Intellectual property due diligence playbook (Founder)

• Publishing or disclosing your research outputs can have knock-on effects for the commercialisation of your research. There are some critical aspects you need to consider and discuss with your TTO before you place anything in the public domain.
• IP can be protected and registered in a timely manner by your TTO, with no (or minimal) delay to publication or public disclosure.
• IP is owned by your employer (unless a contract says otherwise) and this ownership doesn’t move when you change employment.
• In a competitive field others may have existing IP, this does not necessarily exclude new related IP if it has a competitive advantage, your TTO will be able to map out the position.
• The research use exemption normally allows others to use for research purposes, thus generally patents do not limit research in a particular field (though in certain countries this exemption may be less defined).
• Understand any encumbrances on IP (such as joint ownership or needing funder consent to commercialise) and revenue sharing expectations, so that you are aware of as these matters impinge on the commercialisation process

It’s important to protect before you disclose, or at least consider what you should and should not publish (e.g. whether to make all source code available alongside your publication or keep it as proprietary IP that can be licenced from your university).

NOTE: Publication includes any public disclosure or discussion (in any form) of the IP e.g. at conferences, meetings, in pre-prints, journals, blog posts or conversations in any public forums.

Avoid unnecessary speculation in publications about future uses of concepts of a discovery as it will be a public disclosure and jeopardise future arising-IP based on the concept.

There are different time-points when it’s important/advisable to update your IP due diligence, although the earlier the better, to save time, resources and prevent mistakes.  It is recommended to carry out and refresh your IP due diligence periodically, it is never static whilst research is on-going.

• During research funding application, if requested by the funder.
• At point of IP disclosure, once something tangible has arisen from research.
• In advance of licensing, as the licensee will most certainly investigate this prior to committing.

This should be an ongoing practice, particularly to ensure that current IP covers current products or inventions.  It is not unusual for products and processes to change in development and for early patents to no longer be relevant.

You’ll need to briefly describe the IP (product or process) to your TTO (including any confidential know-how/material) and clarify any third-party materials (that you have brought in to enhance or merge with your IP e.g. open-source software code, parent cell line or creative outputs you are responding to) or public domain materials, (even public domain materials usually comes with T+Cs).

Describe the innovative part: what problem has been solved and how you have solved it (that no-one else, to your knowledge, has disclosed). If the invention contains a component from a third party, this doesn’t exclude you from its use as a whole system. However, the TTO needs to note what the originator declares about origin and rights to use materials.

Note: TTO may need to explore the details further, as the innovation description process evolves.

• Your employer (the university) generally owns the outputs of your academic research unless there is a contract that says otherwise. This is not negotiable and is standard practice throughout all sectors of industry and public sector life, under UK employment law.  There may be exceptions, e.g. copyright in research publications can be owned by the researcher, and transfers to the journal upon acceptance of a manuscript.
• Ownership determines who can use the research output for any purpose (research, teaching or commercial application). You need the university’s permission to use the research output for commercial purposes, usually in the form of a licence. Ask your TTO for advice.
• It is a common misunderstanding that IP, such as a patent, prevents research by others. This is normally avoided in many countries such as the UK/EU by the “research use exemption”, where a patented invention can be used for research purposes without permission from the patent owner.
• Is your research IP based upon any ‘building blocks’ of other research or existing technology? This helps the TTO to ascertain if a licence to this third party (background IP) is required, as it may present a freedom to operate (‘FTO’) concern down the line.
• Grant Funder T&Cs or Collaboration Agreements under which the IP has been generated. (TTO to clarify this). IP ownership can sometimes reside with a collaborating institution or external partner, based on funding terms, even if you have done most of the work (e.g. some NIHR-funded research grants or SBRIs).
• When leaving the university: it‘s important to know which elements of your work contain IP owned by the university when you leave an institution and where any agreements need to be drawn up. There is a difference between your personal knowledge and your curated expert know-how (confidential know-how and data produced whilst you worked at the University), e.g. for use in technical consultancy. You need to seek advice to understand what you can do outside the University and in what instance you will need University consent.

You’ll need to advise the TTO of the following information:

• Under what project(s) and funding sources did the IP arise?
• Identify and list those persons who invented/created the IP. Please provide full names, positions (e.g. employee, PhD student/UG student, visiting academic, etc.) nationality, residency and the nature of their contribution, including:
• If University staff solely invent/create it;
• If any University students involved in the Project per se (i.e. involved in the generation of the IP but not noted above as an originator/creator;
• If any other University persons were involved in the generation of the IP (but not noted above as an originator/creator);
• If any third parties invented or created IP, or were involved in the project.

An originator (or inventor in patent nomenclature) is someone who has made an intellectual contribution to the novel idea. Someone is not an originator if they provided input into what criteria a solution must meet, or feedback on the development of a discovery (without ideas on how to implement the solution). Equally, a person who is merely directed to do work is not an originator. These people may fall into the category of contributors. A risk here is that the omission of a legitimate inventor, or inclusion of a non-inventor, can invalidate a patent.

All originators, creators and contributors will need to agree their percentage contribution. This should be in writing and disclosed early to the TTO, by filling in and signing an IP Originator’s agreement. This is preparation for any shareholder agreement and internal revenue sharing policies at your university.

Note: Joint owners have equal and undivided ownership (all originators are considered equal under the law). If patent claims are amended to exclude work done by certain originators, then they should be removed as originators, particularly for the US filing.

Has the IP you have disclosed to the TTO for due diligence been introduced to subsequent research projects (e.g. as background IP for new collaborations, , or used following publication by practitioners in your field).

If yes, have any third parties been granted rights to the IP in the relevant subsequent project? Is there any collaboration agreement with funder terms or an MTA?

Please advise your TTO if there is:

• Third party code incorporated in your software
• Code in your software which has been released by you or a third party under specific licence terms (e.g. open-source software)
• Code stored in the cloud or a server, etc. Who has access and how secure is this storage?
• Any libraries/database contents copied or substantial parts incorporated into your software?
  • If yes – were these accessed with a licence?
  • If yes – are they being used to train an AI model?

Open-Source Software is defined in terms of user freedom. That is, the freedom of users to use (and reuse) software without the need for additional consent. An open-source licence will never restrict the use of software; however, they do place some obligations on how modified software is redistributed.

Open-source software offers benefits, such as cost savings, customisation, transparency, and community-driven innovation. However, risks include potential security vulnerabilities, lack of dedicated support, compatibility issues, and possible licensing complexities. Proper evaluation and management can mitigate risks while maximizing benefits.

There are two main categories of open-source licenses:

Copyleft licence: 

These licences ensure that derivative works remain open source. If you distribute modified versions of the software, you must do so under the same licence, maintaining the freedom of the software.

e.g. GPL, LGPL, AGPL

Permissive licence:

These licences are flexible and allow for the software to be used, modified, and redistributed with minimal restrictions. They are business-friendly and allow proprietary use.

e.g. MIT, BSD, ASL

In United States intellectual property law, a “mask work” is a two or three-dimensional layout or topography of an integrated circuit (IC or “chip”). The layout is called a mask work. Because of the functional nature of the mask geometry, the designs cannot be effectively protected under copyright law (except perhaps as decorative art). Similarly, because individual lithographic mask works are not clearly protectable subject matter; they also cannot be effectively protected under patent law, although any processes implemented in the work may be patentable. Since the 1990s, national governments have been granting copyright-like exclusive rights conferring time-limited exclusivity to reproduction of a particular layout. Terms of integrated circuit rights are usually shorter than copyrights applicable on pictures.

Particularly for SHAPE research, where more creative methodologies may have contributed to consideration for commercialisation, any ethical clearance agreed by your institution needs disclosure to the TTO.

The default position for UKRI is for publications to be Open Access, generally this entails a Creative Commons licence being applied to the outcome (for full rules on this: https://www.ukri.org/publications/ukri-open-access-policy/uk-research-and-innovation-open-access-policy/). This may have consequences for your commercialisation plans and needs disclosure to the TTO.

For both AHRC and ESRC grants, UKRI terms are set out under RGC 12 Exploitation, Impact and Acknowledgement: “RGC 12.1 Unless otherwise agreed, all intellectual property shall belong to the party that generates them. Where the Grant is associated with more than one Research Organisation and/or other project partners, the basis of collaboration between the organisations including ownership of intellectual property and rights to exploitation, must be set out in a formal collaboration agreement in a way that is proportionate to and appropriately reflects the exact nature of the collaboration.”

(https://www.ukri.org/wp-content/uploads/2024/04/UKRI-020424-FECGrantTermsConditionsApril2024.pdf )

Collaboration agreements need to be in writing and provided to the TTO, preferably at the point of disclosure.

NIHR grants: The NIHR requires a Contractor (grant holder) to obtain consent to commercialise. The standard research contract includes the right, but not the obligation, for the Authority (NIHR) to obtain a licence to use and publish Foreground IP, Research Data, Arising Know How, Reports and any information or conclusion arising from the Research that the Contractor does not reasonably protect, manage or exploit. As with the provisions concerning Contractor Background IP, this right is one that is expected to be rarely exercised.

Horizon Europe grants: When considering commercialisation of IP/know-how, the default consortium agreement (CA) states “Subject to agreement, access rights [to foreground IP by consortium members] shall be granted under fair and reasonable conditions (which can be royalty-free)”.

Plant varieties as a specific IP right: Plant Variety Rights (PVRs) are available to breeders of new plant varieties that meet certain conditions. In most countries, plant varieties are not patent-eligible, so PVRs are the only IP available for new varieties. [Source: https://jakemp.com/en/briefings/plant-variety-rights-in-the-eu-and-uk/]

Challenge: valuing data packages (e.g. clinical trial outputs) to licence for commercial purposes