McCartney & Lennon, Jobs & Wozniak, Watson & Crick.
We are all looking for synergistic collaborations. In life
sciences, some of those collaborations may be with your employees,
independent contractors or corporate research partners. This
article will look at a few key IP issues to tie up in your research
with others on patentable inventions. Being prepared for any
outcome is important – not all the collaborations mentioned
above had happy endings!
Going into a research project, there is an end goal and you may
have a sense of who the likely inventors will be. However, there
are usually a few unexpected problems to resolve, plans change, and
perhaps there will be a touch of serendipity. Inventors may be
owners by default so you need to control everyone's potential
IP. It is also important to properly identify all inventors on a
As an example, in a case that went to the Supreme Court of
Canada, two NIH scientists tested samples of GSK's AZT drug in
a human HIV assay on a blinded basis. GSK controlled the
scientists' input for scientific integrity and to try to
maintain sole inventorship. The NIH scientists were ultimately not
considered inventors. So those doing outsourced work to verify
efficacy, even with a complex assay, may not be inventors (the NIH
invention was its assay, not use of AZT for treating HIV). Consider
whether inventorship may have differed if the NIH scientists had
been involved earlier in the project, and in more detail, knowing
the drug they were assessing going in, interpreting results, and
advising GSK on efficacy for treating HIV. Involve your research
partners as much as you wish, but know the potential IP
consequences on inventorship.
Tying Up Ownership with Assignments
Your employees and independent contractors should sign an
agreement transferring IP to your company. If you are outsourcing
research or clinical work on a fee-for-service basis, those
partners should also agree that your company owns the IP. If your
company is in need of a partner for complex analysis, solving
problems, making an invention and commercializing it, then both
organizations may expect to share in the ownership.
Nonetheless, companies can make whatever ownership arrangements
they wish, for example, having ownership follow inventorship or
basing it on the subject matter of the particular invention made.
As well, depending on the country, there may be restrictions on how
each co-owner can commercialize or transfer their own rights to an
outsider owner, so an agreement helps manage this activity.
In a recent case in Alberta, a disgruntled former employee tried
to deny transferring his IP ownership to his company, for a sonic
tool to improve oil well production. However, he had signed a broad
agreement transferring IP, and the inventions he made fell within
the clause, so the company owned his IP. The IP assignment stood up
even though the inventor had never been fully paid.
The terms of a commercial collaboration should be in writing to
ensure that expectations are managed, and everyone feels they are
treated fairly going in. Agreements between companies collaborating
on research projects are a rulebook, setting out the research
milestones, commercial plan and sharing of proceeds. It is
good to have agreements in place early on before revenue
starts to flow, so that parties' entitlements and obligations
are clear before there is money on the table. These agreements will
deal with IP in inventions, but may also deal with other types of
IP ownership, for example, in written manuals, graphic design,
software code and other work product. This ensures that the IP is
transferred to the appropriate owner, regardless of who is the
author or inventor. It is important to have clear financial terms,
and to make sure everyone is on the same page with respect to when
payment is due.
In a case in Ontario, an inventor sold his invention (a cold air
draft-blocker for a window) to a company that manufactured and
distributed the product. The agreement was a bit ambiguous on when
the royalty obligation ended, so the two companies ended up in
litigation. The court fairly picked an earlier date to end
royalties, and the inventor was cut off earlier than he liked. A
clear agreement would have avoided litigation.
Use IP agreements early on and wisely in all your
collaborations. Get good legal advice to make sure you dot all the
i's and cross the t's. This expression
sounds overly cautious, but there was a case just a few years ago
where Rogers and Aliant litigated over the positioning of a comma
in a contract clause, which affected liability for millions of
dollars in royalties!
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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