Looking after your IP in collaborative projects - Business Works

Looking after your IP in collaborative projects

Robin Webb, Innovation Director of the UK-IPO

Intellectual Property is the oil that keeps the wheels of innovation turning, says Robin Webb Director of Innovation, UK Intellectual Property Office.

Innovation is changing. The days of the R&D lab producing a stream of ideas ready for market are passing. Even in the largest organisations, the process of creating and distributing new products and services is becoming too complex to carry out in isolation.

Knowledge is now so freely available and competition is so intense that it is no longer realistic to expect to exercise full control over generating ideas and taking them to market. Instead, innovation now runs on an open model and knowledge is being externally sourced from many different disciplines.

Exchanging knowledge

« by pooling knowledge and sharing ideas, better quality products can be introduced more quickly »

By pooling knowledge and sharing ideas, better quality products can be introduced more quickly. Using Intellectual Property (IP) as a medium of exchange, it is more efficient to buy in ideas from outside and release the ones that do not work, rather than hoarding them in the hope that they will one day see a return. And it is not just technologists and researchers who have the power to put you ahead of the competition, but customers, suppliers and employees as well.

The challenge is to use IP as a medium to bring together all this know-how in a way that you are free to exploit. The difficulty is that IP is essentially a restriction on everyone else or a ‘keep off the grass’ sign. So life can quickly become messy when two organisations combine their joint knowledge and experience, particularly if their partnership is more successful than expected.


UK-IPO offices

Unless you put in place an agreement, both partners will have independent rights to use an idea, but will not be able to sell it unless the other one agrees. If the relationship turns sour, then everything can become highly damaging and expensive.

It is better to be clear from the start about who has the right to market an idea, who has the right to use it as a basis for further development and who is responsible for taking action against any infringements. For simplicity’s sake, it might be best to set up a separate company.

Once the product is launched, you will want to encourage an informal flow of comments about how to improve it. But if a customer or a supplier puts forward a suggestion for an add-on, how do you manage the IP? Do you take a chance and steam ahead? Or do you put in place a simple agreement giving them a cut of the revenue, but assigning the rights to you?

IP management

For open innovation to work, IP is having to move beyond its traditional role as a legal safeguard against the use of ideas by third parties. It becoming a live asset that can be bought, sold, shared and sub-divided, creating the liquidity for a more efficient market in ideas. For smaller companies, who actively manage their IP, it can mean developing products for less initial outlay, giving them the chance to compete with much larger organisations.

Innovation works best when resources can be combined, but the IP can be complicated. So, use model agreements and standard principles where you can.

« small enterprises are becoming partners of choice »

In the search for fresh insights and new angles, smaller enterprises are becoming partners of choice. Even the largest organisations are actively looking to recruit them for their innovation projects.

Because knowledge is so widely dispersed and markets move so fast, nobody, whatever their size, can afford to operate alone in devising solutions. It is better to pool your ideas and co-operate in networks of value.

For corporations and universities, it means access to original thinking, streamlined research and faster returns. For enterprises, it offers a speedy route to global scale for relatively little capital outlay.

The difficulty lies in how you organise the intellectual property. Starting from first principles, a consortium agreement can take a year to construct, then fail.

For enterprises, the fear is that they will lose their crown jewels by injecting their intellectual property into a project. For a corporation, ownership of the IP is usually secondary. What matters is having access to the market.

Model agreements

« a series of model agreements has been developed »

To ease the difficulties in reaching agreement about the form that the IP will take in a research project, a series of model agreements has been developed by the UK Intellectual Property Office (UK-IPO) for use in collaborations between companies and universities. Under the direction of Richard Lambert, former editor of the FT and now Director General of the CBI, these were launched in 2005.

To speed up negotiations and cut down transaction costs, there is a decision guide that allows each party to clarify its own reason for participating in a project. Five model agreements are then available for download, covering speculative lines of inquiry at the initial level, through to a full-blown deal for contract research. Other standard guides are available on consultancy terms and non-disclosure agreements.

None of these models is likely to be a perfect fit for any particular set of commercial circumstances, but they will give the parties a basis on which to negotiate, allowing them to concentrate on the main sticking points. Agreements, which might once have taken months to finalise, are now being put together in days.

Standard principles

The UK-IPO’s model agreements are designed for use by two parties. But the reasoning behind them is now being extended to a new breed of major research programmes. Organised as public- private partnerships, they are actively seeking to develop terms on which to engage smaller enterprises.

In the UK, the Energy Technologies Institute has £500m in public funding over ten years, which will be matched by the energy industry, with the aim of finding solutions to climate change. All projects will be run with reference to a standard set of IP principles.

Similarly, the EU is launching a series of joint technology initiatives in specialist areas, such as innovative medicines and clean skies. Again, each will develop a clear set of principles which can be used in drafting the clauses of a consortium agreement.


The involvement of smaller enterprises is central to the EU’s overarching research programme, Framework 7, which will be distributing 54bn Euro over the next seven years. The goal is to direct 15 per cent to smaller enterprises. To improve the prospects for collaborative research, a European IP Charter was adopted in July; it is a voluntary instrument designed to give equal protection to the interests of public institutions, industry and enterprises.

‘SMEs worry about the compensation for bringing forward their ideas and ownership of the foreground IP,’ says Jim Houlihan, Head of Innovation Policy at the UK-IPO. ‘We are creating the principles that allow them to achieve those objectives.’

When companies work together in open networks of innovation, they rely on cross-licensing their ideas. However, the rate of attrition on these agreements is often high.

A recent review by the UK-IPO concluded that creating a set of model agreements would be unlikely to work. There are just too many commercial scenarios to cover.

However, a guidance toolkit is being developed for launch at the end of 2008. “The aim,” says the UK-IPO’s Houlihan, “will be to put people in good shape to do a deal.”

Need to know more about protecting your ideas?

Contact the UK-IPO central Enquiry Unit on 08459 500505
e-mail: enquiries@ipo.gov.uk
web: www.ipo.gov.uk.

For further details on the model agreements for collaboration between business and universities visit: www.innovation.gov.uk/lambertagreements/index.asp

The UK-IPO is the official government body responsible for the establishment and maintenance of the national framework of intellectual property rights. These IP rights include Patents, Trade marks, Designs and Copyright. We are also responsible for raising awareness of IP across the UK to business and education audiences.

The UK Intellectual Property Office is an Executive Agency of the Department of Innovation, Universities and Skills (DIUS).

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