Innovating together: what are the IP rules?

The UK government is proposing to introduce a new Industrial Strategy promoting prosperity through partnership. Diego Black at Withers & Rogers asks how innovative businesses should go about this and explores the risks and opportunities associated with a successful collaboration

Rachel Reeves has confirmed that the UK government is planning to launch an Industrial Strategy in October, with the aim of attracting global investment. A flow of investment is needed to support R&D activities and accelerate innovation processes in high-growth sectors.

Collaboration is becoming more prevalent across industry sectors, where technological advances in fields such as AI and automation are bringing opportunities for businesses to accelerate their R&D programmes and gain a competitive advantage. For example, in the automotive industry, growing interest in automation and green technologies, such as hydrogen powertrain systems, is encouraging vehicle manufacturers to team up with software and other technology companies to develop solutions that could become mainstream in the future.

Before entering into a collaborative agreement, such as a Joint Venture or a consortium-backed research initiative, businesses should be aware of the potential risks. They need to have a good understanding of the intellectual property (IP) rights that they will be bringing to the table and ensure that they are adequately protected from the start. They also need to consider what will happen when the collaboration ends and take steps to ensure that their IP rights are not compromised.

Where the collaboration includes an academic institution, commercial entities should bear in mind that there can be different motivations at play. For example, academics involved in research studies typically look to publish papers relating to their work.

This could potentially lead to problems, especially if patent protection is sought for an innovation resulting from the collaboration. Publication of the details of a specific innovation before a patent application is submitted would count against any subsequently filed patent application and could render the technology unpatentable.

It is also possible that an academic publication might inadvertently publish a trade secret or know how, which the innovators had not intended to disclose.

Even once a patent application has been filed, care should be taken regarding what information is disclosed by a collaborative partner. If the partner chooses to disclose information over and above what is already included in the application, this could cause issues. For example, the disclosure could be used against any future applications and render them invalid.

Effective communication between the collaborative partners is vital at every stage to ensure that they understand what can and can’t be shared publicly. Additionally, where one of the collaborative partners is an academic research scientist, it is important to keep the university’s management team and/or its technology transfer team fully informed about the terms of the collaboration, who owns what and when, and any non-disclosure agreements that apply.

As well as being careful to retain ownership of any IP rights that they might be bringing to the table, collaborative partners should consider who will own the rights to any new IP outputs they create together.

The terms and conditions of the collaborative agreement should make it clear who owns all IP outputs. If their ownership is going to be shared, it may be wise for the collaborative partners to consider establishing a joint entity to hold them. As well as helping to mitigate the risk of disputes, holding IP outputs in a company structure could bring financial benefits such as tax breaks.

The most important piece of advice for businesses and/or individuals entering into a collaboration is to ensure that break or termination clauses are agreed at the start. If a company is required to sign an agreement stating that it will exclusively license a patented technology to a third party, it may also need to know that it can terminate the relationship if things don’t go according to plan. Including clauses that clarify who owns what IP and when could be critical to exiting the collaboration with their commercial assets intact.

Understanding the scope of IP rights that a collaborative partner is bringing to the table is also crucial. Obviously, patented technologies and registered designs have a clear right of ownership attached.

However, other types of IP such as know-how and trade secrets are often implicit in the way a business operates. In the case of a trade secret, such as a recipe, formula or process, it may be wise to prepare records to demonstrate that it has been owned, used and maintained for a period of time.

Finally, in a world where data is becoming increasingly valuable, businesses entering into a collaboration should make sure they are harnessing and managing it effectively. If they have spent time and money building their own training data and models through the use of machine learning, for example, they should consider their IP rights, such as database rights, before sharing them collaboratively. These rights should then be included along with other IP in the terms of the collaboration.

Getting involved in R&D collaborations is not without risk, but with the right preparation and consideration, they can help businesses to accelerate their innovation programmes and strengthen their market share. 

Diego Black is a partner and patent attorney at European intellectual property firm, Withers & Rogers.

Main image courtesy of iStockPhoto.com and Olivier Le Moal