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Keeping the sharks at bay
1. Keeping the Sharks at Bay Resolving Disputes with Co-Inventors, Investors, Licensees and Third Parties Jane Lambert Leeds Inventors Group 21 July 2010
3. Co-Inventors An inventor who had spent a lifetime in textile manufacturing and had lectured on the subject at a local university acted as a consultant for local manufacturers after he retired. One of his clients won a contract to make components for a large US manufacturer and asked him to help it to meet the order. In carrying out his instructions he invented a machine that he and his client decided to patent. He and his client agreed orally that they should jointly apply for a patent. However, unbeknown to the inventor, his client applied for the patent in its own name stating incorrectly on the application that it had acquired all the rights to the invention
4. Co-Inventors S.7 (2) Patents Act A patent for an invention may be granted - (a) primarily to the inventor or joint inventors; (b) in preference to the foregoing, to any person or persons who, by virtue of any enactment or rule of law, or any foreign law or treaty or international convention, or by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it (other than equitable interests) in the United Kingdom; (c) in any event, to the successor or successors in title of any person or persons mentioned in paragraph (a) or (b) above or any person so mentioned and the successor or successors in title of another person so mentioned; and to no other person.
5. Co-Inventors S.8 (1) Patents Act 1977 At any time before a patent has been granted for an invention (whether or not an application has been made for it) - (a) any person may refer to the comptroller the question whether he is entitled to be granted (alone or with any other persons) a patent for that invention or has or would have any right in or under any patent so, granted or any application for such a patent; or (b) any of two or more co-proprietors of an application for a patent for that invention may so refer the question whether any right in or under the application should be transferred or granted to any other person;. and the comptroller shall determine the question and may make such order as he thinks fit to give effect to the determination.
6. Co-Inventors S.8 (2) Patents Act Where a person refers a question relating to an invention under subsection (1)(a) above to the comptroller after an application for a patent for the invention has been filed and before a patent is granted in pursuance of the application, then, unless the application is refused or withdrawn before the reference is disposed of by the comptroller, the comptroller may, without prejudice to the generality of subsection (1) above and subject to subsection (6) below - (a) order that the application shall proceed in the name of that person, either solely or jointly with that of any other applicant, instead of in the name of the applicant or any specified applicant; (b) where the reference was made by two or more persons, order that the application shall proceed in all their names jointly; (c) refuse to grant a patent in pursuance of the application or order the application to be amended so as to exclude any of the matter in respect of which the question was referred; (d) make an order transferring or granting any licence or other right in or under the application and give directions to any person for carrying out the provisions of any such order.
7. Co-Inventors S.37 Patents Act After a patent has been granted for an invention any person having or claiming a proprietary interest in or under the patent may refer to the comptroller the question - (a) who is or are the true proprietor or proprietors of the patent, (b) whether the patent should have been granted to the person or persons to whom it was granted, or (c) whether any right in or under the patent should be transferred or granted to any other person or persons; and the comptroller shall determine the question and make such order as he thinks fit to give effect to the determination.
8. Co-Inventors Application is brought before an official representing the Comptroller (Chief Executive of the IP Office) known as a “hearing officer”. As far as possible, applications are disposed of in writing or by telephone though sometimes it is necessary to hold an oral hearing. Hearing officers usually sit in Newport with a video link to the IPO’s Bloomsbury office. Hearing officers occasionally sit outside London.
9. Co-Inventors Procedure is a bit like a court: Each side presents written documents setting out their case known as “statements of case” which should really be drafted by counsel or at least a patent agent; Hearing officers review the pleadings and directs evidence; Evidence is served in written statements known as “witness statements”; Hearing officers can order disclosure of documents and attendance of witnesses; Parties or their counsel can cross-examine each other’s witnesses; Each party files and exchanges skeleton arguments.
10. Co-Inventors Big difference is that costs are limited to a scale in most circumstances. Typical award is £1,350 as in Leonard Stockley v HusqvarnaUK Ltd., 1 July 2010. Appeals lie to the Patents Court where costs are unlimited.
11. Co-Inventors Before you start to collaborate, agree the terms with your partner in advance and reduce those terms to writing.
24. what is to happen if a third party wants to exploit the invention
25. who is to own any improvements to the invention
26. what happens if a third party infringes the IP.Again, there should be a dispute resolution clause – mediation followed by documents only arbitration by an IP lawyer or patent agent.
27. Licensee Case History An inventor applied for a patent for her invention. She found a manufacturer and entered a licence agreement with it. The agreement contained a clause that allowed either party to terminate the agreement if sales fell below a threshold. The manufacturer found a way of meeting demand for without infringing the patent and ceased manufacturing the patented product. When the inventor protested, the manufacturer terminated the licence on the ground that sales had fallen below the threshold.
28. Licensee Remedy Ensure that the agreement covers “improvements” and define “improvement” in such a way as to cover products that meet market demand using a different technology. Such clauses have to be drafted with very great care because they can be avoided as contracts in restraint of trade or for vagueness if drawn too widely and too loosely. Ideally such contracts should be drafted by a lawyer specializing in IP or a patent agent with a lot of experience of licensing.
29. Third Party Case History University lecturers in a leading medical school developed an artificial skin for burns victims. They set up a spin off company which applied for patents around the world. A foreign medical devices company saw the invention and decided to make the product without obtaining the licence of the obtainers.
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31. he could not speak for the patent’s validity without knowing all the prior art
32. the costs could be over £1 million in the Patents Court
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34. Third Party Take out IP insurance first – should be easier and cheaper with new rules limiting costs in the Patents County Court.
35. Third Party Consider an application to the IPO for an advisory opinion on infringement under s.74A 0f the Patents Act 1977 for £200: (1) The proprietor of a patent or any other person may request the comptroller to issue an opinion – (a) as to whether a particular act constitutes, or (if done) would constitute, an infringement of the patent; (b) as to whether, or to what extent, the invention in question is not patentable because the condition in section.
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37. US counsel are prepared to take cases on a contingency fee,
38. Damages are set by juries
39. Liability and quantum decided at the same trial, and
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41. Any Questions? Jane Lambert NIPC Media Centre Huddersfield HD1 1RL 0800 862 0055 www.nipclaw.com
Notas do Editor
RemediesConsider an application to the IPO for an advisory opinion on infringement under s.74A 0f the Patents Act 1977 for £200:(1) The proprietor of a patent or any otherperson may request the comptroller to issue anopinion –(a) as to whether a particular act constitutes,or (if done) would constitute, aninfringement of the patent;(b) as to whether, or to what extent, theinvention in question is not patentablebecause the condition in section.If corresponding patent has been infringed abroad, consider proceedings abroad: costs €50,000 in Continental Europe; costs the same or greater in the USA but loser does not usually have to pay the winner’s costs, counsel are prepared to take cases on a contingency fee, damages are set by juries, proceedings are in one stage and law more favourable to patentees.