IP management
Some important early tasks include identifying, protecting, and accessing any intellectual property (IP) that a new business will need. Learn more about what IP is, how to search for existing IP, and the importance of disclosing your IP to EI before you share it more widely.
Identifying and protecting the intellectual property (IP) needed in the new business is a key task that needs to be done as soon as possible. Having the intellectual property appropriately protected will help secure investment in your spinout company. If your IP is protectable via a patent, the EI team and the University-appointed patent attorneys can guide you through the process, but it is useful for you to have some knowledge of the basics.
For staff at Edinburgh University, it is normally the case that the university owns the intellectual property created during the course of your work. This means that a licence needs to be agreed that allows the spinout company to use the IP for commercial purposes. It should also be noted that if the IP is licensed exclusively to one company that it will not be available to any other party unless specific exclusions can be made, therefore careful consideration as to possible alternative options needs to be given.
What is IP?
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. Intellectual Property Rights (IPRs) are the protections granted to the creators of IP – typically the right to prevent others from using their IP. Spinout companies and investors often focus on patents, but other kinds of IPR can also be very useful and valuable
- The forms of IPR most relevant to your purposes are likely to be:
- Copyright – for software, reports, online content
- Design rights – for the shape and configuration of equipment and objects
- Patents – for inventions
- Trade marks – for names
- Data – to access, for example, clinical trial information not in the public domain
- Know-how/trade secrets
Your IP is likely to be one of your key assets; the people who can exploit that IP effectively are another. So it’s crucial that you properly protect your IP. Although some rights are acquired automatically (e.g. copyright), you will have to apply for the appropriate registration to secure other forms of IP (e.g. patents).
The best way to protect your IP will be influenced by factors such as the type of products and services the company will sell, your channels to market and the competitive advantage/ increased profit margin provided by the IP. It is worth bearing in mind that the patent process involves publication of the invention and therefore some companies choose instead to operate using trade secrets (e.g. the Coca-Cola recipe) and/or copyright (e.g. software-based data analytics companies). Non-disclosure agreements with employees are an important protection used in businesses reliant on trade secrets.
A note on branding
Your name and branding can help you to stand out. When thinking about IP, also consider a memorable company name. It might be worthwhile registering your trading name as a trade mark, and you should certainly purchase any related website domain names that are currently available.
Disclosure
It is important that you disclose your intellectual property through the University’s disclosure process, which is run by EI. This ensures that you are correctly identified as the inventor and secures your rights to royalties and other payments from the commercialisation from the IP. We will provide you with professional support to manage the disclosure and will make sure that appropriate protection is put in place that allows you to later publish your research.
It is critical that you do not publish your inventions or discuss them in public prior to assessing the opportunity to obtaining a protected right, as this will mean a patent cannot be applied for. For colleagues wishing to publish papers or attend conferences, and who think they may have IP they wish to protect, please speak to EI at the earliest opportunity so that protection can be put in place before you publish or travel.
Due diligence
You need to identify all of the IP that the spinout company will need by working through each stage of your development and production processes methodically to see what IP is required at each stage. The company may be reliant on a specific software package, manufacturing process, data set or technique for its success.
Write down every piece of IP that your investigations uncover – this list will be required for your discussions with EI to ensure that the IP licence agreement transferring rights from the University into the company covers what your business needs to operate as a separate entity. It is also important to clarify to potential investors the IP rights that your business needs to operate successfully, and that your company has the necessary access rights.
Ownership and freedom to operate
Under normal circumstances, and where an employee creates IP in the course of his or her day-to-day work, the ownership of the IP rests with the employer. Transfer of the right to use IP created within the University to a spinout company will occur via an appropriate licence agreement.
It may be that other parties within the University, or further afield, have a stake in some of the IP that the company needs. Perhaps one of your doctoral students has made a contribution, resulting in ‘joint IP’ (held jointly between the University and the student). Or it may be that a third party working in a similar field already holds some of the rights that you’ll require. For example, you may need to access the rights to a production/manufacturing process that is crucial to the development of your unique product.
To go ahead with a spinout with confidence, find out exactly where you stand in this regard – otherwise your spinout might risk infringement of third-party IP rights.
You can search for existing patents and patent applications yourself using the European Patent Office’s Espacenet patent search website. You should at the very least check for patent applications filed by other researchers and companies active in your field.
EI can assist you with general queries about IP and the required IP due diligence. We run regular, free-of-charge IP surgeries and we work with a number of patent agents and lawyers who give their time free to answer initial questions. Generally, specific detailed analysis of competing IPR will incur sometimes substantial fees, but, independent IP advice can help to give investors comfort that the company has the required freedom to operate. Normally such analysis is funded by the investor or other third party.
Find other relevant resources in our training guide and toolkit