Just sign the _____ form

A reader has asked IP Draughts the following question.

 

A university has entered into a research collaboration agreement with a commercial company, under which any inventions made in the course of the research are to be licensed to the company. Employees of the university – academic researchers – are engaged on the research and make an invention. The university asks the academics to execute a written assignment of the invention in favour of the university.

The academics query the need to execute the assignment. Perhaps they are suspicious that they are being asked to give away their rights, or they are naturally loathe to commit themselves in writing. Perhaps they secretly know that someone else has rights in the invention. Or they just hate anything to do with the university’s administration. They point out that the university has a written IP policy which states when an invention belongs to the employer, and say that this should be sufficient.

Why, asks a reader of this blog, should the academics execute the assignment?

Several points occur to IP Draughts, not all of which are suitable for publication. We will leave aside the general argument that an employee should comply with all reasonable instructions from his employer. Even though this argument is strong in law, there is a strand of thinking among academics that rejects such a proposition, and a university’s senior management (eg its President or Vice Chancellor) may be slow to walk in that minefield. Instead, this article focuses on some pragmatic points.

1. General duty of cooperation in relation to external contracts. The university has entered into the collaboration agreement at the request of the academics. This imposes some duties on the academics to cooperate with the university to ensure that the university can comply with its contractual obligations to the company. If an academic is not willing to give such cooperation, he shouldn’t ask the university to enter into contracts.
2. Responsibility lies with the administration. The university’s administrators (eg its research contracts or technology transfer teams) are responsible for managing contractual obligations in relation to IP. The academics’ starting point should be to cooperate with, and comply with requests from, those administrators in relation to those obligations, unless they are manifestly wrong.  If the academics think that a request is inappropriate, the onus is on them to articulate why it is wrong and to persuade the administration to take a different line.Where a request is reasonable and conventional, any argument for refusing needs to be exceptionally strong.
3. Invention is subject to external contractual obligations. The premiss of the question is that an invention has arisen under a research collaboration agreement with a company, and is subject to a licensing obligation to the company. If the academics think there is any doubt about this, they have a duty to articulate to the university what their concerns are. In the absence of any such explanation, the university is entitled to assume that the invention should belong to the university so that it can comply with its obligation to license the company.
4. Company expectations. The company will expect to see a formal assignment from the inventors to the university, so that that university can grant a licence to the company. This is a normal part of the paper trail that a company would expect to see as part of its ‘due diligence’ into its rights to exploit the invention.
5. Executing assignments is normal. It is normal for academics to execute assignments in favour of their employing university, particularly when patent applications are made or the university has obligations to a sponsor to license or assign the invention. The academic should be reassured that this is not an exceptional request; it is a conventional practice. Indeed, it may be necessary to enable the university to pursue patent applications in some countries.
6. Legal reason for executing assignments. In the UK, the question of whether an employer or an employee owns an invention made by an employer is subject to the detailed and complex rules set out in section 39 of the Patents Act 1977. Oversimplifying, if the employee’s employment duties include the making of the invention, the invention will belong to the employer; otherwise it belongs to the employee. Nothing in an employment contract can override that statutory position, at least in relation to future inventions. Whether an academic employee has a duty to make inventions is unclear. Unlike many researchers in companies, researchers in universities rarely have contracts of employment that state explicitly that they are employed to invent. For this reason, IP Draughts would usually recommend to a university that it obtain a specific assignment of IP after an invention has been made, rather than rely on an argument that the IP belongs to the university as a matter of general law or under the employment contract. The latter argument may sometimes be valid, but the uncertainties mentioned above make a specific assignment highly desirable.
7. Don’t rely on the IP policy. A university’s IP policy is generally useful to clarify the university’s approach, and to set expectations among its employees, but it should not be treated as an alternative to a formal assignment of IP as recommended above. There are several reasons for this, including: (a) it is not always clear whether the policy has been incorporated into an individual’s contract of employment or otherwise made legally binding; (b) the policy cannot override section 39 of the Patents Act 1977; and (c) the wording of the policy is sometimes inadequate from a legal perspective, particularly if its drafting has been the subject of negotiation with a union, or has not been supervised by a specialist IP lawyer, or the wording has been copied from another university’s IP policy that suffered from these problems. For example, many policies say that the university “claims” certain rights, the meaning of which is obscure from a legal perspective but is probably designed to be more conciliatory than a simple statement that the university owns those rights.
8. No good reason to refuse. For the reasons mentioned above, an academic inventor should generally comply with a university’s request to execute an assignment. Assuming that the academic has acted in good faith, there should not be any personal risk on the academic from signing a simple document that transfers title to the invention to the employer. By executing such an assignment, the academic is not entering into a direct contract with the external company that could expose him to liability, and anyway his employer has a general duty to indemnify him against liabilities arising from the performance of his employment duties. This is subject to some exceptions, eg if he has acted fraudulently, but these cases are likely to be very rare. If the employee thinks there is a good reason to refuse, he should explain to his employer what the issue is. For example, if an academic is concerned that the invention may incorporate material owned by a third party, then he almost certainly has a duty to make this clear to the university so that the university can decide whether to disclose the issue to the company.

In summary, just sign the form!