This week's contract construction issue involves joint ownership. Joint ownership of IP rights is one of those relationships to which parties often gravitate, even if legal counsel takes a dim view. In that context, consider the following two provisions, which in various related forms, I have encountered from time to time.
First, the parties state that they "agree they shall jointly own all of the intellectual property rights resulting from their mutual performance of the Project."
Second, the parties further agree that "Party A grants to Party B an [exclusive] licence with respect to the use of the Intellectual Property rights created during their mutual performance of the Project [for defined purposes of use]."
The obvious question is why are there two clauses apparently covering the same subject matter, one establishing joint ownership, while the other purports to grant a licence from one party to the other? If the IP is jointly owned then, subject to any particular local laws, each party is permitted to do what it likes with respect to these rights. If so, what purpose is served by the grant of licence? Permit me to offer several suggestions (readers are urged to offer their own comments):
1. Declaration of jont ownership may not be legally sufficient to create co-ownership. Perhaps the licence provision is a back-up in the event that joint ownership is not recognized. Even if A and B are not joint owners, A does grant to B the same rights that B would have enjoyed a co-owner.I probably have missed other possible ways to understand the two clauses. Dear readers: the floor is open.
2. Alternatively, the licence is an unartful attempt to create a limitation on the unfettered right of each joint owner to use the mark with restriction from the other joint owner, in this case a limitation on the right of use by B.
3. To the contrary, the grant of an exclusive licence could have the affect of limiting the right of use by A, in accordance with the meaning of an exclusive licence under various national laws.
4. The licence is provided in accordance with the requirements of local law. We were informally advised, e.g., that there is such a provision under German law. If this is correct, the provision serves to bring the parties into compliance with the applicable local law.