Are universities difficult to negotiate with?

difficultThere is a strand of opinion among companies that deal with universities, that the latter (and in particular their technology transfer departments) overvalue their technology; that they are difficult to negotiate with; and that contractual discussions take for ever.

IP Draughts discussed this point earlier this week with a poacher-turned-gamekeeper, who used to work in a university TT department, and now works for a company that in-licenses IP from universities. As this person freely admitted, it was difficult for a university to trust complaints of this kind, when made by a company in the course of negotiations, particularly if, in the next breath, the company demands very wide commercialisation rights that could be viewed as a “land grab”. The company in that situation is not an objective witness.

And yet the accusations persist. They are not just made in the heat of negotiations. They feature in national reports on university technology transfer. They are usually anecdotal rather than being based on solid, statistically-valid data. By repetition, the comments acquire a reputation for accuracy, and an impression of objective truth. But how much substance is there in them?

common mythAt one level, it hardly matters whether the accusation has any universal truth, or is just a convenient whinge to lower a university’s commercial expectations. The fact is that the rumour has taken hold in some quarters, and needs to be recognised and addressed. And universities are sometimes their own worst enemies: no matter how good their intentions, a lack of resource in TT offices, and the oddities of the university decision-making process, can conspire to make contract negotiations less commercially-focussed than they would be in a business environment.

Bad impressions can be countered in a number of ways: by providing data to demonstrate that the accusation is false; by acting in a way that is designed to give a positive impression; and by employing the dark arts of public relations. The most productive of these alternatives is to demonstrate that you are easy to deal with. But easiness comes in different forms. An easy manner may help the flow of commercial discussions. Easiness about the substance – the commercial terms on offer – may be appreciated by the licensee, but is it in the university’s best interests? Is there a danger that eagerness-to-please on deal terms may result in the university not getting market value for its valuable IP? Might this be a breach of charity laws? In a European context, could it amount to an unlawful State Aid under EU laws?

easy skankingThis blog has commented before on an initiative that started at the University of Glasgow, and has since been copied by an increasing number of universities, particularly in the UK and Australia. The initiative is called Easy Access IP, and it is designed to make the process of negotiating technology licences with industry as painless and simple as possible. Typically, the licence is free of upfront payments and is either royalty-free or requires the payment of a small royalty on commercialisation. A simple, one-page licence agreement is used, that doesn’t require negotiation.

Advocates of the initiative point to the non-licensing benefits that can result from offering licences on easy-access terms, including PR/reputational, supporting local industry, and demonstrating industrial “impact”. In some cases, easy-access licensing results in increased funding of university research. Cynics may suggest that technology tends to be offered on easy-access terms after it has languished on the shelf for several years, unable to attract buyers on full commercial terms.

easyThe initiative has been running now for about 5 years, and it is a good time to take stock of what it has been achieved. Various organisations in the university sector have clubbed together to commission a study by independent consultants on whether Easy Access IP has been successful. The study has resulted in a report, and the report was published earlier this week. It is worth a read.

Among the points that IP Draughts took from the report (and in his own words):

  1. Small data. Most of the universities that claim to offer easy-access licences only do so with a small minority of their available technologies (perhaps 10%). Licensing on easy-access terms has been on a relatively small scale. The majority of easy-access licences have been granted by just two universities: Glasgow, where the initiative was born, under the management of Kevin Cullen; and New South Wales, where Kevin now works.
  2. Soft benefits. There are soft benefits in offering easy-access licences. It demonstrates that you care about being seen to be easy to deal with, and counters the lazy impression that all university support departments are bureaucratic and negative in their approach.
  3. Not the main issue. Offering easy-access terms does not make a huge difference to the time it takes to get university technology out into the community. In reality, the negotiation of commercial licence terms is not a slow or difficult process, when compared with other factors, such as the difficulty of marketing university technology and finding licensees. It is easy to blame the lawyers but they are not really the problem.
  4. Uptake by SMEs. The main recipients of easy-access licences are small businesses located near the university. For them, any contractual terms are difficult, because they don’t have much experience of negotiating them, nor much of a budget for obtaining legal advice. A non-trivial proportion of those local-business licensees are start-ups formed by the academic who created the technology. In other words, easy-access licensing is sometimes used as a way of letting the academic commercialise the technology.
  5. No thanks. Large companies tend not to like easy-access licence terms, because they have their own template licence agreements that they prefer to work with. These are usually more complex than the one-pager that the university offers. Similarly, investors in spin-out companies are not willing to accept the simplified terms of an easy-access licence, and want to include detailed warranties and other provisions to address legal risk.
  6. Gotcha. At one level, offering easy-access licence terms could be viewed as calling industry’s bluff. You think we are difficult, and we understand that and want to help – here are some very easy terms. Oh, you don’t want easy terms after all? You actually want detailed and complex terms, you just want us to be amenable to those terms.
  7. Where’s my money? Some other stakeholders dislike easy-access terms. Where university research has been funded by an external agency such as a funding charity, the funder may consider it important to see a financial return from its funding. Offering free licences doesn’t achieve this objective. Similarly, some academic inventors dislike easy-access terms, for the same reason – they want to generate a financial return from industry’s use of their technology.
  8. Yeah, whatever. Another important stakeholder is the university itself. The technology transfer manager may be a convert to the new religion of easy access licensing, but is the university finance director still following the old theology where TT offices are expected to maximise the financial return from IP commercialisation? Are TT staff still incentivised to maximise income, eg through bonus arrangements? Easy access programmes work best where senior management actively supports the idea of easy-access licensing. In some universities it is difficult to get senior management support for, or interest in, any aspect of technology transfer activities.

Dear reader, what are your thoughts on easy-access licensing? Is it a really important initiative, or a minor diversion? Is it a nice idea, like the Lambert Agreements, that hasn’t really achieved what its advocates hoped?

Finally, a drafting point. At the end of the report is an example of an easy-access licence agreement. Is IP Draughts alone in thinking that the drafting of this agreement is terrible? Perhaps the author wanted to avoid having the agreement written in a “legal” style that might be offputting to some readers. But surely we can do better than this example, which is poorly written by any standard.

 

 

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Organising a party in a brewery

brewerThe first item on the agenda, at a recent management meeting at Anderson Towers, was to discuss whether IP Draughts should accept an invitation to become the next chairman of a Law Society committee. The discussion did not start well.

Mr Pettifog dismissed the idea as ridiculous. He reminded everyone of the precedent of ‘Lanky’ Short, a former partner of the firm, who became Deputy President of the Law Society at the time of the Suez Crisis. That didn’t result in a single piece of work coming to the firm, Mr Pettifog declared triumphantly.

At this point, there was a stunned silence, mainly because no-one else in the room had heard of Lanky Short. Later, IP Draughts found out from Deirdre Sprockett, the firm’s archivist, that Mr Short had been the batman of Mr Pettifog’s father, when the latter was an army officer during the Second World War. Lance Corporal Short had been encouraged to qualify as a solicitor by Pettifog-pere in the late 1940s, at a time when there was a shortage of solicitors. He had quickly risen through the ranks of the firm, mainly due to his popularity with slum landlords, for whom he acted in eviction actions with glee and a certain lack of restraint.

Lanky would have continued his meteoric rise through the profession by becoming President of the Law Society in 1957 if he hadn’t been convicted and imprisoned for embezzlement and removed from the roll of solicitors, shortly before his term of office was due to start. He was also removed from the firm’s official history and never referred to by the partners again, hence the puzzlement at his name by most of the people attending the meeting.

moreIP Draughts started to say that he wasn’t doing the job to get in new client work, but was drowned out by a clamour of voices. The Draughtatrix wanted to know whether there was a gold chain of office, like that worn by the President of the Law Society. She was disappointed by IP Draughts’ negative reply, and by his refusal to commission a chain from Aspreys.

Young Hope cheekily asked whether IP Draughts would be going on an expenses-paid trip to the Milan Opera as a representative of the Law Society. This was a reference to Mr Pettifog’s trip there on behalf of SADDO, as reported in these pages at the time. Having discussed the matter with his committee secretary, IP Draughts is aware of the rules on claiming expenses for overseas trips, and he has no current plans for a jolly arduous event of this kind.

Hilary Reverse-Polish-Notation, our severe Budget Director, commented that a proportion of the amortised costs of IP Draughts computer facilities should be allocated to a Law Society account. IP Draughts was able to reassure her (or is it him? IP Draughts is never quite sure with Hilary) that there is a Law Society fixed allowance for committee chairman of several thousand pounds, which is meant to cover costs of this kind.

biasThe discussion moved on to the courses that IP Draughts had been required to take, as a pre-condition of becoming chairman, on the subjects of Disability Confident and Unconscious Bias. Mr Pettifog exploded when Young Hope suggested that all members of the firm’s management committee should take these courses. I don’t need to go on computer courses to tell me that I am biased, expostulated Mr Pettifog. But how would you know whether you have unconscious bias unless someone else tells you, asked Young Hope with remorseless logic.

Thankfully, at this point Mavis Trestle came in with the tea trolley, and discussion turned to the quality of the digestive biscuits. The minutes of the meeting record that the management committee unanimously approved IP Draughts’ appointment. But IP Draughts is in charge of the minutes, and no-one else can be bothered to read them…

 

 

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Would you like to be a member of the IP Law Committee?

law societyNow that the Kat is out of the bag, IP Draughts can confirm what he has known, or thought he has known, for several weeks: that he has been appointed as the next Chairman of the Intellectual Property Law Committee of the Law Society of England and Wales. The appointment is for a 3-year term, starting in September.

A Law Society press release on this subject was issued a few minutes ago. IP Draughts’ haste to mention the topic is because the Committee is also in search of new members. The deadline for applying is 5pm today, so if you are interested (and are a member of the Law Society) you will need to apply this afternoon. Details of the vacancies and how to apply can be found here. Expenses are paid (subject to loads of rules) and there is also an annual allowance of about £60o. (Wow!)

In IP Draughts’ unbiased view, being a member of the Committee enables you to make a contribution to the IP profession, and to influence new legislation in the UK, EU and internationally. If you have experience as an IP lawyer, have a mindset where you think about the legal issues involved, and are willing to contribute to discussions and position papers, you may well be the person we are looking for.

The background to this recruitment drive is that for the last decade (and earlier, but IP Draughts is not familiar with that period) the committee operated as a lowly sub-committee, and was largely left to get on with its work undisturbed by Law Society protocols. The work was done very well, and eventually (a few months ago) the Law Society recognised this fact, and decided to upgrade us to being a full committee. However, one consequence of the increase in status is that we are now required to comply with Law Society procedures for committees, including a requirement to retire members and appoint new ones in a 3-year cycle.

The formalities for appointing the Chairman are even more detailed than for members. As well as undergoing SRA checks, and approval by a Board of the Law Society, IP Draughts was required to take 2.5 hours of online training on the subjects Disability Confident and Unconscious Bias, and to pass two exams in these subjects, which he has done. At least IP Draughts is now fully conscious of his biases.

 

 

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Book on our IP transactions course, 20-24 April

ip_transactionsThere are still a few places left on our 5-day course, Intellectual Property Transactions: Law and Practice, which is held each year at University College London’s Faculty of Laws.

This will be the third, annual outing of the course, which has won two awards:

  1. A UCL Provost’s Teaching Award – the first CPD course to win this prestigious award; and
  2. A Law Society Excellence Award (Highly Commended) in the Learning and Development category.

The course covers a range of industry and market sectors, including M&A, IT, life sciences, media and universities, and a range of transaction types. Most topics are covered with a mixture of legal lecture, practice discussion and practical workshop.

The course is taught by approximately 25 experienced IP and commercial lawyers. Students on the course are a mixture of UK and overseas IP lawyers, patent and trade mark attorneys, and research/licensing managers. Lawyers on the course come from a variety of backgrounds including mainly:

  • major City of London and international law firms
  • specialist IP law firms
  • legal departments of companies

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

Please make your application as soon as possible, as we are making final arrangements for this year’s course. If you have any questions, please contact mark@andlaw.eu

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