ARTICLE
24 November 2022

From University To Commercialisation: How Ip Will Help Start-Ups And Spin-Outs Maximise The Value Of Their Innovation

PC
Potter Clarkson

Contributor

Potter Clarkson is one of Europe’s leading full-service IP law firms. Our IP attorneys and solicitors maximise the value of our clients' innovation by providing the experience, vision and clarity required to create, protect, leverage and defend their ideas in the most commercial and strategic ways all over the world.
As a university student or academic you might be vaguely aware of intellectual property (IP) as a concept but you may still not be entirely clear on why IP is so important...
UK Intellectual Property
To print this article, all you need is to be registered or login on Mondaq.com.

HOW IP WILL HELP START-UPS AND SPIN-OUTS MAXIMISE THE VALUE OF THEIR INNOVATION

As a university student or academic you might be vaguely aware of intellectual property (IP) as a concept but you may still not be entirely clear on why IP is so important or where and when you should start setting out your IP strategy?

This white paper will take you through five facets of IP that are particularly important for businesses relying on IP that has originated from their time at a university or other higher education facility.

These five facets are:

1. Clear ownership

2. . Effective innovation capture

3. Setting your IP strategy

4. Market awareness

5. Timing

We should probably begin by looking at what we mean by IP.

When you hear the term IP you probably think of inventions and patents. IP actually covers all creations of the mind, including designs, branding and trade secrets. The different types of IP you'll need and the way you'll use them to build your business and maximise the value of your business will depend on the nature of your business and on what you want your business to achieve.

It's also important to remember that as your business develops, the way you use IP will also develop and, ultimately, change and you will need to change with it. However, as you start out you will probably want your IP to:

  • Make you attractive to potential investors by giving them confidence that they will get a return on their investment.
  • Support the valuation of your company which again will make your business more attractive to investors and possible technology partners
  • Make it harder for competitors to enter the market, which in turn protects your market share and your market position
  • Derive higher profit margins and additional revenue streams.
  • Strengthen your brand and reputation and showcase your company in the best possible light

01 CLEAR OWNERSHIP: WHO OWNS YOUR IP?

Establishing ownership of university-originating IP is not straightforward. It is made even more complicated by the collaborative nature of academic research and potential grant funding obligations.

However, IP ownership is not a question you can afford to overlook especially as it will be one of the issues raised by investors looking into investing in your start-up.

There are three key areas you need to address from day one:

1. Who owns the existing IP?

2. Who will own any new IP you create? 

3. How will your ownership of your existing IP change as you create new IP?

If IP ownership isn't clear, an investor could very well walk away rather than risk investing their funds into the unknown. To prevent this from happening, you need to determine:

WHO IS ENTITLED TO THE IP FOR A NEW IDEA?

Generally the IP owner can be traced back to the creator of the IP. The entitlement to the ownership rights initially resides with the creator, although there may be an automatic transfer of entitlement arising from employment or contractual obligations.

If there are co-creators of the IP, there is the possibility of multiple parties being jointly entitled to the ownership of the IP.

WHY IS IT IMPORTANT TO IDENTIFY THE CREATOR OF THE IP?

Since an IP right can be challenged on grounds of the rights holder lacking entitlement to ownership, it is crucial to correctly identify the IP creator. This will then enable the IP owner to be identified.

The identification process can be very complex and can vary greatly depending on circumstances. This means it is best handled together with help from your tech transfer office or professional advisor.

What you should never do is take the same approach as adding authors to journal publications because someone qualifying as an author may not necessarily qualify as an IP creator in the eyes of the law.

WHAT POTENTIAL OWNERSHIP ISSUES MIGHT I FACE IN A COLLABORATION WITH A PARTNER?

With whom you collaborate in an inventive or creative capacity will impact who owns the IP, and you will need to consider their status in addition to your own.

It is always advisable to maintain an open dialogue about IP ownership and keep clear records of potential inventions and inventorship. Co-ownership in itself is not inherently a bad thing but it can give rise to a lot of problems and headaches if not handled properly.

WHO OWNS THE IP CREATED BY ME DURING MY TIME AT UNIVERSITY?

This will depend on your role in the university and any contracts governing your role.

IP generated by an employee will typically be owned by the employer (unless the employment contract explicitly states otherwise). If you are a postdoctoral researcher, technician or tenured academic, you are likely to be classed as an employee, meaning that your inventions will belong to the university.

The situation around PhD students and undergraduates is different as they are not technically employees. Some universities have a clear policy that student-generated IP belongs to the student, while in other institutions the IP may be partly or wholly owned by the university depending on whether university resources were used in generating the IP.

It may be that your industrial sponsor has rights to the IP created as part of the research programme.

WHAT ABOUT ANY IP CREATED AFTER I LEAVE UNIVERSITY?

The circumstances under which the new IP is created will be a factor in determining whether the university or your industrial sponsor continues to have an ownership stake.

IP you create independently outside the university would normally be owned by you, although having an active university employee or student in your team may complicate matters. If your start-up enters into a collaboration with the university, then you need to consider how background IP and foreground IP are treated in the collaboration agreement.

Licensing agreements in relation to IP owned by the university may have clauses that dictate the ownership of newly created IP that are 'improvements' of the licensed IP.

These improvements would be added to your licensing agreement to clearly distinguish the IP owned by the university from the IP you will own.

To view the full article click here

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.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More