Q: A local company says I have to hand over my designs to them because this was "agreed". We have not signed any contract and I was still mulling over whether to accept what I saw as a very poor offer. What is the legal position?
A: English law enforces verbal or oral contracts though they are harder to prove. A worker in one case offered two colleagues about £20,000 if he won the lottery and the courts enforced the verbal agreement as he had witnesses. However intellectual property rights can only be assigned (i.e. their ownership transferred) in writing signed by the assignor (the person transferring the rights). You have not signed such a document. However there may be an oral agreement to assign which the local company could enforce through a court order. First you need to determine what intellectual property rights are relevant however. If it is design rights then if the local firm commissioned the rights they will belong to the commissioner, though this is not the case with patents and copyright unless agreed in writing. Whatever the rights if you agreed to do these designs for payment by that firm you have almost certainly granted them a licence to use even if no assignment was agreed. If instead you simply showed them the designs and there was no "agreement" whether in writing or verbal to transfer rights then you may refuse to transfer anything to them.
Also consider ownership of the material, paper, etc. on which the designs appear and check if there is registered protection for any rights. In practice make sure you state that all correspondence and meetings is "subject to contract" or say in some other way that you are not going to be legally bound by what is written or said until you have signed a formal agreement. Do no work until an agreement is signed either.
Inventors Legal Problems
Related further reading by Susan Singleton...
Editors Note: These articles first appeared as Susan Singleton's very popular column in Inventors World magazine.
Due to the changing nature of the law, Susan has fully updated them for 2015.
For more Inventors' Legal Problems go to:
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Q: I have designed an electronic database of knitting patterns. How can I protect it?
A: Copyright arises immediately a knitting pattern is drawn and will be owned by the author or their employer. First check you have permission to use the patterns in a database. Just because you have bought the patterns in a shop does not mean you can copy them in this way. Assuming you have no problem there the database itself is protected by copyright in many cases under the Copyright, Designs and Patents Act 1988. So again no registration is needed nor is it possible.
Make sure that any self-employed people working for you on this assign copyright in what they produce. You will need written contracts with such people, with those who own copyright in the database and with the people who sign up to use your database. Make sure your database involves enough "intellectual creation" to qualify for copyright protection. The EC directive 96/ 9 sets out detailed requirements for copyright in databases which has been brought into force in the UK through changes to the Copyright, Designs and Patents Act 1988. Put a copyright and database right notice on all your materials and software so others are informed that you claim copyright in the database and keep safely all original versions of the database with details of the author in case disputes arise later.
Q: What is"knowhow" and how is it protected from a legal point of view?
A: Knowhow is a body of technical information. It is usually secret and therefore protected by the laws of confidentiality. Often it consists of drawings (which may in themselves be protected by copyright), and instructions as to how to build a product, recipes or formulae. It is wise to include the words "copyright - name - date -confidential" though this is not a legal requirement in order to obtain protection. You may choose to patent your inventions but there is likely to be a large body of additional knowhow which goes with the invention, but is not part of the patent. In addition you may help others, such as your licensees, exploit your knowhow, by visiting their premises and showing them how to manufacture. This may be called "showhow". It is likely also to be confidential information. However, a word of warning - it is very easy for information to lose its status of "confidence". Obviously publication can jeopardise rights, but so might showing at a trade fair or hawking the information around potential licensees if they do not sign confidentiality agreements.
When you draw up secrecy agreements there are two main elements - an obligation to keep the information secret and the purpose for which it may be used. Do not be fobbed-off with a contract which provides that the information is not confidential after a very short period. You should obtain protection for decades not one or two years.
In 2015 it is likely that a draft EU directive on trade secrets is likely to be agreed - see http://ec.europa.eu/internal_market/iprenforcement/trade_secrets/index_en.htm.
Q: I heard that the EC rules on licensing technology had recently changed. Do I have to change my licence agreements?
A: From 2014 the new EC technology transfer regulation has been in force. This sets out what clauses are permitted under the EC competition rules for licences of knowhow and/or patents. Existing licences were given 12 months after the regulation came into force before amendments must be made if they are not compliant with the new regulation. The basic principles remain as before - certain exclusivity restrictions are exempted, other clauses are listed which are permitted and certain clauses are banned as "hard core" restrictions including price restrictions and clauses obliging the licensee to assign to the licensor the rights in the licensee's improvements to the technology. The changes from the old law are in the detail of this regulation in areas such as severable improvements, absolute export bans and ownership of licensee improvements/no challenge clauses.
Q: How much do lawyers charge?
A: They have to charge in accordance with Law Society/SRA rules based on the time spent, complexity of the matter, urgency, importance to the client, value of the deal etc. That said, usually the charge is based on time and many small inventors forget this and then spend hours talking to the lawyer, often about irrelevant matters. The hourly rate varies. It is likely to be between about £150 an hour up to about £500 an hour plus VAT. it is very common for a fixed fee to be agreed in advance for separate pieces of work/advice.
"How much do lawyers charge?"