What is IP?
Intellectual property (IP) is the tangible result of intellectual or creative activity in the form of novel ideas, information and knowledge. It can include inventions, industrial processes, software, data, written work, designs and images. (The term invention is used more generally to cover all of these aspects of IP.) It is a commodity that can be exploited by licensing, selling or buying. Gaining legal recognition of intellectual property in the form of intellectual property rights (IPR) is an important part of protecting the exploitation process. IPR can be held in the form of patents, designs, copyright, trade marks, databases and confidential "know-how". The owner of the IPR controls the exploitation process. In the context of NHS and University bioscience research the most important of these categories are probably patents, copyright and know-how.
Intellectual Property is an important area of law about which the NHS is becoming increasingly aware. IP can be a major asset to a NHS Trust and needs to be protected and valued as such. The NHS executive has adopted a Policy Framework for the management of intellectual property within the NHS (HSC 1998/106; pdf 353kb), which will ensure that Research and Development is owned and exploited in the best interests of the NHS.
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| CATEGORIES | PROTECTED BY |
|---|---|
| Inventions: a new idea capable of being made or used and involving a non-obvious inventive step. | PATENT |
| Written work, films & videos, and typographical arrangements, including computer software. | COPYRIGHT |
| Designs and design drawings, mainly of aesthetic objects | REGISTERED DESIGN RIGHTS |
| Engineering components, architectural drawings etc. | UNREGISTERED DESIGN RIGHTS |
| Product brand names, company logos etc. | TRADE MARKS |
| Trade secrets, background techniques | KNOW-HOW |
Why bother protecting your IP?
In simple terms, IP protection is the best method of preventing other people from copying the work. It gives an exclusive right to use the invention or to let others use it under agreed terms.
For universities, NHS Trusts and other research institutions it provides a basis for collaboration with industry and may help attract funding for further research and development. For companies, a strong IP portfolio can be the basis for a successful business.
In more general terms, IP in the form of published patent applications can provide a valuable source of information. In some cases accessing this information may prevent unnecessary repetition of work which has already been carried out and provide a database of information on which to base future research. It has been estimated that 80% of information held in patent applications is unpublished elsewhere.
Exploitation of protected IP can lead to financial reward for both owner and inventor.
Who owns the IP?
In the simplest case, the inventor or originator of an idea has the right to be granted a patent or other IPR and can transfer that right to someone else. However, ownership of intellectual property, including patents, may not be this simple. In most cases, the patent or other IPR will belong to the employer under the terms of the employment contract and assuming that the invention is related to the field of the employers business. The employer's right of ownership is covered by the Patents Act 1977 and the Copyright, Designs and Patents Act 1988. If the work is carried out as part of a collaborative venture or sponsorship deal involving for instance other research institutions, companies or grant awarding bodies then ownership of any IPR arising is more complicated. It is advisable to negotiate IPR ownership before commencing the work. Most Research Councils and grant awarding bodies have policies on IP ownership.
When filing a patent application, the inventor(s) are specified. Thus, if a NHS Trust or University claims ownership, the relevant employee(s) are named as inventor(s). An inventor has to have made a creative intellectual contribution and all inventors must be recorded otherwise there is a risk that the patent will not be granted or may be revoked. A colleague or associate who has contributed substantiating data does not qualify as an inventor. The inventors may be entitled to a reward from their employer but this is not covered by law and will depend on the relevant employment contract.
Although the employer can claim ownership of the IP, in most Universities and increasingly in NHS Trusts there is provision for the inventor(s) to benefit financially if the invention is commercially successful. The simplest method of doing this is to use a "constant ratio of sharing" where net income is shared in a set ratio between the parties involved i.e. inventor(s), department and institution. Net income refers to the income after patenting and other costs are recovered. An alternative method of distributing income is to use a sliding scale, whereby the proportion of net income given to the inventor is greater at lower levels of income and decreases relative to the employers share as income increases. An example of a sliding scale used in a local NHS Trust is shown below. The figures may vary considerably and not all institutions will have such an agreement in place. Where there is more than one inventor, the inventors share will be divided between them.
| Net Cumulative Income | Inventor(s) | Department | R&D Directorate | Trust |
|---|---|---|---|---|
| First £50,000 | 50% | 10% | 20% | 20% |
| Next £100,000 | 40% | 10% | 25% | 25% |
| Next £100,000 | 30% | 10% | 30% | 30% |
| Over £250,000 | 25% | 10% | 32.5% | 32.5% |
How does IPR generate income?
Income can be obtained through licensing, sale or assignment of intellectual property rights. Since protection of IP can be an expensive and time-consuming process, it is often preferable to have an agreement with a commercial partner who will be responsible for leading the exploitation effort. Licensing is the most likely exploitation route. It allows the provider to retain ownership of the IPR and therefore more control over the exploitation process, and the IPR value can be increased with further research. Licences can be exclusive or non-exclusive; they can be limited by e.g. time, geography and field of use and may involve the payment of lump sums and/or royalties to the owner. A straightforward sale of IPR involves transfer of ownership rewarded by payment of a one off lump sum. Alternatively, the IPR can be assigned to another party with an agreement covering transfer of ownership and possibly payment of a lump sums and/or royalties. The buyer or assignee of intellectual property is responsible for all ongoing costs involved in protecting the IP, e.g. in paying patent costs and renewal fees. TrusTECH can broker these arrangements if required.
| Exclusive | The licensee alone has the right to use the IP as specified in the licence agreement |
|---|---|
| Non-exclusive | Any number of licences may be granted under the same terms |
| Sole | A single licensee has the specified rights but the licensor retains the right to use the IP under the same terms |
Rarely, exploitation of IPR will be through a spin-out company. This will require a business plan, significant investment, perhaps through venture capitalists, and facilities. TrusTECH is able through its associate organisations such as MerseyBio, MIL and the Harris Innovation Centre to provide the expertise and guidance necessary for this process. NHS Trusts are not currently allowed to take an equity stake in a spin-out company. They will protect their legal right to IP by licensing agreements or assignment documents. However, the law is likely to change in the near future so that NHS Trusts are allowed to exploit their IP directly through spin-out companies.
What to do if you think you have an invention
Take professional advice before publishing or discussing the details of the invention with anyone who is not directly connected with the work and who is not subject to a confidentiality agreement. In the NHS the adviser is likely to be the R&D Manager or equivalent. In a University or other research institution it may be a Group Leader or Departmental Head. Your adviser may suggest that as a first step you should complete an Innovation/Invention Record. This will cover the basic details needed to determine whether intellectual property is available for protection and identify research with commercial potential. If TrusTECH is contracted to offer its technology auditing service, it will provide advice and support through its Technology Exploitation Managers and a team of experts in the IP field, and will ask you to complete a Preliminary Invention Report.
Confidentiality
Within the NHS Trusts and Universities the principal objective of academic research is often publication and dissemination of information and knowledge; in these cases there can be a direct conflict between publication and the confidentiality required for protection of IP or in protecting the interests of collaborative partners.
Confidentiality is important when:
- research is carried out under funding arrangements which confer responsibilities of confidentiality on the University/NHS Trust
- there is an opportunity to benefit from transferring the confidential results of research to industry and commerce
- an invention may be patentable [it is not possible to patent an invention in the UK which has at any time been made available to the public (whether in the UK or elsewhere) by written or oral description, by use or in any other way]
Confidentiality agreements should be in place before disclosure of confidential information to a company either in the early stages of discussions that may lead to research collaboration, or in negotiating licensing of intellectual property. Confidential Disclosure Agreements (CDA) are frequently used to outline the relationship between the NHS Trust/University and a company or individual, when one party discloses confidential information to the other. TrusTECH can provide these if required.
Keeping information confidential until it can be protected by, for example, patents is often essential in establishing links with industry. It is far harder to encourage a company to fund research or to license technology if the company has no privileged or exclusive access to the research work.
Note
The rules governing IPR, in particular patents, are very complex and each case will be different. The information provided within this site is necessarily general and cannot be guaranteed to cover every individual example. It is important that specialist advice is obtained. The information contained within this web site is for guidance only and TrusTECH does not accept liability for any use to which it is put.