By Gizem Orbey
In earlier posts, I argued that a sharīʿa-compliant Islamic patent regime is not only possible, but could supply fresh ideas for solving certain co-ownership problems extant in U.S. and other patent regimes.[1] In this post, I explore limitations on these ideas in anticipation of possible criticism,[2] and in response to the possible tension between my theoretical patent regime and strict sharīʿa inheritance principles requiring precise property division and prohibiting joint tenancies.[3] I argue that much of the tension is analogous to common problems Muslims already encounter when dividing non-fungible inheritance property, and thus practical approaches from the Mecelle are sufficient to deal with patent-derived profits and usage rights. In particular, the Mecelle’s solution of providing ex post monetary relief to compensate co-owners against other co-owners’ overuse of shared property could honor sharīʿa, both by enabling a redistribution of property values in line with sharīʿa inheritance arithmetic and by preventing the joint tenancies that sometimes arise for inherited patents.[4]
Some emergent characteristics of U.S. patent law[5] present problems for patent co-owners,[6] One is that by default—that is, without contractual agreements to the contrary—every co-owner can practice, assign, or license the entire invention without receiving consent from or accounting profits to the other co-owners.[7] As discussed in an earlier post, this creates a perverse incentive problem, whereby each co-owner is motivated above all to license and use the patent to maximize her own profit without considering the effects of such licenses or profits on other co-owners.[8]
While transfers that occur by contract can deliberately alter these default provisions, they create effective joint tenancies when a co-owner dies and ownership rights are inherited after-the-fact. Consider this scenario: If the co-owner’s will does not specify what should be done with his patent share, or if he dies intestate, probate courts must divide the patent as according to regular state intestacy laws for the division of chattels.[9] In such a case, the courts treat patent ownership rights like all non-cash, non-fungible chattels—splitting them as an undivided partial property interests in common (1/2 rights each to two qualifying heirs, 1/3rd among three, etc.).[10] For example, when an owner of a 20% interest in a patent who dies intestate with eight legal heirs, by default each heir will end up with a 2.5% undivided partial interest. Each 2.5% owner can license or use the entire patent, further sell or divide the ownership interests without accounting to or sharing profits with the other co-owners, effectively behaving as if they have a full survivorship right in the patent’s value as they would under a joint tenancy.[11]
These broad default provisions for patent inheritance may conflict with sharīʿa, which eschews joint tenancies completely.[12] That is, Muslims typically agree to divide property among their heirs-at-law according to strict rules that vary based on the number and relation of the heirs that will still living at the time of death—leaving no room for a full right of survivorship as would occur in a joint tenancy.[13] As such, there appears to be a strict effectual conflict between sharīʿa and a patent regime that resembles U.S. law.
Not so fast. Even if a Muslim follows arithmetic sharīʿa divisions of inheritance to create a compliant will on paper, he or she may still encounter the problem of dividing essentially undividable co-owned assets by the determined proportion in reality. For example, it would be similarly difficult to devise a way to split a house, a single cow, or a well among multiple co-owners. Indeed, such divisions are not unique to patents at all, and its details are not well-described in the four foundational texts. Accordingly, it is illuminating to see how the drafters of the sharīʿa-compliant Ottoman commercial code, the Mecelle, have approached the issue to promulgate practical rules for generally splitting up physical property.
In a prior post, I argued that when it comes to splitting up usage or licensing profits among any co-owners in a sharī’a-compliant way, the Mecelle offers a solution: provide standing to apply to an Ottoman court for a partitioning of the profits from the property’s use (such as selling the milk from a cow, collecting rents from a house, or license profits from a patent).[14] Legislators attempting to solve inheritance issues with a sharīʿa-compliant patent regime can also use this standing as a tool to empower courts to redistribute inheritance profits ex post in such a way as to align with the intended sharīʿa inheritance arithmetic. For example, inheriting co-owners could apply for court partitioning of license profits, [15] but expressly applying proportions from the inheritance arithmetic rather than partitioning pro-rata as among standard non-inheriting co-owners. This may be all that’s required for sharīʿa compliance on the matter of inherited patent value since the classic sharīʿa sources are silent on how to implement non-fungible inheritance.
Mecelle-inspired ex post relief could also honor the sharīʿa joint tenancy prohibition, at least insofar as the patent values go, by threatening compensation against a co-owner that tries to take a truly full survivorship interest in the value of a patent. For example, in addition to partitioning, the Mecelle gives a co-owner whose proportional property is devalued as a result of a co-owners cultivation a legal claim for damages to “have the amount of the decrease in value of his share made good.”[16] So, if after inheritance partitioning one co-owner’s excessive licensing lowers the fair market value of the other co-owner’s license contracts, the court could sustain a damages suit to bring the total values to each co-owner back in line with the inheritance regime. These suits could not only reverse an effectual value joint tenancy but could in fact deter inheriting co-owners from overusing their rights ex ante.
A potentially more difficult problem is how to reconcile sharīʿa norms with the essential joint tenancy on patent enforcement rights as among co-owners co-inheritors, each of whom may completely block enforcement of the patent.
Notes:
[1] In the first Commentary of this series, I argued for a sharīʿa-compliant Islamic patent regime. Drawing on the permissive sharīʿa-compliant elements of an Ottoman commercial code called the Mecelle, my theory conceived of an Islamic patent regime as a system of contracts—between inventors and the state to create the patent property rights, and between inventors and third parties to license their use. This not so different from the existing U.S. and international patent regimes, in which patents are already conceived of as contracts in the public interest.
[2] No Muslim country has endeavored to derive its own IP or patent regime, and some jurists think it is impossible because they believe that protecting ideas are impermissible under sharīʿa principles. See Silvia Beltrametti, The Legality of Intellectual Property Rights under Islamic Law, in The Prague Yearbook of Comparative Law 2009 55 (Mach, T. et al. eds., 2010) (“Nowadays many predominantly Muslim countries apply secular laws in the protection of intellectual property but at the same time some constitutions of these countries hold Sharī’a as their main source.”) available at http://www.digitalislam.eu/article.do?articleId=2729
[3] See, e.g., Steven D. Jamar, The Protection of Intellectual Property Under Islamic Law, 21 Cap. U. L. Rev. 1079 (1992) (“The copyright inheritance scheme is not in step with Islamic law of inheritance in a variety of ways. After the author’s death, his or her heirs . . . shall be entitled to the pecuniary, exploitive rights granted by the statute. If there are no heirs, and the work was a collaborative one, then the statute creates a type of joint tenancy with rights of survivorship: the other collaborators get the descendant’s share. This inheritance scheme involves significant variation from Islamic law under which there is no concept of joint tenancy, only tenancy in common.”); Omar T. Mohammedi, Sharia-Compliant Wills: Principles, Recognition, and Enforcement, 57 N.Y.L. Sch. L. Rev. 259, 262 (2013); Marghinānī, 2 Hedaya 92 (1795); Heba A. Raslan, Sharī’a and the Protection of Intellectual Property: The Example of Egypt, 47 IDEA: The Intellectual property L. Rev. 497, 519–520 (2007).
[4] However, when it comes to the inheritance of patent-derived enforcement rights, the philosophical underpinnings of sharīʿa inheritance may provide a more difficult conflict. I take up that issue in another commentary.
[5] In U.S. patent law, ownership of a patent is a bundle of four fundamental rights. Owners may 1) use and/or work the invention for profit on their own, 2) license others to use or work the patented invention, 3) sue patent infringers in court to enforce the patent right, and 4) assign away all or part of these ownership interests by contract. By default law, each ownership interest is a partial, undivided interest in the entire patent, regardless of the percentage of ownership. When the patent right is first created, ownership is divided pro rata between inventors who jointly file the patent application, regardless of their degree of contribution to the invention (about 33% ownership for each of 3 inventors, 25% for each of 4, etc.). A complete assignment assigns the first three of the aforementioned powers together (to work, to license, to sue) and is properly called a transfer of ownership, regardless of the percentage of pro rata ownership thus transferred. In contrast, an assignment that splits up these 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.” See discussion and further background in my second post.
[6] See generally Robert P. Merges & Lawrence A. Locke, Co-Ownership of Patents: A Comparative and Economic View, 72 J. Pat. & Trademark Off. Soc’y 586 (1990).
[7] Id. Secondly, and relatedly, 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. This creates a collective action problem, whereby a holdout co-owner can prevent an infringement lawsuit from proceeding, thus preventing enforcement of the patent right altogether. Id. As mentioned in supra note 4, I elaborate on this issue in another post.
[8] See Merges & Locke, supra note 6 at 581–90.
[9] See Akazawa v. Link New Technology International, Inc., No. 07-1184 (Fed. Cir. Mar. 31, 2008). In Akazawa, the Federal Circuit held that an heir’s patent right is not a question of federal law, but rather one of local intestacy rules, whether they be state or foreign. Yasumasa Akazawa, the sole inventor on a patent, died intestate in Japan. Yasumasa was survived by his wife and two daughters, and Yasumasa’s wife then executed an assignment transferring all rights in the patent to another relative named Akira Akazawa (Akira). Akira later filed suit against Link alleging infringement; Link moved for and was granted summary judgment on standing on the basis that Akira did not have standing to file the infringement suit. The district court focused on the language of 35 U.S.C. § 261 requiring a writing in order to assign ownership of a patent, and thus held that without a written assignment from the estate, there could be no valid transfer to the wife or subsequent transfer to Akira. Akira appealed. Link maintained that 35 U.S.C. § 261 requires a writing for there to be a proper assignment, even upon death of the inventor, intestate succession notwithstanding; Akira argued that under Japanese intestacy law, any property owned by Yasumasa transferred immediately to his heirs, such that the subsequent transfer to him was valid. The Federal Circuit concluded that the district court’s focus solely on § 261 was erroneous, and that that there is nothing in 35 U.S.C. that limits the transfer of patents to assignments. As a result, although all assignments must be in writing, a writing may not always be required to transfer a patent title. C.f. DDB Technologies, L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284 (Fed. Cir. 2008) (announcing that federal law preempts state law for employment contracts that include rights to patents); see also Ethicon, Inc. v. U.S. Surgical Co., 135 F.3d 1456 (Fed. Cir. 1998) (Newman, J., Dissenting).
[10] See generally Akazawa v. Link New Technology International, Inc., No. 07-1184 (Fed. Cir. Mar. 31, 2008).
[11] Each such co-owner, no matter how small a share she owns, can also block the other co-owners from suing for infringement, essentially creating a potential joint tenancy in the enforcement right as well. Other issues include, inter alia, that, subsequent purchasers of the patent may not be apprised of this development, since transfers by inheritance are not considered “assignments” and therefore need not be recorded to be valid. Akazawa v. Link New Technology International, Inc., No. 07-1184 (Fed. Cir. Mar. 31, 2008).
[12] The four major sources of sharīʿa, the Qur’ān, the Sunna (life example of Muḥammad the prophet), the ijmā’ (consensus), and qiyās (analogical reasoning, in the Sunnī tradition), offer enough guidance on inheritance that scholars have created a structured, rule-based sharīʿa system that Muslims must follow strictly. In particular, the Qur’ān and ḥādīth supply most of the foundation for Islamic inheritance laws. Even when a Muslim makes a will, he or she must follow the distribution laid out by these traditional interpretations. The law dictates that all debts must first be paid out of the decedent’s property, and then cap the amount of a decedent’s property that may be given outside of the traditional heirs-at-law regime to 1/3rd, and then dictate that the remainder is divided arithmetically according to strict equations that take the number of heirs and their relationships as independent variables. See Mohammedi, supra note 3 at 263–69; see also, e.g., Jamar, supra note 3.
[13] See Jamar, supra note 3, at 1079–83.
[14] As I argue in an earlier commentary, these Mecelle provisions offer a solution to the perverse incentive for individual over-use among co-owners that even current U.S. laws do not address.
[15] Mecelle, art. 1083.
[16] Mecelle, art. 1076.