Who is the Owner?

Understanding where the ownership of IP lies can help to reduce the potential risk of disputes and help to clearly identify the role of different parties in IP development. Take trademarks for example. One question in relation to trademarks is who is the owner? Is the party who has devoted significant effort to advertise and promote the brand the owner or is it the party who has the legal ownership of the trademark but devoted little effort to promoting the brand?

Legal ownership

IP law creates a framework for defining when a patent is able to be registered. Once the patent is registered, ownership in the legal sense is easily attributable to the registering party. A registered patent can protected the IP from infringement and give the owner the exclusive rights to exploit the benefits of the IP. Moreover, a registered patent can make sure that the use made by the owner conforms to the legal requirements of use, that is, the patent is not diluted.

Economic Ownership or Economic Interest

The OECD defines economic ownership of assets broadly as: “the right to the income attributable to the ownership of the asset, such as royalties; the right to depreciate a depreciable asset; and the potential exposure to gains or losses from the appreciation or depreciation of the asset).”

In the context of intangibles, additional attributes associated with economic ownership include:

Ability to benefit from the IP and any income stream created by those assets
Possibility of one party having both legal and economic ownership
Economic ownership may easily be transferred without change in legal ownership
A party that bears the costs and risks of developing an intangible should be entitled to a corresponding income.

Other definitions of intangible ownership often used include:

A registration of intangibles in the name of a legal entity. The latter might not have the legal and/or economic ownership.
A process owner who is “de facto” managing the R&D roadmap to create “product and process” intangibles. Moreover, under a contract R&D agreement, the process owner might not be considered as the legal or economic owner of the intangible.