On this page are some illustrative examples of how background and project IP might be managed in a collaboration.  These are presented through different scenarios, depending on which party brings background IP to the project:

  • The Researcher brings background IP
  • The Business brings background IP
  • Both partners bring background IP
  • Neither partner brings any background IP

     

    The Researcher brings background IP

    A researcher develops a new technology but does not have the commercial expertise to bring it to market. The researcher owns a patent over the technology and engages with an industry partner to commercialise it. This scenario is solely focused on commercialisation of the existing IP and does not involve further research and development of the technology.

    There are several ways in which the researcher can share their background IP with their business partner to enable its commercialisation:

    Example 1: IP is sold to the business partner

    The researcher sells the patent to the industry partner to commercialise it with little or no involvement from the researcher. Depending on the terms of the sale, a contract may be agreed which provides, for example:

    • A percentage of future profits go to the researcher
    • The researcher receives a licence to continue their research on the technology in ways that might otherwise infringe a patent over the technology
    • If the industry partner has not commenced commercialising the IP within a certain period, the research partner can request a licence to commercialise the IP or will be given first option to purchase the IP.

    Example 2: IP is licensed to the business partner

    The researcher retains ownership of the patent but gives the industry partner a licence to use the IP for commercialisation activities.  The researcher and industry partner work together to refine the technology as needed in order to bring it to market.  However, the researcher retains ultimate control over the IP and the industry partner’s rights in relation to the IP would only extend as far as the terms of their licence allow.  Future profits would be divided between the parties on agreed terms.

    Example 3: The business partner is made a joint owner of the IP

    Before considering joint ownership of IP, it is highly recommended to seek legal advice.  In this example, the researcher makes the industry partner a joint owner of the patent and they work together to commercialise the technology.  Unless a contract stipulates otherwise, both parties would control the IP and jointly determine future directions in its development. Both parties would also have rights to future earnings from the IP.  

     

    The Business brings background IP

    The industry partner owns some background IP that it wishes to develop further before progressing with commercialisation. They partner with a research organisation to undertake further research and development.

    There are several ways in which the background IP and ownership of the new project IP can be managed.

    Example 1: Industry owns the project IP but research partner can use background and project IP

    The industry partner retains full ownership of the background IP and the parties agree that the industry partner will also own any new IP that is developed during the collaboration (the project IP).  The industry partner would be responsible for applying for and enforcing any IP rights that it might be eligible for.  Future commercialisation of the project IP would be carried out by the industry partner.

    The collaboration contract should clearly enable the research partner to use the background IP in the collaboration project.  The research partner may wish to seek a licence to continue working with the project IP for research purposes that might otherwise infringe a patent over the technology.

    Example 2: Industry and research jointly own project IP

    Before considering joint ownership of IP, it is highly recommended to seek legal advice.  In this example, the industry partner retains full ownership of the existing IP but the parties will jointly own any new IP that comes from the collaboration project.  Responsibility for securing and enforcing any IP rights would be shared and arrangements for future commercialisation of the technology would be jointly agreed upon.

     

    Both partners bring background IP

    Each party owns background IP that will be used in the collaboration project. The project is intended to lead to the development of an improvement in the existing technology or an entirely new technology.

    There are several ways in which the background IP and ownership of the new project IP can be managed.

    Example 1: Project IP is jointly owned

    Before considering joint ownership of IP, it is highly recommended to seek legal advice.  In this example, both parties retain ownership of their background IP and they exchange licences to use each other’s IP.  The project IP that is developed is jointly owned and commercialising activities are undertaken together. Both parties will seek legal advice before deciding to become joint owners of any project IP.

    Example 2: Industry owns the project IP but research partner can continue to use it

    Both parties retain ownership of their background IP and they exchange licences to use each other’s IP.  They agree that the industry partner is best placed to commercialise the project IP and will therefore own the project IP.  A contract may be agreed which provides, for example:

    • A percentage of future profits go to the researcher
    • The researcher receives a licence to continue their research on the project IP in ways that might otherwise infringe a patent over the technology
    • If the industry partner has not commenced commercialising the IP within a certain period, the research partner can request a licence to commercialise the IP or will be given first option to purchase the IP.

    Example 3: Project IP is sold or licensed to a third party to commercialise it

    Both parties retain ownership of their background IP and they exchange licences to use each other’s IP.  Following the development of the project IP they agree that neither party is well-placed to commercialise the technology and decide to sell or license the IP to a third party to commercialise it.

     

    Neither partner brings any background IP

    The industry partner identifies a problem in its sector that is not being addressed by any existing technology.  It approaches a research organisation to undertake some research and development in the relevant field and some new IP is generated.

    There are several ways in which the new project IP can be managed.

    Example 1: Project IP is jointly owned

    Before considering joint ownership of IP, it is highly recommended to seek legal advice.  In this example, both parties will jointly own the project IP.  Consideration should be given to the size of each party’s share of the IP rights.  For example, if the financial contribution of the parties to the project is shared 60/40 then the share of rights to the project IP could be in the same proportions.  However, contributions may not only be financial. Either party may also be contributing resources such as infrastructure, equipment or staff and these could also be factored into the assessment.  Both parties will seek legal advice before deciding to become joint owners of any project IP.

    Example 2: Industry owns the project IP but research partner can continue to use it

    The parties agree upfront that any project IP will be owned by the industry partner.  A contract may be agreed which provides, for example:

    • A percentage of future profits go to the researcher
    • The researcher receives a licence to continue their research on the project IP in ways that might otherwise infringe a patent over the technology
    • If the industry partner has not commenced commercialising the IP within a certain period, the research partner can request a licence to progress commercialisation itself or with another partner.