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:
- 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.
- 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.
- Universities should be prepared for students to ask for these contract terms to be revised where a spin-out is emerging.
- 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.
While you may have a patent to protect your invention, sometimes it’s not enough to stop someone from trying to use your idea. So, what can be done to enforce your patent protection?
Our guide here focuses on that scenario, highlighting your options for preventing further infringement from occurring, and perhaps even for obtaining compensation from the infringer, if the infringement has caused harm to your business.
How can patent ownership be proven?
If your patent is already registered, then proving your ownership and the exclusive rights over the usage of that invention can be straightforward: there will be a digital, publicly viewable record of your registration online to which you can point anyone who needs to know – or whom you want to remind.
You will also have received an official patent certificate at the time of registration. It’s a good idea to keep these in a safe place.
You’ll also need to double check that your patent registration is still valid.
It’s important to inform the IPO if you change your name, address or email address, and you must renew your patent on the 4th anniversary of its filing date and then each year after that if you wish to keep it.
It can be trickier, where the infringement takes place somewhere else, beyond the boundaries of any national registered protection you have in place. This is a challenge faced by many brands who have registered their patents in their home country, only to later discover that unscrupulous copycats have essential free-ridden on all their efforts and success and misappropriated their marks for use in another country.
In this scenario, we recommend speaking to a lawyer. There are certainly options that you can consider, but they may differ significantly from one type of business and jurisdiction to the next, and it’s highly advisable to get an expert steer on what’s going to be best for you.
Gather your evidence
For the infringement to be recognised, someone would need to have either made, disposed of, sold, supplied or imported your patent-protected item.
The clearer the evidence of the infringement the better. As far as you can, you should gather evidence of how the infringement has caused your business damage, such as a loss of sales or a negative impact on your brand’s reputation.
What are the options for patent enforcement?
Once you have your proof of ownership and infringement, you can correspond with the infringer to try and get the infringement rapidly and amicably brought to a close.
Initially, you may choose to send this communication directly.
You can then send a more demanding follow-on version of this communication, threatening legal action unless the infringement is ceased.
Finally, there’s a letter that you can also send yourself, threatening legal action unless the infringement is ceased (called a cease and desist letter).
And if the infringer still doesn’t respond to your satisfaction to these communications, Farillio’s expert legal partners can send a lawyer’s letter to the infringer on your behalf, emphasising that legal enforcement steps will be or have now been taken and requesting co-operation before matters go any further. It’s worth getting advice on your prospects of success from a legal expert at this stage, especially if the infringer is proving tricky to find, is unresponsive and/or is based outside the UK.
Read the full guide
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