Vera Vogel, a researcher at the University of London, developed a diagnostic test involving the use of x-ray diffraction of hair to detect breast cancer. Ibis Innovation, the University’s technology transfer company, owns the patent for the diagnostic test.
(i)_Ibis Innovation wishes to enter into a patent licensing agreement with Novadex LLC, a company that provides diagnostic oncology products. Advise Ibis Innovation concerning the kinds of clauses that should be included in the patent licensing agreement as a means of protecting the University’s intellectual property interests.
When it comes to patent licensing agreement, for Ibis, many important clauses must be taken into careful consideration in order the secure its IPR and well-drafted agreement can avoid many problems.
Basically, what IP is going to be transferred regarding to the agreement must firstly be handled, namely, the subject matter. Furthermore, Ibis, as the licensor, must express what rights has been conferred and to what extend can the Novadex, the licensee, do within the permission. For example, is sub-licensing rights entitled to the Licensee?
Being clear on the clauses, for example, vague definition may bring ambiguousness and problems will arsing as it had been shown in the Oxonica Enger V Neugtec case. Ibis should follow the rule of construction, whereby the agreement is written in a way making business-sense for both parties and naturally, the terms in the clauses are construed on case-by-case basis.
The “scope” (for instance, Exclusivity of the license s. 67 PA) is of prior importance and will be the first battlefield for both sides.
For Ibis, the licensor, granting a non-exclusive license will be the best practice since it will keep Ibis in a advantageous position regarding further exploitations and securing IPR. In practice, non-exclusive license will permit the University stuff to use the invention for research or non-commercial purpose, avoiding the possible sitatuon and the Unversity may be obliged to pay licensing fees for aforesaid purpose (Madey V Duke). Negotiating the non-exclusive license at first.
Considering the registration of license, as in the shoes of Ibis, it should be implied that it should be Novades. So according to S.32-33 & 68 PA, Novadex would be able to obtain damages in case of infringement and subsequently transact without notice.
Granting exclusive territory by clearly stating in the agreement to can be beneficial to both sides, Ibis and Novadex. It means Novadex can exploit the conferred rights, by the Ibis, exclusively in the specified territory . But this is comparable exclusivity does not mean or guarantee monopoly. EC competition law should be taken into consideration. As shown in Consten & Grundig V Commision case, parallel import, for precluding aritificial market, will be allowed by EU and there is potential caveat of the existence of parallel importer.(Dior v Copad).
Agreements, with de jure or de factor effect on competition within internal market, are prohibited (Article 101 TFEU ). But considering the Ibis’s invention is of High technology nature, So the ECJ ruling on Nungesser v Commission can be consulted.
Stemming from Nungesser, exclusions in territories may be allowed under Article 101.3 as the nature of the agreement is open license, which resembles contractual relationship and is therefore compatible with 101.3. Justified exclusivity clause may fall outside TTBER on sales restrictions. Ibis should still be aware of its obligations to comply with the Regulation.
Since it is related to Patent, therefore Improvement-clasue shall be containted within the agreement in a reciprocal way (Feed-back & Grant-back). But the meaning of “Inprovement” varies according to the context (Buchanan). It is usually best only to use word ‘improvement’ as anything more detailed can give rise to disputes as to its true construction. Ibis can also agree “Reach Through” -license or open improvement.
The eligible party