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Intellectual Property &the Academic Community

NAPAGNATIONAL ACADEMIES

POLICY ADVISORY GROUP

THE BRITISH ACADEMY

THE CONFERENCE OF MEDICAL ROYAL COLLEGES

THE BRITISH ACADEMY OF ENGINEERING

THE ROYAL SOCIETY

INTELLECTUAL PROPERTY ANDTHE ACADEMIC COMMUNITY

MARCH 1995

ISBN 0 85403 496 X

© NAPAGCopies of this report may be obtained from:The Royal Society6 Carlton House TerraceLondon SW1Y 5AG

£19.90

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FOREWORD

In 1983 in her foreword to Intellectual Property Rights and Innovation – the Nicholsonreport – the Prime Minister Margaret Thatcher stated:

‘individuals generating new ideas, whether in universities, companies, Governmentresearch establishments, or even in schools, should take very seriously indeed the protec-tion of those ideas’.

This philosophy has been promoted vigorously since that report and there is now a greaterawareness of the value of ideas. However, which ideas should be protected and when? Whoshould exploit them and how? Who should profit? These questions have become increasinglydifficult to answer. There is inevitably a potential conflict between the openness of scientificresearch and the competitiveness of the commercial world. The fundamental problem is howto operate the patent system in a way that encourages both research and its exploitation.

The National Academies Policy Advisory Group was formed in 1992 and in Spring 1993 itwas agreed that the spectrum of issues thrown up by intellectual property required the mul-tifaceted approach that NAPAG could offer. Thus, a working party comprising scientific, tech-nological, medical, ethical, commercial and legal expertise began work in June 1993. Theworking party consulted widely and I would like to thank all those who contributed to itsdeliberations.

Intellectual Property and the Academic Community is published as a statement of NAPAG.I hope that all those with an interest in the impact of IP issues on creative work, or the waycurrent IP regimes cope with technological advance, will consider this report. The issues arecomplex and will take time and effort to resolve, both at the national and the internationallevel. The report suggests some actions that may be required and offers views on what fur-ther examination may be necessary.

Sir Michael Atiyah, O.M.President of the Royal SocietyChairman NAPAG 1992–1994

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CONTENTS

SUMMARY AND KEY RECOMMENDATIONS vii

PART I INTRODUCTION 1

1. IPRs and Academic Science 11.1 Prominence of IP Issues 11.2 Relation to Other Policy Debates 11.3 Types of IPR 11.4 Purpose of IPRs 21.5 Government Research Policy and IPRs 2

2. Academic Expectations and IPRs 32.1 Value of IPRs to Academics 32.2 Results of Scientific Research 32.3 Traditions of Academic Science 42.4 Practical Thrust of Patents 42.5 Academic Rewards in the Science Base 42.6 Role of Public Presentation 52.7 Demands of the Patent System 52.8 Search for Greater Compatibility 62.9 Campus Technology Assistance: The Beginnings 62.10 The British Experience 72.11 Content of the Report 7

PART II SCOPE AND OPERATION OF INTELLECTUALPROPERTY SYSTEMS 9

3. Patent Systems: General 93.1 The Basic/Applied Dichotomy 93.2 Causes of Expansion of Patentable Subject-Matter 93.3 Demands for Contraction 103.4 Particular Issues 10

4. Patentable Subject-Matter and Utility 114.1 Current Exclusions 114.2 Interpreting the Exclusions 114.3 Morality: The General Exclusion 134.4 Competence of Patent Office Examiners 134.5 Reasons for Judgement on Moral Issues 144.6 Fundamental Human Rights 144.7 Effects of Refusing a Patent 154.8 Common Position: Specific Issues 15

CONTENTS

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4.9 Genetic Material Patents 164.10 Genetic Material: Alternative Protection 174.11 Utility 18

5. Prior Publication: ‘Self Pre-emption’ 195.1 Novelty in Patent Law 195.2 Self Pre-emption 195.3 US Approach: Grace Period 195.4 Pitfalls of Grace Period 205.5 Need for Information about Legal Rules 20

6. Lack of Rigour in Patent Office Examination 216.1 Effect of Inadequate Examination 216.2 Patent Plagues 216.3 Second-Tier Protection: Recent Developments 226.4 Lack of Certainty 226.5 An EU Second-Tier Right? 22

7. Disclosure in the Specification 237.1 Patent Law Requirement 237.2 Patents as an Information Source for Academics 23

8. Exclusion for Research 238.1 Patent Law Exception 238.2 Problems of Scope 23

9. Electronic Technology: Computer Science, Telecommunications 249.1 Role of Academic Science 249.2 IP Problems 249.3 IP for Computer Programs 259.4 Copyright in Computer Programs 259.5 Computer Program Copyright: Scope 259.6 Wide Interpretation 269.7 Restricted Interpretation 269.8 Interfaces 279.9 Decompilation 279.10 Databases: Modes of Protection 289.11 Policy for Databases 289.12 Preferable Approach 289.13 Digitisation 299.14 IP Protection of Digitised Material 30

10. Transfer of Technology to Developing Countries 3110.1 Role of IPRs 3110.2 Pressures from Industrialised Countries 3110.3 IPRs under World Trade Sanctions 32

PART III EXPLOITATION OF IDEAS FROM ACADEMIC SCIENCE 33

11. The Growth of Industrial Liaison 3311.1 IP in Research Contracts 3311.2 Experimental Nature of Development 3311.3 Concerns for the Future 3411.4 Informing the Academic Community 35

12. IPRs within Institutions 3612.1 Ownership Issues in the Past 3612.2 Rights under The Patents Act 3612.3 Research Councils and Charities 37

13. IPRs in Academic–Industrial Collaborations 3813.1 New Tensions 3813.2 Pragmatic Solutions 3813.3 Acquiring Licensing Skills 3913.4 Negotiating Positions 3913.5 Enforcement of Rights 40

PART IV CONCLUSION 43

14. The Way Forward 43

APPENDIX I – Descriptive Catalogue of Intellectual Property 45

APPENDIX II – Ownership and Exploitation of Intellectual Property 57Generated in Academic Institutions

APPENDIX III – List of Those who Contributed Information 61

APPENDIX IV – Membership of the Intellectual Property Working Party 63

BIBLIOGRAPHY 65

CONTENTS

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1

INTRODUCTION

1. IPRs AND ACADEMIC SCIENCE

1.1 Prominence of IP IssuesIn Great Britain as elsewhere,intellectual property rights (IPRs)are much in the public eye.Persistent attention has beengiven in recent years, forinstance, to patenting within theframework of the Human Genomeproject, to the propriety ofprocuring animals for experimen-tation by manipulation of theirgenetic structure, to the protec-tion of newly generated computerprograms, to rights in databases,multimedia products and the bur-geoning information industry ingeneral. The academic community, as a major generator of intellec-tual property, has special inter-ests in the subject. The issuesrange widely.

There are fundamental questions:over the general acceptability andscope of IPRs; and over their poten-tially distortive impact on theprocesses of scientific research.

There are practical consider-ations: What personnel and pro-cedures should be in position foracquiring the rights? What cond-itions should govern a researchcollaboration with industry or anoutside investor? How should therights be turned to account – bysharing in production risks or bylicensing? Who should bear theresponsibility of enforcing therights through legal proceedings?

1.2 Relation to Other Policy DebatesThis growing concern over IPRsis one element in larger debates:about the changing objectives,forms and funding of higher edu-cation in general; about the placeof scientific research in univer-sities; about the increasing inter-dependence and interpenetrationof basic research and technolog-ical development in almost everyfield; about the contributionwhich this research can andshould make to new spheres suchas biotechnology and informationscience; about the ethical andsocial issues which these devel-opments raise.

It is within the framework of cur-rent change that this reportseeks to isolate and commentupon the relationship betweenIPRs and research in the non-industrial sphere.

1.3 Types of IPRIPRs are an essential part ofindustrialisation and exist pri-marily to give developers andproducers competing in free mar-kets the exclusive right to makeand distribute productsembodying particular ideas andsymbols.

The various forms of right –patents for inventions, tradesecrets and other confidentialinformation, copyright, plantvariety rights, rights in semi-con-

PART I INTRODUCTION

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INTELLECTUAL PROPERTY AND THE ACADEMIC COMMUNITY

INTRODUCTIONductor topographies, trade marksand names – vary considerablyin detail. A basic description ofthe differences is to be found inAppendix I.

It is important to understandthat these rights are separateand each of limited purpose.Restricting the scope of any rightensures that no person acquiresexclusive legal rights whichwould unduly inhibit competitionin the use of ideas.

There is a tendency in the scien-tific community today to use‘intellectual property’ as a syn-onym for ‘discovery’ or ‘researchresults’. This loose usage maysuggest that there is some over-arching legal right of unspecifiedscope in information or ideaswhich ranks as original: this isnot so. Intellectual property lawin all countries is much moreselective than that and rightly so.

1.4 Purpose of IPRsThe ubiquity of IPRs in devel-oped economies, and their consid-erable similarity between onecountry and another, stand testi-mony to their general usefulnessas legal underpinnings ofindustry and commerce. They area particular means of fosteringcreativity and financial invest-ment in ideas which will makeeconomic and social existencemore efficient, and will add sig-nificantly to consumer choice.

At the same time IPRs express

an instinct for justice that seeksto reward a creative thinker forthe results of mental activity, bysome measure of legal protectionfor those results against imita-tion in the market-place.

IPRs form a complement to thedirect subvention of research bygovernment, charitable founda-tions and industry, acting as anincentive to investment and effortat the stage of commercialisation.

1.5 Government Research Policy and IPRsThe UK government is seekingways of increasing the ‘produc-tivity’ of academic research, whichit funds directly to a very consid-erable extent. The Office ofScience and Technology’s 1993White Paper, Realising ourPotential, signals not only somemajor re-orientations in theadministration of research grantsbut lays particular emphasis onthe encouragement of collabor-ation in academic–industrial part-nerships of one kind or another.An important example is theTechnology Foresight Programme,a systematic process involvingindustrialists and academics inthe assessment of market oppor-tunities and scientific and techno-logical developments likely tohave a major influence on wealthcreation. The Government willdraw upon the results of theForesight Programme in settingpriorities for its own R&Dfunding. In the White Paper andthe publicity for Foresight, there

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INTRODUCTIONis only fleeting reference to IPRsand the commercialisation ofresearch results. However, thesequestions are vigorously pursuedin another, slightly earlier OSTPaper, Intellectual Property in thePublic Sector Research Base. Thisargues that universities and gov-ernment research institutes mustadopt internal policies which willensure that, whenever possible,the commercial potential ofresearch will be identified andpromoted.

The two Papers clearly involvecomplementary policies. But thepotential for strain betweenthem undoubtedly exists. It is amajor concern of this Report.

2. ACADEMIC EXPECTATIONS AND IPRs

2.1 Value of IPRs to AcademicsAcademics, whatever their discip-line, have long benefited fromIPRs. There has been copyrightin their writings and similarworks, including films and audio-visual productions. There havebeen patents for their inventionswhere these can be turned tocommercial account. The law alsoprotects information which hasbeen supplied in confidence andthis can be relevant to academicwork.

Traditionally academics have notshown much interest in shapingintellectual property laws.Accordingly their working prac-tices and expectations have fitted

the different rights with varyingdegrees of comfort. In general,rights which arise informally onthe creation or transmission ofideas (as with copyright andtrade secret protection) har-monise more readily with acad-emic attitudes than rights which are acquired only bytimely application to a govern-ment office (as with patents, registered designs and plantvariety rights).

Thus copyright law protects notonly against commercial piracy butalso against the prime academicsin of plagiarism (which adds toinfringement the insult of misat-tribution). At the same time thelaw contains exceptions whichallow for quotation from works inthe process of reviewing and criti-cising them – a crucial academicactivity; and within limits theremay also be free private copying,notably for private study orresearch.

2.2 Results of Scientific ResearchPatents for inventions seek toinduce those who have madeinventions to reveal them asrapidly as possible by givingrights to the first-comer. (In theUK and most other systems thefirst to apply is entitled to thepatent grant. The US is theexception, applying a cumber-some first-to-invent rule.)Thereafter, even those who makethe invention independently areobliged to respect the patent.

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INTRODUCTIONOne pre-condition, however, isthat no one, including even thefirst applicant, has previouslyrevealed the invention or some-thing similar to the public. Thisrequirement of the law fits illwith academic needs and callsfor further exploration (see fur-ther below, Sections 2.7 and 5).

2.3 Traditions of Academic ScienceTraditionally the institutionalseparation of universities fromgovernment and industry hasensured that academics decidewhat scientific research they willdo. This freedom has always beensubject to the task of obtainingresources for the equipment andstaff needed to carry it out.Generally speaking, however,academics have set their ownagenda, often with generous,unfettered support for well-con-ceived projects from both thepublic and private sectors.

Motivated by personal curiosity,institutional norms and thedesire for professional advance-ment, their interests are centredon the unexplored areas andunexplained basic problems oftheir subjects, where a signifi-cant discovery can attract theacclaim of their peers. Thisacclaim has not in the past beenreadily accorded for the practicalapplication of scientific knowl-edge, which has been regarded asa relatively mundane activity,undertaken at some remove fromthe academic sphere, in indus-

trial laboratories and govern-ment research establishments.

2.4 Practical Thrust of PatentsReflecting essentially the samedichotomy, scientific work inindustry has been centred on theproduction of knowledge of mani-fest commercial or social value.This is often organised aroundthe patent system, whose scopeis limited to practical applic-ations of scientific knowledge.

By law, patents are available for‘inventions’ but not for ‘discov-eries’ and ‘scientific theories’; apatent specification has to showsome measure of practical useful-ness, or capacity for industrialapplication – the language hasvaried from country to country,and the meaning to be attachedto these general expressions maybe difficult to settle (see furtherbelow, Section 4).

2.5 Academic Rewards in the Science BaseAlthough the distinction betweenpure and applied has nowbecome much less sharp, mostuniversity scientists are stilldeeply involved in academic sci-ence. This is undertaken in aninternational arena which haslittle to do with the extraction ofcommercial value from research.Individuals and research teamscompete even more strenuouslythan in the past for the tangibleand intangible rewards of comingfirst with a scientific discovery.

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INTRODUCTIONQuite apart from the personalqualities and technical skills thatthis competition requires andengenders, society gains im-measurably from the inspiredand critically tested knowledgethat emerges from it.

Nobody – least of all govern-ments responsible for the long-term welfare of their nations –should doubt the ultimate benefitof a healthy, vigorous sciencebase, engaged primarily in thesearch for knowledge withoutregard to its immediate practicalutility.

2.6 Role of Public PresentationBy its very nature, academic sci-ence is ‘public knowledge’. This isnot just a sentiment in favour ofthe supposed good of mankind atlarge, rejecting the notion ofturning potentially beneficialknowledge to personal advan-tage. Basic science depends forits validity and reliability on thespeedy, widespread dissemin-ation of novel research results, soas to expose them immediately tocritical analysis and hoped-foracceptance. This is the only wayof purging them of errors andmisconceptions.

For all their personal rivalries,and occasional secretiveness inthe race for priority, academicscientists are unanimous on theimportance of publishing newdata and theories as soon as theycan be presented as sound andconvincing. Indeed, this openness

is a necessary condition for anysystem of personal recognitionfor scientific excellence.Academic scientists are thus sub-ject to a highly competitivesystem of quality control, whichprovides the framework for innu-merable well-established proce-dures, from the peer review ofpapers and grant applications,and the obligation to cite earlierwork, to the award of NobelPrizes.

2.7 Demands of the Patent SystemAs already stressed, establishedacademic procedures are by nomeans totally incompatible withthe grant of corresponding IPRsthrough the patent system. Inboth cases, public disclosure ofvaluable knowledge is the majorobjective. But the patent system’srequirement of initial secrecyoften operates in direct conflictwith the academic norm of fulland prompt publication. Forexample:

– While restraint on publicationis needed only until patent applications have been draftedand filed, delay could criticallyaffect scientific priority;

– Even when the urgency is less acute, the two modes ofdisclosure may be quite out ofsynchronism, with the naturalphasing of research papers seriously disturbed by the demands of patenting;

– There may be know-how

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INTRODUCTIONsurrounding a patentedinvention which scientists would normally expect to make available to theircolleagues – including even potential rivals – but which from a commercial perspectiveought to be kept secret even after patents are applied for.

Faced with such conflicts, manyacademic scientists retain a pref-erence for early publication. Inparticular, since the process ofderiving commercially viableproducts from basic research isoften so long, uncertain andexpensive, they may well reckon(out of hard experience or othergood reason) that such prospectslie beyond their concern.

2.8 Search for Greater CompatibilityThese objections to the wide-spread intrusion of the patentsystem into academic science arenot ill-founded. They derive fromthe basic preoccupations of scien-tific endeavour and from the waythat the science base is organ-ised. They cannot be dismissedtoday as anachronistic; they willcontinue to recur. Yet universi-ties and research instituteseverywhere are now under pres-sure to become less dependent ontraditional forms of publicfunding. The cost of much scien-tific research is acceleratingrapidly and the competition forgrants from all sources isbecoming ever more acute.

Some reasonable accommo-dation has to be reachedbetween the traditions of sci-entific research and turningresults into applicationswhich are both sociallyuseful and a source of rev-enue. The need for this accom-modation is the greater in thosefields where the gap betweenbasic and applied research hasceased to be perceptible. This isso, for instance, in computer sci-ence and communications tech-nology and, above all, in medicalresearch.

2.9 Campus Technology Assistance: The BeginningsThirty years ago and more,leading US universities began toestablish campus units for theindustrial exploitation of researchresults. These units providedexpertise in obtaining IPRs andthen in finding industrial and/orfinancial partners for exploitationof the protected ideas. In a fewcases, the results bore remark-able fruit. In more there was asubstantial, if not an over-whelming, return. It becameaccepted practice, by way ofencouragement and out of a senseof what was fit, that profits ofexploited inventions, after deduc-tion of the development costs, fellto be divided between institutionand inventors, often with a sharealso going to the department con-cerned.

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INTRODUCTION2.10 The British Experience

The US model has now beentaken up in many parts of theworld, developing as well asdeveloped. In this country, fromthe late 70s onwards, it has ledto the setting up of IndustrialLiaison Offices (or now, morepurposefully, TechnologyTransfer Offices) in universities.

Britain has been notable foranother development. Since aslong ago as 1947 the NationalResearch DevelopmentCorporation had been the bodythrough which exploitable resultsfrom government-fundedresearch had to be channelled.After more than 30 years of suc-cessful operation, theCorporation was restructured asthe British Technology Group,and its monopoly position wasremoved. It has since been com-pletely privatised.

Universities and similar insti-tutions have been expected toestablish their own policy forencouraging and organising theexploitation of research results.They must ensure that the neces-sary IPRs are acquired, usingwhatever professional assistanceseems appropriate. As part ofthis process, the rights have beenacquired by, or assigned to, insti-tutions, in return for settled

arrangements about sharing inthe proceeds of exploitation forindividual researchers and theirdepartments. This is leadingincreasingly to more vigorousexamination of commercialprospects arising from the workof universities and research unitsfunded by government and chari-ties. (We return to this subject inPart III below.)

2.11 Content of the ReportAgainst this background theissues particularly addressed inthe ensuing Parts of this Reportare the following:

Part II assesses the impact onacademic research of present andfuture regimes of intellectualproperty. For the most part itconcentrates attention on patentsfor inventions because of the dif-ficulties already mentioned. Thecopyright system and adjuncts toit will be dealt with only in so faras they extend to new technicalapplications, notably computerprograms and databases.

Part III considers how far acad-emic institutions are dealingwith IPRs in an effective manner,given the need to respect the tra-ditions and objectives of thoseinstitutions.

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SCOPE AND OPERATION OFINTELLECTUAL PROPERTYSYSTEMS3. PATENT SYSTEMS:

GENERAL

3.1 The Basic/Applied DichotomyIn recent years there has beennoticeable willingness to roll thefrontier of what may be patentedback into the area of basic dis-covery. It is a matter of shiftingboundaries, not of wholescaleannexation of common land. Noone is proposing patents for theo-retical perceptions at fundamentallevels. Nonetheless the movementis strong enough to deservecareful monitoring, not least froman academic perspective.

3.2 Causes of Expansion of Patentable Subject-MatterThe following factors all con-tribute to the interstitial expan-sion of patent systems:

(i) Some theoreticians of intel-lectual property have argued that patents should be avail-able at an early stage in theprocess from initial discoveryto the working out of prac-tical consequences, because the financial incentives which follow from the protec-tion will bring readier invest-ment to the development process. Patents have been likened to a mining licence, aright to explore a tract for itshidden resources, free from the debilitating dangers of rival prospecting.

Equally it has been proposed that the strict obligation to publish an invention in the patent specification for it should be alleviated; thespecification should act only as notification of the person to whom application may be made for more information and a licence.

These proposals have been made in the belief that the incentive effect of the patent system should be rendered even sharper.

(ii) Courts have recognised that to allow patents in some cases and refuse them in others must have the effect of canalising research in ways which are not self-evidently desirable. They have accordingly been willing to cut back the scope of the exceptions to what is patentable.

The trend was famously marked by the Supreme Court of the United States in its 1980 decision (Diamond v. Chakrabarty) admitting a patent for a novel microorganism capableof eating up oil-slicks: the Court considered that ‘any-thing under the sun’, apart from a human being, was patentable, provided that itsatisfied the statutory

PART II: SCOPE AND OPERATION OFINTELLECTUAL PROPERTY SYSTEMS

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criteria of novelty, non-obviousness, usefulness, etc.

There has been a similar European trend. The European Patent Convention(EPC) of 1973 defines a number of exceptions to patentable subject-matter. (These are mentioned below, Section 4.) In deciding uponapplications to it, the European Patent Office (EPO) has adopted apresumption that these exceptions should be read narrowly, so as to allow patents in border areas, rather than refuse them.

(iii) A separate factor affecting the Western Europeansituation is that there are now competing systems for the granting of patents. In 17 countries, applicants maychoose whether to proceed through national Patent Offices as of old, or to securetheir grants by a single application to the EPO in Munich. Inevitably the com-peting offices adopt an attitude of helpfulness towards their primary clients, the applicants. The effects of this cannot easily be measured but that is no reason for ignoring it.

The European granting system has proved a success beyond the expectations of many. One part of this satisfaction undoubtedly

stems from the treatment received from the official examiners and appeal boards of the EPO, as wellas from such factors as speed of processing andrelative cost.

3.3 Demands for ContractionIn the past there have been tidesof expansion within patent sys-tems which have led to counter-currents of contraction. The chiefforce for the latter has come fromthose in industry who feel them-selves unduly checked or con-fined by patentees. Theirarguments point in particular tocases where there has been nosufficient justification for thegrant or where the holder of astrategic patent has blocked offfurther developments by others.The scope of patent systems isalways in flux as the search goeson for optimal effectiveness.

3.4 Particular IssuesFrom the perspective of academicscience, there is reason toexamine carefully whether thedrive in favour of greater protec-tion now needs to be contained.This involves a number of sepa-rate issues, grouped below underfive headings:

(i) Patentable subject-matter and utility

(ii) Prior publication: ‘self pre-emption’

SCOPE AND OPERATION OFINTELLECTUAL

PROPERTYSYSTEMS

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(iii) Lack of rigour in examination

(iv) Disclosure in thespecification

(v) Exclusion for research

4. PATENTABLE SUBJECT-MATTER AND UTILITY

4.1 Current ExclusionsThe patent systems of WesternEurope currently exclude fromtheir scope a number of cate-gories of subject-matter. Amongthese, some reflect a divisionbetween basic and appliedresearch – for instance, theexclusion of ‘discoveries, scien-tific theories and mathematicalmethods’. Others express arather difficult set of distinctionsabout the manipulation of livingmatter: methods of treating thehuman and animal body areexcluded, while pharmaceuticalcompositions and substances arewithin the net; plant and animalvarieties, together with essen-tially biological processes for theproduction of plants and animalsare excluded; however – excep-tion to the exception – microbio-logical processes or the productsthereof remain patentable.Protection of plant varieties isavailable, in many countriesincluding the UK, under a spe-cial, carefully delineated regime.

In addition there is a ‘long-stop’provision excluding patents forinventions, ‘the publication or

exploitation of which are con-trary to ordre public or morality’.However, more by way of objec-tion must be shown than thatexploitation is prohibited by lawor regulation in some or all of theparticipant states.

4.2 Interpreting the ExclusionsUS patent law does not excludebands of subject-matter from thescope of patentability by statutorylisting. What is within thatpatent system and what outside,is left for judicial decision. At pre-sent, as we have seen, ‘everythingunder the sun’ is open for consid-eration and given a fair wind.

The European exclusions havebeen subject to constant criticismas the course of mainstream sci-ence has shifted so rapidly. It isthought to be difficult to amendthe text of the EPC directly, sincethis would involve convening anInter-Governmental Conference.The EU is currently seeking toprocure changes to the alterna-tive national systems of patentlaw of its Member states, sincethese can be enacted byDirective. The hope is that, inthe light of such a Directive, theEPC would be read by tribunalsand judges in the same sense.However, the draft text of theproposed Directive on Rights inBiotechnological Inventions isthe subject of fundamental dis-agreements about the moralityand safety of biotechnologicalresearch and it is quite unclearhow these tensions will be

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resolved. The Common Positionof the European Commission andCouncil of Ministers, which hasyet to be agreed with theEuropean Parliament, was pub-lished late in 1993.

The Common Position proposedthe following main changes tothe present concept of patentablesubject-matter in the EPC (as setout in Section 4.1):

The concept of inventions whichare contrary to public policy ormorality, is to be understood byreference to the following distinc-tions:

– (Distinction 1) inventions concerning the human body orits parts are not to be patentable; but patents are tobe available for inventions relating to genetic, cellular or other material isolated from the body;

– (Distinction 2) processes formodifying genetic identity of the human body will be unpatentable if they arecontrary to the dignity of man (a phrase which seeks todistinguish between genetic change which eliminates or relieves a condition such as cystic fibrosis, and a change aimed – to take some recent examples – at skin, hair or eye colour or at sexual orientation in a human embryo);

– (Distinction 3) processes formodifying the genetic identity

of animals will be unpatentable if they are likelyto cause them suffering or physical handicaps without any substantial benefit to manor animal; otherwise they willbe patentable.

Beyond these exceptions ongrounds of public policy ormorality, there are also to be pro-visions which narrowly restrictthe exclusion from the patentsystem of plant and animal vari-eties, and the exclusion of theessentially biological productionof plants or animals. Moreover,methods of medical treatment ofboth humans and animals willcontinue to be excluded; but sofar as concerns animals, inven-tions of which a method of med-ical treatment forms only onepart are to become patentable.

These proposed changes, broadlyspeaking, will increase the rele-vance of patenting to the resultsof biotechnological research, thuscontributing to a climate inwhich biotechnology can flourishas a European industry. Weaccept the general directionof this policy and, therefore,the tenor of the proposedrules. At the same time weare aware, as anyoneaddressing the subject mustbe, of the highly controver-sial potential of somebiotechnological develop-ments and of the need to pro-ceed with all attention to themoral, social and environ-mental consequences of prac-


PROPERTYSYSTEMS

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tising some of the techniquesand results. In a field wherefew solutions at present seemself-evident, we offer the fol-lowing comments on the gen-eral desirability of excludingpatents on grounds of publicpolicy or morality, and alsoon some of the specific excep-tions proposed in theCommon Position version ofthe draft Directive.

4.3 Morality: The GeneralExclusionAll scientific progress raisesquestions of ‘ordre public ormorality’. Nonetheless it isargued by some that the EPC isnot the right forum for them.One line of argument is thatmatters of public morality havebecome so firmly political, asadvanced societies grow moreplural and secular, that they canno longer be addressed inabstraction from the varyingpolitical processes of the stateswhich are party to theConvention. Hence patentsshould be granted or withheldsolely on technical grounds, anddecisions whether to forbidexperimentation or use left topublic bodies with responsibilityfor health, safety and medicalethics. Another line with thesame conclusion might be, thatscience is in itself morally neu-tral, and that considerations offreedom and progress combine tofavour the separation of thegrowth of knowledge from moraldebate about its proper uses.

However, in our view restric-tion of patenting on groundsof ‘ordre public or morality’serves a useful purpose. Itrules out the prospect ofpatents for inventions whichwould be uncontroversiallyharmful and does so in gen-eral terms which recognisethat the character and cate-gories of such inventionscannot be specified inadvance. It thus gives asignal about the relevance ofmoral considerations, whichis both symbolically andpractically helpful for scien-tists thinking of research inrelation to its commercialapplications.

4.4 Competence of Patent Office ExaminersLess abstractly, it is frequentlyobjected that patent office exam-iners have no training by whichto make moral, as distinct fromtechnical, judgments. This, how-ever, is not sufficient reason forremoving the present provisionsfrom the Convention and thenational laws which are basedupon it.

It is sometimes forgotten in thedebates on the subject that theexaminers are only the firststage in decision making. Forinstance, from the EPO exam-iners, a disappointed applicantmay proceed to an Appeal Board.Once an application is granted,outside objectors may argue themoral objection in opposition pro-


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ceedings before the EPO’sOpposition Division (again witha right of appeal). And since, atthis stage, the European grantmultiplies into a set of nationalpatents in the various states des-ignated in the application, moralobjections may be raised beforethe appropriate tribunals of eachstate as to the validity of thepatent in that country.

It is right that, where pos-sible, the issue should be set-tled for the EPC territories asa whole. At the same time,scope is properly left for dif-ferent moral attitudes,reflecting differences in rel-igious teaching or culture, tobe expressed by nationalauthorities. If the price is thatoccasionally inventions proveto be patentable in only someparts of the EPC net, that is aprice worth paying.

4.5 Reasons for Judgement on Moral IssuesThere needs to be a continuingdebate about how those who mustjudge the morality of an inventionshould make their assessment ofthe issue. In the Oncomouse case(mentioned in Section 4.8(3)below), the Examining Division ofthe EPO made a ‘common-sense’assessment of advantages and dis-advantages: the invention was toincrease the efficiency of experi-ments into the causes and allevia-tion of cancer in humans, a highlydesirable object in the relief ofhuman suffering; it was also said

that fewer mice would be neededfor experimental work than underprevious regimes. These factorswere held to outweigh the painwhich the mice were ordained tosuffer, or any possible environ-mental danger. Other similarpatents have been allowed, whileby contrast the EPO indicatedthat it would not accept an appli-cation where genetic manipulationof an animal was for research intothe restimulation of hair-growthin the bald.

4.6 Fundamental Human RightsThe pragmatic and constructivistapproach described above may becriticised for failing to grapplewith ideas of fundamental right.We consider that it would be amistake to expect moral de-cisions about the granting ofpatents to be grounded indepen-dently of the evolution of a con-sensual morality among theMember states. Indeed it hasbeen strongly argued that themorality exception in the EPCshould operate by reference tothe rights guaranteed in theEuropean Convention on HumanRights. This Convention, how-ever, does not expressly conferrights either on inventors or onanimals. Further consideration ofthe issue within this frame ofreference, therefore, becomes amatter of implication, and isinherently likely to reflect theopinions and feelings of the de-cision makers, the very difficultywhich a rights-based approachseeks to avoid.


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4.7 Effects of Refusing a PatentDiscussion of the merits of an‘ordre public or morality’ test iscomplicated because refusal of apatent does not mean the with-drawal of the invention. On thecontrary, although it may act asa deterrent to expenditure onsome related research and devel-opment, the publicity may alsodraw attention to an inventionfor which no monopoly right is tobe granted. In consequenceknowledge and use of the ideamay actually spread. Hence leg-islatures still need to considerwhether its use should bedirectly prohibited or strictly reg-ulated. An outcome where aninvention is granted a patentand then regulated will oftenbe entirely appropriate, espe-cially if only some of the pos-sible uses are a matter ofmoral objection.

Meanwhile, a different sort ofquestion about the practicaleffects of a refusal of grant ariseswhere countries not party to theConvention have a different prac-tice. Researchers are most likelyto be influenced by the state ofpatent law in their home territ-ories. Accordingly the greaterreadiness of American courts togrant genetic patents sets aproblem for European scienceand industry. This may be onereason for applying the ‘ordrepublic or morality’ exception onlyin a clear case, but it is not inour view a strong enough objec-tion to merit abandoning theexception altogether.

4.8 Common Position: Specific IssuesTurning to the specific proposi-tions in the Common Positionversion of the draft Directive, wewould refer to Distinctions 1, 2and 3 in Section 4.2 above.

1. Inventions concerning the human body, and its parts as distinct from material isolatedfrom it. This distinction appears to be practicallytenable and one whichdifferentiates at a point whichwould be widely accepted in academic and industrialcircles but there isconsiderable concern atsuggestions that inventions based on materials isolated from the body should also notbe patentable.

2. Processes for modifying genetic identity of the human body. This distinction uses theimprecise phrase ‘contrary to the dignity of man’ in order to differentiate between forms of genetic change which are, and are not, to be regarded as proper and, therefore, patentable. The issues addressed are likely to besubject to changingperceptions as the technology advances and its potential for benefit and harm can be morecompletely assessed. Theformulation does no more thanindicate that some changes in genetic identity of humans must be accepted as beneficial,and, therefore, if inventive,


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patentable; there is no general exclusion. We accept this, and likewise the proposition that national or european authori-ties should not grant patents for inventions of this type which are for morally un-acceptable purposes. The grant of a patent is after all not a neutral act. It confers a legal privilege which is specifically designed to encourage both the making and the exploitation of the protected invention. Patent systems cannot simply put thequestion on one side for othersconcerned with medical and social ethics to decide within adifferent framework of legal regulation. The language in the Directive adequately expresses the intendedpurpose.

3. Processes for modifying the genetic identity of animals. This distinction has come intoprominence because of the application by Harvard University to patent its ‘Oncomouse’ – the mouse genetically manipulated to generate cancers readily for research purposes. To thiscreation, two relatively specific moral objections have been raised: against the suffering imposed upon animalsgenetically manipulatedprecisely so that they may develop cancer; and against potential environmentalhazards which could arise if the animals were to escape.

In the US, despite thesefactors, the relevant patent was granted with despatch. Inthe EPO, the application was initially rejected. But after anappeal which referred the matter back for furtherconsideration on somewhat equivocal grounds, the patent has been allowed to proceed to grant. However, it is subject toopposition proceedings from a considerable number ofdetermined opponents.

The proposed formula would express the factors which the EPO has so far found relevantin judging the moral proprietyof the particular invention claimed. We are sympathetic to that approach and, there-fore, support the proposal. Atthe same time we appreciatethat future cases are likely toraise quite different moral issues. These will pushtribunals back to consider-ations which are not expressed in the legislation in any form,however, vague. The main danger of developing listed Distinctions is that they drawupon case-law of the time. So long, however, as the list is nottaken to be absolute, this objection does not appear anoverriding one.

4.9 Genetic Material PatentsWhen it comes to specific appli-cation of the general exclusionsfrom patentability, there is con-siderable scope for differences of


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view. It is then that the currenttendency towards expansion ofthe system may exert itself.

To take one prominent contro-versy: the question of patentinghas injected into the HumanGenome Programme a disturbingdistraction which was ignored atthe time when the original greatcollaboration was put into oper-ation. Once the possibility wasaddressed, patents werearguably available (particularlywithin the US patent system) forthe identification of short sub-sequences of DNA. Accordingly anumber of applications were filed– from the US for the researchundertaken for the NationalInstitutes of Health, and fromthe UK (by way of protectivereaction) for results from MedicalResearch Council laboratories. Inthis instance the US PatentOffice indicated an initial reluc-tance to accept the particularclaims being proffered; and boththe American and the Britishsets of applications were subse-quently withdrawn. But this hasonly put the issue to one side forthe moment.

The scope of patent law on theissue of genetic material has notbeen definitively settled in anycountry. We would hope that itcan be resolved soon. The pres-ent rule excluding mere dis-coveries should be read asdisallowing patents for DNAsub-sequences which have noknown practical applications.It is an approach not without its

difficulties, since those whouncover sub-sequences orsequences will be under pressurenot to contribute them to rele-vant databanks until they haveinvestigated potential applica-tions. The caution is neverthe-less justified: patents shouldnot be allowed on discoveriesbecause exclusive rightsmight well be conferred on arange of practical applica-tions, the scale of which hasnot even begun to be uncov-ered. That is too large a riskto introduce, even though apatent might induce moreextensive work at greaterspeed on the practical conse-quences suggested by the discovery.

4.10 Genetic Material: Alternative ProtectionSuggestions are currently beingmade that some lesser form ofprotection should be introduced,which would give limited rightsover the discovery of geneticinformation, when that inform-ation is subsequently put to com-mercial use. What is proposedappears to be a non-exclusiveright to equitable remunerationfor such an application of theinformation. Various descriptionshave been offered: a ‘copyright’, aright subject to compulsorylicence, and so on.

The purpose of the proposal is tosecure some return to those whohave produced results fromexpensive experimentation, while


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not putting them in a position toprevent practical deployment ofthe information. It is hopedthereby, to induce researchers topublish results, when otherwisethey would be tempted to keepthem secret. The object is cer-tainly meritorious anddeserves further consider-ation. But before such a rightcould be introduced, its prac-ticality would have to be thesubject of hard-headed examination.

There are two obvious issues:

First, if the right is to be onefor equitable remuneration,it ought not to be necessaryto have the level of royalty orother payment settled beforethe information can be used.Experience in this country withthe compulsory licensing ofpatents (particularly of pharma-ceutical patents under the lawbefore 1977) indicates that theneed for preliminary permissioncan induce tactics aimed at longdelay and expense. Even if thelaw requires a payment whichmay be fixed after the event,there may be complex issuesabout the rate of royalty, if it isleft to be settled case by case. Itwould be important to arrive atsimple formulae.

Secondly, IPRs are only signifi-cant to the extent that theyare enforced; users thenknow that they must pay upor face the costs of successfulproceedings against them. Is

it reasonably likely that theresearchers, or some organi-sation connected with them,will have the resources anddetermination to see toenforcement? The law shouldnot introduce rights inresponse to vague hopes ofaction. If they are in practiceignored, respect for law ingeneral suffers.

4.11 UtilityA distinct concept for limitingthe scope of patents to subject-matter which has a practicalapplication, though one closelyrelated to some of the exclu-sionary categories just men-tioned, is to require that utilitybe claimed for the invention inissue. The present US patent lawapplies a test of practical useful-ness. The EPC, however, is lessspecific, since it requires onlythat an invention be ‘susceptibleof industrial application’. Thismay be read as indicating onlythat any type of industry suf-fices, and that this includes agri-culture (the Convention says sospecifically).

In our view a separaterequirement of utility shouldbe introduced into the EPC.As with the concept of ‘discovery’,one consequence of this would beto leave in the sphere of basicdiscovery the isolation oranalysis of the structure of com-pounds, including the basicstructures of genes, so long as nopractical application of this


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knowledge can be demonstrated.The impact would be to confinethe sphere of patents to workwhich had been carried farenough to show practical results,for instance, by producing sub-stances or establishing processesfor their production which have anovel pharmaceutical use,including uses in testing andanalysis. This would preserve areasonably acceptable line ofdemarcation at a position whererecently there has been consider-able doubt and serious concern.

5. PRIOR PUBLICATION: ‘SELF PRE-EMPTION’

5.1 Novelty in Patent LawIt is a basic rule of patent lawsthat the invention concernedmust be novel. Novelty is meas-ured at the priority date of thepatent, which will normally bethe date on which an applicationis made for protection in a ParisConvention country. (To takeadvantage of the Convention’sprovisions, it is necessary tofollow an initial application inone of the countries, by applica-tions in those other countrieswhere protection is wanted,within a twelve month period.)Novelty is assessed, as is therelated requirement of an inven-tive step, by reference to ‘thestate of the art’. In many coun-tries, including Western Europe,this means everything that ispublished or publicly known (e.g.through practical use) anywherein the world at the priority date.

5.2 Self Pre-emptionIt is from the requirement fornovelty that the danger of ‘selfpre-emption’ arises. In academiccircles in particular, the desireand need to present researchresults to peer groups may leadto a presentation being made or apaper being published before thepriority date of one or all of thepatents which might relate to itscontent. This hazard will notarise if a presentation is madeonly to those who undertake totreat what they learn in confi-dence. But it is often complicatedto ensure that all participantsknew about this condition andshould have accepted it. If evi-dence of this cannot be producedlater, the consequent patents willbe in jeopardy. And in any case,the dilemma will remain, sincepresentation to a restricted peergroup – especially under condi-tions of confidentiality – may wellnot establish priority in discoveryfrom an academic perspective.

5.3 US Approach: Grace PeriodIn US patent law, the danger ofself pre-emption is modified:those who make inventionspublic and then apply withintwelve months to patent themare not treated as having jeopar-dised their position. It is impor-tant to recall a complementaryfactor in US law: that the patentgoes to the first to invent, ratherthan the first to file an applica-tion. One proposal currentlybeing discussed is for the intro-duction of a grace period inEuropean patent law. In part this


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is a negotiating stance: a graceperiod would only be adopted ifUS law were amended so as tointroduce the more straightfor-ward first-to-file approach.

5.4 Pitfalls of Grace PeriodA grace period has some attrac-tion as a moderating device inthe academic sphere. But, it hasbeen strongly argued that itwould necessarily add to theuncertainties and costs sur-rounding the business ofpatenting. If a person wants toknow whether he is free to makean article or use a process, anadviser has to look not only atthe actual patents and applic-ations of others but also atresearch reports from whichpatents might be generatedwithin the grace period.

Such an exception to the ordi-nary requirement of novelty isaccordingly two edged and wedoubt whether it should be intro-duced as a way of dealing withdifficulties over publication inacademic life. If a grace periodhas to be introduced, then itshould be limited in term to afew months at most.

The best way of tackling theacademic problem isundoubtedly to get efficientmachinery in position foracquiring patents. Thisshould work through the ini-tial stages so rapidly thatapplications can be made inthe time that it takes to get

publication organised. Thiswould do much to reduce ten-sions, though it cannot doeverything. It should be pos-sible in the interim period tosubmit material for consider-ation by journals. If it ismade clear that a submissionis confidential, editorialpolicy should be that mat-erial is passed to reviewersonly under equivalent termsof confidence.

5.5 Need for Information about Legal RulesA grace period will not neces-sarily cover those cases wherescientists move towards the solu-tion of a problem by meeting todiscuss work in progress. It canof course happen that duringsuch discussions a piece of infor-mation that later proves crucialis revealed. It is hard for scien-tists to appreciate how, in thetough commercial disputes whichsurround successful patents, achance remark (or whatever evi-dence is later available of achance remark) can assume cru-cial significance before a patenttribunal. But objection to thenovelty of a patented inventionmay hang on a single instance ofprior revelation, a rule which isfollowed in order to avoid anyqualitative assessment of ‘suffi-cient’ revelation to others.

The patent law rule is unlikely tochange and its consequenceshave to be faced. It will add tothe reasons for less frank and


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collaborative attitudes in acad-emic science. The best hope ofaccommodation lies in informingscientists about the need for con-fidentiality in disclosures thatthey make. If they can make itclear that they are discussingtheir work under conditions ofsecrecy, and they keep a clearrecord of what they said, theyare likely to be able to preservetheir ability to patent laterresults.

6. LACK OF RIGOUR IN PATENT OFFICE EXAMINATION

6.1 Effect of Inadequate ExaminationIf patents are too readily avail-able, industries are beset withpatentees who assert dubiousrights. Either the validity oftheir patents has to be chal-lenged in legal proceedings orthey have to be bought off.

It has been in such periods in thepast that business opinion hashardened against patents.Contraction has then occurredthrough various measures, ofwhich two stand out:

(i) there has been added to the requirement of novelty a separate test of inventivestep, asking whether the alleged invention represents some unobvious advance over the state of the art;

(ii) a substantive examination ofapplications takes place in

the patent office before any grant can be made – a process which is at its toughest if the priorexamination deals not only with novelty but also with inventive step.

6.2 Patent PlaguesThe US, the EPC and somenational systems in WesternEurope have a pre-grant exami-nation which extends to inven-tive step. But, as already noted,complaints are now widespreadthat nonetheless, on both sides ofthe Atlantic, patents are grantedtoo readily.

In fields such as electronics, par-ticular technologies now swarmwith patents on very minoradvances. Industries find it diffi-cult to handle such clouds ofprior rights and there is a greattemptation to ignore them alland hope that no belligerentemerges who is truly expensiveto buy off.

If that is the difficulty inindustry, then it poses an evengraver threat for the academicsector as it seeks to turn itsapplied work to commercialaccount. For it remains a worldat some remove from the cut-and-thrust of industrial invest-ment and it may prove relativelyeasy for aggressive, but not nec-essarily deserving, patentees toforce academics into submission.The European patent systemwas designed to provide

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prompt and adequatescreening of applicationsbefore grant. Patent officesand appellate tribunals mustensure that this examinationprocess remains scrupulous.

6.3 Second–Tier Protection: Recent DevelopmentsThere is an allied matter.Various Western European stateshave added to their patent sys-tems a separate, ‘second-tier’form of protection for technicalnovelties. The protection, some-times labelled a petty patent,sometimes a utility model, variessomewhat from country tocountry. There is some suchscheme in all EC states exceptthree. Of these the Netherlandsis contemplating a change, whileonly Great Britain andLuxembourg so far are not.

All the schemes have threecommon characteristics:

– protection is given for a shorter term than for a normal patent: typically for 6–10 years from application;

– registration is required, a partof which is the submission of aspecification of the idea to beprotected, which will become public information;

– no examination of the validityof the subject-matter takes

place before the right is granted.

6.4 Lack of CertaintyA second-tier right is thuscheaper and quicker to obtain;but the validity of any grant hasnot been tested in advance. It isthis lack of certainty which hasbeen the principal reason whythe British government, stronglysupported by much of Britishindustry, has not so far beenwilling to introduce such asystem for this country (eventhough a registered inventionsystem was suggested in theCabinet Office paper, IntellectualProperty and Innovation(Nicholson Report), 1983).

6.5 An EU Second-Tier Right?There is now a movement tocreate a second-tier right for theEU as a whole. From the per-spective of the academic commu-nity, it is far from clear that itsinterests overall will be fosteredby the appearance of a phalanxof short-term, unexamined rightsin alleged inventions. The effectcan only be to add more claims tothe growing range of rights beinggranted under patent systems.In our view, on balance, theinterests of the academiccommunity would not be wellserved by the introduction ofa second-tier system.


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7. DISCLOSURE IN THE SPECIFICATION

7.1 Patent Law Requirement Patent systems at presentrequire that the invention forwhich protection is sought shouldbe described in the patent specif-ication so as to reveal its essen-tial elements. It must tell skilledresearch workers in the field inquestion what they need to knowin order to be able to make orcarry out the invention them-selves. They can be assumed tohave considerable general knowl-edge, but it is not only to theleaders of a forefront researchteam that a specification is takento be addressed.

7.2 Patents as an Information Source for Academics

Some academic researchersderive considerable benefitfrom monitoring new patentspecifications, as do theircounterparts in industry.There is a case for examiningwhether the need of the acad-emic community for access tothis material is adequatelymet. Various networks now makea great deal of patent informationaccessible: for instance the BritishLibrary’s Patent Express, the uni-versities’ Janet/Superjanet net-work and commercial networkssuch as Dialogue. The question is,therefore, largely one of cost.

It would conflict with thisinterest to introduce

changes in the requirementof disclosure so as to allow apatentee merely to givenotice of the kind of inven-tion which he has available.The area of difficulty is not inthe ultimate requirement ofpatent publication, but – as hasalready been discussed – in theinitial need to keep even one’sown inventions confidentialuntil all patents have beenapplied for.

8. EXCLUSION FOR RESEARCH

8.1 Patent Law ExceptionIn UK patent law, and the lawsof many Western European coun-tries, it is not infringement of apatent to perform the protectedinvention for private, non-com-mercial purposes or for experi-mental purposes related to thesubject matter of the invention.The latter exception means thatfurther research may be under-taken by anyone without anylicence from the patentee, pro-vided that it is aimed atextending scientific or technicalknowledge in the sphere of theinvention and is not, forinstance, designed to enhancethe experimenter’s use of theinvention itself once the patentexpires.

8.2 Problems of ScopeConditions in some spheres nowraise considerable difficultiesabout the scope of the aboveexception. For instance, in med-


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ical research, if a patented sub-stance or composition is beingexamined for new therapeuticapplications, it will have, atsome stage, to be tested onpatients, perhaps on a substan-tial scale.

Is this form of testing an ‘exper-imental purpose?’ If it is not,and, therefore, needs a patentlicence to make and administerit, should the full monopolypotential of the patent be quali-fied by making the situation onefor which a compulsory licenceis available on officially setterms?

Not surprisingly research-basedpharmaceutical companies con-sider this solution likely to becounter-productive. It isnonetheless a solution whichpublic authorities are likely tocontemplate if it can be shownthat right-owners are usingpatent powers substantially tohinder useful research.

Particular instances could eventoday be tackled by way of a reference to the Monopolies andMergers Commission and conse-quent action under The PatentsAct 1977, s.51. If the practicewere to become serious andpersistent we would supportan amendment to the lawextending the compulsorylicensing powers under ThePatents Act, s. 48.

9. ELECTRONIC TECHNOLOGY: COMPUTER SCIENCE, TELECOMMUNICATIONS

9.1 Role of Academic ScienceIn the many spheres of elec-tronics, technologies areadvancing at remarkable speed.Academic research is playing asignificant role in this expansion.There are myriad opportunitiesfor collaboration between non-industrial researchers andindustry at the forefront of devel-opment. It is in these fields thatmuch academic technology isbeing successfully transferred.Some of it – particularly com-puting applications – can beundertaken with relatively lowlevels of investment. This typi-fies the sort of venture whichspins off from universities intoscience park enterprise. Equally,university ILOs find it relativelystraightforward to market suchtechnology to industriallicensees.

9.2 IP ProblemsThe extraordinary speed andrange of current developments inelectronics are producing theirown upsurge in claims to intel-lectual property. This is notice-able particularly in the growth ofpatents in those parts of the fieldwhere this form of protection isopen. It is an area in whichmany of the questions alreadyaddressed in this Part of theReport are especially germane.


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Two particular problems will beraised here. The first concernsthe recent development whichgives prime protection to com-puter programs through copy-right. The second concerns theincreasing importance of data-banks and the need to protectthe considerable investmentwhich goes into their creation.

For the future there may be athird problem, between the twomentioned above – e.g. for theprocess of navigation through adatabase that may be protectableby patent (just as are algorithmsfor encryption of the materialwithin the database). There may,then, be a case for stronger pro-tection of innovative techniquesthan by copyright alone.

9.3 IP for Computer ProgramsThe policy of treating computerprograms as not sufficiently tech-nological to warrant inclusionwithin the patent system wasfixed in Western European lawat an early stage in the develop-ment of computing. It continuestoday for application programs.Inventive operational programs,which determine how a computeror network functions, are nowcoming to be treated aspatentable.

9.4 Copyright in Computer ProgramsFor all types of program, copy-right has been deployed to pro-vide the front line of intellectual

property protection. In most sig-nificant countries, copyright lawshave now been amended so as toinclude programs explicitlywithin the category of ‘literaryworks’. This applies to the initia-tory, source-code stage ofdesigning a program, when thework is readable by human per-ception and resembles mathe-matical and other logicalstatements which have long beenregarded as ‘literary works’ forcopyright purposes.

It applies equally – and this isall-important for material soeminently copiable – to the finalobject-code version, readable bythe machine itself. The EuropeanCommunity required this legalchange and various consequen-tial amendments by a Directiveissued to its Member states.

The rights derive from the workof the authors who create theprogram (they may be many).The protection runs for a termfrom the death of the last sur-viving author which soon,throughout the EU, is to becomea further seventy years (see theEC Directives on Copyright inComputer Programs (1991) andon the Term of Copyright (1993)).Objections have been raised inprinciple to such a long period ofprotection for this subject-matter.

9.5 Computer Program Copyright: ScopeAt present, while computing tech-nology is advancing at such speed,


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the question of duration is not ofgreat significance (though it maybecome so as the technologyslows). What is of particular con-cern within academic computingis the extent to which programscan be examined, criticised anddeveloped by others. To somedegree the EC Directive addressesthis issue, for it was the subject ofhigh dispute between differentsectors of the computer industryduring the negotiation of the text.

But the Directive did not addressthe most central question. Thisis: when Program II is in somesense derived from Program I,what is to count as sufficient bor-rowing to constitute infringe-ment of the copyright in ProgramI? It is an issue on which it isinherently difficult to arrive atany useful general formulation.(The Directive did not attempt todo so.) It is left to courts to reachsolutions in particular instances.

9.6 Wide InterpretationMost of the case-law to date hasarisen in the US, and has shownsome alarming divergences ofattitude among judges. Duringthe 1980s, highly protective judg-ments appeared to accept:

(i) that it would be copyright infringement to take thegeneral elements ofstructure and organisationof a program, even ifvirtually all the detailed steps of programmingwere re-written;

(ii) that there could beinfringement of a program which produced screen images if merely its ‘look and feel’ were annexed (as in a computer game).

9.7 Restricted InterpretationThe 1990s are witnessing morerestrictive interpretation. USjudges began to call for copyingat a level of greater detail(though not necessarily by usingthe same or ‘translated’ versionsof the actual programming); andexcluding from the calculationmaterial already in the publicdomain and steps which fromsome functional necessity had tofollow a particular procedure.

A balance is thus beingreached which leaves a realdegree of freedom to developvaried or improved programswhich may even act as a sub-stitute for an initial popu-lariser, provided that in allessential steps the detailedworking has been done afreshand has not been borrowedunder disguise. From the per-spective of academicresearch, this evolving viewdeserves to be strengthenedand supported. The academicsphere is one in which adequatescope must be retained to build inessentially novel ways upon theachievements of others. Therewill of course be instances wherethat freedom is abused by workwhich is essentially plagiaristic.The two English judgements


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which so far explore the sameterritory indicate an awareness ofthe need for a similar balance,though the justifications used toreach it differ. The gravestdanger is that one or two atypicalcases will flair up into litigationwhich settles the case-law into anundesirably restrictive pattern.

9.8 InterfacesA particular issue, that arises inthe further development of pro-grams, is that of electronic inter-facing. One program cannotoperate with another unless itcan adopt the precise proceduresof interface specification estab-lished in the latter (it is not nec-essary to copy the codinglanguage, provided that thestructure of this specification canbe taken). Where the second pro-gram copies substantial elementsof the first in addition to theinterfaces, the copyright in thefirst will be infringed. But whereall that is taken is the interface,in order to secure the inter-oper-ability of the two, this would notof itself constitute infringement.Otherwise the owner of a suc-cessful basic systems programwill be able to prevent any unli-censed applications programs,from being used with it: thatcould confer very considerablemonopoly power on leading sys-tems manufacturers.

9.9 DecompilationConcerning decompilation theEC Directive has given an impor-

tant lead. It has introduced alimited exception into the copy-right laws of Member stateswhich permits the interface spec-ifications of a first program to beuncovered by the steps of reverseanalysis commonly referred to as‘decompilation’. Any making of acopy during this process, to theextent that it is necessary forunearthing interfaces, does notrequire a copyright licence. Thestep can be taken with the aim ofproducing a competing, as wellas a complementary program,provided always that the newprogram does not reproduce ele-ments, which anyway constituteinfringement.

In our view, it is in theinterest of the internationalacademic community thatthis compromise formulashould be generally adoptedand should be interpreted soas to leave adequate scopefor continuing development.Copyright has been intro-duced as the normal means ofprotecting computer pro-grams despite their essen-tially technical character.This copyright applieswithout having to attain anylevel of inventiveness such asis called for in the patentsystem. Yet the patent systemhas an established exceptionfor experimental use.Scientific bodies have aninterest to see that this newapplication of copyright lawcontains suitably framedexceptions designed to secureessentially the same freedom.


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9.10 Databases: Modes of ProtectionThe growth of electronic inform-ation sources already affects aca-demic research in many ways,and we face an immense increasein electronic publishing, whichwill allow readers a range ofaccess and an ability to choosewhat to take, and indeed what toalter, on an entirely new scale.

The costs of such services, in par-ticular for academic commun-ities, will be considerable. Butsince access will be by a telecom-munications link, records ofmaterial consulted and obtainedcan be electronically compiledand it should, therefore, be pos-sible to relate charges accuratelyto the information used. If this isso, the essential concept of copy-right – that each act of copyingand other prescribed use shouldbe authorised by the copyrightowner – should be more readilyrealisable than, for instance, atpresent, given current methodsof private copying.

9.11 Policy for DatabasesThe databases from which notonly literary source material canbe retrieved but other informa-tion can be consulted generallyinvolve considerable investment.This investment can be directlyundermined if there are ways bywhich others can surreptitiouslycopy the collection of sourcematerial and provide access to iton a competitive basis. There is,accordingly, a need for intellec-

tual property protection for adatabase as such, so that preju-dicial acquisition of its contentscan be prevented.

Urgency has been given to theissue by the reluctance of courtsin some countries (though not inthe UK and other Common-wealth jurisdictions) to accordcopyright in the compilations ofinformation, at least where it isan accumulation of mundanefacts. Thus, the US SupremeCourt has refused to find anysufficient authorial activity forthere to be copyright in the com-pilation of a telephone directory;and the Dutch Supreme Courtcalled for reconsideration of thesame factor in respect of the listof words given entries in aleading dictionary.

In consequence the EU is con-templating a harmonisation ofcopyright law, which will allowcopyright in electronic datawhere there is sufficient personalcreativity in the assembly of thedata; but where assembly is ofstraightforward facts, a separateand much more limited rightagainst unfair abstraction of thecontents of the database.

9.12 Preferable ApproachThe academic community assem-bles many electronic collectionsof data and has an interest to seethat there is adequate protectionof them against piracy. At thesame time access should not beunduly limited, as could occur,


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for instance, where those com-piling the data have beengranted some unique opportunityto collect it.

The British and the Irishhave copyright laws whichallow compilations of infor-mation to fall within thescope of the law wheneverthey are not themselves justcopies from elsewhere. In ourview, this country shouldseek to persuade otherCommunity states to adopt asimilar approach; it is prefer-able to the introduction of aseparate and more limitedtype of protection for datacollections which do not con-tain some higher measure ofintellectual activity.Attention could then be givento defining appropriate rulesabout access to databases,deploying, if necessary, theprospect of compulsorylicensing.

9.13 DigitisationThere is at present a rapid devel-opment in the electronic storageand transmission of informationof many kinds in digital, asopposed to analogue, form. Text,image and sound can be stored inthe same format. The contentscan be extracted in whole, or inpart, and can then be manipu-lated and rearranged in myriadways. The results can be distrib-uted over new forms of network,using on-line and broadcastchannels; and this distribution

process can involve active part-icipation by recipients. Theprospects appear revolutionaryand there is powerful support forthe construction of data high-ways, such as the NationalInformation Infrastructure in theUS and the EuropeanInformation Society in the EU.

As this technology advances, itwill redound on many aspects ofacademic work. The developmentof electronic banks of scientificdata, already referred to, is onepart of the process. To a signifi-cant extent – who can tell howcompletely – the book, thejournal and the written record ofdata will be replaced by inform-ation read on screen and held indigital memory. Even todayscholars may engage in discus-sions at a distance which havean immediacy on a wholly newscale, both in terms of speed andin range of contacts. Activitiessuch as the Internet demonstratethese possibilities (and also someof the hazards – for instance thedeliberate provision of misinfor-mation). Opportunities for inter-active learning will be muchenhanced by the new potential,one aspect of which is the abilityto combine the use of materials indifferent media and to manipu-late them into new conjunctions.

As the digitisation revolutionprogresses, there are likely to bevery substantial changes in theorganisation of informationsupply; and the economic andsocial consequences are likely to


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pose a whole range of legal prob-lems, from control over unaccept-able contents to the regulation ofdominant firms in the emergentindustry. Among these problemswill be questions concerning thenature, scope and enforcement ofIPRs. At present, however, it isvery difficult to predict whatadaptation of IP laws will be nec-essary in order to fit a digitisedworld. Whatever else, one mustassume that it will not be aworld confined within nationalboundaries. Accordingly legaldiscussions will increasinglyhave to be international inimpact.

9.14 IP Protection of Digitised MaterialIt seems likely that copyrightwill be the form of IP mostinvolved in the development ofdigitised information systems.Patents in computer functionsmay also come to play a strategicrole. On current predictions,many legal experts regard copy-right (i.e. copyright of both theauthor’s right and neighbouring-right types) as a sufficiently flex-ible form of legal protection toadapt to the new media withoutfundamental alteration. At thesame time, it is recognised thatmuch will depend on the develop-ment of technical means whichcan track the extraction andrestorage of digital material soas to monitor its use in accuratedetail. Once this is achieved, andmade proof against those intenton piracy, it will be possible tolevy charges for use and to dis-

tribute them to a whole complexof right-owners with an efficacyunknown in the distribution sys-tems which for the most part stilloperate today. In practice, if notin law, rights will have to beasserted through collecting soci-eties and the organisation andcontrol of these societies willbecome a major issue.

There will be a need to preservesome material as confidential,and this requires further workon encryption. There will beinterests (of the kind currentlyprotected by the concept of moralrights) in ensuring that the iden-tification of authorship remainspart of a work, even when itsform is adapted or altered, andin maintaining (at least in somemeasure) the integrity of a workheld within a network againstunfair manipulation of its con-tent. Academic authors will haveas strong an interest as anygroup in these last two factors.At this juncture it is difficult tosay more than that, among thegroups of experts who meet con-stantly to review the problems,these difficulties are recognisedand a search is under way to findacceptable solutions. Those solu-tions are most likely to operatein relation to material that ismade electronically available ona large, commercial scale. It maybe doubted whether collectionand monitoring systems willcome into effect for informal sys-tems of consultation and additivecontribution which are a typicalfeature of ‘bulletin boards’ andthe like. Academics are among


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those who must learn, that ifthey choose to place theirideas in electronic circul-ation, they may be commit-ting them to a public domain.They will need to be awarethat this course of action hasits pitfalls as well as itsadvantages.

10. TRANSFER OF TECHNOLOGY TO DEVELOPING COUNTRIES

10.1 Role of IPRsOver the past three decades par-ticularly, it has often beenasserted that IPRs contribute tothe continuing dominance ofdeveloping countries by the activ-ities of the trans-national corpo-rations of the developed world –to a degree that is certainly sig-nificant, even if it is not posi-tively sinister. This became astrand in the demand for a newinternational economic order.

An early response, after complexnegotiations, was the introduc-tion into the two main intern-ational conventions on copyright(Berne Convention, UniversalCopyright Convention) of specialqualifications on the exclusiverights of authors in favour ofdeveloping countries. On theother hand, in 1982 the leadingindustrial states preferred toabandon attempts to revise theParis Convention on IndustrialProperty, rather than concede todeveloping countries a specialright to grant exclusive compul-

sory licences, which would havethe effect of keeping even thepatentee out of the local market.

10.2 Pressures from Industrialised CountriesIn the ensuing years, industrialcountries, led by the US, haveshown their increasing concernover the piracy of protected prod-ucts in a range of countries – andin particular those advancingmost rapidly towards industriali-sation. As well as threats andretaliation through trade controlmeasures, there have been arange of bilateral and regionalagreements between states onlevels of IP protection, andhighly significant negotiations atthe international level.

In the Uruguay Round for therevision of the GeneralAgreement on Tariffs and Trade(GATT), a component has beenintroduced covering TradeRelated IPRs (the ‘TRIPSAgreement’). With the eventualsuccess of the negotiations inDecember 1993, TRIPS providesa new basic accord on IPRs inthe international arena. Itsimplementation (to be spreadover several years) must now bea central preoccupation of diplo-matic activity and commercialconcern.

TRIPS represents some consider-able compromise upon the initialstarting point of its promoters,which was to insist that anycountry wishing to have access to


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the opened markets of the GATTnetwork must introduce andenforce IPRs of a standard equalto that found in leading statessuch as the US. Nonetheless, thelevels of protection required areof a much higher order than pre-viously pertained in much of theworld community, and they arebacked by the sanctioning systemwhich operates within the GATTas a whole. The concessions formany purposes allow developingcountries a five-year period inwhich to bring their laws intocompliance with TRIPS stan-dards. For the least developedcountries this tolerance isextended to ten years.

10.3 IPRs under World Trade SanctionsIPRs now have a distinct weightin the balance of world tradeadvantages and disadvantages.Intellectual property will have tobe respected in developing coun-tries and this will often add tothe burdens being assumed bythose countries as a price ofaccess to international markets.Those which derive most advan-tage from the new regime

overall, should also begin todraw benefits from the protectionof ideas generated in their owncountries, or made the source ofproduction as part of industrialorganisation on a trans-nationalscale. Patents and other rights intechnical ideas after all provide ameans of attracting the newesttechnologies to countries whichare otherwise likely to be passedover as places for industrialinvestment.

At this juncture, two things atleast should be expected: thatleading countries, such as theUS, should now abandon unilat-eral trade sanctions which aredesigned to insist upon evenhigher standards than thoseembodied in TRIPS; and that, ifin future higher levels of IP pro-tection are negotiated withinTRIPS, they will be concededonly in return for improvedaccess to markets for developingcountries.

The impact of TRIPS ondeveloping countries shouldbe carefully monitored.


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EXPLOITATIONOF IDEAS FROM ACADEMICSCIENCE11. THE GROWTH OF

INDUSTRIAL LIAISON

11.1 IP in Research ContractsIn this Part of the Report, weturn to questions of means.Universities and non-industrialresearch organisations now seekto give much greater account tothe commercial potential ofresearch than happened in thepast. More and more of themhave established IndustrialLiaison Offices (ILOs) or similarunits, armed with a mission touncover exploitable ideas andturn them to the commercialadvantage of institutions andindividuals. There is activeencouragement from governmentfor IP exploitation plans, tech-nology audits, training in IPRmanagement techniques, generaleducation on IP matters and sim-ilar initiatives. We believe thatthis shift in emphasis isinescapable, but one whichdeserves to be pursued onlyto an extent that does notcompromise the essentialvalue of academic research.

Pressures on research funding aresuch that no institution can nowadopt an attitude which neglectsany potential for commercialdevelopment, where that exists.Moreover, IPRs are essentialbuilding blocks in that process.They cannot be left out of accountin organising the course ofresearch projects, whether the

project is on a grand internationalscale or is a small-scale pilotstudy. In consequence therehas to be some significantmodification of those freernotions of collaboration-cum-competition, which have per-vaded academic science in thepast. To avoid disputes overrights there must be aware-ness of the need for agree-ment from the outset on anacceptable approach to them,which must be expressed in aproperly drawn contract.

11.2 Experimental Nature of DevelopmentIt must be stressed that thedevelopment taking place is anexperiment; it must not be con-flated in advance into a panacea.It is not the central aim of mostacademic science to produce com-mercially exploitable results. Ifthey come, it is by way of sec-ondary consequence. Industry isinherently more likely to producethe technology it needs from itsown resources.

The usefulness of industrialliaison and technology transfermay prove to lie not so much inIPRs and royalty flows, as in thestrengthening of informal contactsbetween academics and industry,under which exchanges of infor-mation may increase and per-sonnel may move more frequentlybetween the two sides. From this

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real benefits may flow, even if theyare not easily quantifiable.

11.3 Concerns for the FutureLooking to the future we woulddraw attention to three associ-ated dangers:

(i) In the White Paper, Realising Our Potential, the Office of Science and Technology has stressed itscontinuing commitment to the support of basic research,and to the importance of maintaining this country’s long-held position in the international development ofscientific knowledge. At the same time it is placing quite novel emphasis on the needto extract practical benefitsfrom academic work, and thiscannot but have some tendency to squeeze basic science budgets at a host of points. The financialsupport from govern-ment, through the Research Councils, for basic research must remain a crucial and distinct priority. The increasing governmentemphasis on practical benefits must not lead toa creeping displacement of basic science, much of which, by its nature, is far removed fromcommercially successful exploitation.

The competition for basic

science support will becomesharper and increasing attention is likely to be paid to commercial success as a deciding factor. While this may stimulate themarketing of research, it has long-term costs for the system as a whole. Besides the distorting effects on basic science, it is liable toerode the complex structureof mutual support among individuals and institutions which sustains the academic community. Even instit-utions which win out in thiscompetition may find them-selves the poorer when costs are counted in full.

(ii) At present there areoptimistic, but essentially untested, estimates of whatILOs may achieve (though itis at least recognised that they cannot be expected to produce the short-term returns that would make it appropriate to designate them independent costcentres: see Intellectual Property in the Public SectorResearch Base, p. 31). Eventhe well-established andsuccessful US examples, such as the technology transfer scheme at MIT,produce income that is under 5% of annual researchexpenditure ($16 million on $400 million in the MIT case); UK universities are mostly at an even lowerproportion (1–2% at best).

EXPLOITATIONOF IDEAS FROM

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An ILO may indeed be unsatisfactory if it fails to identify and promoteopportunities for commercialisation. But how often these chances will occur must depend very much on the range of research which the institution undertakes, andthat must be affected by a whole range of factors. The‘performance’ of an

academic institution’s ILO should not be taken as the measure of that institution’s science. The activities of aninstitution must reflect ajudgment of what is most worthwhile to do; and that should not be tied too closely to successes incommercial promotion.

(iii) Significantly, the latest Research Assessment Exercise conducted by theUniversities and Polytechnics Funding Councils asked for a tally not only of patents acquired,but even of copyrights. Likewise the OST has called for more emphasis in staff appraisal, performance assessment and promotion reviews to be attached to patents filed, to licences negotiated and royalties earned under them. (Intellectual Property in the Public Sector Research Base, p. 32). Of course applicationsand patents are one way of recording the results of

research, just as financial returns are one measure of its success. So long as theseindicators are treated aselements in assessing the quality of the work as a whole, they have some place. But patents are costly to obtain and commercialisationdepends on success in finding business partners. If the figures are lifted from their context, they may well be treated as measures of research ability, The acquisition of IP shouldnot be treated as anindependent measure of academic achievementwhen all it demonstrates is the scale of the re-search funding or the willingness of an investorto shoulder development risks.

11.4 Informing the Academic Community

Since the change in progressmust have a significantimpact on attitudes of theacademic community, thatcommunity needs to knowmore about the commerciali-sation process, and the roleof the various IPRs within it– in particular, the conditionsunder which they are available,the ways in which they underpinnew product development andthe limits to their effectiveness.It should be one role of ILOsto increase academics’ aware-ness of IPRs. Universities

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must also consider activelyhow far knowledge of intel-lectual property shouldbecome part of undergrad-uate and graduate coursesfor scientists, engineers, man-agers and lawyers.

There is also scope for moreextensive training of thosewhose careers will be in sci-entific research and itsadministration. For them,intellectual property and itsdeployment should form anassessed element in highereducation courses. Thereseems to be considerable willing-ness amongst professionalsinvolved in intellectual propertyand its licensing to participate insuch teaching, but training ofthis kind is as yet very much inits infancy.

12. IPRs WITHIN INSTITUTIONS

12.1 Ownership Issues in the Past

If institutions are to act,directly or indirectly, asagents for commercialexploitation of academic sci-ence, the basis of their powerto do so, vis-a-vis theresearchers, has to be estab-lished. Certainly the legal ques-tion who owns the rights in anyIP is part of that issue, though itis by no means the whole story.

In the past academic scientistshave often ignored IP and its

consequences and questions of itsownership have tended to beneglected, at least where theissue involves only theresearcher and his/her institu-tion. Where, on the other hand,there has been some form of col-laboration with industry it usedto be common practice for any IPissues to be dealt with by theindustrial participant; who notonly would make the necessaryapplications and see to enforce-ment of the rights, but as a con-comitant would acquireownership and so have the powerto exploit itself and/or licenseothers to do so.

12.2 Rights Under The Patents ActIP ownership as between a uni-versity and its staff has not beenseriously examined. At least sofar as concerns patents, generalrules about employed inventorswere laid down in The PatentsAct 1977. It is in consequencearguable that inventions madeby university teachers, as muchas those by research fellows andworkers in non-industrialresearch organisations, belonginitially to the employing institu-tion. However, students, notbeing employees, form an oppo-site case: they are entitled topatents for their inventionsunless there is a different agree-ment with their university.

The important legal issue, how-ever, is not the rule which wouldapply if there is no agreementabout ownership and sharing in


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returns, but what agreementthere should be. It seemswidely to be accepted in theUK – and it is a view whichwe support – that publicbodies which give grants andotherwise provide researchfacilities deserve to share inrevenue from patented inven-tions with the researchers(and, in universities, theirdepartments). As a conse-quence, provided that thebody has proper facilities fororganising protection andexploitation, it (or itsexploitation company) shouldbe the owner of patents andrelated rights. There is a casefor explicit agreements giving theuniversity the rights in an inven-tion made by a student, subjectagain to royalty sharing arrange-ments.

Various royalty sharing schemesnow operate in universities: acommon pattern is for all or avery high proportion of initialreturns to go to the inventor(s);with larger proportions there-after going to the institution,sometimes with a furthertranche for the department con-cerned. There may be similararrangements for shares in anyspin-off company which may takeover a promising venture. Thejustification for such an arrange-ment is that it spreads the incen-tive effect of the patents, so thatboth institution and individualsmay appreciate the stimulus.Indeed if the arrangements as awhole do not strike researchersas efficient, helpful and fair,

inventions may go unrevealed, orbe taken off surreptitiously tothe private sector.

12.3 Research Councils and CharitiesSo far as research in universitiesfunded by Research Councils isconcerned, the terms of the grantnow require acknowledgmentthat ownership is in the univer-sity (or, for reasons to do with itscharitable status, its technologyexploitation company) and thatroyalties will be distributed inaccordance with an agreed plan,similar to those already men-tioned. These arrangements are,however, subject to scrutiny bythe joint Exploitation ScrutinyGroup set up by all the Councils.So far as research sponsored bycharities is concerned, the posi-tion is at present complicated bytheir need not to jeopardise theircharitable status (and risk taxliabilities in consequence). Thereneeds to be careful considera-tion of the position of donorcharities in relation to intel-lectual property generated byresearch which they fund.Most charities are in no posi-tion to enter upon the com-plex business of managingrights, whereas academicinstitutions are building upjust this capacity. Charities,therefore, should not beplaced under any obligationby the general law to takeassignments of IPRs.Ownership of the rightsshould be left with the organ-isation, or person funded,


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where that is the efficientway of ensuring that theircommercial potential is actu-ally realised. To what extentthe charity should receiveany share of returns from theresearch exploitation is a sep-arate question and one thatshould be left to the judgmentof the charity and the recip-ient institution. It is an issuewhich may have complex tax-ation implications.

13. IPRs IN ACADEMIC– INDUSTRIAL COLLABORATIONS

13.1 New TensionsTechnology transfer from acad-emic institutions to industry canbe organised at any stage fromthe initial conception of theresearch programme, through tolicensing of IPRs already obtainedby independent effort. The termson which ILOs or other agents foruniversities and government-funded institutions should strikeagreements have become the sub-ject of a good deal of disquiet anddebate, as the ILOs have begun tomake their mark.

Some in industry have foundthemselves forcefully informedthat they can no longer expect tolook on university research as apublic support programme fortheir private plans; and that theycan, for instance, only expectexclusive rights in resultant IP ifthey are prepared to meet thefull overheads of the project.

On the other side, industrialistspoint out that, by and large, thecost of research is moderate inproportion to that of subsequentproduct development and mar-keting: a ratio of 1:10 is oftentaken as a minimum. If theycannot have exclusive rights toexploit the inventions which theysponsor, they may have justifi-able reason for refusing to goahead with the collaboration.

From yet another perspective,there is concern that some whostaff ILOs at present lack theknowledge and experience to rep-resent their institutions ade-quately against acutebusinessmen. Yet they need inmany instances to negotiate atarm’s length not only withBritish firms but equally withpowerful organisations fromoverseas.

13.2 Pragmatic SolutionsThe importance of these tensionshas been reflected in officialdeliberations. In 1989, theCooper Committee (Report of theInterdepartmental IntellectualProperty Group, IntellectualProperty Rights in CollaborativeR&D Ventures with HigherEducation Institutions) wasunable to prescribe any one solu-tion for the holding and exploita-tion of IPRs which resulted fromacademic– industrial collabora-tion. The circumstances wereconsidered too various. Termshad to be negotiated case bycase.


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While the Committee warnedagainst the impracticalities whichcould flow from joint ownership ofIP, it stressed that ownership wasnot the only, or indeed the vital,issue of itself. A set of interrelatedquestions needed to be addressed:What degree of confidentialitywould be required of theresearchers? Which party wouldtake responsibility for enforcingthe rights (and would, therefore,appropriately be registered asowner, or at least as exclusivelicensee)? What rights of exploita-tion would be given to the indus-trial partner and in particularwould those rights be exclusive?What background IP would alsobe licensed? What would happento IP resulting from modificationsand improvements? How farwould there be rights to use thecurrent invention for furtherresearch and as background forlater developments protected bytheir own IP? The OST’s Paper,Intellectual Property in the PublicSector Research Base, endorsedthese conclusions with only minoradditions.

We support the conclusions ofthe Cooper Committee whichreflect the kind of common-sense which any licensingexecutive acquires. Thisincludes knowledge of howcomplex and difficult suchrelations can prove overtime. Accordingly what mustbe sought is an agreementwhich seems on balance fairto each side – an agreementwhich it is, therefore, betterto honour than to undermine.

13.3 Acquiring Licensing SkillsThe first necessity for universi-ties and research bodies is toacquire their own personnel oroutside professionals who canbring the practical experience, orat least the business instinct, todrive firm but reasonable bar-gains. Investment in this, partic-ularly at the early stages, couldmake the difference between suc-cess and failure. It may well bethat the kind of expertise neededfor the tougher parts of theprocess can only be providedfrom outside: through forinstance an established player,such as the British TechnologyGroup or a venture capital com-pany. What may need to be onsite is a small staff chargedwith stimulating interest incommercialisation and itsmechanics, in working withresearchers on the practicalpotential in their work andgenerally in enhancingknowledge of IPRs in theinstitution. Altogether, toemphasise once more theexperimental nature of whatis now happening, the devel-opment of ILOs needs carefulmonitoring.

13.4 Negotiating PositionsIn 1991, five leading researchinstitutions in the universitysphere (Oxford, Cambridge,Imperial and UniversityColleges, London and Warwick),established guidelines for collab-orative research with industry.These propose a model for negoti-ations which draws a prime dis-


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tinction between a sponsor whichis prepared to fund the full costsof the research, including all theuniversity’s overheads, and asponsor which will provide only alesser level of support.

In the first case, the sponsorshould be entitled to exclusiverights in the IPR, subject to thepayment of royalties to the uni-versity. But even then the uni-versity should examine whetherthe assessment of ownership, orgrant of an exclusive licence,would inhibit subsequentresearch and the exploitation ofits results, possibly with a com-petitor of the initial sponsor. Insuch a case, the universityshould seek to preserve itsfreedom to pursue such researchand retain the ability to decidehow it will then exploit it. In thesecond case, the sponsor shouldexpect only a non-exclusivelicence, subject to royalty.

The Guidelines also recognise thepossibility of granting thesponsor exclusive rights withouta royalty obligation. Howeverthis solution is appropriate onlywhere the sponsor is prepared topay full costs plus additionalsupport in lieu of potential royal-ties. The university would thenhave funds with which to com-pensate staff who otherwisewould be left without royaltyshares under the university’sinternal arrangements.

We endorse these Guidelinesas providing an acceptable

starting point for negotia-tions. At the same time it hasto be recognised that theycannot always be strictlyadhered to. The governingconcern should be thatworthwhile research getsdone and results are madepublicly available as soon aspracticable.

13.5 Enforcement of RightsIt has to be remembered that theactual value of rights dependsupon the financial ability anddetermination of owners andexclusive licensees to enforcethem against competitors whoare not prepared to take alicence. In the past, when theNRDC/BTG was the channelthrough which government-spon-sored research had to pass, thevery fact that a governmentorgan was in charge made some(though not all) would-beinfringers wary of becominginvolved in litigation. It is onedisadvantage of the BTG’s pri-vatisation that it no longer pre-sents this appearance, and it willacquire an equivalent reputationonly if it builds powerful portfo-lios of patents and other rightsand shows that it is not afraid toassert them.

Government should do all itcan to increase the avail-ability and efficiency of courtprocess for the enforcementof IPRs. A beginning hasbeen made with the establish-ment of the Patents County


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Court, but it still needs timeand resources for that courtto become an institution offront-rank importance.

On another front, insurance isavailable privately to IP owners

against the costs of enforcementlitigation. Universities shouldconsider whether, individu-ally or collectively, theyshould have insurance of thistype for their IP.


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CONCLUSIONPART IV CONCLUSION

14. THE WAY FORWARD

14.1 We would end by re-emphasisingthe academic values which westressed in the Introduction.Researchers outside the indus-trial sector will continue toattach major importance to theircontribution to scientific knowl-edge. This involves both a sub-stantial degree of freedom topresent their ideas to their peersand to conduct experimentsunfettered by conflicting rights.

In universities it should beput beyond question that aca-demics retain ownership ofcopyright in their writingsand other works, so that theymay publish them when andwhere they wish, withoutcontrol by their institutions.

14.2 As far as the practical appli-cation of scientific ideas is con-cerned, universities are set on acourse which encourages themaximisation of commercialvalue through patents and otherIPRs. It is important to recognisethat this raises tensions, not justbecause of the immediatedemands of the systems intro-duced to encourage commerciali-sation, but more generally fromthe change of direction itself.

14.3 As to the immediate demands,we have identified the majorsources of tension, such as theneed to keep inventions confiden-tial until the patenting arrange-ments are properly in train. Itmust be a major concern ofresearch administrations toreduce these strains by effi-cient management ofpatenting procedures and byinforming researchers of thelegal requirements and theirobjects. There is much elsethat they can do, particularlyin organising the variousforms of academic–industrycollaboration, to help workout fair solutions which willdiffuse potential conflict.

14.4 Equally it is for government to recognise the contributionwhich wide-ranging andunhindered dissemination ofresearch results through theacademic community, makesto the long-term benefit ofsociety. Government mustplay its part in ensuring thatthese values retain their ownstatus, and are not eroded bythe short-term pursuit ofcommercial return at allcosts. For those costs couldbe immense.

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APPENDIX IAPPENDIX I

DESCRIPTIVE CATALOGUE OFINTELLECTUAL PROPERTY

1. PRELIMINARY

Competition and Intellectual PropertyMarket economies are characterised by a general freedom accorded to alltraders to offer products and services in competition.

Intellectual property rights (IPRs) constitute one exception to this generalproposition, since they accord their owner an exclusive ability to act ingiven ways in the course of trade. This takes the form of a right to preventothers from doing the act in question.

IPRs are not a positive entitlement: they do not give the right-owner anylicence to act in derogation of the rights of others.

National Basis of IPRsIPRs are granted when it is considered that legal protection will advanceeconomic performance in particular spheres, or that the right is needed tosecure conditions of fair competition for the right-holder.

The policy decisions over IPRs are determined by nation states and soIPRs are essentially national rather than international in character. Notall states grant the same types of IPR, and even when they do legal varia-tions remain between the rights in different states.

International LinkagesInternational conventions exist which accord equal treatment to the partic-ipant states (mainly by reference to the nationality of persons to whom, orthrough whom, rights are accorded). To a limited extent these conventionsalso prescribe standards of protection (mostly minima) in the laws of par-ticipant states. The most important of these are:

Paris Industrial Property Convention (originally of 1883): covering in particular patents, petty patents, industrial designs, trade marks and unfair competition;

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APPENDIX IBerne Convention (originally of 1886) and the Universal CopyrightConvention (originally of 1952): both covering authors’ rights aspects of copyright;

Rome Convention (1961): covering the neighbouring rights to copyright given to performers, record producers and broadcasting organisations.

European LinkagesTo a limited extent, there are also international and regional arrange-ments for the processing of some types of IPR, the object being to generatenational rights in a number of states. Among these is the collaboration of17 Western European countries in the European Patent Office (which hasheadquarters in Munich).

The European Community has projects for Community-wide IPRs, equiva-lent to the IPRs granted in political federations such as the US orAustralia. Initially these will become available as alternatives to nationalrights in Member states. They are mentioned individually below.

Classifications of IPRsIPRs can conveniently be divided into two main groups: rights which pro-tect certain classes of ideas (patents, copyrights, designs, etc.); and rightswhich protect elements in the marketing of goods and services (trademarks and names, get-up, etc.) This is the primary division which is fol-lowed below.

IPRs may also be divided into those which have as a pre-requisite that agrant or registration is obtained from a public body (e.g. patents, registereddesigns, registered trade marks); and those which are accorded withoutany such formality (e.g. copyrights, unregistered design rights, confidentialinformation, unregistered trade marks and names when protected againstpassing off).

In the first group, the rights are granted against all others, i.e. they maybe asserted even against those who independently devise the same idea orsymbol. In the second group, the rights can for the most part be enforcedagainst those who take the idea or symbol from the right-holder. Thesecharacteristics will be noted in relation to each type of right.

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APPENDIX I2. IP IN IDEAS

i) Patents for Inventions

Purpose, entitlement, durationPatents are granted to encourage the making of practical inventions andtheir subsequent development into commercial products and processes, toincrease public knowledge of inventions and also to reward inventors.Patents are granted for new and inventive products, substances andprocesses.

The protection is an exclusive right to prevent others exploiting the inven-tion in its various forms, which is good even against those who make theinvention independently. In most countries priority is given to the first toapply (though the US still adheres to a first-to-invent principle). The rightlasts for a relatively short maximum term (under the European PatentConvention, for instance, for 20 years from application for the patent).

ValidityA patent is valid only if the invention claimed is novel (not itself previouslyknown); represents an inventive step (is ‘not obvious’) over the state of theart; and is capable of industrial application (is useful).

Patents must be applied for at a national patent office (or a regional alter-native, such as the European Patent Office). In many countries, the sub-stance of the claim will be examined by that Office before grant. Whetheror not this happens, the validity of any patent granted may be challengedthroughout its subsequent life by those whom it affects.

DisclosureIn return for the patent, the patentee must define his invention sufficientlyin his patent specification for others with normal skills to be able to per-form it.

Where a patent relates to microbiological material, and no adequatedescription can be given of how to acquire this material, a scheme nowexists under which samples are deposited in specified culture collections inorder that others may procure them. However, while the patent applic-ations are still under consideration, only independent experts may be sup-plied with this material.

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APPENDIX IInfringementThe scope of the right granted, which typically is defined by ‘claims’ set outin the specification, should be related to the degree of invention over theprior art. If a patent is to be of real commercial value, it is crucial toensure that these claims are of sufficient breadth to prevent at least simple‘inventing round’ the patent.

Settling the scope of a patent is one of the most perplexing aspects of thesystem. The drafting of claims calls for professional assistance.

Costs and ProceduresThe main routes for British inventors to acquire patents are now the fol-lowing:

a) For an invention likely to be used only in the UK: application to the UK Patent Office. Official fees to grant – £285; from 4th year, annual renewal fees £110, rising to £450 for the 20th year; if a patent agent is used, professional fees depend on complexity and volume of work but probably will start at around £1,000.

b) For an invention likely to be used only in parts of Western Europe: application to the European Patent Office. Official fees to grant – inthe region of £3,000–4,000, depending on the number of countriesdesignated; plus professional fees and fees for translations into national languages. The result is a bundle of national patents for the designated countries. It is possible to make a preliminary application for protection to the British Office and within 12 months to proceed with a more complete application to the EPO.

c) For an invention with international value: application for patents in various countries world-wide is usually commenced by the Patent Cooperation Treaty (PCT) route. A single application through the British Patent Office leads to an international search, and, for many of the participant states (there are now some 70), to a preliminaryexamination at an international level. So far as Western Europe is concerned, a PCT application can lead on to processing in the EPO. A particular value of the PCT route is that it delays the date at which translations into national languages are needed. This allows the initial application to be made earlier and expenditure to be put off during a period when both technical and commercial assessments of theinvention may be under active review. The costs of filing in, say, 50 countries are likely to be around £50,000 depending on the length of the specification.

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APPENDIX Id) Litigation costs also are not low. In the US they can easily exceed

£1,000,000. In the UK estimated averages are: in the High Court, £100,000; in the Patents County Court, rather less; in the Court of Appeal, some £60,000. In continental Europe litigation costs aregenerally lower.

ii) Petty Patents; Utility Models

Second–tier protection systemsSome countries (the UK is not yet one of them) have an additional systemfor protecting technical advances on a simpler basis (in most cases there isno substantive examination before grant) than under the standard patentsystem; and for a shorter duration (typically 6–10 years). They areobtained by application to a government office and are good even againstindependent devisers (cf. design rights, below).

DifferencesIn some countries these ‘petty patents’ or ‘utility models’ are availablewithin the whole field of ‘invention’. In others protection is given to theextent to which an invention assumes a particular shape or set of shapesin (say) a machine part or apparatus. Again the various systems differ overthe level of achievement which must be shown: some impose the same cri-teria of novelty and obviousness as for a full patent; others require only alesser level of practical utility over and above what is already known.

EU DevelopmentThere is a movement to introduce such a supplemental system on a EU-wide basis. All Member states, save the UK, Luxembourg and theNetherlands, already have protection of this general character at a nationallevel, though the systems vary along the lines already indicated, and it isunclear what precise form a EU ‘second-tier’ protection would take.

iii) Plant Variety Rights (PVRs); Animal ‘Varieties’

Systems of ProtectionIn the US from 1930, and Western European and certain other countriesafter World War II, rights began to be granted for newly developed plantvarieties. The form this takes in the UK bears some resemblance to a patentsystem, with an additional right in the name given to a new variety. Rightsare granted once a scheme has been established for a species, and such mat-ters as the duration of the right vary somewhat from scheme to scheme.

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APPENDIX IUK ApproachBefore grant, a new variety is subject to official trials to establish that itdoes have the necessary characteristics of distinctiveness, uniformity andstability. A sample of propagating material has, therefore, to be deposited,though it does not thereby become available to others. The right preventsall others from marketing seed and other propagative material for thevariety. There is a ‘farmers’ exemption’ allowing them to produce their ownseed and rootstock in certain instances. The variety may also be used inorder to produce further varieties.

Relation to Patent SystemWith the growth of genetic engineering of plants, there has been consider-able pressure to by-pass this special, limited system, in favour of extendingpatent rights so that they may include some inventions relating to plants.In the EPO this is succeeding where the invention lies in altering thegenetic structure to some greater or lesser extent than is involved in theproduction of a new ‘variety’.

International and EUThere is an international Convention covering plant variety rights (theUPOV Convention, with 18 member countries), which has now beenamended, so as to allow contracting states to protect varieties by patentsand by special rights if they choose. It is possible that a EU-wide PVR willbe established.

Animal ‘varieties’No special system of intellectual property in new breeds of animal hasbeen introduced, which would provide an equivalent to that for plant vari-eties. However patents for ‘animal varieties’ are excluded from the patentsystem, as are plant varieties. And as with plants, this exclusion is notbeing interpreted so as to prevent the patenting of inventive changes in thegenetic structure of animals, provided at least that those changes affectthem to some larger or smaller extent than amounts to the creation of anew animal ‘variety’ (an inapposite word).

iv) Trade Secrets

Nature and ScopeMost developed countries grant protection to technical and commercialsecrets in a manner which comes close to being a property right. Protectiondoes not depend upon any formal act of deposit or registration of the

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APPENDIX Isecret. In most cases, liability stems from the fact that a person has hadaccess to the secret information on a confidential basis (e.g. as an employeeor a licensee) and is acting or proposing to act in breach of that confidence.

Much industrial know-how is thus protected informally. But it is rarelysimple to use legal rights to stop its leakage away. This helps to explainwhy many who wish to license rights in successful industrial products andprocesses prefer to have patents for the main concepts, while relying ontrade secret protection for the surrounding know-how.

DifferencesLegal systems differ in their treatment of trade secrets over the following:

a) How far the protection extends to mere ‘ideas’, e.g. about useful, or sterile, paths for future research;

b) The extent to which indirect recipients are liable;

c) Whether the protection applies to spies who obtain theinformation surreptitiously, without having any relationship tothe person holding it;

d) The degree to which employees must be left free to takeinformation with them when they leave employment.

v) Industrial Designs

a) Registered Designs

Registration SystemsMany countries (including the UK) grant rights covering the appearance ofmass-produced articles, where a design element is incorporated whichappeals to the eye, rather than for purely technical reasons. In the UKthese rights are granted upon application to the Designs Registry of thePatent Office and are good against both copyists and independentdesigners.

DifferencesThere is considerable variation in the details of registered designs lawfrom one country to another. Typically the rights may run to a maximum ofbetween 15 and 25 years. Countries belonging to the Paris IndustrialProperty Convention are obliged to protect industrial designs and to afford

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APPENDIX Ia measure of priority to applicants from other contracting states. The EUis now proposing to introduce a EU-wide design right of this character,supported by a short-term, informal right against the copying of a design.

b) Unregistered Design Right

UK LeadThe UK has already introduced a separate, informal type of protection forindustrial design, which operates where the designed product does notqualify as an artistic work within copyright law. Being the subject of noregistration procedure, it is available only against those who copy theproduct.

ScopeUnregistered design right applies not to surface decoration but to theshape of industrial products and is available irrespective of whether thepurpose and effect of the design is to appeal to the eye or to perform atechnical function. It accordingly provides some informal equivalent bothto a registered design (for the ‘eye appeal’ of a product) and to a pettypatent where that is granted for the shape of an article.

Duration and LimitationsThis unregistered design right usually lasts for 10 years from first legitimatemarketing of products embodying it, there being a power to impose compul-sory licences in favour of competitors, mainly in the last 5 of those years.

There are in any case exceptions (notably the so-called ‘must fit’ and ‘mustmatch’ exceptions) which aim to allow competitors to make spare parts forcars and other durables without seeking any design licence (virtually thesame exceptions also apply to registered designs).

vi) Copyright and Neighbouring Rights

Authors’ RightsTraditionally copyright has been accorded to ‘authors’ (i.e. creators) of lit-erary, dramatic, musical and artistic works. The right gives protectionagainst copying in various forms, notably making reproductions and usingthe material in public performances, broadcasts and the like.

Infringement may occur when less than the whole work has been copied: thereproduction of a substantial part of the work as it is expressed will be actionable.

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APPENDIX IDurationAuthors’ copyright lasts for long periods – in most countries for theauthor’s life and 50 years post mortem, if not longer. Under a EC Directive,the period throughout the EU is soon to be the author’s life plus 70 years.In some form there will also be protection of such moral rights as the rightto be named as author and to have the work protected from derogatorytreatment.

Neighbouring RightsA modern tendency has been to create similar rights against copying infavour of other persons, mainly in the spheres of culture, education andentertainment. These ‘neighbouring rights’ to authors’ rights differ fromcountry to country. In the UK, they at present include copyrights given tothe producers of films, videos and sound recordings (i.e. the investors whofund their making), to broadcasting organisations and to publishersagainst photocopying. In addition, protection is now given separately, toperformers and those with exclusive rights in their performance. Therights endure for somewhat shorter periods than authors’ copyright.

Computer ProgramsComputer programs, whether in source or object code, have recently beenprotected by copyright, by deeming them to be works of literary authors.(To some extent, programs are also beginning to acquire patent protection,though this differs between countries.)

In most industrial and many industrialising countries copyright protectionof programs has been introduced by special legislation. In some countriesliterary copyright has been adapted by special provisions, relating, forinstance to the term of protection and the degree to which programs maybe decompiled by others wishing to make their own developments. It is stillfar from clear what activities, other than exact reproduction, will consti-tute infringement of this copyright.

vii) Semiconductor Chip Design

Separate Protection Against CopyingComputer ‘firmware’, consisting in the layout of chip circuitry, has alsobeen specially treated. Following a US model, the EC and other advancedcountries have created a separate right in semiconductor chip design,which operates against copying of the design, and lasts for a 10 yearperiod. It is subject to exceptions which allow reverse analysis and adapta-tion.

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APPENDIX Iviii) Unfair Extraction Right

Database ProtectionThe rapidly increasing value of computerised databases is leading todemands for greater IP protection than is available in some countries. Aparticular difficulty arises in European countries which confine the scopeof copyright law to cases where there is a real element of personal creativity in a work. This may make it hard to show copyright in a compilation of facts or other material from a variety of sources. To fill thislacuna, the European Commission has proposed the creation throughoutthe EU of an unfair extraction right, lasting for a short period, and subjectto compulsory licensing in certain cases. At present there is considerableargument over whether this is a desirable development.

ix) Slavish Imitation of Products

Misappropriation of IdeasMany countries (though not the UK or countries which derive their lawfrom it) have a general right of action against unfair competition. Therehas been a noticeable tendency to extend such unfair competition laws toall circumstances where products are simulated to a degree which can belabelled ‘slavish imitation’. It may not be easy to predict what will substan-tiate such an allegation.

The right forms a drag-net for cases where no specific form of IPR is avail-able. The absence of this drag-net in British law has led to a tendency toincrease the scope of specific rights, notably copyright and its attendantneighbouring rights.

3. IP IN MARKETING GOODWILL

i) Registered Trade and Service Marks

Registration SchemesWords, phrases, devices, logos, etc. are used as symbols to indicate thesource from which goods and services come. They are crucial elements indifferentiated, competitive markets and are prominently featured in adver-tising. Where practicable today, marks are protected against adoption bycompetitors (deliberately or innocently) through a system of official regis-tration. In the UK this is at the Trade Marks Registry of the Patent Office.

The EU is poised to introduce the alternative of registering a CommunityTrade Mark enforceable by a single process throughout the Member states.

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APPENDIX IInfringementOnce a mark is registered, in most systems it can be protected against theuse of the same or a similar mark, on the same or similar goods, and forthe same or similar services. Provided that renewal fees are paid, theserights can be extended as long as the mark remains in use.

Ease of RegistrationCountries vary in the details of their system for the registration of marks.Some encourage the registration of everything, so that there will be a com-plete listing of symbols in which rights are being claimed. Others allowregistration only after an official investigation into inherent objections toregistrability, and even (as in the case of the UK) into whether there areconflicting marks already on the register.

The coming EU system will confine official examination to inherent objec-tions (that, e.g. the mark is descriptive of the product or is misleading); butcompetitors will be able to oppose registration in advance where they havea conflicting mark with a prior claim to protection.

ii) Misleading Use of Marks, Get–up, etc.

Passing Off and Similar ConductMisrepresentations in the course of actual trade may also give rise to legalprotection. If one trader uses the mark or other symbol by which another isknown to consumers, this conduct will be actionable in law. Some countriesclassify the right under a general law against unfair competition. Others,such as the UK, use somewhat more limited categories, such as the torts ofpassing off and injurious falsehood.

UsefulnessThese are rights which do not depend upon any formal act of registrationand so are particularly important in countries where it may be difficult toacquire a trade-mark registration or where the administration is slow.They are also useful for protecting aspects of marketing which do not (in aparticular country) fall within the scope of a registration system, such asthe appearance of packaging or even product, disparagement in adver-tising, merchandising of characters and endorsement by celebrities.

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APPENDIX Iiii) Collective and Certification Marks

Shared InterestsSignificant goodwill may be shared by undertakings in a word or symbolwhich characterises some aspect of the goods or services which each ofthem separately produces.

This phenomenon includes those cases where products acquire some oftheir quality from the growing of materials and production methods in aparticular place or region (‘champagne’, ‘sherry’, ‘stilton’). Other casesrelate simply to the common description of a product (‘advocaat’; the ‘wool-mark’).

Registration SchemesMany industrial countries have an official registration system under whichthey afford protection to such ‘appellations of origin’ and ‘denominations ofsource’.

In some countries, special forms of joint trade mark exist for this purpose,in the form of a ‘collective’ or ‘certification’ mark or through some otherspecific type of registration. In addition, there is likely to be protectionwithout any need to register, in cases where consumers are likely to beconfused by use of the term. This liability will arise under a general lawagainst unfair competition, or, in common law jurisdictions, because ofpassing-off.

APPENDIX II

OWNERSHIP AND EXPLOITATION OFINTELLECTUAL PROPERTY GENERATED

IN ACADEMIC INSTITUTIONS

Where the employment terms of academic and research staff lay down whois to own intellectual property generated by the employee, for the mostpart these express arrangements determine the issue. This is the mainpoint made in Section 12.2 of this Report.

It does not matter whether these express terms are found in the originalterms of employment or in any subsequent variation of the employment, pro-vided that they are legally binding. What follows here is a statement of therules which apply if no express agreement has been reached on the subject.

The purpose of this Appendix is:

i) to demonstrate that these (largely) presumptive rules do not apply with complete clarity to academic situations; and

ii) to suggest this reinforces the need for both sides, employers and employees, to give fair recognition to each other’s interests, when settling the express terms on the subject in employment contracts.

1. Initial Ownership of a Patent and the Right to Apply for itBy UK law, where an invention is made by an employee in the course ofemployment, ownership lies initially in that person’s employer. This isdefined as covering cases where the employee’s duties (i.e. his normalduties or duties specifically assigned) are such ‘that an invention mightreasonably be expected to result from the carrying out of those duties.’(Patents Act 1977, s. 39(1)).

Since the enactment of the 1977 Act, many universities have taken theposition, also supported by the CVCP, that they are entitled to inventionsmade not only by purely research staff but equally by teaching staff in thecourse of academic research.

2. Compensation to the Employed Inventor for Outstanding BenefitsElaborate rules in The Patents Act 1977, ss. 40–43, seek to secure somemeasure of fair return to employee inventors from patents to which their

APPENDIX II

57

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APPENDIX IIemployers are entitled either initially or by assignment. When theemployer is initially entitled to the patent and obtains an outstanding ben-efit from it, the inventor becomes entitled to compensation representing afair share in the light of all the circumstances (a list of factors is given in s.41(4)). While this statutory scheme can be displaced by a collective bar-gain, it cannot be altered by an individual agreement entered into beforethe invention was made.

These provisions have a compulsory effect; but the circumstances wherethey apply are not always easy to identify. Much may hinge on facts ofwhich there is no adequate record. It is, therefore, highly desirable that anexpress arrangement is embodied in individual contracts and in relevantinstances should be negotiated with an appropriate ‘trade union’ (theexpression is widely defined).

The rules under Heads 1 and 2 together underpin the contractual practicewhich is today frequently an express provision in academic science employ-ment. This provides:

i) that the employer should have initial ownership of patents, rights to apply for them, and similar rights in technology (e.g. petty patents (in other countries), plant variety rights, semi-conductor chip rights, etc.)Equally it makes broad sense to treat IPRs in computer programs on asimilar basis, even though those rights take the form of copyright more frequently than of patents;

ii) that the employee should be entitled to a substantial share in royalty earnings from inventions, generally in accordance with a stepped or sliding scale which enhances the institution’s proportion as the returns increase.

3. Copyright in writingsThe underlying legal position relating to the copyright in writings is notthe same as that affecting patents and related rights. For a start there isno statutory scheme requiring the payment of compensation for out-standing benefits to an employer.

The Copyright, Patents and Designs Act 1988, s. 11(2) lays down that‘where a literary, dramatic, musical or artistic work is made by anemployee in the course of his employment, his employer is the first ownerof any copyright in the work subject to any agreement to the contrary’.

Where the employer thus becomes entitled, the author’s moral right to beidentified as such (s. 77) does not apply in relation to anything done with

59


APPENDIX IIthe copyright owner’s authority. Equally in such cases, the author’s moralright to object to derogatory treatment (s. 80) is reduced to a right, wherenamed, to insist upon a disclaimer.

Under these conditions, the question arises whether and, if so, when thewritings of academic research employees belong initially to their employinginstitutions; and that is primarily a question of what is done ‘in the courseof the employment’.

In this context there has been little interpretation by the courts of thephrase. But on one occasion, the Master of the Rolls, Lord Evershed,speaking of the cognate subject of the delivery of lectures by an academic,took the view that copyright in their text would nonetheless belong to theindividual lecturer:

‘Lectures delivered, for example, by Professor Maitland to studentshave since become classical in the law. It is inconceivable that becauseProfessor Maitland was in the service at the time of the University ofCambridge that anybody but himself, one would have thought, couldhave claimed the copyright in those lectures.’ (see (1952) 69 Reports ofPatent Cases, p.18)

At least so far as regards academic staff in universities, it has not been thepractice for their institutions to claim copyright in their writings. In thelanguage of the statute, the production of copyright material has not beenregarded as falling within ‘the course of the employment’. If the contrarywere to apply, the institution would have the right to decide when the workshould and should not be published, and (as noted above) the author wouldhave no moral right of identification; and only a right to have his or hername dissociated where the work was improperly altered, e.g. by makingcuts or insertions.

It would be wrong for institutions to claim such a right as a matter of gen-eral law, or indeed to take it by express contract, in a way which woulddeprive academic authors of essential powers to control how, when andwhere their work should or should not appear.

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APPENDIX IIIAPPENDIX III

LIST OF THOSE WHO CONTRIBUTEDINFORMATION

The Working Party was greatly aided by the input of data and views from thefollowing individuals and organisations.

3i plcABPIProfessor John N. Adams – University of SheffieldSir Geoffery Allen – Kobe SteelDr D. A. Anderson – CBDE Porton DownAsamura Patent Office, TokyoAssociation of Medical Research CharitiesAUTBBSRCProfessor Margaret A. Boden – School of Cognitive & Computing Science,

University of SussexDr Jeremy Bray MPBritish Biotechnology LtdBritish LibraryBritish Telecommunications PlcBritish Technology Group (BTG)Dr Noel Byrne – IP Law Unit Queen Mary & Westfield CollegeCBIChartered Institute of Patent Agents (CIPA)Ms June Clark – Oxford University Research ServicesCommon Law Institute of Intellectual Property (CLIP)CVCPProfessor Paul A. David – Department of Economics, Stanford UniversityProfessor Kay E. Davies – John Radcliffe HospitalDepartment of Trade and IndustryDepartment of TransportProfessor Gerald Dworkin – Department of Law, King’s College LondonDr Norman F. Elmore – Independent ConsultantETRAC, University of StrathclydeEuropean Patent OfficeHuman Genome Organisation (HUGO)ICRFIMPELInstitute of PhysicsIPMSMrs Vivien Irish – Murgitroyd & Co

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APPENDIX IIIISIS InnovationsMr Justice Jacob – Chancery Division of the High CourtSir Aaron Klug, FRS – MRC Laboratory of Molecular BiologyLSEDr Hector L. MacQueen – The David Hume InstituteMRCDr Alan Munroe – Cantab PharmaceuticalsProfessor K. Murray FRS – University of EdinburghNATFHENERCNixon and Vanderhye PC, Arlington, VirginiaOffice of Science and TechnologyProfessor Dawn Oliver – Law Department, UCLPatent OfficeProfessor Marcus E. Pembrey – Institute of Child HealthPICT, University of EdinburghPOSTRothwell, Figg, Ernst and Kurz, Washington D.C.SATSU, Anglia Polytechnic UniversityScience Policy Support Group (SPSG)SERCMr Andrew Serjeant – SerjeantsSir Trevor Skeet MPSmithkline Beecham PharmaceuticalsSPRU, University of SussexSuzuye and Suzuye Patent Attorneys, TokyoDr David Thomas – Research Contracts Imperial College of Science, Technology

and MedicineTrade Marks, Patents and Design Federation (TMPDF)UMIST Ventures LtdUniversity Directors of Industrial Liaison (UDIL)Professor James D. Watson, FRS – Cold Spring Harbor LaboratoryProfessor Sir David Weatherall FRS – John Radcliffe HospitalWellcome Research LaboratoriesWellcome TrustProfessor R. Williamson – St Mary’s Hospital Medical SchoolWorld Intellectual Property Organisation (WIPO)Zeneca Seeds Ltd

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APPENDIX IVAPPENDIX IV

INTELLECTUAL PROPERTY WORKINGPARTY

Professor W. R. Cornish, FBA (Chairman) Magdalene College, University of Cambridge

Dr M. J. Crumpton, CBE, FRS Imperial Cancer Research Fund

Professor D. Grahame-Smith, FRCP MRC Clinical Pharmacology Unit,Radcliffe Infirmary

Professor C. Hilsum, CBE, FEng, FRS Corporate Research Adviser GEC plc

Professor J. M. Hollis, FBA Pro Vice-Chancellor,University of East Anglia

Mr M. P. Jackson former Head, Group Patents and Agreements, The Wellcome Foundation Ltd

Dr J. E. Thompson, FEng Chief Adviser Multimedia,BT Development & Procurement

Professor R. M. L. Winston, FRCOG Royal Postgraduate Medical School,Hammersmith Hospital

Professor J. M. Ziman, FRS former Chairman, Council for Science and Society

Mr A. J. Leaney (Secretary) Science Advice Section,The Royal Society

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BIBLIOGRAPHY

Cabinet Office, Intellectual Property and Innovation (Nicholson Report) (Cmnd9117, 1983).

Cabinet Office, Office of Science and Technology, Intellectual Property in thePublic Sector Research Base (September 1992).

Convention for the Protection of Industrial Property (Paris 1883; latest revi-sion, Stockholm 1967) – Paris Convention.

Convention for the Protection of Literary and Artistic Works (Berne 1886,latest revision, Paris 1971) – Berne Convention.

Convention for the Protection of New Varieties of Plants (Geneva 1961) –UPOV Convention.

Convention on the Grant of European Patents (Munich, 1973) – EuropeanPatent Convention.

Diamond v. Chakrabarty 65 Law Ed.2d. 144 (1980, US Supreme Court).

EC Council Directive on the Legal Protection of Computer Programs (No.91/250/EEC, O.J. No. L 122, 17.4.91, p. 42).

EC Council Directive on the Term of Protection of Copyright and CertainRelated Rights (No 93/98/EEC, O.J. No. L 290. 24.11.93, p.9).

General Agreement on Tariffs and Trade (Uruguay Round, completedMarrakesh 1994): Agreement on Trade-Related Aspects of IntellectualProperty rights, including Trade in Counterfeit Goods.

Interdepartmental Intellectual Property Group, Report on Intellectual PropertyRights in Collaborative R&D Ventures with Higher Education Institutions(Cooper Committee) (September 1989).

Patent Cooperation Treaty (Washington 1970).

Universal Copyright Convention (Geneva 1952, revision, Paris 1971).

White Paper, Realising our Potential: A Strategy for Science, Engineering andTechnology (Cm 2250, May 1993)

BIBLIOGRAPHY

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