Q: I have been asked to pay some money up front to a company which says it will help me to commercialise my invention. Should I do so and what are the legal problems which arise?
A: Many inventors do need commercial expertise from others in order to make a success of their invention. However there are many different ways of achieving this. You may prefer to find investors yourself. Assuming you want to pay money to the relevant company the first legal point to watch is to ensure that there is a written agreement. Read it carefully. From your point of view it should say exactly what they will do for you. Is it just to assess whether the invention is marketable? Will they check for prior inventions in the same field? Will they find investors or arrange manufacture? Watch out for "get-outs" - clauses allowing them to wriggle out of their obligations. Consider amending clauses in the agreement you do not like. Do not sign the contract until you are happy with it.
"Do not sign the contract until you are happy with it."
Inventors Legal Problems
Related further reading by Susan Singleton...
Further Reading:
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.
Part #5
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Q: I am a software programmer. I regularly use the Internet and often find ideas and even software there which I use in my working life. What legal risks do I run?
A: The Internet and the law is a big subject. Sticking to the basics, and assuming you are in the UK, the first risk is copyright infringement. There will be copyright in the information put on the Internet (though sometimes companies and individuals waive this) and also on software put on the Internet. Just because it is there does not mean that you can freely use it. Ofcom aims to write to about a million UK residents a year who make illegal down or uploads on line. However some information on line is issued with a statement that copyright is waived. Check that the person waiving the copyright actually owns it. In addition plenty of software is provided under specific licences such the GNU public licence. It can then be used free of charge. The is known as "Open Source" software. However always read the licence conditions as it may be free of charge but it may be a term that resulting software using parts of what was available free must similarly be made available free on-line or other conditions may apply.
As for ideas you find there, they will clearly not be confidential as they have been placed in the public domain. Check if there are any notices limiting future use - as they could be legally enforceable. Many websites include a use term that the material may not be used for commercial purposes and nor may web crawlers or data aggregation tools be used to mine or take data from a site. Even without such restrictions such use of data usually breaches copyright and / or database right. Also consider the issue of foreign laws. Virgin Atlantic was caught under US trade descriptions law because it did not update its Web page giving details of flights. Some people in the US tried to book a flight at the "old" price on the Web page, which had altered, and the company was prosecuted even though it was in the UK. Out of date data can also lead to prosecutions in the UK under the Consumer Protection from Unfair Trading Regulations 2008.
Q: I have an invention in relation to valve technology. I have found a company interested in marketing it and they have asked me to enter into a licence agreement. I have a very basic question. What is a licence agreement? It all sounds very complicated.
A: A licence is simply permission to do something. If you let a friend sleep on your floor overnight - that is a licence. A patent, copyright, design or trade mark licence is the same. It is permission to use those rights given usually by the owner of the rights to someone else. A licence agreement is written permission to do so. Note that a verbal arrangement or exchange of letters can also grant a licence, so be careful what you say. "I give you permission to use my patent" - that is a licence, but legally it is not much good. There are many other provisions to include. Where can the patent be used? For what period? For what applications? For what payment? It may be sensible to have a solicitor check any proposed licence for you before signature. An EU regulation on technology transfer, which applies to most patent and know-how licences in the UK came into force in 2014 replacing a previous version. It sets out exactly what restrictions may be included in such licence and which are banned. Contracts which infringe the EU competition rules may lead to fines of up to 10% of worldwide turnover and the parties cannot enforce the restrictions. Ensure that whoever draws up your licence is familiar with these rules.
Q: Last year at a party I told my "best friend" about a wonderful idea I had for a new form of baby's plastic feeding bowl. He is in the plastics industry. I have just seen their new catalogue and there is "my" idea for sale. What can I do about this? We are no longer speaking. I have told all our friends about how he has treated me and he is threatening to sue me for defamation.
A: It has been said before in this column, but always bears repeating - there is no copyright in ideas, just their expression. To be frank you were silly to tell your friend about the idea. Your only hope is if there was an obligation of confidentiality between you. Did you say to him that you were passing confidential information on to him and he must keep it confidential? You probably did not. You may have a case if he copied a prototype or drawings you had made. It is unlikely he did if there was simply a discussion at a party. Your last hope might be if you had already applied for a patent. His invention may not be the same as yours anyway. You will need to check all these areas before deciding whether you can take any action. In future always have confidentiality agreements signed in advance before imparting ideas. On the defamation point if what you say is true you will have a defence the statement is true under the Defamation Act 2013. If you simply say you told him the idea and he copied it you would only be in trouble if in fact he did not copy it. He may have been working independently when you spoke. I would cease making these statements, say you have taken legal advice and seek to do a deal with him - he may offer a small lump sum or royalty to avoid a legal action.