What is an IP Strategist?

IP Draughts was recently involved in a discussion about the communications gap that can exist between an IT service provider and its corporate client, and whether an intermediary should be involved who is fluent in the language of IT and of the boardroom. A similar question seems to arise in relation to some patent service providers and their corporate clients, and where the gap is filled by the IP Strategist. This brought to mind this golden oldie. Read on…

IP Draughts

IP Draughts can’t seem to stop stumbling across internet discussions of a question that is puzzling many IP lawyers: what, exactly, is an IP Strategist?

The question is brought into focus by the fact that there is an international league table of IP Strategists, which forms part of the IAM250 series. In its first year, this table comprised the members of the International IP Strategists Association, or INTIPSA.

Whether or not they are strategic, IP lawyers tend to be competitive, sceptical and analytical.  This tugs them in different directions over a league table like this one.  Should they try to join it, and claim kudos from belonging to such a rare and exclusive club, or should they point out the flaws in the concept of a group that is distinct from, but overlaps with, IP lawyers?

IP Strategists advise on commercial strategy in relation to IP assets. In view…

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Formalities for a binding contract: a conventional steer?

IP Draughts can’t resist re-blogging this golden oldie, about writing your contract on the side of a cow (OK, US readers, it’s not a steer; we don’t have steers in the UK so how is IP Draughts supposed to know the difference? Tsk!)

Nowadays, he would recommend parties consult the Law Society guidance on executing contracts by electronic means.

IP Draughts

How many people remember the case of a cheque written on the side of a cow?  The fictitious case of Board of Inland Revenue v Haddock was one of the more famous of A P Herbert‘s Misleading Cases in the Common Law, which first appeared in Punch magazine in (probably) the 1920s.  It concerned the question of whether a cheque written on the side of a cow was a valid payment of an income tax bill.

The case has been cited in real court cases, including Victor Chandler International Ltd v Commissioners of Customs and Excise [1999] EWHC Ch 214 (16th July, 1999) in which Lightman J held that, for the purposes of certain gaming legislation: “neither a person nor A.P. Herbert’s ‘negotiable cow’ …can constitute a document.”

Cheques are, of course, a different type of legal instrument from contracts.  Both types have some features in common –…

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Negotiating fair and reasonable licence terms

The recent case of Unwired Planet International Ltd v Huawei Technologies Co Ltd & Anor continues to provide much food for thought. This blog has previously commented on the poor drafting of the licence terms that the parties settled, and which the court declared to be “fair, reasonable and non-discriminatory”, or FRAND.

The more that IP Draughts thinks about the case, the more he comes to realise that this is really a case about contract negotiations that have got stuck, and where the parties want to reach agreement. Because the patents to be licensed were “standards-essential patents”, or SEPs, the parties were able to ask the court to settle the terms of their licence agreement. A by-product of the case being about SEPs is that the court had to decide on questions of the rules of standards-setting bodies, and competition laws, and conduct in litigation. These aspects of the dispute took up a lot of time and money, and led to some ground-breaking judicial comments. But the heart of the case was about what terms were reasonable in a patent licence agreement.

IP Draughts is writing an article about the transactional aspects of the case, which has so far reached about 8,000 words. He hopes to get it published by a legal journal in the next few months.

Looking at the case in this way enables you to broaden its application beyond the arcane world of SEPs and FRAND, which many IP lawyers don’t get involved with, as it tends to be something that large corporations do, in specific industry sectors such as telecommunications.

In IP Draughts’ world, perhaps the most obvious analogy is the terms of “access rights” to IP that parties to a Horizon 2020 research consortium are supposed to grant one another. The grant terms of the European Commission for this and similar research programmes include a great deal of detail on the IP licences that the collaborating parties are required to grant one another and external parties.

Consider, for example, the following terms, taken from the Multi-Beneficiary General Model Grant Agreement (Version 4.0 27 February 2017):

25.3 Access rights for other beneficiaries, for exploiting their own results
The beneficiaries must give each other access — under fair and reasonable conditions — to background needed for exploiting their own results, unless the beneficiary that holds the background has — before acceding to the Agreement — informed the other beneficiaries that access to its background is subject to legal restrictions or limits, including those imposed by the rights of third parties (including personnel).

‘Fair and reasonable conditions’ means appropriate conditions, including possible financial terms or royalty-free conditions, taking into account the specific circumstances of the request for access, for example the actual or potential value of the results or background to which access is requested and/or the scope, duration or other characteristics of the exploitation envisaged.

26.2 Joint ownership by several beneficiaries
Two or more beneficiaries own results jointly if:
(a) they have jointly generated them and
(b) it is not possible to:
(i) establish the respective contribution of each beneficiary, or
(ii) separate them for the purpose of applying for, obtaining or maintaining their protection (see Article 27).
The joint owners must agree (in writing) on the allocation and terms of exercise of their joint ownership (‘joint ownership agreement’), to ensure compliance with their obligations under this Agreement.

Unless otherwise agreed in the joint ownership agreement, each joint owner may grant non-exclusive licences to third parties to exploit jointly-owned results (without any right to sub-license), if the other joint owners are given:
(a) at least 45 days advance notice and
(b) fair and reasonable compensation.

31.3 Access rights for other beneficiaries, for exploiting their own results
The beneficiaries must give each other — under fair and reasonable conditions (see Article 25.3) — access to results needed for exploiting their own results.

 31.4 Access rights of affiliated entities
Unless agreed otherwise in the consortium agreement, access to results must also be given — under fair and reasonable conditions (Article 25.3) — to affiliated entities established in an EU Member State or associated country, if this is needed for those entities to exploit the results generated by the beneficiaries to which they are affiliated.

[Emphasis added.]

These are not necessarily the only situations in which parties must grant licences to background or foreground IP, but they are the main ones that IP Draughts found on a quick search of the model terms linked above. Nowadays there are multiple versions of the model terms for different research programmes.

There is, as far as IP Draughts is aware, little or no jurisprudence on what amounts to fair and reasonable conditions, or fair and reasonable compensation, in the context of EU-funded research programmes (though he is happy to be corrected).

Of course, in most cases parties simply agree terms without the need for judicial guidance. This is true for SEPs and for IP arising from EU-funded research programmes. In both cases, licensing has been happening for decades. But in case the parties decide to go to court over whether they have been fair and reasonable, the Unwired Planet case provides useful guidance that could be applied by analogy to the above-quoted EU terms.

As part of the article that he is writing, IP Draughts has come up with a 10-point plan for drafting and negotiating fair and reasonable (and non-discriminatory) licence terms, based on Mr Justice Birss’s judgment in the Unwired Planet case. The points may not be particularly clear without the surrounding, detailed commentary, but they are reproduced here for what they are worth. In its current draft form, the 10 points are as follows:

  1. Work with technical and patent attorney colleagues to identify or define the patents that are to be licensed. This may not be an easy task, particularly in the case of SEPs, where the list of SEPs may change during the lifetime of the licence.
  2. Unless the parties agree otherwise, ensure that the terms of the licence agreement comply with the detailed rules of the standards-setting body, or the European Commission’s terms of funding, as applicable.
  3. When drafting and negotiating the licence agreement, always take a reasonable position that can withstand scrutiny by a court.
  4. When negotiating the licence, don’t assert that any term is a ‘deal breaker’ (i.e. that it must be included in the licence agreement) unless you are certain that a court would regard that term as fair and reasonable.
  5. During litigation, it may be in each party’s interests to come up with complex models and criteria to justify a particular set of royalty rates, and the judge may echo this complexity in his judgment. But when it comes to drafting a licence agreement, try to agree royalty terms that are as simple as possible, as this will reduce the likelihood of further dispute over their application.
  6. Try to agree as many of the licence terms as possible, and ask the court only to decide major issues of principle.
  7. Where you agree terms without needing the intervention of the court, it is likely, but not inevitable, that the court will agree with your assessment that the agreed terms are fair and reasonable (and non-discriminatory).
  8. Except for points that are likely to be considered by the court as raising FRAND issues, the parties should draft and negotiate the licence agreement in the same way as any other patent licence agreement.
  9. Start your licence negotiations with a template licence agreement that has been drafted (a) in a clear, modern style, and (b) to be suitable for use under the law and jurisdiction of the contract. Don’t use a US template for an English law agreement.
  10. Involve a contract drafting specialist in your negotiating team, preferably one who has experience of drafting patent licence agreements.

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Course on IP transactions: quinquennial review

In April this year, University College London’s Faculty of Laws ran the fifth, annual outing of  Intellectual Property Transactions: Law and Practice. This 5-day course qualifies for 29 continuing education hours.* We have approximately 30 volunteer speakers on the course, and typically the students number in the mid-30s. The course seems to be well-established and to be achieving its purpose, which is to provide a mixture of doctrinal and practical teaching for early-stage practitioners in IP transactions. We hope it will run for many years to come.

Date for your diary: the course will run next year from 16-20 April 2018. Details, including a link to the course brochure and application form, can be found here.

After 5 years of the course, IP Draughts hopes readers will indulge him in some reflections about establishing and running what some attenders have described to him as the only course of its kind, anywhere in the world.

IP Draughts had thought about running a university course on IP transactions for many years. In 2003, he decided to do something about it. He sent out lots of emails to people who might be interested in hosting or participating in it, including law schools and business schools. He received good feedback from potential speakers, but nothing concrete from any institution that might host it.

He decided to approach IP law professors at leading UK universities. He had polite conversations with several, but nothing of substance resulted until in 2006 he contacted the late Hugh Laddie, former patents judge and then a newly-appointed professor of IP law and UCL. This led to some positive discussion in 2008, but very sadly Hugh died before the idea could be taken much further.

In 2010, IP Draughts contacted Robin Jacob, who had just been appointed as a replacement for Hugh Laddie as professor of IP law at UCL. Discussions followed over the next 2 years. Meanwhile some momentum had built up in finding speakers, helped by some very positive write-ups on the IPKat blog. (IP Draughts attributes these write-ups to having been one of Jeremy Phillips’ students in about 1981.) We also had some discussion on this blog. In 2012, we held a successful meeting of potential speakers at UCL, hosted by Robin Jacob.

Finally, the course started in 2013, and received very good feedback. It has run every year since then. UCL Laws seems to be very happy about it.

Here are some reflections.

  1. It took 10 years to get the course started. As someone with no academic track-record, but plenty of experience of teaching commercial courses for practitioners, IP Draughts found it very difficult to get universities to understand how good the idea was and why it would be beneficial to the faculty to run it. The route-in proved to be to engage with IP professors who straddled the academic and practitioner worlds, in the form of two IP judges who, on retirement, had moved into academia. Even then, it took several years of discussion. Universities just aren’t naturally set up to take practitioner courses seriously, no matter how much they may protest to the contrary. It is only a few, such as UCL, that have the outward-looking interest, and employ the necessary staff, to run courses of this kind – Lisa Penfold, take a bow.
  2. A key to making this course work is to have an individual directing it, who has a clear idea of what he wants to do and who understands what the intended audience wants and needs. In principle, this function could be done by a committee, but it is important to have a strong, directing hand. This feeds into the structure and content of the course, the appearance and content of course materials, and generally in the ‘tone’ of the course. From the outset, we have ensured that speakers don’t just give their ‘standard’ talk, but instead focus on topics that fit with other topics that are discussed throughout the week.
  3. At the same time, we do respond to feedback, and have tweaked the content over the years. This will always be a work in progress, but we hope we have got the basics right.
  4. Another important element is the setting for the course. Although it is normally held at the law faculty, for the last 2 years we have had to find alternative accommodation while the law faculty is renovated. This year’s outing, at another academic department, was more successful than last year’s, at a busy hotel. There seems to be something about the academic environment that encourages concentration and learning.
  5. So far, we have avoided making the course part of the ‘official’ courses of UCL – degrees and diplomas. This was recommended to IP Draughts during the planning of the first year’s course. There have been some benefits in this route, as it avoids us having to fit within university procedures that may not have been designed with a practitioner course in mind. But on the other hand, it would be good to give students the option of making the course part of a larger LLM or diploma course. The Oxford IP diploma course has gone the other route, of being an official diploma course of the University of Oxford, and IP Draughts understands that this has created some tensions. We are keeping this topic under review.
  6. IP Draughts is grateful to UCL Laws for welcoming the course, and recognises that they are ahead of many other, leading UK universities in running practitioner-led courses. And he welcomes positive noises from the central university hierarchy about engaging with practitioner training. But he feels that they (and other universities) have yet to engage fully with practitioners. Practitioner training and research are still a sideline, nice to have for the revenue it generates, and for demonstrating ‘impact’, but it shouldn’t get in the way of the ‘higher calling’ of the academy. In IP Draughts’ opinion, a practitioner focus has just as much place in a university as a pure academic focus, and should be given equal treatment.

 

* For those UK legal professionals who are still required to do a set number of hours. UCL Laws is registered for CPD purposes with the Law Society, Bar Council, and CIPA.

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