IP Toolkit

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Intellectual Property (IP) Agreements

Overview

The goal of protection of the intellectual property of the partners is handled through collaborative research and development agreements and/or separate intellectual property (IP) agreements. Such IP agreements define both background IP and IP anticipated to be developed through the project activities.

Component Checklist

Parties to the agreement

The legal names of all parties to the agreement are specified, with identifying terms that will be used throughout the document. (e.g., X College of Applied Arts and Technology, hereinafter called the “College”). Addresses may also be included.

Intention clauses

Optional, and normally beginning with “Whereas” followed by the intentions of the parties, these clauses specify relationships and the intent to protect the intellectual property of the partners.

Definitions

The term “intellectual property” should be defined. The Canadian Intellectual Property Office (CIPO) defines intellectual property as the “legal rights that result from intellectual activity in the industrial, scientific, literary and artistic fields”.

Intellectual property assets (IP assets) are: Those intangible assets that may be protected by formal legislation (e.g. patents, trade-marks, industrial designs, copyrights, integrated circuit topographies, plant breeders’ rights) or that are provided national and international value (e.g. know-how, trade-secrets). If appropriate to the project, specific types of IP may be identified, such as “software”, “industrial design” or others relevant to the specific nature of the expected IP resulting from the project activities.

Background IP

Any IP that is brought to the project should be identified and the prior ownership of that IP acknowledged. Background IP may be brought by two or more parties to the agreement. The IP agreement is concerned only with the ownership and right to exploit the IP in the outputs or results of the Project; the ownership and exploitation of other intellectual property rights are not affected.

Freedom to Operate

It is important that the parties have the right to use any background IP in the Project. The parties should acknowledge that the IP to be used is free from all charges and encumbrances (such as a mortgage) and rights of third parties (except those that it doesn’t know about, or could not be expected to know about).

The Project

The official title of the project as it appears in other documents is specified. The project identifies the scope of the intellectual property agreement. Background to the project may be included, such as the nature of the project, its funder (if appropriate), principles under which it is conducted, and others.

Factors influencing exploitation rights

The decision as to which party owns the IP resulting from the project and/or has the right to exploit them will depend on a number of factors including: the parties’ respective contributions in terms of intellectual effort, background, money, materials, facilities and human resources, their ability to exploit the results, any conditions imposed in relation to any external funding, and a company’s need to claim R&D tax credits (for which the IP in the results needs to vest in the company, either alone or with another person) and a company’s need to own assets against which it may be able to raise investment.

IP terms and conditions

Terms and conditions may include:

  • Disclosure of IP resulting from the project’s activities. How IP should be disclosed to the parties should be identified. A separate disclosure agreement or an invention disclosure form may be used.
  • Evaluation of IP resulting from the project’s activities. It may be appropriate to identify another party that will evaluate the value of any IP resulting from the project.
  • Ownership of IP resulting from the project’s activities. Colleges and institutes normally assign ownership to the industry partner, although there are examples of shared ownership.
  • Assignment of IP. It should be clear as to how the IP will be assigned to the respective party. It may be part of the overall IP agreement, an Invention Disclosure agreement, or there may be a separate IP Assignment form if the IP cannot reasonably be anticipated in advance.
  • IP not disclosed in the project deliverables. There may be situations when IP cannot reasonably be anticipated and may not be disclosed during the project. A clause that specifies what happens to that IP may be considered.
  • The return to the College/Institute. When the College/Institute has an ownership stake in the IP and either assigns or licenses the IP to the industry partner, there should be a fair return to the College/Institute. This return may have various forms – at a minimum a non-exclusive right to use the research results for educational purposes. Revenue-sharing clauses may also be included.
  • Re-assignment of IP/time limited license. The College/Institute may wish to include a clause that re-assigns rights to the College/Institute if the industry partner is not exploiting the IP. Another approach is to time limit the rights of the partner where the partner is to exploit the IP, allowing it exclusivity for a number of years, and at the end of that period, the College/Institute and the industry partner both having non-exclusive rights to exploit the IP.
  • Subcontractors and students. Where any student or sub-contractor works on the project, the College/Institute or the party engaging the sub-contractor should ensure that it has acquired any rights in the IP that the student or sub-contractor acquires by virtue of his/her involvement in the project.
  • See the following reference for additional details.
  • Disclosure of project results. How the overall project results or deliverables are disclosed or used may impact on the protection and use of IP resulting from the project, and should be included in the IP agreement.
  • Limits of liability/warranty and/or indemnification clause.
  • Governing law, normally of the province/territory and of Canada.
  • Other as mutually agreed upon.

Relationship of IP agreement to other agreements between the parties

If the parties to this agreement have a previous relationship and have signed previous agreements (either IP agreements or others), it may be wise to indicate that the current IP agreement supersedes any prior agreements.

Amendments

Some agreements specify if and how amendments to the IP agreement are to be made.

Term of agreement and effective date

The length of time the agreement is in operation is specified, along with the date upon which it becomes effective (usually date of signing).

Designated Representatives/Contact Persons

Authorized representatives for information and notices should be identified, along with contact information, including full mailing addresses, phone and e-mail.

Signature Block

Official signatories may be senior administrators, company executives, or others who may sign on behalf of the organization. Full name and position should be stated.