Better negotiation outcomes – better process

…properly!

Ever since his firm’s negotiation training in February, IP Draughts has been reflecting on what Rob Marshall, our course leader, taught us. A topic that particularly resonated with IP Draughts was how different negotiators have a different mix of priorities, in the following categories, and how these priorities sometimes change when you are under stress. The categories are:

1. People
2. Process
3. Outcomes

IP Draughts has been re-assessing clients and others through the lens of these categories – are you a “people” person, or mainly focused on outcomes, or obsessed with process? Or do you have these qualities in balance?

This has helped him to understand better some situations where he found a negotiation frustrating, and where one or more of these qualities was neglected. The same thought process has been helpful in explaining internal conflict within an organisation, between someone who is people and outcomes focussed, and someone who is more interested in process.

While he can think of examples, over the last few decades, where the issue was a lack of focus on people or outcomes, with his commercial clients the biggest problems have arisen from a lack of focus on process. There seems to be a particular type of business development manager who engages at a personal level with his opposite number, and is focused on getting the deal done, but seems to have no interest in process. The lack of focus on process can sometimes jeopardise the deal, or result in an organisation taking on inappropriate risk.

This can operate at different stages of the deal, including:

1. Bad term sheet. Where the parties negotiated a term sheet but didn’t involve their lawyers, causing downstream problems in the negotiation of the final agreement. Or perhaps others in the organisation vetoed the deal altogether once they heard about it, as being not consistent with company policy or risk appetite.
2. No term sheet. Where the parties didn’t have any discussion of key terms (and certainly no term sheet) before starting the negotiation of a detailed agreement. Signficant commercial differences emerge during the page-turning exercise, which can be an extremely inefficient way to negotiate the key principles of a deal. Sometimes, it becomes apparent only during the detailed negotiations that the draft agreement being used is an inappropriate starting point, e.g. because the deal is really a licence agreement rather than a research collaboration, or a joint venture rather than a distribution agreement.
3. Too much spontaneity. Where one party thinks it is fine to “jump on a plane” to see the other party, or to call them on the phone unannounced, without prior scheduling and preparation, much to the frustration of the legal team that has to review the draft carefully. Or a draft is sent through hours or minutes before a planned negotiation call, leaving insufficient time to review it properly.
4. Careless mark-ups. Where one party sends through a draft that is only partly marked-up, or marked up oddly, or in an uneditable format, or some other malarkey, that gets in the way of smooth, trusting negotiations. Often this can be avoided by better control over process, including the editing process.
5. Assuming the deal is done. Where one party thought the deal was done and had gone for signature, only to find that it was being reviewed at another level, eg by a legal department or a higher level of management, and that substantial changes would be required. Prior discussion of the exact process and timetable would have avoided this last-minute surprise.
6. Different expectations on signing. Where the parties made assumptions about the signature process, failing to schedule time for a Board meeting to be held to approve the transactions. Or they failed to agree on the exact signature process and one party thought Docusign would be used, whereas the other party wanted to see wet-ink signatures. Or the agreement is signed but not dated, or a party has just signed without taking the trouble to fill in the lines that state their name and role, and the signature is illegible.

Often, these and other problems can be avoided by careful discussion and implementation of an agreed process, including allowing a reasonable period of time for each stage in the process. But that approach is sometimes not favoured by the impatient commercial manager who is leading the deal. Or they may fear that a focus on process will be perceived as indicating a lack of trust. The lawyers assisting in the negotiations (on both sides) may be more focussed on the benefits of a good process, but they aren’t in control.

Good negotiations are a team effort, where all members of the team are full participants.

 

 

 

IP Draughts’ Late Lunch 2

Yesterday, IP Draughts hosted a one-hour, online meeting, using Zoom, and titled IP Draughts’ Late Lunch. It was an experiment to see if people would turn up, contribute, and enjoy the experience. It was billed as a light-hearted, social conversation, for those of us who are in varying states of lockdown during the Covid 19 pandemic.

Early indications are that it was a success. For most of the hour, we had 13 participants, nearly all of whom were on camera. A majority were from the UK (spread from south-east England to Inverness, in the north of Scotland), plus others in the USA, France, Switzerland and Germany. Most of us worked in the fields of IP, technology transfer or contracts.

We talked about lots of different things. How we found home-working, our experiences of shopping and leaving home (with different rules in different countries), how we interacted with others, working at different times of the day, the social side of work, dealing with children while they are at home, and so on.

The consensus seemed to be that we should repeat the experiment, perhaps every couple of weeks. Two weeks from yesterday will be Good Friday, and people may have other commitments on that day. So, IP Draughts has scheduled another Zoom meeting for the previous day, Thursday 9th April, at 2 pm UK time (time differences with other countries may not be the same as yesterday, as we all seem to start Summer Time on different dates). Please put this date and time in your diary!

Again, IP Draughts will post log-in details on this blog about an hour before the meeting is due to start.

Yesterday’s experience suggests that once people break the ice, they are happy to have a wide-ranging discussion rather than stick to a specific topic. However, to get us started, let’s focus on the topic of building relationships remotely, i.e. when we can’t all be in the same room.

Suggestions for other topics and formats are welcomed.

 

Psst… pass it on, we’re meeting at 2pm

As indicated in an earlier blog posting, IP Draughts will be hosting a online meeting on Zoom at 2 pm today (UK time). Log-in details below.

Topic: IP Draughts Late Lunch

Time: Mar 27, 2020 02:00 PM London

Join Zoom Meeting:

https://zoom.us/j/890271571

Meeting ID: 890 271 571

Covid 19 – an open letter from the UK IP Minister

Well, perhaps. This article suggests that the UK’s Intellectual Property Minister, Amanda Solloway MP, should write an open letter on the subject of infringement of IP, in relation to developing and making urgently-needed products to deal with the Covid 19 pandemic. Draft text of a letter, written by IP Draughts for her consideration, appears below.

This article is prompted by several conversations and exchanges of emails that IP Draughts has had in recent days. It seems that many people (students, scientists, business people and others) have risen to the challenge of developing, making and distributing products that are urgently needed by the National Health Service and the nation. Examples that IP Draughts has been made aware of in recent days include:

• oxygen concentrators
• mechanical ventilators
• 3D printing of facemasks and airflow dividers
• apps to predict whether someone is infected
• apps to track the development of the virus across the population
• apps to provide reassurance to people in isolation

A concern that has been raised more than once is whether these activities may infringe the IP of others, and whether anything can be done at a national or international level to remove this risk. This concern has probably been stimulated partly by the news from Italy that someone has been making a ventilator valve using a 3D printer, for use in hospitals. Apparently they had asked the original manufacturer for design drawings and had been refused and threatened with an IP infringement suit.

The facts of this story have subsequently been disputed, but they raise an understandable concern. Some people in the IP community feel that reassurance needs to be given to people doing their best in a national emergency, that they are unlikely to be sued.

But any such reassurance is ultimately only someone’s opinion. No matter how unlikely you think it that a reputable company would trash their reputation by suing someone who is trying to save lives, there is nothing to stop them from doing so. Or is there?

There are provisions in UK IP legislation (and, IP Draughts suspects but doesn’t know, in the laws of other countries) that enable the UK government to override IP laws.

For example, section 55 of the Patents Act 1977 provides:

…any government department and any person authorised in writing by a government department may, for the services of the Crown and in accordance with this section, do any of the following acts in the United Kingdom in relation to a patented invention without the consent of the proprietor of the patent…

The section then lists various activities that would normally constitute patent infringement.

Section 59 of the same Act provides an alternative route. It includes the following provisions:

During any period of emergency within the meaning of this section the powers exercisable in relation to an invention by a government department or a person authorised by a government department under section 55 above shall include power to use the invention for any purpose which appears to the department necessary or expedient;

(a) for the efficient prosecution of any war in which Her Majesty may be engaged;

(b) for the maintenance of supplies and services essential to the life of the community;

(c) for securing a sufficiency of supplies and services essential to the well-being of the community; …

Similar provisions apply to certain other types of IP. For example, in relation to unregistered design right, section 240 of the Copyright, Designs and Patents Act 1988 includes the following provisions:

(1) A government department, or a person authorised in writing by a government department, may without the licence of the design right owner—

(a) do anything for the purpose of supplying articles for the services of the Crown, or

(b) dispose of articles no longer required for the services of the Crown;

and nothing done by virtue of this section infringes the design right.

(2) References in this Part to “the services of the Crown” are to—

(a) the defence of the realm,

(b) foreign defence purposes, and

(c) health service purposes…

On a slightly different topic, where IP has been generated under a contract with the government, the IP may be owned by the contractor but subject to a contractual equivalent to the Crown user provisions mentioned above, to allow the government to make use of the IP and authorise others to do so. For example, IP Draughts has seen funding agreements from the Department of Health that include such provisions.

To implement provisions of this kind, a government minister is required to take a formal decision, and in the case of section 59 of the Patents Act 1977 an Order in Council is required to declare a “period of emergency”.

Thus, the government has several levers of power to ensure that people responding to the Covid 19 pandemic are not sued for IP infringement.

With this in mind, and with a view to encouraging people to do what they can to help the NHS and the nation through the present crisis, IP Draughts proposes the following draft statement, or open letter, from the relevant government minister. Given that Amanda Solloway is both the IP Minister and the Minister for Science, Research and Innovation, she would seem ideally placed to issue such a statement.

For the avoidance of doubt, IP Draughts waives any IP rights that he may have in the following statement!

IP Draughts’ draft statement for the IP Minister to issue:

Covid 19 and the use of intellectual property (IP) for the public benefit

It has been inspirational to see the public responding so generously to appeals for help during the current pandemic. Within the science and technology communities, we have seen hundreds of initiatives to help solve shortages of vital equipment such as ventilators, face masks and hand sanitiser. There have also been initiatives to improve our understanding of the spread of the disease, including diagnostic tools and tracker apps. On behalf of the UK government, I would like to express our strong support and appreciation for initiatives of this kind.

Some of the people involved in these and similar initiatives have expressed concerns that they may be sued for infringement of third party intellectual property. For example, a scientific technique may be patented, or a product may make use of existing designs that are protected by design rights.

It would be extremely concerning if anyone who is trying to develop, make or supply products to help with the current emergency were to be threatened or actually sued for IP infringement.

The government would like to remind IP owners that it has statutory powers known as Crown user provisions, that enable the government to use, and authorise others to use, IP in the national interest. The government will not hesitate to implement those powers where appropriate.

However, the government hopes that it will not be necessary to devote time and national resources to implementing such laws. It trusts that IP owners will voluntarily cooperate to ensure that urgent needs are met (e.g. by voluntarily supplying designs and blue prints of their products where required), and refrain from asserting IP rights against those who are trying to meet those needs.