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LESI 2009 Negotiating the International Life Sciences Licence Agreement Rob McInnes Principal.

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Presentation on theme: "LESI 2009 Negotiating the International Life Sciences Licence Agreement Rob McInnes Principal."— Presentation transcript:

1 LESI 2009 Negotiating the International Life Sciences Licence Agreement Rob McInnes Principal

2 Ownership of IP in Australia  Principles derived from English law  Statutes are differently worded for different IP rights re employees  Patents governed by non-statutory principles  No “work done for hire” principle for contractors  All subject to express contract terms  Universities and institutes have always owned IP created by their employees under ordinary principles, but…

3 A Disturbing Case on IP Ownership  University of Western Australia v Gray  Prof Gray employed from 1985 to foster research at UWA  Federal Court Judge distinguished a “duty to research” from a “duty to invent”  UWA did not own inventions resulting from Dr Gray’s research »UWA did not have the contractual power to prevent Dr Gray from publishing  Regulations under UWA’s statute ware ineffective  Probably limited to universities/public sector

4 Joint IP Ownership in Australia  Any owner can work the invention  Neither party may license or sell a patent or copyright without consent of all owners  Percentage shares of ownership are commonly referred to but are meaningless  Subject to contractual modification  Know-how/trade secrets need to be defined before “ownership” is meaningful

5 “No Challenge” Clauses  No express legal restrictions in Australia  May be unlawful as part of a course of conduct constituting a misuse of market power

6 Negative Covenants  Trade Practices Act: »Generally, market sharing by competitors is unlawful »Generally, “vertical” conditions like distribution territories are only unlawful if they substantially lessen competition or are part of a misuse of market power  TPA s51(3): - exempts certain IP licences from most antitrust restrictions »Exemptions do not apply to resale price maintenance or misuse of market power  Exempt licence conditions in: »patent licences relating to the patented invention »registered trade mark licences relating to the characteristics of the goods bearing the mark »copyright licences relating to the subject matter of the copyright

7 Improvements in Australia  Australia has no explicit antitrust or patent misuse issues with licensor ownership of licensee improvements  May be unlawful as part of a course of conduct constituting a misuse of market power  No legal need to distinguish “improvements” in the ordinary sense and improvements falling within licensed IP

8 Post-Patent Royalties  No express prohibition on post-patent royalties, but…  s 145 Patents Act »patent licence agreement may be terminated by either party once the patent expires or is revoked »Problems with licences of multiple patents and/or in multiple jurisdictions »for payments to continue, use a separate know-how licence or a service/consultancy contract

9 Patent Misuse in Australia  S 144 Patents Act »conditions in a licence may not be used to force the purchase of non-patented goods or to prevent licensee from using other products or processes »except where the licensor proves the licensee had the option of not submitting to the condition and it is terminable with compensation »sanctions include unenforceability of the condition and the patent

10 Insolvency and Termination  Normal for licence agreements to be expressly terminable by licensor for insolvency of licensee »No US-style compulsory continuation of licences  If licensor becomes insolvent, any assignment of the licensed IP is subject to the licence »Unless liquidator gets court approval to disclaim the licence

11 Naked Patent v. Know-How Licences  Need to make “bundles” of IP for best licensing outcomes – parallel patent/know-how licences  Registered design system is being improved »Distinctiveness required to register, but broader enforcement possible  Good definition and active protection of confidential information required  NDAs that go too far can be void as restraints of trade  Copyright for software, manuals etc

12 Dispute Resolution  Courts are reasonably efficient in Australia  No history of efficient, cheap arbitration in IP disputes  Expert determination good for some issues  Urgent injunctions: »Serious question to be tried »Without an injunction, plaintiff will suffer injury for which damages will not be an adequate remedy »The balance of convenience favours the grant of urgent relief  Often express final hearings are offered

13 Enforcement by Licensees  For patents, only licensees who have the right to exploit exclusively throughout Australia, including to the exclusion of the patentee  Not sub-licensees  Not licensees with a licence subject to reserved rights

14 Statutory Implied Warranties (Federal, in AU)  IP licensing is a service under the TPA  “Consumer” sale if less than A$40K (even if acquired for trade, business or profession)  Liability cannot be excluded but can be limited in business transactions  Implied warranties that: » services will be rendered with due care and skill »materials supplied will be reasonably fit for purpose »and the big one …

15 Trade Practices Act s 74(2)  Where a corporation supplies services … and the consumer, expressly or by implication, makes known to the corporation any particular purpose for which the services are required or the result that he or she desires the services to achieve,  there is an implied warranty that the services supplied under the contract … are of such a nature and quality that they might reasonably be expected to achieve that result,  except where the circumstances show that the consumer does not rely, or that it is unreasonable for him or her to rely, on the corporation's skill or judgment

16 Funding Conditions & Government Policy in Australia  Federally: typically “benefit to Australia”  Discretionary approvals  Australian SME preference  Move to requiring a “Commercialisation Plan”  Interpretation has changed over time  States can have stricter requirements

17 Permissions for Biological Materials  Border controls for biological materials  GMOs: »Permit system through the Office of the Gene Technology Regulator »Streamlined for “DNIR” (no intentional release)  Stem cells: »Human cloning prohibited »licensing system for the use of excess embryos from ART

18 +61 2 9393 0300 Rob McInnes Any Questions?

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