Patent enforcement

Spin-outs and IPR ownership

Many startups begin their journey in university settings, with students building, or helping to build, exciting business propositions out of projects and experiments. These projects may be progressed with the guidance of university staff, or students might be working in support of staff leading these initiatives.

These startup businesses are often called ‘university spin-outs’. They raise questions over who owns the intellectual property rights (IPRs) – often patents - in what has been created: is it the student founders exclusively, or does the university own them/a part of them?

Recent UK case law in the High Court has confirmed the following:

1. If it looks like a project/experiment will transition into a business proposition, it must be clear in writing from the outset who owns the IP in the technology/other elements fundamentally underpinning it. Universities must ensure they are clear on this – and students should check this too.
2. Inventor postgraduate student contracts (especially PhDs) should be reviewed to ensure that any position taken by the university regarding IPR ownership is fair and in good faith – particularly if the student has carried out research/related activities in their own time or gone beyond the assigned project covered by their contract. If a student has done this, they might have a successful argument that they have ownership over some of the core IP.
3. Universities should be prepared for students to ask for these contract terms to be revised where a spin-out is emerging.
4. Challenges to IPR ownership could now argue that it is in the public interest to ensure educational fairness and that universities should act to uphold this interest, and their own duty of good faith, by not including significantly imbalanced terms in students’ contracts that act to the detriment of those students. The High Court was willing to consider all students – undergraduates and postgraduates – ‘consumers of educational services’ for these purposes.

So, if you’re a founder of a spin-out and your university is claiming rights over what you have created, you may be able to challenge the claim for these reasons. It will depend on your situation and your contract terms. Speak to an adviser for tailored support.

News update: Key changes to IP after Brexit

Under the terms of the withdrawal agreement, EU trademarks and designs registered before the transition period will be cloned in the UK for free. Details and dates will be kept but they will be fully independent UK trademarks. UK representation required.

EU trademarks (EUTMs) will offer no protection in the UK but Intellectual Property Office (IPO) will create an automatic comparable right for every EUTM if registered. You can opt out of the automatic comparable UK right after the transition period if you don’t need one. Once a comparable UK trademark is created, you’ll need to pay a separate renewal fee and renew separately.

Pending designs and EU trademarks will not be protected in the UK. Owners had nine months up to 30 September 20201 to apply for a comparable right. If proceedings declared an EUTM invalid before January 1st 2021, the corresponding UK right will also have been cancelled.

And, if an unregistered community design right arose during the transition period, there will be continued protection in the UK for the remaining three-year term.

Finally, ownership of EU domains and registration in the UK will be phased out whereas copyright and patents will be unaffected. As the European Patent Office (EPO) is not an EU agency the UK's departure from the EU has no effect on the current European patent system and existing European patents covering the UK are also unaffected.

For more information on patents, SPCs, Northern Ireland Protocol and parallel trade between the UK and EEA and more, can be found here on .gov.uk.