Intellectual Property IP: A Legal Perspective

Welcome Introduction – Benjamin Dredge & Napthens LLP Section 1 - Authorship & Ownership of IP –Overall confusion –Copyright, Patents, Databases –Employees vs. Contracts Section 2- Confidentiality Agreements / NDAs –The Basics –Key terms & provisions

Intellectual Property SECTION 1 Authorship and Ownership

IP: Authorship and Ownership IP limits what an owner of personal property can do with the things they own Overlap, technical legal ease, confusion IP an essential asset - can be: –Competitive edge –Distinct part of business model –How consumers identify with you Therefore should be in everyone’s interest to identify, formalise authorship and ownership

Copyright Tangible rights versus intangible rights – letter of the law Tangible rights of property owner –Store –Gift or transfer Intangible rights of copyright –Prevent copying –Stop publication –Licence –Assign

Patents Default position: –The inventor or joint inventors shall be deemed to be those persons entitled to apply for a patent and thereby become the first owners of such intellectual property right…. UNLESS the position is to the contrary by virtue of: –a rule of law; or –a contractual term which applies to the inventor

Patents - Employees Patents Act 1977 Section 39 For those employees who do not have a "special obligation to further interests of the employers undertaking“….. then the invention belongs to the employer where: –the invention was created "in the course of the normal duties of the employee"; or –in the course of "specially assigned duties"; and –it might "reasonably be expected to result from the carrying out of his duties“ –Case Law - Liffe v Pinkava

Patents - Contractors Outsourcing R&D - be cautious –Legal title to invention lies with contractor – unless contractual term to provide otherwise –Ensure a contractual term - all IP rights to vest with the company –WITHOUT such a term, contractual uncertainty, seek remedy through courts ? Worst case scenario ? –Right only to hold a licence to practice the invention –Not overall ownership Key points of concern: –Sub-contractors and foreign contractors –Part funding of research and academic institutions

Databases Governed by the rules of both copyright and EU database rights If a contractor is engaged to compile a database and no written terms regarding ownership of IP: –The contractor will own the copyright in that database, but –The EU database rights will reside with the company (or commissioner) Both different restrictions and durations of protection Beware if sub-contracting the compilation or creation of databases

Intellectual Property SECTION 2 Confidentiality and Non-Disclosure Agreements

Two main purposes –Obligation to maintain confidential nature of information –Increases the likelihood of enforcing implied confidentiality obligation upon the recipient of the confidential information Cannot provide an absolute guarantee of protection! Common sense - vital when protecting confidential information – e.g: –Only disclose what information is absolutely necessary –Provide controlled hard copies of documentation to ensure data is controlled to fullest extent

The basics… Mentioned, negotiated and signed up before information is disclosed –Historically disclosed information difficult to protect Standard or template two-way confidentiality agreement Very useful when information is not capable of any other form of IP protection Always consider the parties entering into the agreement –With newly incorporated or a corporate front for an individual - minimal protection –Executed by an appropriately authorised person if being entered into by a company

Key Terms – Duration Time period should always be negotiable! Consider type of information to be disclosed and possibility that on termination might be freely available to the public –Commercial data - may lose value after short period of time –Business models - may require longer period of protection –Chemical formulas - may require ongoing obligation of confidentiality Large companies and PLCs will be nervous but consider…. on termination is the information no longer of value?

Key Terms – “Confidential information” Definition does not automatically make it confidential! Frequent exceptions for information –In the public domain –Already known to the recipient –Becomes known to the recipient through an alternative source Blanket definition of confidential information may be subject to challenge by a court Case Law - Faccenda Chicken v Fowler

Key Terms – “Permitted purpose” What can the “Confidential Information” be used for? Often neglected, but can be the most important clause Without it, only an obligation not to disclose –Technically possible to use the information to compete with the disclosing party Immediately foreseeable intentions of the parties. What if circumstances change? Beware: –Obligation to provide data or information, should always discretionary –Unintentionally binding yourself into entering further contractual arrangements or procuring services

Key Terms – “Indemnity” Strongest form of contractual protection possible In the event of breach, indemnity basis of damages Breach of contract claim vs. indemnity claim: –Duty to mitigate loss vs. no such duty –Remedy to be placed back in same position had breach not have occurred vs. pound for pound recovery inc costs and expenses NB: Should indemnity not be accepted, may be possible to provide for a liquidated damages clause

Key boilerplate or standard clauses Jurisdiction clause – UK courts only Governing law – UK courts only Entire agreement clause – avoid argument of further obligations

Remedies for breach Act quickly! Avoid prejudicing your claim Injunctive relief - most effective remedy Value of the information often based on the date when the breach occurred and not the future value of such information

Key points of caution Group?  Consider complex corporate structures Man of straw?  May not be capable of paying damages Oral disclosures?  US approach Confidentiality can be outweighed by public interest –case Law - Lion Laboratories Ltd v Evans Always keep records and note durations of NDAs for which you / company are bound by