Division into

unequal

as reliance seems to be placed on the circumstance that both parties then start on a footing of equality and have the same chances in dealing with the public in respect of the patent. Thus the conditions of separate working of a patent by co-owners of moieties are occasionally made to relate only to the payment of the renewal fees, the joint granting of licences at premiums or other capital sums, and the joint benefit of improvements or additions to the invention or discoveries useful for the manufacture of the patent article made by either party (g). In all other respects each co-owner is left to deal with his share in the patent as he shall think fit. As these conditions will not provide for the difficulties that may arise in the event of there being a sub-division of either moiety, whereby the patent becomes divided into unequal shares, it is advisable to have an arrangement as to the division of a patent into equal shares similar to that which is usually made in the case of a division into unequal shares as mentioned in this and the next few pages.

Where a patent is by assignment or agreement divided into shares- Sepa unequal shares, and it is intended that each owner may work the rate workings -No trustees. patent as to his share separately from the others without the introduction of trustees, the covenants and provisions usually inserted may be taken to be such as are now to be mentioned (h).

Each owner to pay share of fees.

Each owner should covenant to pay his proper proportion of the renewal fees, and should charge his share in the patent with the repayment of any moneys which may be paid by any other owner on his behalf in this respect. In the absence of such a covenant it is presumed that no owner will be bound to contribute with the others towards the payment of any fee, unless he assumes to use the patent for any part of the period for which the fee is paid, or otherwise obtains some benefit from the payment of it by the others (). The covenant virtually makes it obligatory on each

(g) See Agreements IV. and VIII., ante, pp. 70, 82, and Assignment III., post, p. 142. In Agreement VIII., ante, p. 82, the division into equal moieties is varied by providing for a partial partition of the patent, i.e. by the assignment of the patent for a certain district to each party absolutely.

(h) See Assignment IV., post, p. 144, as to an assignment of a twelfth share of a patent, in which are contained these covenants and provisions.

(i) The law will not create a covenant respecting a personal thing (Com. Dig. tit. "Covenant," A. 4; Hindmarch, 243; and ante, p. 116, note). The claim to contribution might, perhaps, be supported by applying the maxim,

owner to contribute to the payment of the fees so long as any other owner is willing to keep up the patent, but a proviso to that effect might, for the sake of clearness, be inserted (k).

granted

With regard to the granting of licences, it should be provided Licences to be that this should be done only by all the owners jointly, who are to jointly. share all benefits therefrom in proportion to their shares (7). The case of a licensee taking his licence from a single co-owner without having notice of such a provision need hardly be considered, as it is assumed that the deed of assignment or arrangement will be registered immediately after execution (m).

With regard to the manufacture by each co-owner himself of the Each owner to pay royalpatent articles, it should be provided that every article so manu- ties on articles factured shall, when manufactured (or sold), bear a royalty which made by him. shall be divided amongst the owners generally (including the manufacturer) in proportion to their shares. The amount of this royalty should generally be such as would be charged to a licensee who paid no premium. Where this royalty is put on the manufacture and not on the sale of the article, it should be fixed lower than the royalty in the latter case, so as to allow for the article remaining unsold for a time. A royalty placed on the manufacture seems, however, the most convenient incidence, as the articles are freed (so to speak) at the earliest opportunities, and no delay in the final settlement of accounts will be caused by there being unsold articles in the possession of any owner. Where the royalty is placed on the sale, it should be provided that unsold articles in hand on the final winding-up shall bear a lesser royalty than that payable on a sale, and in lieu of the latter royalty.

"Qui sentit commodum sentire debet et onus." See Strelly v. Winson, 1 Vern. 297; and Green v. Briggs, 6 Hare, 395, which are cases as to the obligations, inter se, of co-owners of ships; and Lindley on Partnership (4th ed.), pp. 63-69; as to remedies of co-owners inter se.

(k) Where an owner objects to have the patent renewed, and cannot sell his share, he should agree with the other owners to assign or release the share to them respectively in proportion to their shares, on condition of being released from his covenants.

(1) See ante, p. 118, as to the grant of licences by co-owners separately. (m) As to registration, see ante, pp. 23-25, and post, pp. 132, 133. As to constructive notice, see Dart's Vendor and Purchaser (Chap. XV., sect. 5), and cases there cited, especially as to the neglect of a purchaser (of land) to investigate the title, relying on the mere assurance of the vendor (Jackson v. Rowe, 1 Ph. 255; Neesom v. Clarkson, 2 Hare, 173; West v. Reid, 2 Hare, 260. See also Conveyancing Act, 1882, sect. 3, post, p. 383).

Other provisions.

Assignment

to trustees for

owners; nature of.

Assigns of owners to

Provisions as to the use of the patent mark, the keeping and furnishing of accounts, and allowing inspection of the books, the periodical delivery and settlement of accounts, the inspection of the factories or places of business of the different owners, and the benefit of improvements or additions to the invention or discoveries useful for the manufacture of the patent article (n) and an acknowledgment and undertaking by one of the parties as to the custody and production of the letters patent, should be inserted in the deed. A reference as to the non-implication of a partnership between the parties is unnecessary, as no owner will be an agent of the others, and the profits are not to be divided between the owners (0).

Where no partnership is intended, the introduction of trustees on a division of a patent into shares is no doubt the only satisfactory method (if any) by which the mutual rights of the owners for the time being can be properly regulated. In the plan now under consideration, the principal object sought to be effected is the reduction, practically, of the ownership of the shares in the patent itself to that of interests only in the net proceeds of sale or profits to be obtained from it. The share of each owner is thus charged for the benefit of all the owners with the current expenses of the arrangement, in priority to his obtaining any benefit for the time being from his share in the patent. Each owner also parts with his right to use the patent except by way of licence from the trustees. A purchaser therefore of any original owner's share takes it according to its nature and subject to the charge. Except as to any licence granted to him, the only active obligations of an owner are made to be those relating to his contribution towards the expenses in case the trust fund for the time being shall be insufficient for that purpose, and the bringing into the trusts all improvements, &c. made by him.

As a step towards binding the assignee of any share to perform

one;

(n) The benefit is to all the owners of all improvements, &c., made by each and the new inventions and patents in respect thereof are to be subject to the provisions of the deed as if part of the premises. See Clause 5 of Assignment IV., p. 145.

(0) See Lindley on Partnership (4th ed.) pp. 33-54 (“Quasi-Partnership"). The Partnership Law Amendment Act, 1865 (Appendix, post, p. 368), does not affect the case.

For a provision as to bad debts, see the next paragraph.

For an arbitration clause, see Form 24, p. 55, ante.

deed;

their acts.

obligations in respect of it, it is found advisable to insert in the execute the deed as parties" every person who shall become an assignee of a share in the trust property and execute [the deed] or otherwise assent to be bound by it." The execution of the deed by an assignee pro- but they might be vided thereby to be made a party may not be the only evidence of bound by his having assented to it, as his acts, apart from the deed, may be sufficient for this purpose (p). This would no doubt be so where the assignee taking the benefits under the deed interferes with or attempts to control, as provided by the deed itself, the trustees in the execution of any trusts, if such action can be only referable to the deed. As the assignee would be bound to indemnify the assignor (q) the former might be forced to do some overt act by which he would be bound to the trustees to conform to the deed should he not execute it. In the precedent carrying out the scheme () the definition of owner is inserted, from which it follows that a beneficiary of a share is not to be recognized until he has executed or otherwise assented to be bound by the deed in respect of his share, for, until such assent be given, the last previous beneficiary who had so assented is to be deemed to be still the owner. The patent then is to be assigned to trustees who, by means of Duties of licences to all or any of the owners for particular districts, and to other persons (if thought fit), or by sale of the patent either in the entirety or for any districts, will from time to time receive moneys which, after satisfaction of all current costs and expenses relating request of to the patent and the trusts, will be divisible amongst the owners owners; periodically in the specified proportions. Except by means of a licence from the trustees, no owner is to use the invention. The licence to each owner should be on the same footing as that to a stranger except that no premium should be made payable. The power of sale is to be exercised at the request of a majority in value being (say) one third at least in number of the owners for the time being, and the respective terms of the sale are to be settled or at least approved of by the persons composing the same or another like majority.

(p) As to a party to a deed who, taking the benefit of it, is bound by it, though he does not execute it, see Co. Litt. 230 b; Rex v. Houghton-le-Spring, 2 Barn. & Ald. 375; Burnett v. Lynch, 5 Barn. & Cress. 589; Webb v. Spicer, 13 Q. B. 886; Witham v. Vane, 44 L. T. N. S. 718 (1881, C. A.).

(9) Ante, p. 121.

(r) Assignment V., post, p. 148.

trustees: to grant

licences to strangers, or sell patent at

owners or

to pay expeuses, defend patent, &c.

Contribution of owners to expenses.

Remuneration of

The duties of the trustees beyond the granting of licences and receiving the royalties and doing other acts in relation thereto, will be to pay or provide for the current costs and expenses, and (if thought fit) any approaching or contingent liabilities in respect of the trusts, and to take or defend proceedings in relation to the patent, and to obtain (where necessary) from each owner his contribution towards such costs and expenses, and to deliver and settle the accounts periodically.

Where the trust moneys are insufficient for the expenses, the trustees, while having a lien on the patent for the deficiency, are to be entitled to demand the same from the owners generally without regard to the amount of their respective shares (s), but as between the owners themselves the contribution is to be according to the shares. Further, each owner is to have a charge on the share of any other owner in the patent and trust moneys for any sum paid by him in respect of such share in excess of his proper contribution.

Provision is also made for the remuneration of the trustees out trustees. Ap- of the trust funds from time to time, and for any majority in value pointment of new trustees. being (say) one-third at least in number of the owners for the time being, to remove any trustee or to appoint new trustees.

Assignment of a share by

patentee, but

he alone to work patent. Nature of reservation.

If a patentee assigns a share only, and it is agreed that he (say) shall alone work the patent, a licence to use the share can be granted by a separate deed, or the deed of assignment itself can provide for the sole working of the patent. In the latter case, it seems advisable in the operative part of the assignment, to reserve to the assignor the right to use the share according to the prescribed conditions. The right thus reserved being a legal one, a notification of it can be made on the register (t). For convenience of language, however, this right may be treated as being conferred by way of licence, although it is presumed that an assignee cannot by the same deed make a legal disposition of any part of the premises assigned. The assigns of the assignee would then virtually obtain the share subject to the licence, which they could not revoke, except as prescribed by the deed. The obliga

(8) This is necessary for the convenience or protection of the trustees in case of the absence from the kingdom, or the default or bankruptcy of any

owner.

(t) See sect. 85 of the new act as to the non-registration of trusts.