Category Archives: Legal practice

New standard agreements for universities are published

Sir Richard Lambert

Sir Richard Lambert

Have you had sleepless nights? Have you found it difficult to concentrate on Brexit or the US presidential elections, through wondering when the new Lambert agreements, promised many months ago, will finally be issued?

Worry no more: over a dozen new agreements and term sheets are waiting for you on the UK IPO website.

How are they different from the old Lambert agreements, IP Draughts hears you ask. In fact, he is one of those asking. Well, it’s difficult to say, without a line-by-line comparison. Has anyone done such a comparison? The Lambert committee, for example? And could they share the mark-ups? That would be very helpful for the university community.

Comparing the new and the old agreements won’t provide a complete picture, as some of the new documents are completely new, and don’t have an equivalent in the old set. In particular, there are now 7 bilateral agreements, numbered 1-6 (yes, that is confusing – there is a 4A as well as a 4). The old set comprised 5 bilateral agreements. There continue to be 4 multi-party agreements, numbered A-D.

A European consortium: Queen Victoria and Albert, the Prince Consort

An early European consortium: Queen Victoria and Albert, the Prince Consort

IP Draughts prefers to call the documents bilateral, or two-way, agreements, and multi-party agreements, though the documents themselves are named “collaboration agreements” and “consortium agreements” respectively. In IP Draughts’ mind, these official names are not descriptive. Some bilateral research agreements don’t involve a true collaboration, and are merely one party paying another to do research. And most multi-party research agreements are collaboration agreements, as that term is normally used. The name consortium agreement seems to have become popular through its use as a term of art in EU funded research projects, and in this context is synonymous with collaboration agreement.

Sometimes, universities will instinctively select Lambert 2 as a starting point. Its terms are similar to those used by US universities in most cases, ie the university owns the resulting IP, and grants the sponsor a non-exclusive use licence plus an option to negotiate an exclusive licence to commercialise.

From a quick scan through the new Lambert 2, and without the benefit of a line-by-line comparison with the old one, IP Draughts spotted the following:

  1. Many or most of the terms are familiar from the old document.
  2. There seem to be more optional terms, marked in square brackets.
  3. One of the clauses mentions the need for the university to demonstrate public impact in its research, and to disclose certain information for this purpose. “Impact” as an important policy objective for UK universities post-dates the date of publication of the old Lambert agreements.
  4. There are some tediously lengthy schedules that set out policies on issues such as anti-bribery, non-use of child labour, etc. Many large companies now seem to require references to such policies in their standard agreements.

As with the old agreements, the main “variable” between them is their different IP terms. Below is a summary of the IP terms in each case.

Bilateral agreements
No Terms IPR owner
1 Collaborator has non-exclusive rights to use in specified field/territory; no sub-licences (Institution)
2 Collaborator may negotiate further licence to some or all Institution IP (Institution)
3 Collaborator may negotiate for an assignment of some Institution IP (Institution)
4 Institution has right to use for non-commercial purposes (Collaborator)
4A Each party has right to exploit certain results created during project and takes assignment of those results. Institution has right to use for academic and research purposes, Collaborator for research purposes (Both)
5 Contract research: no publication by Institution without Collaborator’s permission (Collaborator)
6 Institution has right to use for academic and research purposes (Collaborator)

Multi-party agreements
No Terms
A Each member of the consortium owns the IP in the results that it creates. They grant each other party a non-exclusive licence to use those results for the purposes of the project and any other purpose.
B The other parties assign their IP in the results to the lead exploitation party (or the lead exploitation party is granted an exclusive licence).
C Each party takes an assignment of IP in the results that are germane to its core business and exploits those results.
D Each member of the consortium owns the IP in the results that it creates. They grant each other party a non-exclusive licence to use those results for the purposes of the project only. If any member of the consortium wishes to exploit another’s IP they must negotiate a license or assignment with the owner of that IP.

A new feature in the 2016 Lambert agreements is that two templates for term sheets are provided, one for Lamberts 1-6, and one for Lamberts A-D. In IP Draughts’ view, these are not particularly useful documents. They are very detailed and lengthy. If one is going for that amount of detail, it will often be better to move straight to negotiation of the actual agreement. IP Draughts has previously commented on his preference for term sheets, MOUs, heads of agreement and similar documents to be brief, perhaps no more than 2-3 pages. For instance see this article: Keep the Term Sheet Simple. Pretty please…?

IP Draughts is aware that some UK universities use modified versions of the (old) Lambert agreements. It will be interesting to see if those documents are updated to reflect the new Lambert terms. If not, we may end up with a proliferation of versions, and the original Lambert message – that parties should use the Lambert agreements rather than their own, favoured documents – may be further diluted.


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Filed under Contract drafting, Intellectual Property, Legal practice, universities

What’s the point of good contract drafting?

imperfectThis post is triggered by several recent conversations and thoughts:

  • the patent attorney who told IP Draughts’ colleague recently about the poor quality of patent examiners in the USA and certain other countries, who apparently sometimes misunderstand basic English, let alone complex scientific concepts. This raised in IP Draughts’ mind the question of why patent attorneys spend years honing their patent drafting skills to a very high technical level, when the system seems to be crude and imperfect; and whether a similar question should be raised about the drafting of contracts.
  • the Court of Appeal judge who told IP Draughts that courts would always try to “do justice in the case” in contract disputes, the implication being that interpretation of the wording used in the contract might take second place to wider policy considerations, and that if IP Draughts wanted an approach based purely on the contractual obligations he should go to arbitration.
  • the fact that contracting parties will sometimes argue an interpretation of contract wording that is clearly wrong, no matter how clear the drafting, if it is in their commercial interests to do so.

There is a legitimate question about whether we are too nice (in the senses of fastidious or foolish) about the drafting of contracts. Rather than waste time focussing on clear and accurate use of language to state contractual obligations, shouldn’t we recognise that the world is imperfect, treat contracts as a process rather than an opportunity for exercising our writing skills, get the wording roughly right, and save our energies (and the client’s money) for arguing the toss when a dispute arises?

yukIP Draughts’ answer to this question is an emphatic no. But mere assertion is not enough. Why should we spend time in getting the wording as right as we can? Several thoughts come to mind:

  1. The example of the construction industry, where parties tend not to take legal advice at the stage of entering into their contracts, and instead spend more money on litigating their contracts. There is a view among (at least some) lawyers that more money spent in getting the contracts right in the first place would save money in litigation and overall.
  2. The fact that sometimes court cases are decided based on the wording of the contract – several examples come to mind  – where clear and accurate wording may reduce the likelihood of the court coming up with an inappropriate interpretation. In recent years, the UK Supreme Court has heard several cases in which it has updated its approach to interpretation – particularly where the wording is unclear. Those cases would probably not have reached the Supreme Court if the wording had been clear.
  3. That producing clear, accurately drafted contracts demonstrates professionalism, which itself can help to smooth contract negotiations.
  4. That clients don’t always know whether their lawyer has the necessary legal knowledge and experience to handle their matter, but they can more often spot poor use of language. The self-interest of lawyers should encourage them to draft well.
  5. That consumer pressure, particularly in the UK but probably in other advanced countries, has made it difficult for lawyers to hide behind obscure, fusty language. IP Draughts had a very interesting conversation with some Chinese law students during a recent training course, in which they queried IP Draughts’ focus on clear, simple language and said that clients in China would expect their lawyer to use complex legal language, and possibly even think less of their lawyer if they used simple language. This didn’t resonate with IP Draughts’ current experience of UK clients, but he could imagine a similar approach a few generations earlier in the UK.
  6. That even if clients sometimes argue extreme interpretations of wording if it suits their commercial purpose, by making the wording clear and accurate, those arguments become more difficult to make.

wandIn summary, clear contract drafting is not a magic wand that guarantees that disputes are avoided and that contracts are interpreted correctly. The benefits are more nuanced. But there should not be any doubt that taking care to draft clearly and accurately is a good use of time and money.




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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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