The evolution of intellectual property rights ownership in the new global economy

January 2017  |  SPECIAL REPORT: INTELLECTUAL PROPERTY

Financier Worldwide Magazine

January 2017 Issue

January 2017 Issue


There is a definite worldwide research & development (R&D) race in this global economy. Time is of the essence for academic or corporate researchers, as the faster ones get the recognition but above all the resulting intellectual property (IP) rights and attendant monopoly.

Although universities and academic institutions are not in the business of commercialising innovations, their researchers are now looking more and more to get funding from industry as government funding for R&D is persistently diminishing in the face of perceived increasing budgetary needs in other areas such as healthcare in industrialised countries. Academic researchers are therefore more often embarking on a collaboration crusade with corporate researchers.

There are many benefits of engaging in R&D collaboration for both academic researchers and

for-profit corporations. The direct benefits for either party include, at the macro level, sharing of costs and risks, sharing and accessing of cutting edge as well as across field techniques, knowledge and skills, strengthening areas of weakness and addressing global problems. At the micro level, this includes accessing foreign facilities, unique sites and populations, equipment, sharing and accessing techniques, know-how, skills and increasing knowledge capacity.

The indirect benefits include, at the macro level, improving the economic performance of countries by increasing science and technology capacity, creating goodwill between academic establishments, commercial entities and government bodies, as well as providing understanding and access to foreign markets. At the micro level, these partnerships create personal recognition and reputation, encourage further additional funding opportunities and generate cultural and personal experience and enjoyment.

In November 2006, Canada’s federal government released Advantage Canada, an economic plan to make Canada a world leader to turn its ideas into innovations. It also recognised that Canada has a strong research base and must do more to provide solutions to environmental, health and other important social challenges to improve its economic competitiveness. Without effective international collaboration, Canadians have limited access to breakthrough scientific knowledge generated by researchers in other countries; the quality of the scientific knowledge generated locally would decline and industries would be unable to obtain innovative technological information and knowledge needed to maintain their competitive edge. The future of the Canadian health system depends on having a critical mass of health scientists with the international knowledge and intercultural skills necessary to meet globalisation’s challenges.

Even though all collaborations are beneficial for advancing science and technological developments, the resulting ownership of the IP rights derived from these collaborations is without a doubt the most valuable asset, which, in the current highly competitive global economy, is the sinews of war.

It is of utmost importance to enter into any collaboration with duly identified pre-collaboration or background IP rights from both parties. It is also critical to be clear on the expertise, skills and IP rights that each party brings to the table at the onset of the collaboration. The Joint Research Agreement should strive to identify the role of each party in the collaboration, for example which party is supposed to do which part based on their expertise and skills, and provide clear timetables as to when each party is to divulge the results of their respective efforts and potential public disclosures.

Furthermore, the ownership of the IP arising from the collaboration – or foreground IP – must be determined well in advance of the conclusion of the collaboration, rather than after important discoveries and advances have been made. It is far easier to reach a mutually beneficial agreement regarding such ownership before initiating the collaboration, as the scientific outcome is still a desired result rather than a hard and tangible reality.

Unfortunately, in many cases, the resulting IP rights derived from the collaboration will be jointly owned. Co-ownership of IP rights is undivided when several parties hold the right of ownership together. This joint ownership of IP rights creates issues for the commercialisation of the innovations protected by these IP rights, as no single party holds the exclusivity. Furthermore, joint ownership is often governed by diverging rules and laws in the different countries where the IP rights may be held.

For example, the rights of each owner to grant valid licences on an IP right differ between the US and Canada, such that the strategy of one owner may not align with the other owner’s strategy in these countries, potentially creating friction between them. When commercialisation involves a third party under licence agreement, it becomes difficult to negotiate with a beast with two heads.

Ultimately, a joint ownership of IP rights creates a dilution of assets for all key players involved. Researchers should consider this outcome prior to entering into any collaboration.

 

Mathieu Miron and France Côté are Canadian patent agents at Benoît & Côté. Mr Miron can be contacted on +1 (514) 658 4844 or by email: mathieu@benoit-cote.com. Ms Côté can be contacted on +1 (514) 658 4844 or by email: france@benoit-cote.com.

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