We rejoin the fictional CompanieBee at its usual locale in the incubator. . . . The usual morning’s think session had reconvened to an afternoon gathering to review the latest draft of CompanieBee’s first patent application.  It seemed a lot different from the research papers that Vijay and Elle had written at the university. Truthfully, it was rather dull and seemed very repetitive. But Jan assured them that it looked very similar to those she’d been involved with at his previous company.

Vijay seemed a bit miffed. Only Elle and Jan were listed as inventors on the front page of the application.  As Elle’s PhD advisor, Vijay had been listed as the senior author on all of her publications as well as every other article that his students and postdocs had written.

CompanieBee’s IP attorney Daniella had walked Vijay through the rationale this morning, but he still hadn’t accepted her reasoning.  “Look” she explained, “inventorship is determined by who contributed to the claims listed at the end of the patent.  With the claims here, they all relate to the assay steps that Elle designed.  Jan is included because for the last 2 claims listed, she came up with the additional step that was added the Elle’s original method.” Vijay had argued back, “but the idea to get into this area, to do an assay for our drug was mine.” But this point had not swayed Daniella. She had explained that because he had not contributed to the concept of the actual assay, just the abstract idea of having any assay at all, this was not enough.

Now Jan and Elle were trying to reassure Vijay that it just didn’t matter.  The patent belonged to CompanieBee, and that was all of them.  They assured him that there would certainly be other patents, and in some of those likely Jan or Elle would not be listed inventors, whereas Vijay would be listed.  In that case, Vijay declared, he would begin working on their second application.  This would be for the new formulation of BXC that he had been working on at the University and brought with him to the new start up.  Last week he had tested the new formulation in cell culture and seen a ten-fold improvement in uptake as well as target efficacy.  It also passed with flying colors through the first round of lab tests for toxicology.

When Daniella came by a few weeks later to join another of their morning think sessions, Vijay had his outline of the new application ready.  He wanted her to get right on to drafting and filing the application. She was encouraging, but she also had a number of questions for him.

How many different formulations had he tried?
Were there other variations that would work, even if the level of improvement, wasn’t quite as high?
Was his formulation or something like it already in use with other drugs or published in the literature?
Was there anything unexpected about the way in which the formulation worked or the level of efficacy observed compared to other formulations?

These questions seemed relatively straightforward and he and the others could answer them right away based on their familiarity with the field and the scientific literature.  Daniella also agreed to do her own searching in the patent literature to see what she could find, and might hire an outside searching firm to do a more thorough search.  Although this would be an upfront cost, she explained how it could save them time and money in the long run by honing in their application on aspects that were not already known.  It would also help them analyze other companies that might be out there working in overlapping areas.

Then Daniella moved onto a topic that stumped Vijay and Elle.  She asked them about their obligations to the university in assigning inventions they had worked on while there.  Neither had any idea.  As a grad student, Elle couldn’t remember signing anything to do with employment.  Vijay was sure he had an employment agreement, but would have to dig it out from files at home. He couldn’t remember reading it or what provisions it had.

“Why does this matter?” Elle asked.  Daniella explained that because the research on the drug and its formulation had started in the lab at the university, this could impact who had ownership rights to the inventions. It could be the university, CompanieBee or the two as joint owners.  “How come we as individuals aren’t the owners?” Elle inquired.  “That would be the default” Daniella explained “if you didn’t have any agreements with the university or the company. But remember when you were first setting up CompanieBee and my partner put together the employment agreements? These included provisions whereby you agreed that all your inventions here would be assigned to the company. The only thing that wouldn’t be assigned automatically, would be inventions you made before becoming part of CompanieBee.”

Jan wanted to know what the implications would be if CompanieBee and the university had joint ownership.  Daniella explained that joint ownership of patents can impact issues like enforcement and licensing, and can depend on the countries in which the patents were granted.  In the US, joint owners of a patent can grant licenses independently.  This could mean that the university could license the invention to a competitor of CompanieBee without the company’s input and CompanieBee would have no right of veto over such a decision.  Joint ownership would also mean that when the time came to enforce the patent against an infringer, the university and company would need to work together to bring the infringement lawsuit. It would be much simpler, she explained, if the inventions were cleanly owned solely by CompanieBee.

Food for thought:

What options does CompanieBee have if Vijay’s or Elle’s previous agreement required them to assign their inventions to the university?

Will the university continue to have ownership rights as CompanieBee develops improvements and directions based on the original research?