INTELLECTUAL PROPERTY AND HOSPITALS

Generally, investigators in university and public hospitals – just like employees of pharmaceutical or medical products companies – are used to transferring the fruit of their investigation to the institution for which they work. Their contract (in the main employment) usually includes a clause transferring patent rights to the hospital.

Hospitals are beginning to realise the important source of income which ‘inventions’ or ‘improvement’  licences can contribute currently being produced by their doctors and investigators.

1.- THE SCOPE OF TRANSFER CLAUSES OF INTELLECTUAL PROPERTY

1.1 General Rules: Who owns the Intellectual Property of an invention?

In principle, all creations made for the hospital, or during work hours, are the intellectual property of the hospital. This is what the Patent Law, Intellectual Property Law and Workers Statures say.

1.2. Contracts

In any case, it is a good idea to reflect on the obligation of transfer of intellectual property, on the contract between the investigator/doctor and the hospital and fix limitations. It is the only way to avoid doubt and conflict.

1.3. Special attention to the ‘objective’ or ‘range’ of contracted work

In principle, the contracted investigation is limited to the description in the contract. But, what happens with the ‘grey areas’?  For example, investigations carried out in a hospital but outside the objective for which the doctor is contracted, or inventions developed by an investigator exclusively outside the hospital.

2.- CONSEQUENCES OF TRANSFERRING INTELLECTUAL PROPERTY

For investigators and doctors, the transfer of Intellectual Property has important consequences and restrictions.

2.1. Registration in the name of the hospital

(a) The transfer of the invention’s ownership supposes that the hospital will be the one responsible for registering patents/designs/intellectual property.

In these cases, hospitals take on the expenses of obtaining registration and defending it in the face of challenges from third parties.

(b) The hospital will register it in its name although it should always be aware of possible intervention of the doctor/investigator.

2.2. Controlling intervention through the Office of Transfer of Research Results (OTRI)

(a) In fact, the control of an invention’s ownership will pass through the hospital or university’s Office of Transfer of Research Results (OTRI).

The hospital’s Office of Transfer of Results Rights can be a great help for the investigator/doctor. The latter is saved the financial responsibility and time which the patent/design/intellectual property registration entails. Subsequently, promotion, negotiation and commercialisation activities are also avoided with potential purchasers or funding sources.

(b) The inventor can, therefore, lose medical control of the future development of his idea. Any contract with an investor or pharmacist or medical products company will have to be negotiated and approved by the hospital.

2.3. Economic gains from an invention

As owner of the registration, the hospital will receive economic benefits deriving from any resulting commercialisation or from a licence.

Certain hospitals have created a profit share plan.  It allows the inventor to obtain significant participation in the price of technology transfer, royalties or licence rights.

3.- CLUSTERS AND START-UPS

3.1. Possible ways for collaboration

These days, medical and hospital inventions are making room for new specialised firms. Contracts between a hospital and investigator/doctor are establishing ways for collaboration not only through participation in royalties and other benefits obtained.

3.2. From participation in benefits to a shared company

It is common to include clauses in contracts which allow common ownership or even include the organization of ‘ad hoc’ structures – passing through successive phases:

  • Development in the hospital department or in a specially dedicated ‘cluster’
  • Promotion through the hospital’s Office of Transfer of Research Results
  • Licence or commercialisation through a new company (‘start-up’) created between investigators/doctors and the hospital with possible participation of private capital

4.- FUTURE STRATEGIES

Taking all the above into account, there are some strategies to consider, including:

  • Revise contracts in detail with a clear focus on the protection of Intellectual Property so that this is defined clearly and is shared equitably between hospital and investigators/doctors.
  • Establish clearly: to whom do the investigations belong, what concrete projects are the objective of the contract, who is responsible for what or how the implicated parties participate in the income.
  • If the investigator/doctor is contributing to hospital inventions or previous projects, be clear if they are excluded from the objective of the new contract and if they are excluded from the transfer of Intellectual Property – or the reverse.
  • If the investigator/doctor is already employed by the hospital and has a project which s/he would like to develop as part of a newly created company, s/he should negotiate an agreement with the hospital – to exclude this invention from his contract with the hospital or to obtain a licence.
  • It should be especially noted whether the licence is exclusive or not – if it includes an initial payment or a share of royalties and the relationship with product sales once it is commercialised.

Working in a hospital interested in investigation and development of new products is a blessing. Especially if it exempts the investigator/doctor from any financial responsibility and time which is entailed in the presentation and defense of patents (and Intellectual Property, in general) as well as the search for potential purchasers or funding sources and the negotiation involved. Although it only really makes sense to transfer/share this Intellectual Property, if the hospital has a capable Office for Transfer of Research Results, and is involved in projects.

Whatever the situation, at the point of developing a medical invention, it should always be taken into account what the consequence of transferring Intellectual Property created by investigators/doctors to the hospital could be.

Santiago Nadal