Monday 14 September 2009

IP Ownership: Are We Up To The Task?

I don't know if this is a "tipping point" in the precise sense intended by Malcolm Gladwell in his 2000 bestseller--The Tipping Point: How Little Things Can Make a Big Difference. There, Gladwell argued in a rhetorically compelling fashion how there is a moment of critical mass that leads to significant sociological changes. I want to bring Gladwell's concept down to a personal level, and perhaps amend it by a metaphorical notch or two, to consider my own "tipping point" with respect to a potentially emerging problem of IP practice.

Last week, I attended a conference on patent ownership issues, including whether the invention was made in the employer-employee or otherwise (and where the highlight was a speech by my fellow IP Finance blogger Jeremy Phillips, who doubles (at least) as the blogmeister of the granddaddy of all blogs, IPKat). A constant theme of the conference was the paucity of case law on the issues considered by the speakers. Leaving the conference, a colleague noted to me that he had drafted and prosecuted hundreds, if not thousands of patents during his career, but issues of ownership, and especially what happens to ownership in the employer-employee, or contractor-inventor relationship, hardly had ever arisen. "Okay", I noted to myself, and went a about my way back to the office.

Several days later, being last Friday, I considered the most recent publication of IPKat, devoted to comments on a press release from the UK Intellectual Property Office regarding climate change. One particular part caught my attention. Thus,
"Peter Holland, International Director, IPO said: "Evidence suggests that managing and reaching agreement in IP ownership and access is difficult in all industry sectors [That, says the IPKat, is why you need IP lawyers ...]. This means that collaborative projects can take a long time to set up or simply never happen [... and we can blame that on the collaborating parties]. The provision of a framework for IP management looks to encourage and support more collaboration. It could also dramatically reduce the transaction costs involved in establishing such agreements and we hope this increases technology diffusion".
The quoted text and intertwined IPKat commentary hit me over the head. When taken in conjunction with the earlier observation of my colleague about his paucity of encounters with IP ownership matters, the question arises: How skilled are we IP lawyers in dealing with questions of IP ownership, the IP implications of the employer-employee relationship, and inventorship and ownership in the contractor situation? Perhaps I take mild issue with the IPKat on this point, but I have this sense of unease that Mr Holland's reservations are not wholly without merit.

Simply put, where exactly do we IP attorneys, especially those on the front-line of patent drafting and prosecution, obtain the reservoir of knowledge and experience to allay Mr Holland's concerns? Not being a strong believer in osmosis as a source of professional competency, I am challenged to find a compelling answer to the question. The odd conference aside, the issue seems to be neglected in in-service training, if the importance of this competency appears to be increasing apace.

The cover story in a recent issue of Business Week, "The Radical Future of R&D: It's a New World of Collaboration Across Corporate and National Boundaries", puts the issue in stark relief. The contribution of the IP professional is no less dealing with the arrangements for ownership of IP rights than with the legal creation of these IP rights. At the least, policy makers such as Mr Holland need to feel that the IP profession can handle these two aspects with equal competencies. I am not certain that the answer is an unqualified "yes."

Employer or employee; inventor or owner?


Mark Anderson said...

As a commercial IP lawyer, I feel I have to know about employment law issues, contract law issues, competition law issues, company law issues, etc, as well as "pure" IP law issues relevant to transactions.

As I am not a patent agent, and don't have stuff about patent drafting and prosecution boggling my mind, there is more space in the hard drive for these commercial law issues.

Being a transactional IP lawyer is a peculiar niche, somewhere between IP law and general commercial law.

Michael F. Martin said...

Just a guess, but I doubt the patent prosecutor you talked to had seen much litigation. Ownership is a third-rail in defending patent infringement lawsuits. The reason the issue so seldom "comes up" for prosecutors is because prosecutors usually work for the employer, who doesn't want to have to deal with an expensive ownership/inventorship question upfront without knowing that the costs will be justified by avoiding litigation later. Nonetheless it is common practice among the best prosecutors I know to do diligence on these issues sufficient to have a solid record in advance of any patent filing or issuance. The underlying problem, which is thorny indeed, is the potential conflict of interest between inventors and employers, which the patent lawyer (whose client is the employer) is in a sticky situation to address.

Nick White said...

I think we are crossing two issues here. Patent attorneys deal with the issues of legal IP ownership on a daily basis and it’s not usually a challenging issue to resolve. There is a paucity of case law in these areas because it is usually black and white. This is because any dispute usually occurs in an agreed framework i.e. employee/employer. Conferences on this subject are usually very dull.

What Peter Holland is highlighting is a completely different issue. What he is talking about is the difficulty in getting two parties to agree IP ownership issues at the outset of a JV or other forms of collaboration agreement before the IP is generated.

IP is so crucial these days that parties often do not progress with projects because they cannot agree on background and arising IP definitions, ownership of arising IP and suitable access to background IP etc etc. Most patent attorneys do not have any experience of this area and few commercial IP lawyers have it either. I’m not talking about the legal issues around agreements here but the ability to understand the IP issues in the commercial and technical context to get the right deal done as smoothly as possible.

In-house patent attorneys or those that used to be in-house like me have loads of experience of these commercial ownership issues and the strategies and tactics around negotiating these agreement issues. That’s the best ground for training experience working in-house at the commercial frontline of IP. Most private practice patent attorneys have no experience of this area and no hope of getting it. Some commercial IP lawyers also have this sort of expertise albeit often theoretically based and more form of legal agreement focused.