Author Archives: Mark Anderson

About Mark Anderson

I am an English solicitor (attorney) who qualified originally as a barrister in 1983. After working as an in-house lawyer and with Bristows in London, I formed Anderson & Company in 1994. Our offices are based in Oxfordshire, on the banks of the River Thames, 50 miles west of London. Outside work, I enjoy walking and canoeing. I met my wife Sara whilst cycling from Land's End to John O'Groats (1,100 miles) in 1991.

Training from IP Draughts in 2015

bandwagonImpressed by the reception to Ken Adams’ recent seminar at the UCL Faculty of Laws, Drafting Clearer Contracts, IP Draughts has decided to jump on the bandwagon and offer four one-day training courses via UCL Faculty of Laws. These courses are in addition to (and complementary to) the 5-day course Intellectual Property Transactions: Law and Practice, which will be running for the third time at UCL from 20-24 April 2015.

Each of the one-day courses will be held in London and will provide 6 hours of CPD.

The first of these, Drafting IP Terms in Research Contracts, will be held on Thursday 26 March 2015. The course is pitched at an intermediate level, for contracts managers and lawyers who have had some exposure to negotiating research contracts but are still at a relatively early stage in dealing with them. Brochure and booking details can be found here.

Further one-day courses will be held at UCL on the following dates. Details will be posted on the UCL Faculty of Laws website in due course [update: now posted, see here], but for your diaries…

  1. Introduction to Contracts – CPD for legal support staff. Tuesday 12 May 2015. This course is designed for beginners who don’t have much experience of working with contracts and would like to understand them better. Previous attenders have included project managers, administrators, legal secretaries and paralegals.
  2. Drafting Legal Clauses in Commercial Contracts. 2 June 2015. This course is designed for lawyers and commercial managers who have at least 2 years’ experience of drafting and negotiating commercial contracts, and who wish to increase their understanding of the “legal” clauses in contracts, including warranties, indemniabsentties, limitation of liability and boilerplate clauses.
  3. IP Licensing – An Advanced Level Drafting Workshop. 16 June 2015. This course looks in detail at the main terms in an IP licence agreement, including grant, payments, performance, warranties, and law and jurisdiction. It is designed for lawyers and commercial managers who have at least 2 years’ experience of drafting and negotiating IP licence agreements.

 

 

 

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10 tips for dealing with non-performing licensees

performanceTypically in exclusive licence agreements, and sometimes in non-exclusive licence agreements, the licensee has obligations to “perform” – to bring licensed products to market and to maximise sales. One of the reasons for including such obligations is that the licensor wants to avoid the  licensee “sitting on” the licensed IP, failing to exploit it yet preventing the licensor from doing so.

Below are 10 tips for dealing with the situation where a licensor considers that its licensee (under an existing licence agreement) is not performing its obligations to exploit the licensed IP, and is unable to get satisfactory information from the licensee that provides reassurance that the licensee is in compliance with its contractual obligations. In IP Draughts’ experience, this situation is not uncommon. Sometimes, it happens because the licensee is undergoing a corporate reorganisation and the project in which the licensed IP is used has been put “on ice” for many months while a new strategy is developed; the licensee may be unwilling to admit this has happened. Other times, the licensee is just very poor at communicating, or doesn’t wish to spend the time and effort necessary to keep the licensor fully informed of progress. On a few occasions IP Draughts has encountered a licensee who has stopped developing the licensed technology altogether, but is unwilling to admit this or negotiate a termination agreement, or sees no pressing need to do so. Meanwhile the licensor’s patent life is ticking away.

treborIn all of these situations, the licensor’s attempts to communicate meaningfully with the licensee have failed, and something a little stronger is required. It may not be necessary to go as far as starting litigation, or formally terminating the licence agreement (though sometimes it will), but the licensee needs to see a determined course of action on the part of the licensor that is likely to lead to these outcomes if the licensee fails to respond appropriately.

Having said that, IP Draughts is not in favour of bluffing as, once the bluff is called, it is difficult to get the licensee to take the licensor seriously thereafter. Steady, unflashy, unexaggerated, clear, patient, determined, timely and above all believable action, with consistent follow-through, is the order of the day.

These are general tips, and different actions may be required in individual situations. The most important point to make is that you should consult at an early stage with your legal adviser and together work up a strategy for dealing with the non-performing licensee.

prejudiceThe tips are set out in order of activity, but some of them should be happening at roughly the same time. For example, it is conventional to assert rights in an “open” letter at the same time as making proposals for settlement in a “without prejudice” letter. Your legal adviser should be familiar with all of these steps and advising you on them.

  1. Take legal advice. This point goes before all others. Don’t think in terms of legal advice meaning that you have to escalate the problem into something larger than it needs to be, or spend a huge amount on legal fees. A good lawyer will help you to take appropriate action, which may be a very light hand on the tiller in the early stages, to make sure you don’t steer into the rocks. At some stage, it may be appropriate to obtain a formal opinion on your rights and remedies, eg before you decide to give formal notice of breach or terminate the agreement.
  2. Read the contract. What, exactly, are the licensee’s obligations under the contract, and what are the consequences of failure to perform the obligations? Sometimes, people make assumptions on these points without checking the contract carefully.
  3. Marshall your facts. Put together a file of all relevant documents, including the agreement, correspondence, and reports. Make sure that people in your organisation who have had dealings with the licensee have made file notes of those dealings, particularly if they are relevant to the question of performance, eg if the licensee made statements on the subject in conversations. But do all of this in a disciplined way, based on advice from your lawyer (see above). Too often, a situation of this kind causes clients to send internal emails to one another that comment on the rights and wrongs of the situation. Those emails and other documents may be disclosable to the other side in litigation, and they may say things that don’t help your case. Your lawyer will be able to advise you on whether such communications and documents (a) should be avoided altogether, or (b) should be conducted in a managed way. For example, sometimes it may be appropriate to send such emails to the lawyer and thereby take advantage of “legal privilege” exceptions to disclosure. Other times, discussions should happen face-to-face, and not be recorded.
  4. Reserve your rights. If you have evidence that suggests that the licensee is not performing, don’t wait for weeks before communicating with the licensee. Sometimes, it is important to send a holding letter in which you indicate that you have concerns and are investigating them, and in the meantime you “reserve all your rights”. This should help to avoid an argument that you have waived your legal rights by delay.
  5. Follow a clear strategy. Develop a clear strategy for dealing with the dispute, and don’t fall into the trap of just reacting to communications from the licensee. Follow through on your strategy in a steady way. Make sure that senior management has bought into the strategy and is not deflected by noise emanating from the licensee (or from doom-merchants within your organisation). At the same time, keep re-assessing your options in light of any further information received from the licensee.
  6. Give notice of breach. Once you know your facts, have taken legal advice and are clear that a breach of contract has occurred, you may wish to give formal notice of that breach to the licensee. Think ahead a few steps as to what you want to happen. Are you intending to go through with termination or just try to shock the licensee into action. How will they react to a formal notice? How will your organisation react if the licensee escalates hostilities in light of the formal notice? Is your organisation prepared to follow through?
  7. Try to keep talking. In parallel to any formal legal action, such as giving notice of breach, it is usually desirable to try to engage in a dialogue with the licensee, with a view to resolving what has now become a dispute. A conventional way of doing this is to send the licensee communications that are marked “without prejudice” and which are intended to be part of negotiations to settle the dispute. These communications are run in parallel to the “open” communications that set out your organisation’s legal position. An advantage of without prejudice communications is that they shouldn’t be seen by the judge and therefore it is easier to be a little freer in what you say. As with all of these tips, individual jurisdictions may have different rules on these matters, so it is important to take advice from a local lawyer.
  8. Don’t lose focus. Dealing with a non-performing licensee may not seem the most valuable or inspiring use of your time, particularly if you think the reason for non-performance is that the market for the licensed products is not good. It may be tempting to try to deal with the matter during lulls in your workload, when you are not busy doing deals that look likely to generate greater income. Unfortunately, this attitude can result in a patchy and inconsistent approach to resolving the dispute. This often looks weak, and results in delays. In IP Draughts’ experience, the best way of working to resolve disputes is to be steady and consistent. If the licensee doesn’t respond to your letter, don’t wait 6 weeks before following up. Make a note in the diary to follow up in, say, 16 or 17 days (2 weeks plus a couple of days for postal delays). Keep acting in a timely way. Plan ahead as to how and when you will escalate if the licensee ignores you. Don’t act precipitately, but also don’t fail to act. The best credit controllers take a similar approach and so should you.
  9. Be prepared to compromise. Even if you think you have a cast-iron case, it is usually worthwhile to bend a little to achieve an agreed outcome. And most cases are not cast-iron, in which case it becomes even more attractive to try to settle the dispute.
  10. Try to enter into a written settlement agreement. Even if the outcome is to terminate the agreement, it is generally desirable to have an agreed basis of termination, recorded in a termination and settlement agreement.

 

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Who owns copyright in an academic’s work?

butterflyRegular readers of this blog will know that IP Draughts is sceptical about the value of some of the articles in academic law journals. Too many of them seem to be engaged in a private conversation between academics that has very little connection with the world that IP Draughts inhabits.

A recent article in Legal Studies, the journal of the Society of Legal Scholars (SLS), bucks this trend. Make the butterflies fly in formation? Management of copyright created by academics in UK universities, by Dr Andreas Rahmatian of the University of Glasgow (Legal Studies Vol 34 No 4, 2014, pp 709-735) makes some interesting points about the ownership of copyright in works created by an academic employee. Not only are the points interesting, but they have practical relevance to anyone who is involved in drafting, interpreting or advising on IP ownership issues within a university. It is to SLS’s credit that it provided funding for the work that led to the article being written.

Astute readers may already be asking themselves: who owns the copyright in an article written by an academic, on the subject of who owns the copyright in articles written by academics? Does Dr Rahmatian, or his employer, the University of Glasgow? What does his contract of employment say on this subject?

In IP Draughts’ experience, it is often a term of an academic’s contract of employment that the university’s financial regulations (or similar) form part of the contract of employment. Many universities have adopted an intellectual property (IP) policy, and in many cases the policy is made a part of those regulations. In such cases, the IP policy is considered to be binding on the academic as it forms part of their contract of employment.

So what does the University of Glasgow’s IP policy say about ownership of copyright in academic works? IP Draughts looked on the university’s website, and couldn’t immediately find an official-looking document that appeared to have the status of an employment term. Instead, he found an explanation on the website (legal status unclear) which reads as follows:

The University owns IP generated by University staff in the course of or incidental to their employment, including teaching or university materials.  Ownership may, in part, be determined by the terms and conditions of any external funding.

The University waives its rights to ownership of any copyright in scholarly materials, except in relation to any work created by an employee of the University whose job description specifically includes the creation of printed or electronic materials.

This form of words reflects a set of broad principles that many universities seem to follow in their IP policies, and which Dr Rahmatian rightly criticises as flawed. As will be discussed below, these principles are woolly around the edges, but they seem to be commonly understood by universities as:

  1. The university owns IP created in the course of the employee’s employment. [This is the default position for UK copyright, but not for patents, and the position for patents can’t be overriden by contract terms, so the wording is defective. But today we are discussing copyright.]
  2. Pretty much everything the academic does is done in the course of their employment. [This is an extrapolation, but probably reflects the university’s position. As Dr Rahmatian’s article explains, it is doubtful whether this is true in the case of public lectures, and perhaps also in the case of other non-teaching materials.]
  3. This includes “scholarly materials”, but the university graciously “waives” its rights to these. Depending on who you ask, scholarly materials might include articles, books and public lectures, but not course materials. [The legal status of a statement that someone “waives” their ownership rights is unclear. Is this intended to mean (a) I own the IP but I won’t sue you, (b) I agree that you own the IP in the first place, or (c) I will assign the IP to you? The use of the word “waive” seems to be a fudge, to avoid tackling the ownership question head-on.]
  4. The terms of funding contracts may transfer ownership in the funder. [This assumes, of course, that (a) the funding contract assigns IP to the funder, and (b) that the funding contract is made with the original owner of the IP. If the contract is made with the university but the academic owns the IP personally, this won’t work.]

sls_logo_largeSo, who owns the copyright in Dr Rahmatian’s article: him or the university? According to a footer on each page of the article, the answer is that neither of them do. Instead, the Society of Legal Scholars does. The article does not reveal whether SLS obtained an assignment of copyright from Dr Rahmatian, or from the University of Glasgow, or from both of them. Or, indeed, from neither.

Dr Rahmatian’s article reports on a study that he conducted, in which he attempted to interview the custodians (IP Draughts’ name) of IP policies at several UK universities, to find out what the policies were and how they were applied. While he was able to obtain copies of several policies, it diffidenceproved to be more difficult to secure interviews, as the custodians were sometimes “diffident” about discussing the policies. The causes of this diffidence seemed to include (a) the custodian not wanting to show his ignorance by incorrectly describing the policy or its legal effect, (b) the policy had not been finalised or was not, in practice, followed, or (c) making comments about the policy could get the custodian into trouble, given its political sensitivity.

Dr Rahmatian did, however, manage to secure interviews with at least 8 universities.

Several themes emerge from the article that chime with IP Draughts’ experience, including:

  1. The issue of academic copyright is politically sensitive, and formulating a copyright policy sometimes involves negotiations with an academic trade union.
  2. The resulting wording is sometimes a messy compromise, and its drafting may not have involved a specialist IP lawyer.
  3. Many of the respective policies of UK universities have a similar look and feel. They sometimes use odd words like “the university claims ownership” or “the university asserts ownership”, which suggests an unresolved negotiating position rather than a clear ownership statement.
  4. Sometimes, it appears that the university considers that it owns all IP generated by the academic, without fully focussing on issues such as (a) what falls within the scope of the academic’s employment duties (the patent test, in summary) or (b) what is done in the course of employment (the copyright test).
  5. More generally, the university’s staff who administer the policy are not always clear on the detailed effect of the policy, or how it is affected by the underlying law on ownership of employee-generated IP.

Dr Rahmatian rightly refers to the case of Stevenson Jordan & Harrison v MacDonald & Evans (1952) 69 RPC 10, in which the court discussed the position of a university lecturer who delivers a public lecture. The following quotation, and in particular the word “inconceivable”, forms the basis of much of Dr Rahmatian’s premise in the article:

Lectures delivered, for example, by Professor Maitland to students have since become classical in the law. It is inconceivable that because Professor Maitland was in the service at the time of the University of Cambridge that anybody but himself, one would have thought, could have claimed the copyright in those lectures.

As Dr Rahmatian points out, this case has been cited in more recent cases such as the important patent case of Greater Glasgow Health Board’s Application [1996] RPC 207 @ 223.

IP Draughts has a feeling that Dr Rahmatian hinges a great deal on this one case, and it make him want to play devil’s advocate, while recognising that it may be right to rely on the case. Counter-points that might be made include:

  1. The comments are obiter dicta.
  2. The case is over 60 years old, and assumptions about academic duties have moved on since then, as have the terms of their employment contracts.
  3. The example given is of an even older set of lectures, and given at Cambridge, which has a distinctive approach to the ownership of academic IP, even today.
  4. The example seems to have concerned a public lecture, as distinct from a lecture given as part of a course. How far one should extrapolate from that example to articles and books is not clear.

Other parts of Dr Rahmatian’s article are less convincing to this practitioner. Mindful no doubt of SLS’s plea that articles in Legal Studies should include “particular reference to doctrinal, conceptual, theoretical, comparative or socio-legal analyses”, the author discusses the impact of “managerialism” on university IP policies, which “provides the technocratic illusion of seemingly rational and unquestionable managerial rules that replace substance by procedure …this military-like uniformisation is a typical effect of modern human resource management …the assertion of copyright ownership by universities can serve as a first step in this development.”

1984Wow. In other words, a university’s copyright policy is part of a Orwellian nightmare where a university’s central administration acts as “big brother” and treats academics as units of production. IP Draughts expects that this characterisation will appeal to many academic readers.

Coming back to the legal content of the article, the take-away message for IP Draughts is the reminder that university administrators sometimes have misguided views on the extent to which the university automatically owns the intellectual output of its academic employees; to put it mildly, there are some areas where the legal position is not clear. Prudent universities will obtain formal assignments from their academic inventors and creators before seeking to commercialise that output.

 

 

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IP Transactions course brochure 2015

ip_transactionsThe brochure for the 2015 outing of our annual course, Intellectual Property Transactions: Law and Practice, is now available. This time, the course is being run slightly later in the year, from 20-24 April.

Run by the Institute of Brand and Innovation Law at University College London, and delivered by approximately 25 experienced practitioners, this course has won two awards: (1) an English Law Society Excellence Award (Highly Commended), in the learning and development category, and (2) a UCL Provost’s Teaching Award, in the CPD course category.

The course provides 29 CPD points and is designed for newly-qualified IP lawyers. It also attracts lawyers, patent attorneys and licensing executives from the UK and overseas. Past attenders have included lawyers from South America, North America, Europe, Japan and Australasia. The course seems to be unique in providing in-depth analysis and discussion of different types of IP transaction, and in combining rigorous legal content with very practical and practice-based training. The course is followed by a voluntary exam. People who pass the exam receive a Certificate in IP Transactions.

An application form for the course can be found at the end of the brochure.

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