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| Chemistry Research Laboratories at Oxford University Author M stone Licence CC BY-SA 3.0 Source Wikimedia Commons |
Traditionally universities have been funded by grants from central government, fees and gifts from alumni and philanthropic members of the public. These are the so-called first and second funding schemes. More recently universities have been encouraged to exploit their accumulations of knowledge and expertise through licensing, consultancy and training. That is often referred to as "the third stream" of funding.
In order to tap that income stream, universities have had to own the right to exploit those resources. That is to say, the intellectual property in research carried out by their staff and students. The right to apply for patents for inventions resulting from research carried out by their staff will usually be covered by s.39 of the Patents Act 1977. That section will not apply to research carried out by students in the course of their studies. Unlike academics who are paid to teach and carry out research, most students pay their a lot of money for their tuition and research facilities.
Universities address that problem by requiring their students to assign their rights to apply for patents and other intellectual property rights arising resulting from their research to them in certain. circumstances. An example is section 5 of Statute XVI of the University of Oxford's Statutes:
"5. (1) The University claims ownership of all intellectual property specified in section 6 of this statute which is devised, made, or created:
........................................
(b) by student members only in the circumstances specified in sub-section (3) below;"
Subsection (3) provides:
"The University does not claim ownership of any intellectual property which is devised, made, or created by University student members, unless that intellectual property was devised, made or created:
(a) jointly with anyone else subject to section 5 of this Part of Statute XVI;
(b) using University facilities or equipment (unless the terms of access for the facility or equipment provide otherwise);
(c) in circumstances where that intellectual property is subject to obligations (including obligations imposed by contracts or grants) that the University owes to a third party;
(d) using funding received from the University (unless the terms of that funding provide otherwise); or
(e) in the circumstances specified in Section 5(1)(a), (c) or (d) of this Part of Statute XVI."
This section is incorporated by reference into offers to work on a doctorate at Oxford.
Last night I spent some time checking the websites of a range of universities in England, Wales and Scotland including that of my alma mater and I found very similar provisions in their intellectual property policies. The foundations that I surveyed included medieval Scottish, English red brick and white brick, Welsh civic, former polytechnics and other recently founded establishments.
Just before Christmas. Mr Daniel Alexander KC, sitting as a deputy judge of the High Court, handed down judgment in Oxford University Innovation Ltd v Oxford Nanoimaging Ltd [2022] EWHC 3200 (Pat) (23 Dec 2022). It is a very long and complex decision consisting of 174 pages in the printable version. I have written an article about the case entitled Patents: Oxford University Innovation Ltd v Oxford Nanoimaging Ltd which appeared in NIPC Law on 23 Jan 2023. The main point of that case is that the provisions requiring students' intellectual property rights to vest in the University of Oxford were challenged by a company that had been set up by one of the university's research students. The company argued that the student had been a "consumer" within the meaning of reg 3 (1) of The Unfair Terms in Consumer Contracts Regulations 1999 ("UTCCR"). He contended that the provision vesting in the University his right to apply for patents arising from his research was unfair.
The challenge failed but the deputy judge held that the student was indeed a consumer, the UTCCR applied to contracts between students and their universities and there were aspects of the student's contract with Oxford that created an imbalance that was detrimental to him. The only reason why the challenge failed is that the detrimental aspects of the contract were outweighed by benefits to the student. The University paid for the application for a patent. It had helped to develop the invention. Its technology transfer company had invested in his company. The University paid the student a share of the royalties that it received from its licensees.
That will not necessarily apply in all circumstances even at Oxford and it is even less likely to apply to all students at all universities throughout the United Kingdom. Not every university has Oxford's resources and connections. There are likely to be other student inventors who feel that they have had a raw deal. Some of them may challenge their universities on similar grounds to Oxford Nanoimaging's challenge. It is entirely possible that some of those challenges will succeed.
To avoid such challenges, universities throughout the United Kingdom should review their IP policies and if necessary amend them. They should also pay regard to some of their other contracts. If a research student is a "consumer" then a fortiori so is an undergraduate. Universities should consider their other contracts for tuition, board and lodging, parking on campus and so on as well as their contracts with their graduate students.
It is also worth remembering that the UTCCR implemented the Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts which remains in force in the remaining 27 member states of the EU. Mr Alexander reached his decision after a very thorough analysis of the Directive and the case law. If his decision is correct his reasoning is likely to apply to the EU.
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