Avoid the perils of business collaborations
by Intellectual Property Attorney Bill Honaker, the IP Guy
Moderna and the National Institute of Health (NIH) are in a legal tug of war. NIH claims Moderna failed to add three of its scientists to Moderna’s principal COVID-19 vaccine patent application. If NIH is correct, they would co-own any issued patents on a very valuable technology. Moderna’s 2021 vaccine sales are forecasted to be $18 billion. If correct, NIH would own an equal undivided interest in the patent, meaning they can do what they want with it.
Devastating Consequences for failing to name inventors.
This can have a devastating effect on the patent’s value. Recently, Ono Pharmaceutical Company learned the hard way that collaborations can be costly. They collaborated with Dana-Farber employees Freeman and Wood on a cancer treatment. One of the inventors, Tasuku Honjo was awarded the Nobel Prize for the invention. Eight patents were issued to Ono, but none named Freeman and Wood. A lawsuit followed, and the court determined that they should have been named. Dana-Farber is now the co-owner of all eight patents, and is actively licensing the technology, competing with Ono. Yeah, I’ll say it. Oh No!
You can read more about these devastating consequences in another article here. It’s not easy to decide who should be named as inventors. To help, I’ve written a guide to make these decisions easier. You can get that guide here.
Red flags should wave when working with non-employees.
Collaboration between businesses in developing products is common. Each needs the expertise of the other. But if they don’t have an agreement defining who has what rights, there can be unwanted surprises.
Collaboration issues can also be hidden. When seeking the help of an independent contractor, it’s a collaboration, and it doesn’t have to be a product; it could be artwork, pictures, or content. The best practice is to have a written agreement with any non-employee. This agreement needs to define who owns any patents, copyrights, or trade secrets, and what can be done with them.
Unfortunately, a spokeswoman said that none of the agency’s collaboration agreements with Moderna, “include language controlling the licensing of inventions that might result from that work.” New York Times, Nov. 9, 2021 If there had been, there wouldn’t be a tug of war.
If you’re working with non-employees, you need an agreement that clearly defines who can do what and who owns the results.
About the Author:
Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, Invisible Assets – How to Maximize the Hidden Value in Your Business. To download a sample chapter, click here.