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Explanatory note to Regulation 24 for Intellectual Property Rights: Notice

1 December 2008

The Council in its Notice in response to the Board of Scrutiny's Thirteenth Report (Reporter, p. 138) agreed to the Board's Recommendation 8 that it should publish an explanatory note to Regulation 24 for Intellectual Property Rights in Statutes and Ordinances. It accordingly attaches below the comments on the scope of Regulation 24 made by the Technology Appeal Tribunal after a hearing held on 1 May 2007. The full text of the Tribunal's decision is available at http://www.admin.cam.ac.uk/offices/secretariat/ipr/ipr_appeal.pdf.

The scope of Regulation 24:

5. Regulation 24 commences as follows;

'During the period following receipt of notification of the research results from a University staff member, Cambridge Enterprise shall consider with her or him how commercial exploitation of the results shall or may be pursued, having regard to all reasonable proposals for that exploitation made by the staff member. Cambridge Enterprise and the University staff member shall keep each other informed and shall co-operate fully in order to achieve an agreed outcome.'

6. In his written submissions to the Tribunal, [the appellant] said 'there has to be an agreed outcome and co-operation between the University staff member and CE and this has to be based upon the wishes of the creator of the intellectual property'. This was developed during the course of oral submissions before us. It was argued that if there was no agreement on a particular issue there was no 'agreed outcome' as referred to by Regulation 24. In the absence of agreement, the matter had to go to the Referee for determination. We do not accept this argument except in as much as there should normally be reasonable opportunity for the Referee to become involved if appropriate. In our view, when the Regulations refer to CE [Cambridge Enterprise] and the staff member co-operating 'in order to achieve an agreed outcome' it means that those parties must co-operate with the objective of achieving an agreed outcome. It is not dependent upon an agreement being achieved and it does not bestow on the staff member a veto. The Regulations mandate a process, not an outcome. Furthermore, where CE and the relevant staff member have agreed a particular outcome, for example an agreement for exploitation between CE and a third party, Regulation 24 does not give the staff member a right to be consulted on, or a veto over, every commercial decision to be made within the scope of that agreement. Were it otherwise it would become difficult to run any normal commercial arrangement with third parties. Indeed we think that were staff members to have such wide-ranging powers, it could be a significant disincentive to third parties who might otherwise be tempted to invest in the results of Cambridge research. We do not believe the Regulations should be read that way. That would be to the long term disadvantage of both the University and its staff.

7. In our view, Regulation 24 requires CE and the staff member to enter into bona fide discussions with the aim of achieving an agreed outcome. The views of the originator of the research are to be given great weight. The Regulation requires the member of staff and CE to keep each other informed and to co-operate fully. The word 'fully' clearly governs the obligation on the parties to co-operate. Whilst, as a matter of grammar, it may not also govern their obligation to keep each other informed, in our view full co-operation involves not just bona fide discussion but also an obligation to keep each other fully informed of any significant factor which can be or is likely to be taken into account in determining how the research is to be exploited. Full co-operation involves the parties being on as near an equal footing as possible as far as knowledge of relevant facts is concerned. Furthermore such disclosure must be done at a time which gives the disclosee a reasonable opportunity to make a proper assessment, to respond and, where suitable, to make counter-proposals. Save in cases of necessary urgency, the disclosee must also be informed sufficiently in advance to enable him or her to properly consider the implications of what is being proposed by CE, to formulate and properly present a response. We emphasise that the obligation of disclosure only applies to significant factors. It does not mean that the parties are obliged to disclose trivial matters to each other.

8. We accept that situations may arise where full disclosure may not be possible. For example it may not always be possible where defence related research is involved. Similarly, occasions may arise where disclosure of some information may put the discloser at significant risk of being in breach of a legal obligation to some third party. In such cases, the discloser must indicate to the other party the nature of the restraint. Once again this must be done in sufficient time to allow the disclosee to express informed views on the claimed restriction and to suggest ways in which it can be avoided or its effect minimised. For example, if commercially sensitive information is involved, the disclosee may be able to suggest a reasonable compromise whereby the information is disclosed to an independent third party acting on her or his behalf who can express views to the disclosee without the need to disclose the confidential information to her or him.

9. In addition to this, we believe that Regulation 24 obliges both CE and members of staff to avoid, wherever possible, entering into arrangements which would hinder their ability to comply with their duty to make full disclosure of relevant information. A party should take reasonable steps to ensure that third parties do not impose restraints on the disclosure of relevant information or, where such restraints are unavoidable, that they are no more extensive than necessary.

10. In any case where there is a reference to the Referee under the Regulations and it appears that significant relevant information has been withheld from one of the parties by the other, the onus is on the withholding party to demonstrate that the information was not significant, that there was a binding obligation not to disclose it or that no reasonable alternative mechanism could have been put in place which would have allowed the disclosee or someone acting on her or his behalf to have access to all or some of the information.

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Cambridge University Reporter 10 December 2008
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