Anticipate the Unexpected: How Effective Processes Avoid Patent Ownership Disputes
Higher education institutions often benefit when they commercialize innovation and protect patent rights. However, unexpected business arrangements, institutional delays, and predetermined assumptions can frustrate these purposes. Fortunately, there are ways to limit mishaps that jeopardize crucial patent rights.
This article examines three scenarios involving actual or potential patent ownership disputes and highlights a key lesson for each. A common thread runs through each scenario: process matters as much as progress. Internal guardrails can stop ownership disputes before they arise.
The Competing Contracts Scenario
THE LESSON
Institutions should have a system in place to inform university technology management about outside contracts to avoid patent ownership disputes. Tools that build relational currency – such as questionnaires, email updates, and short case studies – keep the technology office top of mind and prompt researchers to check before signing a competing agreement.
THE SCENARIO
A university hired a contract researcher to conduct HIV research under an industry collaboration with a biotech company. The researcher assigned future inventions to the university, under a standard employment agreement. However, the university was unaware that the researcher later signed a separate agreement – a visitor’s agreement – which was required for access to the biotech company’s facility where some research was conducted. Problematically, the visitor’s agreement also assigned patent ownership to the biotech company.
The research produced significant advances in HIV treatment. Consequently, the Patent Office granted several patents to the university, naming the previously mentioned researcher and two tenured university professors as inventors. However, 12 years later, the court ruled that the visitor’s agreement signed by the researcher superseded the ownership clause in his university employment agreement. This ruling granted co-ownership of the patents to the biotech company and impaired the university’s ability to sue others for infringing lucrative patents on HIV diagnostic tests.
The Blind Spot Scenario
THE LESSON
Institutional leaders should cultivate an expanded view about situations where innovation might occur and how everyone can benefit. The researcher in this scenario was hired only for testing. However, anticipating that even a testing role could lead to invention should have prompted the university to secure a patent assignment at the outset.
THE SCENARIO
This second scenario also involves a contract researcher assisting in university research. Although hired to perform testing on existing liquid crystal display technology, the researcher ultimately and unexpectedly contributed much more: an innovative method for creating these chemicals. Once the researcher’s university contract expired, he went to work elsewhere. Subsequently, full-time researchers at the university continued the work, using the innovative method contributed by the contract researcher. As the contract researcher had been hired for just testing, his co-inventorship contribution was unanticipated. Because of this blind spot, the contract researcher was never asked to assign patents resulting from his work, and he was omitted from the patent.
Years later, upon learning about the patent, he sued the university to be named a co-inventor – and won. Like the first scenario, a co-owner outside of the university would share the patent rights.
The Subtle Shift Scenario
THE LESSON
It is important to confirm both present and future patent ownership among partners. As this hypothetical scenario demonstrates, working with a third party to optimize a fully conceived invention can muddy the waters of patent ownership. Clear agreements avoid problems later.
THE SCENARIO
A tenured university researcher developed solar energy materials and new solar chemical formulations. The researcher met a technology representative from a solar energy company, and they discussed mutual interests in commercializing the newly developed technology. The initial discussion contemplated a Sponsored Research Agreement. However, the solar energy company instead introduced a third party into the talks, a principal investigator from a larger university with a long-standing federal grant, who could offer state-of-the-art testing and analysis.
The principal investigator suggested sharing the proprietary materials and formulations among the group and working to optimize them jointly. As added value, the company representative touted past successes involving scalability and distribution channels. Fortunately, though, the researcher who innovated the formulations sensed a shift in the discussion and contacted the university’s technology office to discuss possible consequences of this arrangement. The university then began working with the other parties on a new agreement addressing patent ownership involving future improvements.
Mr. Hall is a registered patent attorney who helps clients create strong patents and implement effective policies around innovation. Please contact him, Jeff Knight, or Steve Gillen for any questions or needs related to intellectual property policy or this article.
