Transcript Slide 1
LESI 2009
Negotiating the International Life Sciences
Licence Agreement
Rob McInnes
Principal
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…
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
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
“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
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
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
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
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
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
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
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
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
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 …
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
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
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
Any Questions?
Rob McInnes
+61 2 9393 0300
[email protected]