An early-stage life sciences company should ensure that all employment and consultancy agreements with parties who may make, or contribute towards making, inventions as part of their commitments to the company, contain assignment of title clauses. When drafting or reviewing such intellectual property rights (IPR) clauses, four considerations are particularly important:
If the requirement to assign title to an invention is not included in an employee's or consultant's employment or consultancy agreement, assignment of title to inventions can be effected through a subsequent intellectual property assignment declaration or through a separate agreement with the relevant inventor. The points set out above, at no. 1, 3 and 4, should be considered when determining what should be included in such declarations or agreements.
Title to inventions made by, or on behalf of, a third party are typically obtained through an asset or share purchase agreement.
When an early-stage life sciences company is considering acquiring title to inventions from a third party, through an asset or share purchase, we recommend ensuring that the seller or target company can document unbroken chains of title to the relevant inventions, in accordance with the recommendations set out above under (A), Obtaining title to an invention through agreement, no. 1 and 4. If the seller or target company is unable to document the assignment of title to the inventions in question, as a condition for the purchase, we recommend requiring the seller or target company to obtain assignment agreements or declarations in accordance with the recommendations set out above. Alternatively, the seller can provide a warranty in the asset or share purchase agreement that it, or the target company, has the title to the relevant inventions .
Additionally, for asset purchases, the asset purchase agreement must clearly define the rights that are being transferred and the inventions that are subject to the transferred rights.