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I have patent coverage in 9 euro, U.S and Canada. My father-in-law is co-owner. He does not want to be in business with me and has offered to give me US and then he gets Eruo/Canada. We initiated agreement with our patent attorney. My father in law wants a provision in agreement that essentially forces me to transfer anything we develop related to technology to turn this over to him so we do not make his Euro/Canada patent obsolete. I understand why but this completely hampers my ability to go out and license and/or sell to third party in US. So, it may be a smart thing to do in patent space but I do not believe it will be favorable on a business side for either party. Essentially, I would have to tell any third-party that we license or sell to, yeah, BTW, anything you develop based on this patent, when you are reducing to practice, has to be turned over to this Euro/Canada entity (father-in-law). My patent attorney is not able to give me convincing business argument that this is a wise thing to do...can you help?
2 ANSWERS
Internet Attorney serving New York, NY
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Handal & Morofsky, LLC
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If you are going to have separate territories, your father-in-law may not be much affected by being a little obsolete, as it is unlikely that US sales will substitute for European sales. So I would argue that he doesn't need this. Likewise, if you do something significant in the future, why shouldn't that carry some compensation in exchange for a license to your father-in-law? That would be a win-win. I do not see the scenario proposed by your father-in-law as a win-win, and suggest that if you hold out you will not have to give rights to future inventions. I think a little hard negotiation will get you what you want.
Answered on Apr 04th, 2011 at 9:44 AM
Intellectual Property Attorney serving Spokane, WA
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Malhotra Law Firm, PLLC
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I am not fully understanding exactly what he is asking for. Each country has its own patent system so there is already a geographic division. Is he asking you for a U.S. license to any improvements you make? Or a Europe and Canada license to any improvements you make? Who is responsible for filing improvement patents in the U.S. and who is responsible for filing improvement patents in Europe and Canada? If there aren't going to be any improvement patents, they all you have are copyright rights, trademark rights, and maybe some know-how. You could set up a cross license deal, which would be more fair than a one-way license. So you get a U.S. license to any improvement patents that he obtains in the U.S. and he gets European and Canadian licenses to any European and Canadian improvement patents that you obtain. Third party licensees are not necessarily obliged to license back any improvements they make in Europe or the U.S. unless you specify that they are.
I would say that whatever license you give, you should get something back. Doing something reciprocally is fair. You also have to consider what happens if you only file improvement patents in the U.S.then there is no European or Canadian rights to license to him. Same thing if he only obtains improvement patents in Canada and Europe.
Answered on Apr 04th, 2011 at 9:29 AM