IP Strategy, contracts and commercial relationship management
The participants all came from Contract and Commercial Management backgrounds, and so the discussion Duncan planned focused on five stages of commercial relationships and picked out a few IP issues at each stage :
1. Early discussions
Don’t rush into signing NDA’s. Sometimes it’s better not to, particularly if you may end up receiving information that you already have, or being bound not to compete with something you already knew about. Instead, fully understand the meets and bounds of what you can say and speak to these.
2. More detailed discussions / due diligence
Now may be the time for an NDA. Also, consider using the ‘6Ts’ framework to understand your own and the other party’s intellectual property positions. The 6T’s are: type of IP, territory, time (until expiry), terminated (status), technical scope, true monopoly (validity). You can read more about the 6T’s in our earlier articles:
3. Formation of an agreement
Here you may be negotiating an agreement, and the usual terms need to be considered. (Readers will be familiar with these, but they include: ownership of current and future IP, cross licences, exclusivitiy, enforcement, warranties, indemnities, infringements, etc.)
On the infringements front, be aware that sometimes third parties may be brought into litigation. Two examples are sponsored links (eg. Google Adwords ) and third party sale of infringing product (eg. eBay’s litigation against Tiffany – eBay was held not liable in the US, but liable in France for providing the platform on which resold originals as well as counterfeit products were sold.)
4. Ongoing relationship
You need to have processes in place to properly run the IP side of things, some examples are capturing new IP, detecting and acting on infringements, and dealing with infringement suits aimed against you. A good example is how to deal with non practicing entities (‘trolls’) – what role will each entity take, and how will this be dealt with?
The agreement ends, but this isn’t the end of your relationship. You may have ongoing confidentiality obligations, confidential information may need to be returned, one party may need to continue to allow access to inventors to sign documents, etc.
6. New deal?
Sometimes new arrangements are forged from existing ones. When this happens, you obviously need to pick where to enter the above flow. Usually somewhere between due diligence and formation of an agreement. Don’t forget to ensure that the intellectual property issues are dealt with fully, even though you have an existing relationship.
Finally, there were some great questions on the call (and thanks again everyone for those). Here’s a quick summary of some of them:
– patent reform in Europe and the US and impact on patent ‘trolls’ (amongst other things, I suggested that the ‘troll’ problem would be largely dampened if winning parties in IP disputes in the US were able to seek some of the attorney’s costs from the losing party. This is standard practice in many jurisdictions.
– the status of intellectual property in China and where to from here (it’s not as bad as people say – you can get a patent infringement judgment faster and cheaper than just about anywhere else, enforcing it against ‘phoeni&xrsquo; companies can be difficult)
– Eastern vs Western philosphilies on IP and what this means for the fuure. (I don’t think that there is a discernable ‘East’ vs ‘West’ anymore. However, there are some cultural differences in the way property rights are viewed. I think there is a growing (and often overlooked, at least by attorneys) movement in ‘open innovation’ and that this is only going to become more important over time.)
– Jurisdictional differences in the way IP is handled. (India vs China, vs Germany, vs US, etc.)
– Is intellectual property law progressing along the road to harmonisation? (Yes, but slowly – look at Europe for an example of the long periods of time that are required. Look at the DSS v European Central Bank patent litigation for an example of how the same patent claims and the same law can be interpreted differently in different countries, partly due to procedural issues, evidence that can be led, etc, etc.
Finally, you might want to take a look at our scorecards to track intellectual property strategy as it unfolds. Here’s a list: