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 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

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

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?

Patent pitfalls (3) More at: http://www.btgplc.com/info/links_lit.php 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

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?

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

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

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

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

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