Report highlights key factors in successful cross-border intellectual property management

US more restrictive than Canada

Canadian university researchers seeking to engage in collaborative research with their US counterparts need a far greater understanding of the rules and regulations surrounding intellectual property (IP) in the two jurisdictions to achieve successful outcomes, says a first-of-its-kind report released this month by a committee of the Canada-California Strategic Innovation Partnership (CCSIP). The 89-page report — Canada-California Cross-Border Intellectual Property Framework — compiles valuable information on the IP environment in Canada and California and includes recommendations on how best to manage IP deals.

While Canada lacks a national IP policy for university-based research, legislation in the US such as the Bayh-Dole Act and others place myriad restrictions on the IP activities of its academic researchers. Without prior knowledge of the IP landscape south of the border, the value of promising IP could be devalued or the collaboration could disintegrate altogether.

"The laws don't line up. You have to sort them out or it'll be a real dog's breakfast later on," says Dr Angus Livingston, managing director of the Univ of British Columbia's University-Industry Liaison Office and a member of the CCSIP IP and Venture Capital Working Group that authored the report. "You need clear title. We found that many people could not provide the documentary evidence. That can be a deal killer or it can reduce the value of the IP."

Livingstone cites recent changes to the IP policy of the Natural Sciences and Engineering Council to allow for the assigning of IP ownership to companies as the kind of latitude that's not possible in the US. Under Bayh-Dole, there are limitations on the mechanisms by which universities can commercialize technologies. US universities cannot assign ownership of inventions to third parties and insist that any joint IP managed by a Canadian entity must adhere to the terms of the act. Many large corporations find Bayh-Dole's restrictions so onerous that they often prefer to conduct collaborative R&D in other nations such as Canada.

"The US environment is more restrictive while we have more freedom to structure our own IP policies," says Livingstone. "Some major multinationals are not doing as much business at US universities. They prefer other jurisdictions."

"Failure to maintain the appropriate IP management practices can make the successful commercialization of those few commercially viable technologies significantly more difficult by adding to the uncertainty and, therefore, risks inherent in the commercialization of such technology. The consequence of limited, or absence of, IP management practices as described in this report may only show up years later when IPDD (IP due diligence) is underway and, unfortunately, at that time, the problems may no longer be addressable or rectifiable." — CCSIP Report on Cross Border IP Management

The report describes the environment for collaboration research, outlines the jurisdictional differences specific to California and concludes by offering good IP management practices. That includes a recommendation for each institution to create an IP Due Diligence Binder which can be referred to by researchers and research managers when preparing for due diligence reviews by potential investors.

"As compared to the situation in the U.S., the federal government of Canada provides comparatively little direct oversight on technology transfer activities. Canada does not have a legislative equivalent to the Bayh-Dole Act and the lack of a nation-wide policy with respect to technology transfer practices has led to the development of an assortment of IP policies and practices across the spectrum of Canadian research institutions." — CCSIP Report on Cross Border IP Management

The report includes a checklist of terms which should be included in any compliant cross border agreement, such as:

* A term that compels researchers to assign the rights to any IP generated to their home institution/employer.

* A term to require collaborating parties to notify all parties when IP is developed.

* A term that provides for academic collaborators to use IP for academic and research purposes.

* Do not provide for assignment of IP developed during the course of the research, unless expressly permitted by any relevant entity.

* Do not restrict publication rights beyond the provision of a short delay to allow for review of pending publications to remove confidential information or to allow for patenting.

* Language that requires the consent of all co-owners to commercialize technologies.

* Recognize that technologies developed using US federal funding will require licensees to substantially manufacture technology in the US, preferential licensing to small entities (<500 employees), and maintenance of March-in Rights by the federal government.

* Recognize that "benefit to Canada" may need to be considered when commercializing technology developed using funds from Canadian sources.

Perhaps most importantly for end users, the report's contents are available on the CCSIP Wiki site with the expectation that it will become a living, ever-evolving document.

"We're very pleased with the Wiki format. It allows people to read the material including supporting documents, make comments and in some circumstances have editing privileges," says Livingstone. "They become living documents and the search function is excellent."

The writing of the report was completed 18 months ago and updated this summer to include pending changes to the US Patent Act which are now before the president.

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