Co-ownership of a Cypriot patent

The Patents Law (16(I)/98) sets out the Cypriot law in relation to patents. However, in enacting this law the Cypriot government missed an opportunity to enact comprehensive legal rules regulating the rights and obligations of each co-owner of a patent towards each other and towards third parties.

The only provisions of the law referring to co-ownership of a patent are found in Sections 9 and 10. They provide as follows:

9 Any natural or legal person may file a patent application, either on its own or jointly with any other person.

10(1) The right to a patent to the inventor or his lawful successors. Joint inventors have equal rights unless they agree as to the contrary.

The inadequacy of these provisions is obvious. Section 10(1) is even missing a verb. It is likely that the section was intended to be read as: “The right to a patent belongs to its inventor or his lawful successors.”

To date, there are no judgments by either the Supreme Court of Cyprus or any district court dealing with the issues concerning the concept of co-ownership of a Cypriot patent.

In examining the whole problem, a distinction has to be made between cases where the relationship among the co-owners and the rights and obligations of each towards the other(s) and towards third parties are regulated in a detailed manner by an agreement between those co-owners, and cases where no such agreement was ever made.

In the first case, the inadequacy of the law does not usually lead to major difficulties. If an issue or dispute arises, it must be solved by reference to the contract between the parties and its appropriate construction under contract law. Consequently, it is strongly recommended that the co-owners of a patent make such an agreement.

However, various other issues can arise during the lifetime of a patent which is owned jointly by two or more persons. The main questions in relation to co-ownership are as follows: 

  • What happens in the event of death of one of the co-owners? 
  • Is one of the co-owners entitled unilaterally and without the consent of the other co-owner(s) to assign or license a third party to use the patent?

Cyprus, which until 1960 was a colony of the United Kingdom, inherited a rather peculiar system of law, the essence of which has not been radically altered since its independence. The system was based on a series of codifications of the English common law in the form of Cypriot statutes, coupled with a general provision that in the absence of a statutory provision, the law of Cyprus is to be found in the common law.

This system is still applicable today. But, in respect of the questions under consideration the “common law” does not apply because of the specific sections of the Patent Law. However, as the Cypriot courts have a long tradition of referring to English authorities, in appropriate cases the Cypriot courts will look to English authorities for guidance. This is not to suggest that it is certain that they will apply these authorities; or that they will consider themselves bound by those authorities. However, it is likely that they will look at these authorities and, if their tenor is consonant with common sense, they will follow and apply them.

Pursuant to the common law: 

  • each co-owner is entitled to make use of the patent but is not entitled to assign or license the patent to a third party without the approval of all the other co-owners; and 
  • the co-ownership of patents may be assigned to a legal successor – that is, in the event of the death of one of the co-owners, his or her entitlement is transferred to his or her successors and is not extinguished, nor is it assigned to the entitlement of the other co-owners.

Therefore, the two questions posed above can be answered as follows: 

  • In the absence of an express agreement, each of the co-owners may make use of the rights derived from the patent independently from the other co-owners, provided that the said use does not include an assignment or a licensing of the patent to a third party. In other words, no co-owner may grant exclusive or non-exclusive use to a third party. 
  • In the event of the death of one of the co-owners, the rights of the deceased over the patent will not be extinguished resulting in enhancement of the other co-owners’ rights, but rather will devolve to his or her heirs, in accordance with the Law of Succession.

In light of the insufficient legislative regulation of these issues and the absence of any authoritative Cypriot case law, it is possible, albeit unlikely, that a Cypriot court could come up with different answers to these questions.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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