevet):

• Allocation of shares. The agreement should clearly define the proportion of ownership held by each party. This is a fundamental point and should be expressly agreed to minimise the risk of dispute.
   
• Transfers of shares. The agreement may impose conditions governing the validity and enforceability of transfers. For example, pre-emption rights may allow existing co-owners to prevent an external party from acquiring a share.
   
• Appointment of a representative. A mandataire commun may be appointed to act as representative in dealings with third parties and as administrator between co-owners. While certain routine administrative acts (such as payment of renewal fees) may be delegated, more significant decisions (such as granting security interests) should require prior approval. The representative may also act as a mediator between co-owners, so careful selection is important.
   
• Exploitation and licensing. The right of each co-owner to exploit the invention should be clearly regulated. It may be appropriate to distinguish between direct exploitation and exploitation through subsidiaries or related entities. The agreement should also address royalty arrangements and additional formalities for granting licences.
   
• Infringement actions. Although each co-owner has an individual right of action, the agreement may provide for coordinated enforcement, allocation of legal costs, settlement procedures and joint defence strategies.
   
• Collective decision-making. The agreement should specify voting thresholds, quorum requirements and decision-making procedures, depending on the seriousness of the matter concerned.

Practical recommendations

Securing legal protection for an innovation is often an exciting stage in a collaborative project. Where multiple parties are involved — for example, businesses working with universities or research institutions — legal arrangements should be addressed at an early stage.

While the default French regime is efficient and flexible, it is frequently too general to provide sufficient commercial certainty. A tailored co-ownership agreement is therefore strongly recommended to safeguard both internal relationships and the patent itself.

Important notice

This article concerns French law. It has been prepared by Citizen Avocats as part of their collaboration with SO Legal. It does not constitute legal advice from SO Legal. Specific advice should be sought in relation to your circumstances.

Our collaboration with Citizen Avocats

SO Legal works closely with Citizen Avocats, a French law firm specialising in corporate, commercial and litigation matters. Through this collaboration, we are able to support clients with cross-border issues involving English and French law, including intellectual property protection, corporate structures and commercial agreements.