Existing Sharī’a-Compliant Property Laws Can Suggest Broadly Applicable Solutions for Patent Co-Ownership Problems

By Gizem Orbey

In another post, I argue that it is possible to derive a sharīʿa-compliant Islamic patent regime that is in harmony with U.S. and international patent law principles, relying in part on the Ottoman commercial code the Mecelle. That is, I conceive of of the Islamic regime as contracts between inventors and the state to create the patent property rights, and subsequent contracts between inventors and third parties to license their use. This is not so different from existing patent law regimes.[1]

In this post, I explore complications that arise from the co-ownership of patents in current patent laws and how those problems might play out in a sharīʿa-compliant patent regime of the kind I envision. Co-ownership of patents is especially important in an era dominated by collaborative innovation. Today, organizations conduct large-scale research projects to accomplish feats of invention that only many humans working together can attain. For example, a single experiment in the Large Hadron Collider requires over 2,500 engineers, technicians and scientists in 37 countries working together.[2] Issues regarding patent co-ownership and transfer arise frequently in such collaborative research and corporate environments, and a modern industrialized nation’s patent regime must stand ready to address them.[3] I argue that a patent regime such as the one I describe could not only be sharīʿa-compatible by design, but that Islamic law solutions to patent co-ownership problems may even inspire solutions that have broader international appeal.

U.S. patent law recognizes that a single invention may often be jointly invented by multiple co-inventors.[4] In the absence of any contractual agreement specifying otherwise,[5] each co-inventor becomes a de facto, pro rata co-owner of the patent right in the first instance.[6] Each co-owner may use and/or work the invention for profit on their own, license others to use or work the patented invention, and sue patent infringers in court to enforce the patent right.[7] Each co-owner may also assign away all or part of their ownership interests by contract.[8] A complete assignment assigns all the aforementioned powers together (to work, to license, to sue) and is properly called a transfer of ownership, regardless of the percentage ownership thus transferred.[9]

It is true that patent co-ownership presents interesting problems under U.S. law.[10] Significantly, patent co-owners are said to be at each other’s “mercy” in several ways.[11] One is that by default—that is, without contractual agreements to the contrary—every co-owner can practice, assign, or license the entire invention, regardless of their pro rata ownership share, without receiving consent from or accounting profits to the other co-owners.[12] This can cause perverse incentives among patent co-owners, who may dilute the value of the invention through personally profitable excessive use, over-licensing, or reckless transfer, without accounting to the others.[13] However, it is also true that this problem of co-ownership is neither unique to patent law nor new, as people have been splitting non-fungible property for centuries.

The Ottoman Mecelle gives some insights into splitting non-fungible property that may be relevant to the question of how to split patents. The Mecelle recognizes voluntary joint absolute ownership of property[14], distinguishing between joint ownership of divisible property and property that is “mixed,” that is, property that is not easily divided.[15] In my proposed scheme, patents would fall into the latter category.[16]

In general, the Mecelle allows such co-owners to “by agreement deal with their property in any way they wish, in the same way as a single owner,” allowing for contractual flexibility as under U.S. law.[17] However, the Mecelle default rules are starkly different. First, a co-owner cannot sell jointly owned mixed property without the other co-owners’ permission.[18] In fact, a co-owner may not “deal with” property in any way without permission,[19] and he or she especially may not deal with it in “such way as to cause injury to the other[s] . . . .”[20] These rules contradict the default U.S. rules that allow co-owners to transfer rights without directly notifying or requesting other co-owners’ consent, sometimes to the effect of diluting the patent’s inherent value or its attractiveness for future sale.

The Mecelle similarly contradicts the U.S. default laws that allow co-owners to use or license and keep profits regardless of ownership share without accounting to other owners. The Mecelle refers to and proscribes rules for the usufructs, or the fruits of, jointly held properties.[21] These usufructs—essentially, “rents”—can be analogized to a co-owner’s own direct commercial use of a patent, or her selling of a patent’s commercial usage rights via licenses. In the Mecelle, co-owners must generally receive each others’ permission to cultivate, reap, and profit from usufructs, and must share them according to proportion of ownership.[22]

However, the Mecelle does offer some wiggle-room for co-inventors when it comes to reaping benefits of co-owned property. Sometimes, co-owners may reap without permission from an absent co-owner, using a doctrine of “implied consent.”[23] However, they may only do this if their use will not have the collateral harm of reducing the value of the co-owner’s property or usufruct, and they must eventually account to him and give him his proportion of profits.[24] Most interestingly, co-owners can apply to an Ottoman court for partition of the usufruct (they cannot partition it on their own)[25], and a co-owner whose proportional property was devalued as a result of a co-owners cultivation is given a remedy, a legal “claim to have the amount of the decrease in value of his share made good” by the reaping co-owner.[26] Such remedies are not used in U.S. patent courts today, but they could be put in place following judicial valuation precedents from corporate and antitrust law.

In sum, fundamental sharīʿa co-ownership rules contradict U.S. and other common international regimes. However, the Mecelle’s solutions for dividing co-owned property by law supply fresh ideas that even U.S. patent law could incorporate to solve some of the current system’s inherent problems.


[1] Grant v. Raymond, 31 U.S. 218, 242 (1832) (“The laws which are passed to give effect to this purpose ought, we think, to be construed in the spirit in which they have been made; and to execute the contract fairly on the part of the United States, where the full benefit has been actually received: if this can be done without transcending the intention of the statute, or countenancing acts which are fraudulent or may prove mischievous. The public yields nothing which it has not agreed to yield; it receives all which it has contracted to receive.”).

The international Agreement on Trade-Related Aspects of Intellectual Property Rights is modeled off of the U.S. patent regime, which has been repeatedly referred to and conceptualized as a series of temporary-monopoly contracts in the public interest. See, e.g., Robert P. Merges and John F. Duffy, Patent Law and Policy: Cases and Materials, 6th Edition 260 (2014). The Agreement delegates questions regarding assignment, co-ownership and inheritance of patents to signatory countries: “Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts” and “Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement.” Article 28 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments – Results of the Uruguay Round vol. 31, 33 I.L.M. 81 (1994) [hereinafter TRIPs] available at http://www.wto.org.

[2] Leonard Mlodinow, Subliminal 90–91 (Pantheon, 2012).

[3] Existing patent regimes already grapple with the complications of co-ownership and the best way to address them legally. See Robert P. Merges and John F. Duffy, supra note 1, at 1081–45 (2014); see also Craig Allen Nard, Herbert F. Schwartz, et. al. Principles of Patent Law, Cases and materials 1235–52 (3d ed. 2004); Silvia Beltrametti, The Legality of Intellectual Property Rights under Islamic Law, in The Prague Yearbook of Comparative Law 2009, 55­–94 (T. Mach et al. eds , 2010).

[4] 35 U.S.C. § 116.

[5] Today, it is common for inventors to “assign away” their patent ownership rights before they have even filed any patent applications, for example to their employing corporations or universities. Indeed, express assignments of employee inventions are somewhat ubiquitous in employment contracts in certain industries. For further reading on whether or not such assignments increase total social welfare, compare Mark B. Baker & Andre J. Brunel, Restructuring the Judicial Evaluation of Employed Inventors’ Rights, 35 St. Louis U. L. Rev. 399 (1991) with Robert P. Merges, The Law And Economics Of Employee Inventions, 13 Harv. J.L. & Tech 1, 3 (1999).

[6] By default each co-inventor has the same undivided partial co-ownership interest, regardless of any varying percentages of their contributions up to the moment of patenting ¬—such that each of 3 inventor/owners owns 1/3rd, each of 4 owns 1/4th, etc. This is an artifact of the “moral right of inventorship”, which dictates that each inventor is said to have invented the whole patent invention, regardless of any varying percentages of their contributions. This is a moral right because it is preserves the name of all inventors, in equal stature, on the patent document, but it has no direct practical use or significance, in contrast to the all-important ownership right. See Merges & Duffy, supra note 1 at 1082–1124. Furthermore, this is only a default rule, and inventors may in fact contract around this in advance by specifying percentage shares of inventorship. However, such agreements do not have practical effects on inventorship itself, and only become relevant if the inventors remain the owners and thus are said to have contractually agreed on a percentage ownership. Still, in this case, each owner has an undivided partial share that is irrelevant for profit-sharing and enforcement by lawsuit, as discussed in the text above. See, e.g., Ethicon, Inc. v. U.S. Surgical Co., 135 F.3d 1456 (Fed. Cir. 1998).

[7] See, e.g., Ethicon, Inc. v. U.S. Surgical Co., 135 F.3d 1456 (Fed. Cir. 1998).

[8] Id. For a nice summary of the structure and history of this organization of rights, see generally Waterman v. Mackenzie, 138 U.S. 252 (1981).

[9] Waterman v. Mackenzie, 138 U.S. 252 (1981). In contrast, an assignment that splits up the three powers (only to work, only to license, only to sue, or some combination) is said to be less than a full ownership interest, and is called a “license. Licenses can be thought of as rents, or usufructs—rights over the fruits of a patented invention’s use. Licenses are of limited interest in this commentary, since patent ownership confers the most important rights and has the highest value for corporations buying, trading, and selling patent assets. As with property deeds, assignments of ownership interests must be recorded with the patent office, such that subsequent patent purchasers can verify the chain of title to the patent before investing in its acquisition. See 35 U.S.C. 216 (“Patent Recording Statute”). In further analogy to real property title deeds, doctrines such as the Bona Fide Purchaser rule exist to protect good faith purchasers from the effects of fraudulent conveyances. For further reading, see Filmtec Corp. v. Allied-Signal Inc., 939 F.2d 1568 (Fed. Cir. 1991).

[10] When it comes to ownership of the patents themselves, U.S. patent law considers them chattels, such that patent ownership is generally thought of as a form of personal property ownership (as opposed to real property). See Merges & Duffy, supra note 1, at 1125–1145.

[11] See Robert P. Merges & Lawrence A. Locke, Co-Ownership of Patents: A Comparative and Economic View, 72 J. Pat. & Trademark Off. Soc’y 586, 586–91. (1990).

[12] Id. Another key way in which the co-owners’ are at each other’s mercy is that every single co-owner must be joined to a lawsuit in order for an infringement action to proceed, such that a single owner with a 1% share can block an entire infringement suit by other owners. The importance of this provision is taken up in a later commentary.

[13] Merges & Locke, supra note 11 at 587–90.

[14] Mecelle arts. 1060–68 available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[15] Mecelle arts. 215, 1088, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[16] Indeed, general methods of splitting patent ownerships among co-owners or co-inventors by default laws, for example by using partition, have been considered and abandoned in the U.S. for policy reasons. Partitioning patents by, for example, splitting the claims over certain components of a larger invention between co-owners, is considered unviable because this would create “blocking patents.” Blocking patents are valid patents which pre-empt each other, in effect, by rendering each patent holder practically unable to make, use, or sell their patent without also incidentally infringing the other (Consider this example: a partition that split the patent for a handheld razor into two patents, one for the blades in parallel and one for the solid device for holding the blades in place and handling them). Patent laws try to minimize blocking as much as possible, for obvious reasons – such that they deprive society of the benefit patent laws are meant to provide in the first place, by rendering patents impracticable. See Merges & Duffy, supra note 1 at 1109.

[17] Mecelle, art. 1069, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[18] Mecelle, art. 1088, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[19] Mecelle, art. 1071, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[20] Id.

[21] Mecelle, arts. 1078–90, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[22] See, e.g., Mecelle, arts. 1073 and 1076, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[23] Mecelle, art. 1079, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[24] Mecelle, arts. 1076, 1079, 1080, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[25] Mecelle, arts. 1083, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

[26] Mecelle, art. 1076, available at http://www.iium.edu.my/deed/lawbase/al_majalle/al_majalleb10.html.

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