By Gizem Orbey
In an earlier series of posts, I argued that that a sharīʿa-compliant patent law regime is possible and can even provide valuable new ideas for solving issues of patent co-ownership that are still extant in U.S. and international patent regimes. I also argued such a regime can be internationally harmonious even despite strict sharīʿa inheritance limitations.[1] The theories behind such a regime can put Muslims living in U.S. and foreign patent law jurisdictions at ease; alternatively, a Muslim country could implement this U.S.-derived regime to create the world’s first de novo sharīʿa-compliant patent law system in such a way as to integrate it smoothly with existing U.S. and foreign laws.
In this post, I follow up on a second complication in the compatibility between sharīʿa inheritance and the inheritance of patents under U.S.-based laws: The essential joint tenancy[2]— forbidden by sharīʿa[3]—that may be created in a patent co-owner’s enforcement right upon intestate inheritance of a co-owned patent. This occurrence provides the largest philosophical roadblock to a harmonious sharīʿa-based patent regime. However, I argue that this roadblock is quite easy to overcome through carefully written, sharīʿa-compliant wills that include a waiver of necessary joinder as a condition for inheritance.
Under default U.S. law, an essential “mutual” joint tenancy occurs with respect to the enforcement right of any co-owned patent upon its inheritance.[4] This flows as a natural consequence of the foundational structure of the U.S. patent regime. Under default U.S. patent laws, unless co-owners have agreed otherwise by contract, every co-owner has an undivided partial interest[5] in the entire “bundle of rights” inherent to patent ownership: the right to make, use, and sell the patented subject matter, and to alienate its interest in whole or in part.[6] Also included in this bundle is the enforcement right, or the right to “a remedy by civil action for infringement of [the] patent” to collect damages against a non-co-owner who attempts to make, use, or sell products claimed within the patent’s scope without a license.[7] Common law precedent further establishes a default doctrine called the “necessary joinder rule”: That each and every co-owner must voluntarily join an infringement action as a plaintiff for the enforcement suit to proceed.[8] In practice, the rule means that any co-owner hoping to sue someone for infringement must first track down all the other co-owners—no matter how small their percentage of the whole ownership share—and convince them to join the suit voluntarily.[9] U.S. federal courts cite many policies in support of this rule that relate to protecting co-owners and licensees and promoting judicial efficiency. [10] However, legal scholars have also criticized this rule, arguing that it impermissibly raises litigation costs for co-owners with valid infringement claims. They point out that the rule enables co-owners to become holdouts, refusing to join infringement suits due to personal, political, or economic motivations.[11]
In an earlier post, I criticized the default U.S. patent regime for creating other essential joint tenancies between inheriting co-owners of a patent, in possible contravention of sharīʿa inheritance.[12] With respect to the enforcement right of the patent bundle in particular, the default U.S. regime and the “necessary joinder rule” create another potentially sharīʿa-prohibited joint tenancy: One of many inheriting co-owners of a patent may hold out on the enforcement right against other family members, behaving as if they own the entire enforcement right as they would under a joint tenancy right of survivorship.
However, U.S. law also suggests a rather elegant solution to this problem, which is implementable through sharīʿa-compliant wills.[13] Under U.S. law, a party can contract around the necessary joinder rule ex ante, by executing a waiver of his right to refuse to join suit under the necessary joinder rule (a “right-to-refuse waiver”) such that ‘‘his co-owners may subsequently force him to join in a suit against infringers.’’[14] Additionally, U.S. law in general is extremely liberal in enforcing wills to match the intent of a private testator. For example, U.S. law allows a testator to require the practice of Islam to be a condition of inheriting under a will, even though in other circumstances such a condition might contradict the Constitution’s free exercise clause.[15] Relatedly, U.S. patent law in particular is also highly deferential to states and foreign entities on default rules of inheritance, such that a U.S. court will require inheritance to be settled under the laws of the state or foreign jurisdiction before considering subsequent questions of patent enforceability.[16]
As a result, it would be quite simple for a Muslim patent owner to write a “right-to-refuse waiver” as a condition into a sharīʿa-compliant will, such that every inheriting co-owner would need to waive his right to refuse suit as a prerequisite for inheriting part of the patent at all. Indeed, the Hadith corpus (the authoritative statements of the Prophet Muḥammad) strongly encourages Muslims to have written wills, as the Prophet Muhammad reportedly said that “[i]t is the duty of every Muslim . . . not to have [inheritable property] for two nights without having his will written down regarding it.”[17] Therefore, being sure to have a will would not be burdensome for many Muslims. Additionally, sharīʿa-based wills by definition already include some conditions on inheritance, such as the condition that regularly inheriting members must be practicing Muslims (only a small proportion of inheritance may be cordoned off for non-Muslims, under wasiyya bequest.).[18] As such, a “right-to-refuse waiver” condition could be allowable in a sharīʿa-compliant will as well.[19]
Based on these principles, necessary joinder waivers in patent owners’ wills can make patent inheritance sharīʿa-compliant. Muslims living under the federal U.S. patent law jurisdiction, which defers to state and local laws on issues of inheritance before reaching federal patent questions, can rely on such wills to stay in compliance with Islam. Additionally, a Muslim country attempting to derive an internationally-harmonious de novo sharīʿa-compliant patent regime can likewise promote the use of “right-to-refuse waivers” to minimize conflicts among patent co-owners.
Notes:
[1] Drawing on the permissive sharīʿa-compliant elements of an Ottoman commercial code called the Mecelle, my theory conceived of a sharīʿa-derived 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. Interestingly, no Muslim country has endeavored to derive its own sharīʿa-based IP or patent regime, and some jurists think it is impossible because they believe that protecting ideas are impermissible under sharīʿa principles. Overall, I argue that an internationally harmonious and sharīʿa-derived regime is possible precisely because international patent frameworks are not premised on protecting intangible ideas, either, and have clear philosophical and historical roots in mercantilism, contract law, property law, and antitrust.
[2] A joint tenancy is a form of co-ownership of property, wherein each surviving co-owner has a “right of survivorship” such that they absorb decedent co-owners’ shares upon death. This means that when one co-owner dies, the surviving co-owner automatically owns all of the assets, regardless of what the deceased party’s will dictates. For example, in a marriage, a dying spouse’s entire share of jointly co-owned property would automatically transfer to the remaining spouse, rather than being distributed among both the remaining spouse and other heirs according to the dying spouse’s will. See Robert P. Merges & Lawrence A. Locke, Co-Ownership of Patents: A Comparative and Economic View, 72 J. Pat. & Trademark Off. Soc’y 586, 581–90 (1990).
[3] Islamic law scholars identify the joint tenancy prohibition as a consequence of other strict sharīʿa inheritance rules. See, e.g., Steven D. Jamar, The Protection of Intellectual Property Under Islamic Law 21 Cap. U. L. Rev. 1079, 1099 (1992) (explaining that the automatic absorption of a decedent’s assets by co-owners contradicts the strict inheritance arithmetic for standard sharīʿa wills.); Ali Khan, Mohammad Mustafa, Islamic Law of Inheritance: A New Approach 29–30 (Kitab Bhavan, 1989) (explaining that the generally accepted prohibition of joint tenancies in Islam may flow from the prohibition of gharar, or uncertainty, since joint tenancies leave the delineations of each co-owner’s shared rights unclear.)
[4] See Merges & Locke, supra note 2.
[5] In an undivided partial interest, every co-owner of jointly owned property can behave as if they own the entire property, regardless of their percentage or pro rata ownership share. That is, every co-owner can make, use, or license the product on his or her own without gaining permission from or accounting to the other co-owners. Additionally, each co-owner can transfer or further subdivide their interest to or among other co-owners without notice, creating even more undivided partial interests. This creates several problems in U.S. patent law, such as that 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. See Merges & Locke, supra note 3. These types of concerns are the subject matter of earlier commentaries.
[6] See 35 U.S.C. § 262 (‘‘Joint Owners’’).
[7] 35 U.S.C. § 281 (‘‘Remedy for Infringement of Patent’’). An example of a license is a contractual agreement with at least one co-owner to make, use, or sell patented products by paying the co-owner some amount of money in return as consideration. According to the US Patent Office, a license is “in essence nothing more than a promise by the licensor not to sue the licensee. No particular form of license is required; a license is a contract and may include whatever provisions the parties agree upon, including the payment of royalties, etc.” General Information Concerning Patents, United States Patent and Trademark Office, http://www.uspto.gov/patents-getting-started/general-information-concerning-patents (October 2014) (last visited Apr. 24, 2015).
[8] See, e.g., Ethicon, Inc. v. U.S. Surgical Co., 135 F.3d 1456 (Fed. Cir. 1998); STC.UNM v. Intel Corp., 754 F.3d 940 (Fed. Cir. 2014) cert. denied, No. 14-717, 2015 WL 1400870 (U.S. Mar. 30, 2015) (holding that right of a patent co-owner to impede an infringement suit brought by another co-owner trumps the procedural rule for involuntary joinder embodied in the Federal Rules of Civil Procedure 19(a)).
[9] For example, when an owner of a 20% interest in a patent bequeaths his share equally among 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 and 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 or usage rights as they would under a joint tenancy. Additionally, each 2.5% co-owner could also block the other co-owners from suing for infringement, essentially creating a potential joint tenancy in the patent’s enforcement right as well.
[10] Such policy reasons include: it shields the accused infringer from multiple separate suits from each co-owner, it safeguards the goal of resolving all potential claims efficiently and fairly, and it protects, inter alia, a co-owner’s right to not be thrust into costly litigation where its patent is subject to potential invalidation. The last of these may be the most important. To establish infringement of a patent, a plaintiff must prove that the patent is both 1) valid and 2) infringed. Both invalidity and non-infringement are viable defenses to an infringement action. As a result, any plaintiff suing to enforce a patent right runs the risk of the defendant proving invalidity of the patent at trial. STC.UNM v. Intel Corp., 754 F.3d 940 (Fed. Cir. 2014) cert. denied, No. 14-717, 2015 WL 1400870 (U.S. Mar. 30, 2015).
[11] Id. See also, e.g., Merges & Locke, supra note 2.
[12] See, e.g., Jamar, The Protection of Intellectual Property Under Islamic Law. 21 Cap. U. L. Rev. 1079 (1992).
[13] For further reading on how sharīʿa-compliant wills can be used by Muslims in the U.S. to harmonize their religious goals with U.S. laws, see generally Omar T. Mohammedi, Sharia-Compliant Wills: Principles, Recognition, and Enforcement, 57 N.Y.L. Sch. L. Rev. 259 (2013).
[14] Ethicon, 135 F.3d at 1468 n. 9 (citations omitted) (quoting Indep. Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459, 469 (1926)).
[15] See, e.g., Matter of Eckhart, 39 N.Y.2d 493 (1976) (recognizing that children may be disinherited provided there is a clear intention to do so); In re Laning’s Estate, 339 A.2d 520, 525-26 (Pa. 1975) (“[T]he courts stand ready to effectuate the testator’s intention without regard to what religious or irreligious doctrine he wishes to advance. Nor does this entail expenditure of public resources in a manner which advances or inhibits religion but rather the disposition by a private individual of her own property.”) (citations omitted). Cf. Lemon v. Kurtzman, 403 U.S. 602 (1971) (overturning two public statutes, which provided aid to religious schools, as a violation of the First Amendment’s establishment clause).
[16] See Akazawa v. Link New Technology International, Inc., No. 07-1184 (Fed. Cir. Mar. 31, 2008). Significantly, this deference includes issues of how to interpret written wills in relation to the particular intestacy laws of a jurisdiction. In Akazawa, the Federal Circuit held that an heir’s patent right is not a question of federal law, but rather one of local inheritance 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, because U.S. law generally demands that patent assignments be in writing and the de facto “estate” created by Yasumasa’s death did not write over the patent to his heirs. The Federal Circuit concluded that nothing in U.S. law limits the transfer of patents to written assignments, and that as a result, although all assignments must be in writing, a writing may not always be required to transfer a patent title. Therefore the default transfer to Yasumasa’s spouse by intestacy laws (rather than written instrument from the “estate”), and her subsequent written assignment to Akira, might all be valid. The court remanded the question for consideration under Japanese inheritance law.
[17] See Mohammedi, supra note 13, at 261–63.
[18] A wasiyya bequest is an intermediate step between settlement of the decedent’s debts and sharīʿa distribution of his assets among his legal heirs, in which the testator has flexibility in controlling a portion of his bequests up to the value of one-third of his assets. Since non-Muslims are by definition not eligible for inclusion in the subsequent sharīʿa distribution, Muslims frequently use the wasiyya step to bequest property to non-Muslims they wish to include among their heirs. Id. at 261–70.
[19] This may on rare occasions create further problems, such as by risking transfer of more than the sharīʿa-proscribed share of assets to a single heir by assigning the patent right fully to that heir as the one willing to execute the waiver. To get around this, the testator could rely on market forces as among the heirs—that they would likely all prefer to own the patent but waive the right to refuse to sue over having no ownership interest in the patent at all. Alternatively, the testator could hope to rely on ex post partitioning of the assets upon his death, wherein a court may transfer to the non-waiving heirs higher proportional shares of his other assets to make up the difference to bring the overall proportions into compliance with sharīʿa rules. In an earlier commentary, I argued a sharīʿa-compliant commercial court would have the power to undertake such a partitioning for patents and their license revenues.