IP Transactions course: reflections on 2024 outing

Last week, at the UCL Faculty of Laws in London, IP Draughts (together with around 30 expert speakers) ran the 11th annual outing of a five-day course,  IP Transactions: Law and Practice.

This year we had 33 students; like them, IP Draughts is still processing information from the course. Here are a few of the points that stood out for him:

1. The next generation of speakers. IP Draughts counted 11 new partners, counsel and associates speaking on the course. To pick out a couple, Hayley Gow and Maria McAlister, both senior associates from Ashurst LLP, gave us an interesting talk on Tuesday, on what corporate lawyers want from their IP colleagues in M&A deals. All the new speakers did a great job in terms of lively and informative content.  If he were being picky (which he is), a minor quibble is that one or two of the week’s speakers might practise projecting their voices more across a large room.
2. A diverse group of students. This year, we had many more students from in-house roles than in previous years, and fewer students from private practice firms (perhaps because IP Draughts had neglected to remind speakers to send their juniors on the course). The students provided interesting insights on what happened in their practices, from a professional mediator to an in-house lawyer at a leading AI firm, as well as several people from universities in the UK and overseas. A part of the course that IP Draughts doesn’t always see is the opportunity for new entrants to the world of transactional IP to network with each other. It helps when the vast majority of students attend in person, rather than online.
3. New content. We were instructed and entertained by a new session on Artificial Intelligence, given by Vik Khurana, a partner at Bristows. This session formed part of the day on IT contracts (Thursday), led by the excellent double act of Sam de Silva of CMS and Toby Crick of Bristows.
4. Developments in existing law and practice. IP Draughts noted (from John Hull’s Monday talk) that there were recent, reported cases on confidentiality issues where counsel presented alternative arguments based on EU trade secrets law and English case law on confidentiality. He was also interested to hear Edmund Forey’s insights (on Wednesday) on how English competition law might diverge from EU law over time.
5. Old faithfuls. The sessions on media law, on Friday morning, are always interesting. Sam Oustayiannis has been helping to run these sessions for several years as part of John Enser’s CMS team, and this time he came back as a new partner at that firm (are these two facts connected?). Each year, it is interesting to hear how the commercial landscape for broadcasting continues to change, from terrestrial TV to new business models for subscription services. Some things remain unchanged. IP Draughts was pleased to hear John’s explanation of why saying “all rights reserved” on your copyright statements is of marginal value.

IP Draughts has left this year’s course with the impression that it is more than the sum of its parts. He and the other speakers can and do provide useful information on law and practice, and they help to facilitate workshops where the information is “contextualised” (to use a piece of jargon that he has heard many times recently). But it is the students who bring the course to life.

A big thank you from IP Draughts to all of this year’s speakers and students.

New template clinical trial agreement is a mess

On 28 March 2024, the UK National Health Service’s Health Research Authority published a draft of a new template agreement. See https://www.hra.nhs.uk/about-us/news-updates/call-for-comments-on-new-study-agreement-template/

That webpage explains the purpose of the new agreement in the following terms:

The draft Investigator Initiated Study Agreement is proposed for future use between non-commercial sponsors and commercial organisations providing support for investigator-initiated trials.

These are research studies where the research idea comes from a non-commercial sponsor but that also receive commercial support.

Although non-commercial sponsors already work with commercial companies in this way, it can take a long time to get agreement because there isn’t a standard contract available.

The Investigator Initiated Study Agreement provides a standard contract agreement template for this type of research.

Unlike many clinical trial agreements where a pharmaceutical or medical device company acts as sponsor of the trial, and commissions a hospital to test the company’s product on the hospital’s patients, in this case the hospital is both acting as sponsor and performing the trial. The company’s role may be to supply free quantities of its products for use in the trial and/or to provide financial support for the trial. But an important difference from “commercial” trials is that the company is not taking on the regulatory responsibilities of being the sponsor of the trial.

IP Draughts has helped universities and hospitals to negotiate agreements of this kind over many years, and recognises the value of having a template agreement. He suspects it will be more of a starting point for negotiations rather than a “take it or leave it” non-negotiable document, given the variety of factual situations where an agreement of this kind may be used. But he is puzzled. The website linked above talks of “non-commercial sponsors” which presumably would include universities. But the draft template agreement is clearly focused only on the situation where an NHS Trust sponsors the trial, and there are no optional clauses to make it suitable for universities. For example, a clause headed insurance states “Institution confirms that it is a member of and throughout the duration of this Study shall maintain its membership of the NHS Resolution Clinical Negligence Scheme for Trusts.” There is no alternative clause stating that the university sponsor will maintain a clinical trials insurance policy. This may reflect the fact that the template has been drafted by “the R&D Forum contracts group, who are NHS contract managers, with support from the UK Four Nations contracts leads, who are responsible for maintaining the UK model research agreements…” Perhaps in the next round of the document we will see more alternative clauses that enable it to be used with non-NHS-Trust non-commercial sponsors.

IP Draughts has read through the draft template agreement. As an exercise in drafting, it is not impressive. IP Draughts has seen many templates that have been “drafted by committee” and end up being sub-optimal. He feels strongly that where a group works on a draft agreement, there needs to be a “scribe” who can take the group’s decisions on principles and convert them into a coherent and well-thought-through text. This is an important part of developing a robust, long-term template agreement.

IP Draughts suspects this has not happened in this case. Perhaps there was no budget. To do a decent job and be involved in discussions and iterations, a specialist contract lawyer would likely charge at least £15,000 to £20,000.

For whatever reason, in places the text of this draft template agreement is unclear, inaccurate, wordy and inconsistent. This makes it less likely that a major pharmaceutical company would find the terms acceptable. IP Draughts noted too many problems to mention them all here, but here are a few:

1. Legal mistakes. Imposing obligations on someone who is not a party to the agreement, eg CI in clause 3.5, auditor in clause 6.2, or Company Indemnitee in clause 12.4. These errors could be fixed with more skillful drafting.
2. Drafting inconsistencies. Several inconsistencies between the detailed wording of the three indemnities in clause 12, which appear to be due to use of clauses from different sources (e.g reference to ex gratia payments in one of the indemnities but not the others). This is lazy and needs to be cleaned up. More importantly, it is not stated whether the caps and exclusions of liability in clause 12 apply to the indemnities.
3. Inadequate obligations, e.g. clause 10.6 states that the Company warrants that the Product will be “fit for its intended purpose”. This is fairly meaningless without further detail on what that purpose is, and is likely to be resisted by a large pharma company.
4. Confused and questionable statements, eg as to whether Company is receiving personal data when it gets pseudonymised data without the key (see differences in clause 11.13, where second sentence says no, third sentence says likely no but question of fact). Make your mind up!
5. Defined terms that are not defined (eg Location in clause 3.8.2). All capitalised terms should be checked to see if there is a definition.
6. Inconsisent usages, eg the agreement can’t decide whether to say “Institution” or “the Institution” or whether a party “shall”, “will” or “agrees to” perform obligations, or whether to say “6 months” or “six (6) months”. While these inconsistencies may not prejudice the meaning, they show a lack of care and attention to detail. They should be cleaned up.
7. US-style legalese that, in IP Draughts’ view, has no place in an English/Scots/Northern Ireland law agreement, eg “in consideration of the above premises and subject to the terms and conditions stated herein…” and “This Agreement shall inure to the benefit of and be binding upon each Party, its successors and assigns.”
8. Focusing on some legal issues but not others, e.g. clause 10.3 headed “Fair Market Value”, which reads: “Each Party acknowledges that this Agreement has been negotiated in an arm’s-length transaction and has not been determined in any manner with regard to any implicit or explicit agreement to provide favourable procurement decisions with regard to Company’s products, or to the value or volume of any business or referrals generated between the Parties.” This clause focuses on procurement policy, whereas IP Draughts would have been more concerned about fair market value in relation to compliance with subsidy control law in the grant of IP licences, which is not addressed.

All of these errors can be fixed but together they provide a case study in poor technical drafting. The draft template is out for consultation, so hopefully the drafting will be improved in a subsequent round.

Spinout company dispute

A dispute between a “big name” academic scientist and an entrepreneur over their spinout company went to arbitration.

Not recently. In the nineteenth century. It concerned the electric telegraph and Charles Wheatstone, famous as the inventor of the Wheatstone Bridge (the dispute was not about the bridge). It went to arbitration.

Fascinating stuff, described in this old blog post.

Academic inventors and investors: an eternal story

Oxford Nanoimaging – one last time!

Regular readers of this blog may recall that, earlier this year, IP Draughts organised a one-day conference at UCL on the implications of the High Court’s judgment in the case of Oxford University Innovation v Oxford Nanoimaging Limited [2022] EWHC 3200 (Pat).

A recording of the event is now publicly available on the UCL Laws website at https://www.ucl.ac.uk/laws/events/2024/feb/universities-commercialisation-implications-oxford-case

The recording covers all but one of the sessions of the conference. The second session, on whether students are consumers under UK consumer protection law, has been omitted as we didn’t get permission from all the speakers. IP Draughts would summarise the views of the panellists on that session as: the judge’s analysis of the law was correct – students are consumers of university services and therefore universities must act fairly to students. The practical implications of this point were discuss in a later session, which is part of the recording.