4 Requirements of a Concrete Intellectual Property Collaboration Agreement

“Having loose ends in an intellectual property collaboration agreement can lead to disaster.”

An inventor has a brilliant idea but doesn’t have the capability to implement it. He needs a developer (on a contract basis) who has the required technical expertise to help with the implementation. Now, you play a crucial role in defining the terms of the contract between the inventor and the developer. You need to lay out an IP collaboration agreement so that both parties have a fair deal while collaborating over the project. 

In this article, I am going to cover four requirements to help you design an agreement that is able to satisfy the interests of both the parties by following the guiding principle of concreteness. I will conclude by sharing a yardstick that can help you determine if you have met the requirements successfully.

Alternatively, you can watch this video to understand the requirements for concrete drafting.

IP Collaboration Agreement | 4 Requirements

In order to draft an effective intellectual property collaboration agreement, you must account for four things. The contract must be:

  1. On specification: be very clear on whatever is being delivered
  2. On budget: a milestone-based payment system can protect the interests of both parties
  3. On time: a systematic approach to tracking progress can prevent development from going off the rails
  4. And demonstrate fairness: neither party should feel tricked 

These items may sound simple, but it is very important to get all four requirements on point in order to deliver a concrete intellectual property collaboration agreement. The watch word here is “concrete.”

Requirement #1 – On Specification

The first requirement is to be ‘on specification.’ This means that you must be very clear on what is being delivered. This may not be as simple as it sounds, particularly when the project is in the research and development stage, as the inventor may provide a good idea of the final product, but not supply detailed requirements for its implementation. It may be the case, for instance, that an A/B test is required as part of development, the results of which will lead the project in one of two different directions. The agreement needs to cover both potential paths and must be equipped to fill-in where documentation of the software development is lacking.

The Guiding Light of Concreteness

To deal with situations like this, or whenever in doubt, my advice is to return to the guiding light of concreteness. It may also help to think of the contract you are preparing as a mutual service agreement rather than a delivery agreement. It is possible that the project will involve a design or testing phase, which can cause understanding of the final product at time of drafting to be fuzzy. The mutual service agreement must lay out a framework to ensure that at the project’s conclusion, regardless of what is being delivered, both parties are liable to protect each others’ rights. You also may find it useful to look to training materials or any other documentation associated with the product, to help you mention development requirements in a more concrete way. 

Always make sure all hidden requirements by both parties are not hidden (pun intended) in the contract.

Requirement #2 – On Budget

The second requirement for a concrete intellectual property collaboration agreement is to be on budget.  Here some issues arise due to deviating interests: the buyer wants to pay less, and the developer wants to be paid more. A client needing a research and development agreement with their developer, might wonder why the developer’s budget is so high or why, during the course of development, they demand more money than the amount initially set. This client may want to have the product delivered before making the payment. The developer, in contrast, may well desire to be paid in full before beginning work on the project. To ensure a harmonious working relationship, you will need to ensure that these kinds of issues are addressed up front in the agreement you draft.

Milestone-Based Payment System

One strategy for avoiding friction in these scenarios is to adopt a milestone-based payment system in which payments are linked to each specific phase of a project, as they are completed. This allows your client to have greater transparency around what is being delivered and allows developers to be more specific about the job description and payments they are charging. This arrangement might be structured with an initial payment, followed by milestones and an end-payment upon completion, to keep both parties on the same page throughout the development process.

One thing to keep in mind is that it might not be possible to set a concrete budget at the start of a project because the developer might not know how much time will be required for research, or how extensive that research will be, until development is underway. Therefore, it can be useful to suggest that the development process be systematically tracked, in parallel to milestone payments, to ensure that the terms remain as concrete as possible.

IP Toolworks Demo

Requirement #3 – On Time

I recall a case where the buyer kept-on paying the developer without tracking the progress of the project, only to discover that what the developer delivered some time later was completely unusable. This not only wasted tremendous resources but ruined the relationship between the buyer and the developer. This is a reminder that it is important to cover the time aspect in the agreement. You can suggest the concept of time-bound milestones tied to variable payments on terms favorable to both parties, and further recommend that the agreement include provisions for scheduling regular meetings to track the development progress.

Requirement #4 – On Fairness

The fourth and final requirement in a concrete intellectual property collaboration agreement is that neither party should feel tricked. Two parties working together generally desire a good relationship throughout the course of engagement. However, contracts can be written in such a way that the parties may have divergent assumptions and incentives when things do not go as expected. In these types of situations, you should ‘play the tape till the end.’ Let’s look at a few examples where finesse is needed to ensure there is no perception of unfairness, from both the buyers’ and the developers’ perspectives.

Buyers’ Perspective

On situation where a buyer may feel that the developer is behaving unfairly is when the developer does not want to provide source code to the buyer. The developer may suggest that the buyer should make an additional payment to buy the source code, as the  developer believes the source code is his intellectual property right. Further the developer might state that as the code is his expression of an idea, he has claim to any copyright or patent that might be filed on the resulting work product.  In such scenarios, even though the buyer was not actually tricked, but rather unclear on the terms upfront, he may well feel that he was being tricked. Therefore, if source code will be produced as part of development, it is important that there be either agreed pricing for the intellectual property transaction, or clarity in the ownership of the code mentioned in the contract itself.

Developers’ Perspective

A situation where a developer feels that the buyer is being disingenuous may arise when the buyer changes his mind during development, and decides to discontinue working with the developer. This can be completely catastrophic for the developer, as it means a planned revenue source is unexpectedly derailed. The buyer likely has valid reasons for making such a decision such as a change in business model or that he is selling the license to someone else.  To cover for such situations the intellectual property collaboration agreement should be concrete, with clauses that account for such eventualities, to ensure that neither buyer, nor developer, is primed for unpleasant surprises. 

The Yardstick

The contract should be recognizableIn any of the situations where things are not going as mutually agreed, the developer and the buyer should be able to look at the intellectual property collaboration agreement and be able to identify a possible way out without needing your help. But what if the involved parties are not able to resolve the conflict and your intervention becomes necessary?  Then, of course, you can offer your assistance, which may include performing research or finding people with subject matter expertise, to gain additional knowledge about the situation that can help identify what could be done to make things correct.  

Wrap-Up

Clearly specifying:

  • software development requirements 
  • a milestone-based payment system 
  • a structured approach for timely tracking of the development progress
  • and ownership of the intellectual property (e.g. source code)

can help you prepare a concrete intellectual property collaboration agreement. 

Even after careful drafting, there remains a small possibility of conflict between the parties, at which point, seeking help from subject matter experts can help you find a way out.

Disclaimer – “The statements and views expressed in this posting are my own and do not reflect those of my law firm, are intended for general informational purposes only, and do not constitute legal advice or a legal opinion.”

Three Steps To Achieve Effective Delegation | The Gamechangers

If you want to do a few small things right, do them yourself. If you want to do great things and make a big impact, learn to delegate.”  

– John C. Maxwell

Do you ever feel as if your to-do list is never-ending or you are always short of time? In a survey conducted by the Institute for Corporate Productivity (i4cp), it was revealed that 46% of companies have a high level of concern about their workers’ delegation skills. Delegation of work takes a great deal of unlearning, particularly if you are of the habit of doing everything yourself. You will need to let go of the adage, “If you want something done right, you must do it yourself.”

At some point in your career, you will undoubtedly have achieved enough experience in your practice to have younger attorneys working under your guidance. When the time comes, you will have to learn a whole new set of skills to pass on the torch in a way that is productive both for them and for you. Delegation of work might not be easy but when done well it has tremendous value both in maximizing the limited hours you have available in a day and in allowing younger attorneys you might be assigning tasks to to learn the tricks of the trade.

As challenging as delegation can be, these three steps will help you delegate effectively:

  1. Delegate everything you can
  2. Recognize the things that can’t be delegated
  3. Change your ‘cannots’ into ‘cans’

#1. Delegate Everything You Can

Try to delegate every task which can be delegated to your team. If you don’t delegate, you’ll always be overburdened, putting you at risk of missed deadlines and slippages in work.

Once you start delegating, you’ll soon realize that it:

  • Reduces your mental load
  • Saves time
  • Improves client relations

For example, you don’t need to deal with invoice disputes yourself. If your client thinks that your billing hours are too high, let one of your (less senior) team members tackle the situation.

The delegation will have the added benefit of freeing up your mind and time to better handle the more important tasks on your plate, resulting in a job well done.

#2. Recognize the Things That Can’t be Delegated

You need to know what you can and cannot delegate. If you are anything like me, you won’t let anything get out of the door on your project, unless you are completely comfortable with it. If you delegate work to a team member who cannot handle the particular task, you’ll end up doing it yourself, which is an inefficient use of everybody’s time. Often, the task will end up getting done twice, as it is easier to redo something from scratch than to fix somebody else’s shoddy job.

To avoid this situation, you need to recognize which tasks can be delegated to your team and which you have to handle yourself. While there will always be some level of rework when delegating tasks, especially when you are training someone, it is important to consider the strengths of your team members when making assignments. You don’t want to delegate a task that your team member might still be too inexperienced to handle. Thus, the key is to delegate all you can, but to also recognize what you cannot delegate.

IP Toolworks Demo

#3. Change Your ‘Cannots’ Into ‘Cans’ 

The final step to effective delegation involves a special alchemy: transforming your ‘cannots’ into ‘cans’. To achieve this, a few things are essential:

Recognize the Strengths of Your Team Members

Knowing the strengths and abilities of your team members is key. For example, one colleague might be good at drafting patent applications, while another might be good at analyzing office actions in order to draft a meticulous response. Acknowledging these strengths will make your job reviewing their work easier and faster. Everyone wants their team to do a spectacular job—because, let’s be honest, at the end of the day, you are still accountable for the work done by your team. Therefore, learning what to delegate to whom is an art, which you need to master as a leader.

Train Your Team Members to Overcome Weaknesses

You also need to recognize the areas where your your team members might be less capable. Once these areas are identified, training can be provided to turn weaknesses into strengths. It is essential to build support for people working on the tasks you assign. For example, you might provide a library of template communications, to give your team members examples of how to respond to a particular kind of communication from the USPTO. This will make it much easier for a newer attorney to put together the expected response.

Provide The Right Kind Of Support At The Right Time

Make sure that while delegating, you provide your team members with the support they need when they need it. For example, if you have tasked a colleague with analyzing an office action and drafting a response, you must explain what to look for and how issues can be tackled. You might want to point out key areas to focus on and refer them to your library of office action responses for additional guidance.

As a matter of habit, during the last fifteen years of my career, I put together a document containing examples of successful office action responses, to help with future responses. It was, in effect, a small library of office action responses that I could use in my own practice and share with colleagues I might be assigning work to. Eventually, I thought, why not build a library of office action responses that encompasses the work of other attorneys as well? This is when I put together the Arguminer software. It allows you to upload your office action and will analyze various parameters within it to match it with relevant responses other attorneys filed. It looks something like this:

You can customize the results by selecting different parameters, such as successful responses to office actions by the same examiner. You might want to show your team member the arguments used in similar office responses, which will have higher chances of succeeding.

Getting a younger attorney to get the same results as you would, is good delegation, which is exactly what this software helps to achieve.

Takeaway:

The more you delegate, the more trust you place in your team members. It boosts their confidence, helps in improving the overall team effort, and gives you time to focus on more important tasks.

Practicing good delegation also gives you a breather to concentrate on the things that are important to you. This is a special category of “non-delegable duties” that for me includes making time each night to spend with my one-year-old daughter before bed. There are some things I don’t assign out, even on my busiest days.

 I believe that the more you can outsource, automate and delegate out, the more time you have for your family and loved ones.

Good luck! I hope you can put Arguminer to use, to effectively delegate and train the young attorneys working with you. 

Disclaimer – “The statements and views expressed in this posting are my own and do not reflect those of my law firm, are intended for general informational purposes only, and do not constitute legal advice or a legal opinion.”

Patent Prosecution | Bridging the Gap between Experienced and New Attorneys

Bridging the gap between new and experienced patent prosecutors

Want to teach the nitty-gritty needed to write office action responses to new patent prosecution attorneys. Read on to find out if there is an easy way to do it!

The Gap in Learning Patent Prosecution | ‘School’ and ‘On the Job’

Patent attorneys are among the most highly educated professionals out there. Simply to be eligible to sit for the patent bar exam, a would-be patent attorney must have demonstrable proficiency in a field of science or engineering. Many candidates come with industry experience and/or advanced degrees. The problem is, upon conclusion of law school they, like nearly all aspiring attorneys, are likely missing the most important ingredients for success. In fact, a 2015 survey by 5 Square Research found 95% of hiring partners and senior associates who supervise new attorneys believed recently graduated law students lack key practical skills at the time of hiring. This study focused on basic competencies in drafting, transactional skills and legal research, however the gap is greater for more technical, specialized fields. How many IP courses in law school begin to get into the nitty gritty of responding to an office action, for example?

Hiring New Attorneys – A Huge Investment

New attorneys are a huge investment. One law firm strategist calculated $295k as the average cost simply to make the initial hire when recruitment costs are factored in. Large law firms typically find that it takes three to five years to break even on a new hire. The first years can be a time of friction for new attorneys as well, making it even more important that measures are taken so churn is avoided, for the wellbeing of attorneys and firms alike. While such observations have inspired calls for curriculum reforms and certification programs to address the issue, much of the onus remains on the hiring firms, with firms investing an estimated average of $19k per new associate per year, often forming specialized programs to acclimatize new cohorts to life at the firm. New technologies can provide another, often overlooked way to bridge the gap, that was not available for previous generations. Historically law schools have been seen as intertwined with liberal arts education, whose purpose was to “provide the student with certain faculties of thought and expression” designed to allow the student to continue learning long after leaving the classroom.” Law students hone their critical thinking abilities through intensive hours spent analyzing statutes and cases. Even when combined with the most comprehensive knowledge of case law, the best a young attorney can do at this point is reinvent the wheel from first principles. The true education on how to practice as an attorney comes on the job, as is recognized in European practice under the EPO, where the qualification period is not complete until an attorney has finished three years of supervised postgraduate training.

The Need for Mentorship From Experienced Attorneys

Although no such formal requirement exists under the USPTO, the situation is not so different in the United States. On day one I was given an office action to respond to for a client because it needed to be done,” recalls U.S. patent attorney William Morriss of his training fifteen years ago, “A senior attorney reviewed my work. The same is done for new associates today.” While there is no substitute for the depth of experience provided by a solid mentor, guidance can be enhanced with supplementary resources. Such resources in turn lighten the load on mentoring on senior attorneys, who are often pushed to juggle multiple internal and external responsibilities. Over the years, Mr. Morriss started collecting examples of good responses in a folder and spoke to others who did the same. Firms may put together internal examples, but such collections are resource intensive to assemble, and not always kept up to date. These resources are valuable but tend to be limited to the particular examiners and types of rejections colleagues happen to have seen. 

Patent Prosecution Software – Arguminer

Mr. Morriss, who was inspired partly by such observations to develop Arguminer, software specific to the patent prosecution cycle, has likened the on-the-job education new attorneys typically receive to induction to an artisanal guild. There is a certain irony in that we secure protection for the most cutting-edge inventions, yet are often reluctant to incorporate new innovations when it comes to our own practices. With the Arguminer software attorneys are able to get immediate feedback on the specific arguments that did or didn’t work. There is a lot going on behind the scenes. The software uses algorithms to automatically match the user’s uploaded rejection to examples with strong similarities to their situation and allows users to apply their own customized search filters as well. In the case of a brand-new associate, these examples can serve as a sort of template that can be quickly modified to match the situation at hand. More seasoned early career patent attorneys and agents, who have already achieved strong proficiency in drafting, have been able to leverage the Arguminer software to make stronger, more strategic responses on behalf of their clients and to exercise more confidence in their prosecution choices. Users may discover a competitive edge by uncovering responses prepared by a competing firm or draw upon their research to lend support to recommendations when counseling clients.

IP Toolworks Demo

Novice to Experienced Attorney

The Arguminer software, developed by Mr. Morriss with IP Toolworks, is one example of how technology can allow for a smoother path from novice to experienced attorney. It is no substitute for experience, but it means that new attorneys can start their careers with the working knowledge of the most successful practitioners in their field already at their fingertips. From there it is up to them to apply their own judgement, knowledge and insight to do the best job possible on the task at hand.