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Stanford Loses Patent battle Because Researcher Signed Visitor’s Confidentiality Agreement When Visiting a Private Lab

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Universities need to be very careful about what agreements they have researchers sign, and especially vigilant with respect to consulting agreements signed in the course of joint ventures between the university and industry.

In Stanford v. Roche, both parties claimed ownership of the IP in the research and technology related to a procedure for calculating the amount of HIV in a patient’s blood. This technique allowed doctors to determine whether a patient was benefiting from HIV therapy. Roche commercialized the technique in HIV kits, which are used in hospitals and AIDS clinics worldwide. The dispute came about because the Stanford researcher signed a Copyright and Patent Agreement (CPA) when he began his employment with Stanford, assigning all his IP rights resulting from his employment, to the university. Stanford entered into a consulting relationship with the private lab that originally developed the technology, to improve the methods for quantifying the HIV in a patient’s blood. When the researcher visited the facilities of the private lab, he signed another agreement, unaware that it conflicted with the earlier agreement he had signed with the university.

This ‘Visitor’s Confidentiality Agreement (VCA)’ assigned to the lab all future IP developed as a consequence of his access to the lab. Roche subsequently acquired the ownership of all the lab’s IP. The university was unaware of this agreement. When the process was commercialized by Roche, Stanford University sued for breach of patent rights.

In the end, Roche won, as confirmed by the Supreme Court of the United States.

Read the article here.

Take away:

  • Consultants must take care that they do not sign conflicting IP Transfer agreements.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Third Party Experts Should Enter Into Consulting Agreements Which Include Robust Confidentiality and IP Transfer Provisions

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This article notes that people “in the renewable energy and clean technology fields regularly need to speak with others outside their company for solutions to ongoing research and development problems.” The problem is how to protect confidentiality and company IP when engaging in such discussions. The solution lies in entering into a consulting agreement with all third parties that includes clear provisions on confidentiality and ownership of resultant IP rights. It is especially important that the innovator company own all IP in anything which results from the consultation, since that is why they are paying to consult with the third party.

Situations which give rise to these problems include speaking with academics; outside experts, technical consultants and engineering firms; equipment builders, vendors and subcontractors. The consulting agreements should be tailored to each type of consultant and the types of IP likely to be generated by each consulting relationship.

Read the article here.

Take away:

  • Innovators should not seek third party advice without having the third party enter into a consulting agreement. The agreement should deal with confidentiality, non-competition and IP issues.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Unless the Consulting Agreement Contains an IP Transfer Provision, the Consultant Will Own All IP Developed During the Term of the Agreement

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Two companies claimed to own patents and other rights in systems and devices for testing blood samples. The two companies competed directly with each other. Their claims stemmed from the actions of one employee (later a consultant). This employee had worked for company ‘A’ for 15 years. He then resigned and entered into an 18-month consulting agreement with the company. The consulting agreement continued several of the restrictive covenants of the employment contract, including confidentiality, non-solicitation and non-competition obligations. The non-competition covenants were to expire 18 months after the execution of the consulting agreement, which expired at the same time. Unlike the employment contract,the consulting agreement did not include any assignment of patents or ownership rights in IP developed during the term of the consulting agreement. A few months after the consulting agreement expired, the consultant filed patent claims, which he subsequently assigned to a company later acquired by company ‘B’, the other party to the lawsuit.

The court held that the consultant retained ownership in the IP developed over the time of his consulting services with the company, because he had not assigned it to them under the consulting agreement.

Since the employment contract had expired, and the nature of the relationship between the parties had changed, the court declined to ‘read the employment contract terms into’ the consulting agreement.

Read the article here.

Take away:

  • When employees resign and enter into consulting agreements, it is important to ensure that all restrictive covenants continue in effect, and that the consulting agreement contain an IP transfer agreement similar to the one contained in the employment agreement.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Additional Rent Announcements API Approval of Terms Asset Purchase Agreement Background Intellectual Property Board of Directors Business Case Law CASL Clausehound Collaboration Commercial Lease Confidential Information Confidentiality Consulting Agreement Contract Drafting Contract Negotiations Corporation Costs and Expenses CPD Definition of Intellectual Property Dispute Resolution Distribution Agreement Employee Employment Employment Agreement ESOP Events Farming Law Generally Used Clauses Grant of Licence Handling of Confidential Information Indemnity Independent Contractor Independent Legal Advice Informal Discussions Intellectual Property Intellectual Property Transfer Investor Journey Licence Restrictions Limitation of Liability Long Form Marriage Contract Master Services Agreement NDA Non-competition Not for Profit Articles of Incorporation Notice of Arbitration No Waiver Obligations Ownership of Intellectual Property Ownership of Work Product Parties Partnership Privacy Policy Product Sales Agreement Purpose Representations and Warranties Restrictive Covenants Safeguarding Requirements Settlement Agreement Shareholder Agreement Software Development Start-up Subscription Agreement Technology Termination Term Sheet Terms of Use Trademark Registration Transfer of Intellectual Property Waivers and Releases Website Terms of Use
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