Intellectual property due diligence playbook (TTO)

• 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

• When do you plan to publish data/research results related to the invention?
• What is the inventive concept and what date was it formulated?
• Is there documentary evidence (e.g. lab book)? This may become important if a third party challenges the IP.
• Do you know of any other research groups or businesses conducting research into this tech?
• Are there any public disclosures (non-confidential) by you or other people that anticipate the invention or are material to the IP?
• How was this research funded?
• Who had input in creating the IP and were there any supplemental contributors you wish to acknowledge?
• Following a landscape search into. The invention: look at the listed patents and “prior art” and consider matching tech/related tech, etc. Are there any overlaps with the invention? Is there a non-obvious improvement for the invention? What is the lifetime and prosecution status for overlapping patents? Are they in relevant countries? What can you learn from the examiner’s objections and searches?
• Remember if IP becomes valuable and captures market share from a competitor, then often the competitor will make a legal challenge attacking what the perceive to be the weakest points in the IP, a thorough paper trail of the diligence will be important.

• What type of IP – Patent, Trademark, Material, Knowhow, Copyright and Designs.
• Any relevant patent application numbers.
• Confirmation whether patent application has been filed.
• What competitive advantage does it create in the market?

You should document all disclosures received by the TTO, so that reporting can be done (e.g. HEBCIS) and year-on-year comparisons made (e.g. to review people and budget resourcing in your team).

Clarify ownership of the innovation/idea/IP:

Does it solely belong to the University based on inventive contribution?

• If YES, please gather all the names and positions (e.g. employee, PhD student/undergraduate student, visiting academic, etc.) and nationality + residency of those University persons who invented/created the IP. This is legally defined at UKIPO. Patents: Manual of Patent Practice – GOV.UK (www.gov.uk)
• If NO, please provide all names of third parties who invented/created the IP – including: personal names and company/institution names, addresses and other contact details.

If there is University ownership, ensure assignments to the University have been obtained from all known originators/creators.

Understand the basis for the University being the party to commercialise (e.g. taking assignment from co-originator(s), co-creator(s) or collaborating institutions).

• Were there any additional contributors to the innovation/idea/IP who are not deemed to have had inventive contribution but were key in making the innovation tangible.

Clarify if the innovation/idea/IP has come out of work or research associated with a PROJECT or GRANT.

• If YES, has the relevant project agreement (e.g. collaboration, studentship, material transfer) and any funder terms, been checked to make sure that the terms do not grant any third-party ownership rights?
• If NO, ensure you can trace the source of internal or departmental funds, for downstream due diligence as part of any commercialisation deal.

Determine if any agreements have been made on originators’ % contribution to the innovation/idea/IP.

Document inventive contribution and % accordingly, to comply with any originator revenue sharing process within the University.

Ensure to check any PhD studentship agreement terms on ownership and licence rights to funder and student.

Check this is in agreement with all the originators listed, to prevent disputes once a deal materialises.

Determine if any companies, other institutions or third parties were involved in the Project or creation of the IP.

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.

Remember, jointly owned IP with a collaborating institution is generally not preferred by a potential licensee as it complicates liability.

If anything goes wrong and jointly owned IP is treated differently in different territories, particularly with respect to the owner’s ability to use and licence, then permissions from the joint owner may be required.

Review any relevant project agreement or funder terms for any automatic licences (R&D and/or commercial) and for any ‘live’ option to licence rights and the like, including any funder rights to input/sign off on future commercial agreements (e.g. commonplace for NIHR and Wellcome Trust).

If any such (option to) licence rights have been granted to third parties, ensure you understand the details and any encumbrance this may present in downstream commercialisation activities.

For funder rights, ensure you approach the consent process in sufficient time, whilst a deal is being worked up!

Has the academic(s) confirmed that they haven’t promised rights in the IP to anyone else?

Determine the nature and source of any code used in the proposed innovation software products, including:

• Any third-party code
• Any open-source software licenses
• Code already released under licence
• Incorporation of libraries or databases

If any of the above are incorporated in the innovation, what is the status of licence agreements for their use?

Where is the code stored and who has access to the code – how secure is the repository?

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