University IP policies are an unusual subject matter for the English courts, so it was a rare occurrence that the English Patent Court had to grapple with the terms of a university intellectual property policy to decide whether the university could validly claim rights under its IP policy.

The case – Oxford University Innovation Ltd v Oxford Nanoimaging Ltd [2022] EWHC 3200 (Pat)

This case was brought by Oxford University for outstanding royalties of over £700,000payable by Oxford Nanoimaging Limited, a spin out company of the university. The defence to payment of these royalties was that the terms of the university’s IP policy were too broad, as the university could claim patent rights in respect of inventions created by a DPhil student “in the course of or incidentally to” their studies, and as such the IP policy was unfairly balanced in favour of the university and therefore void and unenforceable.

While the court rejected the university’s arguments that the DPhil student contracts were not subject to consumer protection legislation (they were and so the Unfair Terms in Consumer Contracts Regulations 1999 applied), the court then went on to assess whether the terms of the IP policy were significantly imbalanced in favour of the university and whether they were made in good faith.

Court findings of the IP policy

The court found the terms of the IP policy did not cause a significant imbalance between students and the university, and were made in good faith, it did comment on the IP policy generally, particularly as there were two versions at issue: one that was incorporated into the DPhil student’s contract and the subsequent amendments that had been made by the university following concerns expressed by students as to the scope of student-created IP.

The court found that in the previous version of the IP policy (which was incorporated into the DPhil student’s contract) there was a “potential imbalance” between students and the university for claims of IP made or created “in the course of or incidentally to their studies”, for the following reasons:

1. Such terms would deprive the student of their IP rights in circumstances where the university’s contribution was negligible.
2. Students were not paid to invent (unlike employees), but generally pay to receive an education.
3. Such terms went beyond national law.
4. Such terms were out of line with other universities’ IP policies (the court in fact consulted 10 other university IP policies in assessing the claim and preparing its judgment).
5. Such imbalance had been acknowledged and debated by the university itself (which led to an amendment and removal of such term in the amended IP policy).

The court did acknowledge there were some circumstances where such a position would be reasonable i.e. where inventions were created jointly with university employees, where students further developed existing inventions owned by the university, created using University facilities, etc.

However, the court did not believe the IP policy created a significant imbalance to the detriment of the DPhil student and found it not to be unfair. There was no significant impact on students generally as the university was found to only apply for 100 patents through World Intellectual Property Office per year, and there was no evidence that the university had in fact enforced its rights under the IP policy to apply for patents so as to claim rights from students. When the wording of the IP policy was brought to the University’s attention, they changed the wording to address the potential imbalance and unfairness this could cause. The University justified the amendments as not intending to alter the meaning of the University’s policy or practice, as reflecting the position more accurately.

A first for English courts

The court itself acknowledged this is the first case heard in the English courts which dealt with issues of applicability and impact of consumer protection legislation of terms relating to the intellectual property rights of students and terms relating to employed academics.

It is a stark reminder for universities not to overreach in their claims over IP rights created or developed by students. IP policies should include appropriate sections which set out the position on IP ownership between academics, undergraduates, postgraduate research students, and employees.

Contracts/agreements

Contact:  Carys Thompson  carys.thompson@shma.co.uk