Category Archives: Legal practice

The technology transfer profession: does it exist?

professionals1When IP Draughts started in practice, many of those who worked in research contracts and technology transfer at universities were drawn from the pool of administrators. Many were not graduates. Most would not have regarded themselves as belonging to a technology transfer profession.

Their skills lay in working with academics over many years, and dealing with all the issues that academics tend to dislike (while believing they could do them better than those responsible for them), and which are bundled together under that dismissive name, administration. Some became highly skilled at managing relationships with industry, and rose to senior positions within leading universities (in one notable case, receiving an honour for doing so); some others probably deserved the opprobrium that academics hurled in their direction.

The people who work in technology transfer nowadays (or, if we are being inclusive or fashionable, knowledge transfer) tend to have many paper qualifications. They may have several university degrees – a PhD and MBA are not unheard of – and many will have attended professional training courses such as those mentioned below. Some have law degrees or are qualified lawyers.

administratorsYet a significant part of their jobs has not changed from the early days. They are still required to work with academics, and liaise with industry. Their work is sometimes still referred to as administration, though there is greater recognition that it requires specialist skills. It is not a purely commercial role, though it requires many of the skills that business development managers in industry possess.

When a specialist work activity grows in scale, the people who perform that activity tend to come together for mutual support. IP Draughts has noticed a pattern to these activities across different disciplines. First, people come together and start to run national conferences and training courses. Next, they establish a professional qualification. At some point, this professional qualification becomes, de facto or de jure, a necessary condition of working in the sector. Finally, the body that oversees the qualification achieves recognition as a professional body. In the UK, this tends to be done by obtaining a Royal Charter.

IP Draughts has seen this happen in the UK investment community, which in the last 30 years has introduced professional exams and continuing education. In 2009, the Chartered Institute of Securities and Investment received its Royal Charter, thereby (according to the CISI website) “join[ing] the ranks of professional bodies such as accountants, lawyers and bankers.” In 2016, the Institute of Trade Mark Attorneys received its Royal Charter.

practitionerThe variety of roles within technology and knowledge transfer, and the variety of types of organisation that do these activities (eg a few research-intensive universities and a larger number of organisations that have a smaller throughput of TT or KT deals) may reduce the likelihood of reaching the final stage of this process soon. But progress is being made with some of the earlier stages.

Organisations such as PraxisUnico (in the UK) and ASTP/Proton (across Europe) have been running training courses and annual conferences for well over a decade. Disclosure: IP Draughts and his colleagues have taught on some of these training courses for many years, and IP Draughts’ partner Paul Maclennan is currently on the training committee of PraxisUnico.

In the last few years, membership organisations of technology transfer managers in different countries have come together to form the Alliance of Technology Transfer Professionals. ATTP has established a professional qualification, the Registered Technology Transfer Professional (RTTP).

Some technology transfer managers may also consider themselves licensing executives. A few years ago, the Licensing Executive Society (USA and Canada) formed an independent body to administer a new qualification, the Certified Licensing Professional (CLP).

A few weeks ago, a new qualification appeared. The European Knowledge and Technology Transfer Society appears to have grown with funding from the European Commission. It has established a certification for TT managers, at 3 levels.

expertA mixture of curiosity and professional pride led IP Draughts to apply for these qualifications (or should they be called certifications or registrations?). He is now entitled to put the letters CLP, RTTP and EuKTS (Expert) after his name. In reality, his qualification as an English solicitor (attorney) is the one from which he makes his living, but these other qualifications are nice to have.

TT practitioners are clearly travelling in the direction of professional status. But whether they want or need to reach that destination is far from clear. In IP Draughts’ view, a true profession has several attributes:

  1. A set of skills that are not easy to learn, and formal qualifications that must be obtained to demonstrate competence in those skills. Those skills should be maintained for as long as the individual remains actively involved in the profession.
  2. A shared understanding of what it means to be a member of the profession, and a shared set of professional values – an ethos. These professional values should be maintained in the face of pressures from employers, clients and others, and there should be a mechanism for ejecting people from the profession if they don’t adhere to these values.
  3. Protection for the public in the form of compulsory insurance and compensation schemes.

travelUsing this definition, TT practitioners are making good progress with item 1. Many will feel they have elements of item 2, but not the formal processes. As most TT practitioners are employed rather than self-employed, item 3 may be less relevant.

It will be interesting to see where TT practitioners go next on their professional journey.

 

 

 

 

 

 

 

 

 

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Remedies for breach of warranty

Beware of Daphne, bearing grease...

Beware of Daphne, bearing grease…

At one level, the case of Idemitsu Kosan Co Ltd v Sumitomo Corporation [2016] EWHC 1909 (Comm) (27 July 2016), reported on BAILII last week, is of limited interest. It is only a hearing of an application for summary judgment, before a deputy judge.

Nevertheless, it is a decision of the Commercial Court, and is a useful reminder of several points:

  1. That parties will argue obscure legal points if enough money is at stake, or if their “normal” legal remedies are time-barred (in this case there was a time limit of 18 months from completion for any warranty claim to be brought).
  2. That High Court judges can and will come up with different answers to those obscure points, and if there is not a good Court of Appeal authority on them, the chances of an unpredictable outcome are increased.
  3. That the issue of whether a party can bring a claim in tort for misrepresentation as well as, or instead of, one for breach of contract, is alive and kicking and can take many forms. It does not depend solely on whether the parties used the phrase “represents and warrants” in their contract.

The parties in this case were two Japanese companies who entered into a share sale agreement. A subsequent dispute with a third party resulted in the buyer suffering loss. The buyer was unable to bring a claim for breach of warranty because the agreed time period for bringing such a claim had expired. It argued that it also had a right to claim for misrepresentation, which was not time-barred. In other words, the buyer argued the same set of facts that caused it a loss gave rise to parallel claims for (a) breach of contract and (b) misrepresentation under the law of tort.

This was not a case where the argument was based on lead-in wording in the relevant clauses that the seller “represents and warrants” a series of statements. The clause in this case started with the following words:

Each of the Sellers warrants to the Buyer in respect of itself and its Relevant Shares in the terms of the Warranties in paragraphs 1 and 2 of Schedule 4

The buyer nevertheless argued that the matters warranted were also representations that were actionable under tort laws, including the Misrepresentation Act 1967.

This was despite the presence of another clause in the agreement which read:

The Buyer acknowledges and agrees with the Sellers that:

(a) it has not relied on, or been induced to enter into, this Agreement by any representations, warranties or undertakings of any kind other than the Warranties (as modified by the Disclosure Letter); and

(b) the Sellers shall not be liable to the Buyer (whether in equity, contract, tort or under the Misrepresentation Act 1967 or otherwise) for any warranty or undertaking which is not set out in this Agreement and the Buyer shall not be entitled to terminate or rescind this Agreement as a result of a breach of this Agreement, including the Warranties (for which the Buyer’s only remedy shall be in damages for breach of contract).

The buyer argued that the Warranties (as set out in Schedule 4 to the agreement) should be treated as representations as well as contractual promises and therefore the above clause did not prevent it from bringing a claim for misrepresentation.

The judge was referred to conflicting authorities on this point, namely:

  1. The decision of Arnold J. in Invertec Ltd v (1) De Mol Holding BV, (2) Henricus Albertus de Mol [2009] EWHC 2471 (Ch) which supported the proposition that a claim for misrepresentation could be brought.
  2. The contrary decision of Mann J. in Sycamore Bidco Ltd v (1) Sean Breslin, (2) Andrew Dawson [2012] EWHC 3443 (Ch).
Arnold J and Mann J have a disagreement

Arnold J and Mann J disagree

In the words of the deputy judge in the present case, “Mann J. gave fully reasoned consideration to the question, and to the decision of Arnold J. in the earlier case. He refused to follow Arnold J., not on the basis that there was any room to distinguish between the contractual wording in the two cases but because he disagreed with Arnold J.’s view as a matter of principle.” The deputy judge agreed with Mann J’s view on this point.

It seems that it was not entirely clear to the deputy judge whether the buyer’s argument was based on the idea of a prior representation made prior to signing the share sale agreement, that induced the buyer to enter into the share sale agreement, or of a representation that was made as part of the share sale agreement. Either way, the claim failed.

One of the deputy judge’s many stated reasons for coming to this view was that there was no express statement that the warranties were also to be treated as representations:

In some cases that problem is solved by an express provision making certain contractual statements representations. In such a case the parties have agreed as to their nature and how they should be treated. However, that is not the present case.

IP Draughts is disappointed by this last comment, which is a little glib and was not considered in detail. It suggests that the judge might have accepted the buyer’s argument if a formula such as “represents and warrants” had been used. That is far from a foregone conclusion, in IP Draughts’ view, though he is aware than many practitioners in the M&A field have a similar view to the judge on this point.

IP Draughts hopes that this topic will get an airing at the UCL panel discussion to be held in London on 8 November, Dysfunction in Contract Drafting, at which Ken Adams, Mr Justice Flaux, Kate Gibbons of Clifford Chance, and Kristin McFetridge of British Telecom’s legal department will be speaking. So far, 169 people have booked their (free) tickets for this event. Don’t miss out on what will be an interesting and lively occasion!169

 

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Brexit and IP transactions

eliteIP Draughts learnt this week that he was part of a metropolitan elite. Which is nice. #lookingforthepositive

Yesterday the UK electorate decided, unexpectedly, to leave the European Union. At this stage, no-one knows what will happen next, or what “leaving” actually means. The possibilities, however far-fetched some of them may be, include:

  • Change of mind. Nothing changes in the EU (except, perhaps, some face-saving remarks by EU leaders or trivial changes in law), following which the UK electorate has a change of heart and decides not to leave after all. Some point to the Irish experience with the Lisbon treaty as a precedent for this outcome.
  • Squeezing some more concessions. Negotiate real “improvements” in the way in which the EU does things, following which the UK electorate has a second vote in which they decide to remain in the EU, either in a referendum or by voting in a general election for a pro-remain political party. These improvements might be concessions for the UK alone, or general changes in the structure of the EU.
  • demographicsAssociate membership. Create a new, “associate member” category of membership of the EU, which the UK would then transfer to, and which would give associate members some exemptions from EU rules, eg on free movement of labour.
  • Leave and join EFTA. Leave the EU and join the European Free Trade Association, and therefore benefit from some but not all of the legal regime that applies in the EU, but without any special concessions for the UK. In other words, have the same relationship with the EU that Norway has as an EFTA member.
  • Leave and expand EU rights for non-EU members. Leave the EU and change the rules of the EU, so that countries that are outside the EU (ie the UK at that point) can benefit from certain aspects of the EU that are currently only available to members (eg participation in the Community Trade Mark regime). The new arrangements might be designed for, say EFTA members (if the UK decided to join that club) or might be made more broadly available to, say, European countries that are outside the EU.
  • Leave and negotiate one-off trade deals. Negotiate individual, arms-length trade treaties between the UK (as a non-EU-member) and the EU.

social-classesIt is fair to say that the Brexiteers have not focussed on IP during the pre-referendum debates. When Brexit is negotiated, IP legislation is likely to be some way down the list of priorities, after immigration, trade tariffs, and other political topics.

In the area of business regulation, much was made during the referendum campaign of so-called “Brussels red tape” but few examples were given. In one televised debate, IP Draughts heard Boris comment scornfully that the remain campaign didn’t want to change any existing EU laws, “not even the Clinical Trials Directive”, as though this was self-evidently a terrible piece of legislation. For some reason, this law seems to trigger a response in Boris, like a mood-altering drug.  The benefits to the UK economy of pan-European regulation of life-science product development seem to have passed him by.

elite2Perhaps Boris is not aware that the UK has a thriving life-science sector, the best in Europe, and that being part of the EU is a significant benefit for that sector. David Cameron seems to be aware of this, as he negotiated for the UK to have the chemistry and life-science part of the central court for the Unitary Patent.

It is impossible to know what the implications of Brexit will be for international IP transactions until the blueprint for Brexiting has been established. Nevertheless, there are some obvious risks that can be addressed when drafting IP-related agreements. They include:

  1. EU research funding. In research agreements that benefit from EU funding (eg under the Horizon 2020 programme) what will happen if the UK party ceases to receive EU funding on Brexit? Is it still obliged to do the work but not get paid for it? Or can it terminate its participation in the project? As a separate issue, what do the terms of funding say about the grant of IP rights to companies that are outside the EU? Is any preference given to EU parties?
  2. EU territory. Does the agreement grant rights to a territory defined as the European Union or the European Economic Area? What are the implications if the UK is no longer part of the EU or EEA?
  3. UK territory. Does the agreement refer to the United Kingdom? What implications are there for the agreement if Scotland decides to withdraw from the United Kingdom (but possibly try to remain in the EU)?
  4. Definition of IP. How is intellectual property defined in the agreement? Is the definition flexible enough to cater for changes to the IP system, or new types of IP, that may emerge following Brexit?
  5. Export of personal data outside EU. Sometimes, agreements have clauses that refer to the export of personal data outside the EU. Have the implications been considered of what this will mean in practical terms if the UK is no longer part of the EU?
  6. Compliance with regulations generally. Some agreements, eg clinical trial agreements, impose an obligation on a party to comply with applicable regulations. Are these obligations worded in a way that is resilient to the possibility of UK regulations being significantly different from those in the EU?
  7. Law and jurisdiction. Does the agreement have a clear law and jurisdiction clause? If not, bear in mind that if the UK is not part of the EU, the Rome and Brussels regulations will probably no longer apply to tell a UK contracting party which law and jurisdiction will govern the agreement.

This is unlikely to be a comprehensive list of contractual issues that could be affected by Brexit. If you can think of others, please suggest them in the comments below this posting.

 

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Diversity in IP law

hug a lawyerAsk the public whether they like and trust lawyers in general, and the answer may be distressingly negative. Ask them about a lawyer they have used, and the answer tends to be more favourable.

The same contrast is found in other areas. The current debate in the UK about ‘Brexit’ has a strong focus on immigration. Ask (some) people about immigration in general, and the answer may be very negative. Ask them about the Romanian tradesmen who did an excellent job tiling their bathroom recently, and the answer may be much more positive.

Since he became the chairman of a Law Society committee, IP Draughts has become more conscious of the Society’s approach to diversity. It is difficult to object to the general principle that the legal professions should encourage diversity in their membership and leadership. This theme resonates with the principles of fairness and meritocracy that our profession is likely to support.

And to the extent we are concerned with trends at the macro-level, such as the recruitment practices of major firms that employ thousands of people, we can encourage more diversity and learn from the statistics whether this encouragement is bearing fruit. In IP Draughts’ view, the efforts of the Law Society and of CIPA in this area should be commended.

At the personal level, though, the merits of a strong focus on diversity are not always so obvious. English firms of solicitors are required to report their diversity data to their regulator, and publish the results. For instance, Anderson Law LLP’s most recent data can be found on our website here. It so happens that we have people from a variety of backgrounds. But some might say that in a firm as small as ours, the data is not useful. It is affected too much by who were the candidates for employment in a particular year, and who met our requirements. In even smaller firms (and much of the English solicitors’ profession is made up of small firms) this is true with knobs on.

whiskasSimilar thoughts were prompted by our recent recruitment exercise for new members of the IP Law Committee of the Law Society. Following open advertising of the vacancies, we received 6 applications. IP Draughts has no official data on the candidates’ backgrounds, but the vast majority were male, and the vast majority would probably classify themselves as White British. How far should a diversity agenda influence the Law Society’s choice? How far can it, when the candidates mostly come from particular categories? Should the questions asked of interviewees be designed to bring out their attitudes to diversity, as a substitute for actual diversity, or is this a ridiculous way of selecting people for a committee of technical experts?

Sometimes, it seems that the diversity agenda has so much momentum in organisations that to question its relevance to a situation is to put oneself beyond the pale (and no, that is not a reference to skin colour).

Gender and race are, in some respects, easier to determine than other, well-known diversity categories. Educational background is a particularly knotty one. Some would say that the virtual extinction of selective grammar schools in the UK a generation or two ago, done in the name of equality, has resulted in the legal profession becoming less diverse in recent years.

One aspect of diversity that we are required to report on is whether our lawyers were the first generation in their families to go to university. But what of the lawyers who tick this box but (as in the case of IP Draughts) their parents saw fit to save hard-earned money to send them to a fee-paying school to improve their chances in life? Are they good or bad from a diversity perspective?

numbersIf we focus resources on the extreme cases – the bright kid with hopeless parents who needs a huge amount of help – we may end up achieving less in the name of diversity than if we make incremental improvements that benefit those who are a few rungs higher up the ladder of opportunity and whose families support them. Or is that taking too quantitative an approach, despite the diversity industry’s apparent interest in statistics?

Yes, the legal professions, and the IP professions, need to keep improving on diversity. But we also need to be brave enough to object when a heavy, bureacratic approach is taken that focuses on process and being seen to do the right thing, rather than gently encouraging best practice.

 

 

 

 

 

 

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