Can you assign IP that doesn’t yet exist?

sign-upIt’s that time of the year again, when IP Draughts starts to prepare for the 5-day course that he runs, with up to 30 volunteers, at the UCL Faculty of Laws: Intellectual Property Transactions: Law and Practice. If you haven’t yet booked but would like to, please complete the booking form at the end of the brochure, linked above.

This year, we plan to introduce a few new sessions, and retire some others, as part of our continual improvement plan.

IP Draughts is currently working on a new session, titled “What does this IP drafting mean, and what is its legal effect?” In it he explores the differences in meaning and legal effect between:

  1. agreeing first ownership of future IP;
  2. agreeing to assign future IP to one of the parties; and
  3. assigning (now) future IP.

These issues might arise, for example, in the IP terms of a collaborative research agreement, or in an employment contract.

You might think this topic is rather theoretical, but the purpose of including it is to get the students to think carefully when engaged in the practical subject of drafting IP ownership provisions.

Declarations of ownership

Consider, for example, the following clause, taken from one of the standard, UK Lambert research agreements:

The Collaborator will own the Intellectual Property Rights in the Results, and may take such steps as it may decide from time to time, at its expense, to register and maintain any protection for the Intellectual Property Rights in the Results, including filing and prosecuting patent applications for any of the Results…

What is the legal effect of this clause? Will the (future) IPR automatically belong to the Collaborator without further formality or documentation?

In IP Draughts’ view, the answer to this question could be yes in the UK, but is likely to be no in the USA. Let us make the following factual assumptions:

  1. An employee of the other party to the contract, defined in the Lambert agreements as the Institution, makes an invention when doing work under the contract.
  2. A patent application is to be filed in respect of that invention.
  3. As between the employee and the Institution, the employer owns the invention and patent application under section 39 of the Patents Act 1977, as it was an invention made in the course of specially assigned duties of the employee.

Relying on declaration of ownership in UK

air-ukCan the Collaborator file the patent application and be the first owner of the subsequent patent? In the UK the answer is yes. Under section 7 of the Patents Act 1977:

(1) Any person may make an application for a patent either alone or jointly with another.

(2) A patent for an invention may be granted—

(a) primarily to the inventor or joint inventors;

(b) in preference to the foregoing, to any person or persons who, …by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it

(c) in any event, to the successor or successors in title of any person or persons mentioned in paragraph (a) or (b) …

Thus, someone other than the inventor can both apply for a UK patent and be “entitled to the whole of the property” in a UK patent and therefore be granted the patent as its first owner.

This entitlement could, in IP Draughts’ view, arise without the need for any separate, written assignment from the inventor or the Institution, and simply by virtue of the employment duties of the inventor, and the above clause in the research contract between the Institution and the Collaborator.

Need for assignment in the USA

airThis probably doesn’t work in the USA, in view of the different language of the patent legislation. Traditionally, the inventor was required to make a patent application in the USA. Under amendments to 35 USC 118 that were made by the America Invents Act:

A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent.

This wording refers to “assigning” the invention, rather than use the UK concept of the grant of a patent to someone who is entitled to it by virtue of an agreement.

Assignment language for future inventions

In the UK, in IP Draughts’ view, there doesn’t need to be an assignment (a formal transfer of title to property) in order for this entitlement to arise. Nevertheless, a prudent Collaborator might well want to have some “belt and braces” wording in the contract such as an obligation on the Institution to execute further assignment documents and to cause its employee to do so, and/or include assignment language in the contract.

What language should you use in the contract to assign future IP? Should you say “hereby assigns”? Will the law recognise a present assignment of IP that doesn’t (yet) exist? If you say “agrees to assign”, does this imply that a further assignment needs to be executed once the IP comes into existence?

UK copyright law recognises the possibility of assigning future IP. Section 91 of the Copyright, Designs and Patents Act 1988 provides:

Where by an agreement made in relation to future copyright, and signed by or on behalf of the prospective owner of the copyright, the prospective owner purports to assign the future copyright (wholly or partially) to another person, then if, on the copyright coming into existence, the assignee or another person claiming under him would be entitled as against all other persons to require the copyright to be vested in him, the copyright shall vest in the assignee or his successor in title by virtue of this subsection.

UK patent law has no equivalent provision, but arguably section 7 of the Patents Act 1977, quoted above, achieves a similar result, at least when the parties are at the stage of obtaining a patent. At least this was the view of Arnold J in the case of KCI v Smith & Nephew [2010] EWHC 1487. In that case he was concerned with an employment contract that included the following language:

I hereby assign and agree to assign to the Company all right, title and interest in all confidential information, inventions and improvements conceived or developed by me…

Referring to section 7, Arnold J said (obiter): “In my view, this [section] must mean that it is possible to assign the legal title (and not just the beneficial interest) in an invention before it is made”.

fudgeIn IP Draughts’ view, the phrase “hereby assign and agree to assign” is a bit of a fudge, in that it is not entirely clear whether, for any particular item of IP, it is being “hereby” assigned or is merely the subject of an agreement to assign that must, at a later date, be perfected by a further assignment document. Nevertheless, given the complexity of the legal issues involved, and in the interests of brevity, IP Draughts is inclined to go along with the fudge.

In taking this approach, he draws some comfort from the US Supreme Court decision of Board of Trustees of the Leland Stanford Junior University v Roche Molecular Systems Inc, et al. (number 09-1159) June 6, 2011. In that case, an inventor had signed two documents that dealt with the question of ownership of an invention, one with his employer Stanford University, and the other with a predecessor of Roche, Cetus Corporation. Even though the Cetus document was executed at a later date than the Stanford document, the Supreme Court held that the later document prevailed. As Breyer J (dissenting) put it:

In the earlier agreement—that between Dr. Holodniy and Stanford University—Dr. Holodniy said, “I agree to assign . . . to Stanford . . . that right, title and interest in and to . . . such inventions as required by Contracts and Grants.” In the later agreement—that between Dr. Holodniy and the private research firm Cetus—Dr. Holodniy said, “I will assign and do hereby assign to Cetus, my right, title, and interest in” here relevant “ideas” and “inventions.”

The Lambert agreement from which the above-quoted clause was taken (Lambert 5) also includes the following clause, which takes a more rigorous and lengthy approach to this issue:

To the extent that any Intellectual Property Rights in the Results are capable of prospective assignment, the Institution now assigns those Intellectual Property Rights to the Collaborator; and to the extent any Intellectual Property Rights in the Results cannot prospectively be assigned, the Institution will assign those Intellectual Property Rights to the Collaborator as and when they are created, at the request of the Collaborator.


Contracting parties find it natural to state who will own future IP. A prudent drafter will go on to provide for assignment of IP. There are some technical issues with assigning future IP, which the drafter may wish to address in a number of ways, including having a “further assurances” clause to require further documents to be executed where necessary under national IP laws.

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IP and Brexit

may1So, at last the UK Prime Minister has spoken. In a speech today, she set out her 12-point plan for Brexit. The point that seems most relevant to IP commercialisation is the tenth:

10. The best place for science and innovation

A Global Britain must also be a country that looks to the future. That means being one of the best places in the world for science and innovation.

One of our great strengths as a nation is the breadth and depth of our academic and scientific communities, backed up by some of the world’s best universities. And we have a proud history of leading and supporting cutting-edge research and innovation.

So we will also welcome agreement to continue to collaborate with our European partners on major science, research, and technology initiatives.

From space exploration to clean energy to medical technologies, Britain will remain at the forefront of collective endeavours to better understand, and make better, the world in which we live.

jojoThe UK’s Minister of State for Universities, Science, Research and Innovation, Jo Johnson MP, has recently added the job of IP Minister to his portfolio, which is a recognition that these subjects are connected. IP Draughts hopes that the above reference to collaborating with European partners on technology initiatives will be interpreted, within government, as including collaboration on European IP initiatives such as the Unitary Patent.

There are some signs that it might be. The government has announced its intention to ratify the Unified Patent Convention. That announcement was accompanied by the following, careful wording:

We will seek the best deal possible as we negotiate a new agreement with the European Union. We want that deal to reflect the kind of mature, cooperative relationship that close friends and allies enjoy. We want it to involve free trade, in goods and services. We want it to give British companies the maximum freedom to trade with and operate in the Single Market – and let European businesses do the same in the UK.
But the decision to proceed with ratification should not be seen as pre-empting the UK’s objectives or position in the forthcoming negotiations with the EU.

A possible stumbling block to UK participation in the UPC post-Brexit is the requirement for participants to recognise the supervisory jurisdiction of the Court of Justice of the European Union (CJEU). This potentially runs up against the Prime Minister’s determination, albeit focused on other areas, for the UK to cease to be subject to the CJEU. As she put in point 2 of her speech today:

2. Control of our own laws

That means taking control of our own affairs, as those who voted in their millions to leave the European Union demanded we must.

So we will take back control of our laws and bring an end to the jurisdiction of the European Court of Justice in Britain.

Leaving the European Union will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast. And those laws will be interpreted by judges not in Luxembourg but in courts across this country.

Because we will not have truly left the European Union if we are not in control of our own laws.

Thus, there appears to be a conflict between the Prime Minister’s desire to collaborate with EU countries on science and technology (assuming this extends to the legal protection of science and technology through IP rights such as the UPC) and her desire to escape the jurisdiction of the CJEU.

Some commenters have assumed the worst and concluded that this makes post-Brexit, UK participation in the UPC (and, for that matter, participation in pan-EU IP rights such as trade marks) impossible.

There is, however, a potential way through this tricky issue, if there is the political will to pursue it. Our former IP Minister, the astute Baroness Neville-Rolfe, caused the following statement to be added at the end of the announcement about ratification of the UPC:

Notes to editors
The UPC itself is not an EU institution, it is an international patent court. The judiciary appointed include UK judges.

This point was repeated by the new IP Minister when he gave evidence to the House of Commons’ Science and Technology Committee last week. In IP Draughts’ view, it is a coded signal to the Brexiteer faction within government, and it is reasonable to extrapolate from this slightly obscure statement as follows:

  1. The political objective of “taking back control” by removing the jurisdiction of the CJEU is concerned with how domestic UK laws are made and interpreted, as distinct from cooperation on international trade.
  2. The UPC is an add-on to the European Patent Convention, which is separate from the European Union. It forms part of the UK’s arrangements for cooperation on international trade.
  3. The main courts of the UPC are being established separately from the CJEU and will include British judges (and indeed a retired British judge is leading the recruitment process).
  4. Yes, the UPC will involve a supervisory CJEU jurisdiction, but this should be viewed as a hybrid arrangement concerned with international trade and not part of EU membership. In other areas of international trade, the UK accepts the jurisdiction of international bodies (eg arbitration of WTO disputes) and this is not considered to damage national sovereignty.

dsbThere are some technical weaknesses in these points (which IP Draughts prefers not to dwell on, as it will only muddy the case), but the broad thrust is a reasonably strong argument.

Ultimately, whether the argument is accepted by the government and argued for strongly will depend not on its detailed, technical merits but whether it is acceptable to enough Tory MPs and right-wing newspapers. There are plenty of other areas of international trade where similar arguments are being raised. For example, representatives of the Law Society and English Bar made similar points about the mutual recognition of court judgments in the UK and EU, post-Brexit, when they gave oral evidence to the House of Lords’ Justice Sub-Committee recently.

IP Draughts hopes that, in Brexit negotiations, the international trade card, and the protecting science and technology card, will be used to ensure that there is continuing international cooperation on IP laws, despite the faint spectre of the CJEU lurking in the background.

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Should clients prefer a non-specialist lawyer?

screenwritingVia Ken Adams and the wonderful world of Twitter, IP Draughts was alerted to this article:
The Business of Screenwriter: Get a damn good lawyer!

The article discusses the lack of foresight of a lawyer who drafted a screenwriting contract for the author in the 1980s. The contract provided for bonus payments for sequels in specified formats, but had failed to include generic language that would cover “direct to DVD” sequels – a format that didn’t exist when the contract was made. As a result of this omission, when a sequel was made in the 2000s, the author failed to secure two bonus payments, each of $150,000, to which he thought he was entitled.

The punchline (punch-paragraph?) of the article was as follows:

So when you sell your script and you get an agent and/or manager, and they talk to you about how you need to get a good entertainment attorney, you smile, and gently correct them:

“No, I want a damn good lawyer.”

The article seems to be suggesting that the lawyer who drafted the contract was too close to the entertainment industry as it existed in the 1980s, and followed convention rather than thinking carefully about what the contract should say, and future-proofing it against new technologies.

It should, of course, be possible to be a damn good lawyer and a good entertainment attorney. Any entertainment attorney who keeps abreast of case law will be aware of a steady stream of cases where the court was asked to apply contract language to new technologies that didn’t exist when the contract was made. See, for example, this article, which provides a short overview of the subject.

specialist2But perhaps in some market sectors, the lawyers who specialise in that sector aren’t very good lawyers. If you have to choose between good and specialist, which should you go for? It is difficult for a lay client to know whether she is choosing a damn good lawyer (a qualitative assessment). It is easier to find evidence of prior experience of the industry sector (a quantitative assessment). In IP Draughts’ experience, many clients prioritise prior experience, sometimes to an excessive extent. He has encountered clients who prefer a lawyer who has done exactly the same type of deal before (eg the development of a particular type of medical device), rather than one who has advised on many other types of development contract in the medical sector. Viewed from afar, the latter category may be thought already very specialist, and perhaps sufficiently specialist for the contract in question.

About 25 years ago, a former senior partner of a leading IP law firm discussed with IP Draughts the choice of barristers (advocates) for a major case. His view was that, if he couldn’t get one of the very top barristers at the intellectual property bar, he would not go down to the second tier, but would instead instruct a high-quality barrister at the commercial bar, and instruct them in the technology and IP issues, with assistance from junior IP counsel. His priority was a damn good lawyer rather than a specialist.

goodenoughComing back to contract drafting, rather than IP litigation, in an ideal world one would choose a lawyer who is both good and specialist (as well as having other qualities like fitting in with the client’s approach, being a good negotiator, etc etc). For a major transaction, it may be worth a client’s time to research carefully who might fulfil all of these criteria. For more routine matters, if you have a lawyer whose abilities and integrity you trust, and they tell you that they are comfortable with the task, then you may prefer to stick with them than find someone more specialist.

Sometimes, you should be reassured when your lawyer tells you “I’m not a specialist in this field (but I think I can help you).”

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UCL course on IP transactions 2017

brochure coverFive-and-a-half years ago, this blog proposed the development of an in-depth course on IP transactions. IP Draughts was delighted when Professor Sir Robin Jacob agreed to host it at University College London’s Faculty of Laws.

The first outing was in February 2013. It was a week-long course, providing 29 continuing education hours. It was designed for, and mainly attended by, newly-qualified IP lawyers, though we also had a number of patent attorneys, commercial managers (including university TT managers) and overseas lawyers. We had about 30 volunteer speakers, and about 35 students. This blog reflected on the first year’s outing here.

Within 12 months, the course won both a UCL Provost’s Teaching Award, and a Law Society Excellence Award (Highly Commended).

The fifth outing of this annual event will take place at UCL from 3rd to 7th April 2017. Bookings so far are in the mid-20s, so we still have some vacancies. Please get your booking application in as soon as possible, if you have not already done so!

Student feedback from the 2016 course:

“Brilliant course – really helped to tie together
what were, in my head, lots of “loose strands””

“Overall I thought the course was really practical
and relevant.”

“…the course was very good…”

“…a highly impressive and informative course
which I will recommend highly.”

“Excellent delivery, good overview of issues.”

“…I would recommend the course.”

“Very useful and practical, very clear and easy to

“Very well structured…very good, interactive
and clear.”

“…the talks were excellent and very helpful.”

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