The importance of clear drafting in collaboration agreements

Research collaborations are set up to produce innovative results and potentially valuable intellectual property. A core part of any collaboration agreement, then, is to deal with the ownership of and usage rights for these assets. 

A recent High Court decision (Bionome Technology v Clearwater) highlights the importance of clear drafting in collaboration agreements, particularly around ownership of IP rights which might arise from the project. 

The dispute concerned ownership of patent applications relating to a method for controlling vegetation growth. These had been generated through a collaboration to develop new weedkillers between three individuals, Mr McCarthy, Dr Clearwater and Mr Tindall.

Central to the dispute was the interpretation of a Collaboration Agreement entered into in 2019 between the three participants. Unfortunately, things did not go well and relations between them broke down. However, the patent applications were filed with two of the participants named as inventors (Mr McCarthy and Dr Clearwater) and with Bionome named as the applicant. Mr McCarthy is sole shareholder and a director of Bionome.

Another company, Okipa, started proceedings before the UK IPO. Okipa claimed that it should be added as a co-applicant because the second inventor, Dr Clearwater, was in fact a co-owner of the applications and had assigned his rights to Okipa. 

The IPO Hearing Officer concluded that the patent applications were in fact jointly owned by Dr Clearwater and Mr McCarthy’s company, Bionome. Bionome appealed this decision to the High Court. 

In summary, the relevant parts of the Collaboration Agreement said: 

• once specified ‘first milestones’ had been achieved, the participants ‘will agree to proceed to a patent application’
• ‘In all respects of the project, IP is to remain under control of the [three participants], or an entity that is equally controlled between them’ (e.g. a private limited company in which they each have an equal shareholding or otherwise equally control)
• there would be an ‘Initial Timetable’ under which, amongst other things, the participants would:
  
  • focus on filing a patent application before arranging funding; and
  • register an entity jointly owned by them and take legal advice on the optimal jurisdiction and intent to transfer IP applied for to the entity as soon as possible.

Bionome argued that the Collaboration Agreement amounted to (i) an assignment of the rights in the applications to Bionome, or (ii) an unconditional agreement to assign them, in either case meaning that Bionome was the sole owner of the applications. 

Dr Clearwater argued that the Collaboration Agreement was no more than an expression of intention to assign those rights at some point in the future once certain steps had been carried out. As these steps had not taken place, the agreement to assign was never effective (and so the assignment did not take place).  

The judge agreed with the IPO Hearing Officer’s conclusion that the Collaboration Agreement only created an agreed framework for assignment of rights in the applications to take place in the future. It was not an assignment or an agreement to assign to Bionome. The judge decided that the relevant wording in the Collaboration Agreement created too much uncertainty with too many intervening future steps or pre-conditions to be satisfied before an assignment of the applications could occur. 

This short judgment succinctly highlights the importance of clear drafting in collaboration agreements, particularly the provisions around the ownership of and rights to use IP rights. This is particularly critical in the life sciences sector where IP rights are almost always a key issue between parties. 

The judge urged the parties to resolve their remaining differences outside of the courts.  Clearer drafting could have prevented the dispute arising altogether, potentially saving considerable time and money. 

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