Strong patent protection is essential for a start-up biotechnology company and can be a valuable company asset. However, it is also expensive, with costs ranging from tens to hundreds of thousands of dollars over time. This session will focus on how to get the most out of your patent dollars. This session presentation is available in audio format here: http://www.marsdd.com/bioent/dec4

1. MaRS Event Series,
BioEntrepreneurship-Intellectual
Property Strategy
Ownership and Inventorship Issues
•Anita Nador, Partner, McCarthy Tétrault LLP
(anador@mccarthy.ca)
•December 4, 2006

2. What Will We Cover?
1. Intellectual Property (IP)
Ownership
2. Inventorship (Patents)
3. Best Practices

3. Intellectual Property
• Patents
• Trade-Secrets/Know-how
• Copyright (incl. moral rights waiver)
• Trade-marks (incl. good will)
• Others

4. Why Is Ownership Important?
• Want to make sure you have an
asset that you can:
• Use
• Sell
• License
• Enforce against third parties
• Otherwise extract value from (e.g.
attract investors)

5. Why is it Important?
! Ownership or license right is fundamental to
any IP Agreement or financing.
! Minimal IP due diligence is to verify
ownership/license rights.

6. How Do You Gain The Right To IP?
! You created it (e.g., for patents - inventor or
employer engaging other!s to create).
! An assignment gives you all of the legal title
and right and interest in the IP.
! In a license, the IP owner retains the legal
title, but leases all or part of the intellectual
property right to you.

7. Creation - Inventorship
• For Patents, inventor is first owner
unless there is an agreement or
relationship to indicate otherwise.
• Inventions developed “during the
course of employment” are generally
considered to be owned by the
employer.

8. Inventorship
• In the steps leading from conception to
patentability, the inventor(s) may utilize
the services of others, who may be highly
skilled, but those others will not be
co!inventors unless they participated in
the inventive concept as opposed to its
verification.
• Apotex Inc. v. Wellcome Foundation Ltd.,
[2002] 4 S.C.R. 153

9. IP Inventorship/Ownership
Inventorship is distinct from ownership.
!
Inventorship is distinct from authorship.
!
Inventorship not determined by contract. It is
!
governed by patent law of each jurisdiction.
Ownership can be determined by contract.
!

10. Beware of Joint/Co-Ownership Provisions
Canada United States
Can dilute “quid “of other co-
Cannot dilute “quid” of !
!
owner.
other co-owner.
Each co-owner can license
Each co-owner can work the !
!
right or assign to more than
invention themselves and
one assignee without
can assign their entire right
consent of other co-owner
to one other but cannot
or accounting to other co-
license right or assign to owner.
more than one assignee
Absent agreement to
!
without consent of other co- contrary, all co-owners must
owner or accounting to be party (plaintiff) to
other co-owner. infringement suit
Ethicon Inc. v. United States
!
Surgical Corporation 135 F.
Forget v. Specialty Tools of
!
3d 1456 (Fed. Cir. 1998) 35
Canada Inc. (1992), 48
USC 262.
C.P.R.(3d) 323, aff’d(1995), 62
C.P.R. (3d) 537 (B.C.C.A.)

11. IP Due Diligence - Ownership
• Identify all parties involved with or
having access to business/IP
development.
• Make sure you have agreements and
procedures in place outlining their
obligations to you.
• EE, Confidentiality, Collaboration,
Assignment, License Agreements.

12. Academic Lab
Funding Source
Students/Post-Docs
3rd Party Academic Lab
Technicians
Collaborators (PI)
University Collaborations
University Policies

13. Company
Funding Source (Co.)
(i) Consultants
(ii) 3rd Party
Funding Source
Company Collaborations
(3rd Party)
(iii) Suppliers
(iv) Distributors
EEs

14. IP Due Diligence - Ownership
Check Title and Prior/Future Obligations and
!
Encumbrances:
quot; Assignments/Title on record in patent
offices
quot; Employee/contactor agreements
quot; Funding Sources
quot; Collaborations/licenses
quot; Encumbrances: Liens/Securities
quot; Ongoing IP Practices (CDAs, Invention
Disclosures, Security Procedures)

15. Major Points That Will Be Considered When
Reviewing Agreements
# Field & Scope
$
(Ownership/License/CDA)
2. Termination provisions:
Termination triggers (licenses,
CDAs)
Contract termination procedures
and survival clauses (EE, CDAs,
licenses)

16. 1. Field & Scope
Sole
!
Exclusive
!
Non-Exclusive
!
Territory
!
Subject Matter
!

17. 2. Termination
Triggers
!
Representations and warranties
!
Deliverables / milestones
!
Bankruptcy
!
Events upon termination
!

18. 2. Termination
Events Upon Termination
! Return of all IP rights
! Return of all material / confidential information
! Cease and desist activities
! Final reports, payments, other deliverables
! Survival provisions (e.g. confidentiality)

19. Components of IP Provisions of EE
Agreements
• Grant Clause
• Consideration
• May have description of Employment.
• Confidentiality Clause
• Representation that EE not using prior
employers IP or other IP in contravention
of ongoing prior obligation.
• Termination and Survival Clauses:
Ongoing obligation regarding
Confidentiality and Not Use Your IP for
benefit of future ERs without consent.

20. Confidentiality Agreements
• Definition of Confidential Information
• Duty to maintain information in
confidence
• Limited generally accepted
exclusions
• Optional publication clause (if
dealing with academic institution,
likely required. For company EEs, do
not provide publication clause).

21. Best Practices
• Implementation of Internal IP
Management Systems
• Inventory of IP Assets (current and potential
future IP)
• Adoption of internal IP practices to identify
and maintain control over IP:
• Security Procedures
• Confidentiality
• Assignments/Licenses

22. Best Practices
• Inventory and monitoring of 3rd parties
Company/Academic Lab is involved
with:
• Education
• Communication
• Compliance
• Internal Database:
• Diarize action point due dates
• Sort by type of agreements/parties
• Contact people (internal/external)

23. THANK YOU!