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Causes of disputes

Causes of disputes. Dispute Resolution in International Science and Technology Collaboration - WIPO. Ian Harvey Chairman, Intellectual Property Institute & UK Government Intellectual Property Advisory Committee Retired CEO, BTG plc 25 April, 2005. A patent is an uncertain right.

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Causes of disputes

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  1. Causes of disputes Dispute Resolution in International Science and Technology Collaboration - WIPO • Ian Harvey • Chairman, Intellectual Property Institute & UK Government Intellectual Property Advisory Committee • Retired CEO, BTG plc • 25 April, 2005

  2. A patent is an uncertain right • A national right: apply for a patent in each country where the patent may be important • A license must be equally geographic in scope • Issues: • a patent is not an absolute right: • Novelty: at any time new “prior art” from anywhere may invalidate patents everywhere • Obviousness: courts may decide it was “obvious” • Costs: $250k lifetime for international patents • Defending patents against infringers can be complex and expensive

  3. Patent pitfalls (1) • NATURE OF CLAIMS: • too narrow • what are the products that flow from the invention? • do the claims actually cover these products? • not substantiated • patent specification must include full enabling disclosure • have the necessary experiments been carried out? • INVENTORSHIP NOT CLEARLY ESTABLISHED • Naming inventors incorrectly can invalidate your patent

  4. Patent pitfalls (2) • OWNERSHIP NOT CLEARLY ESTABLISHED • who employed the inventors? • who funded their research? • what materials did they use? • PRIOR ART • what disclosures have been made by rival groups? • have the inventors made damaging prior disclosures? • FREEDOM TO USE • Do ‘blocking patents’ exist?

  5. Patent pitfalls (3) • THE IMPORTANCE OF PROPER LABORATORY NOTEBOOKS • US operates a ‘first to invent’ patent system, not ‘first to file’ • Disputes are resolved by complex “interference” proceedings • To prove a priority date of invention, applicants must: • have proof of the conception of the invention • show diligence in its reduction to practice • Keeping lab notebooks in proper format is critical More at:http://www.btgplc.com/info/links_lit.php

  6. Contract Issues • For a contract worth signing there is no standard contract • There is a standard checklist of questions to help define the nature of the agreement • What is a “fair” split of benefits and risks between licensor and licensee?

  7. Contract Issues - Warranties • Only ownership • Not validity • Not non-infringement of third party patent rights

  8. Contract Issues - Financial • People move - must be understandable in ten years’ time • Royalty must be factual e.g. revenue not “profit” based • Provide for audit – preferably by licensor • Post-patent-expiry payments • Patent extension obligations • Definition of milestone/trigger and termination payments • Beware “fully paid up” – have thresholds

  9. Contract Issues - Termination • Change of control • Termination - failure to meet obligations • Which rights should survive termination • Definition of product

  10. Contract Issues - Miscellaneous • Beware: • antitrust law – US and EU (TTBER) • “Most Favoured Nation” clauses • Sublicensing

  11. The value of mediation • Allows managers on each side to justify sensible business concessions to “higher authority” ie CEO and Board • Helps CEOs to get gung-ho lawyers back in sensible business line • Brings the business people in and the lawyers out

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