It's in the drafting – two recent UK cases show how collaboration agreements and employee arrangements with individuals involved in R&D can come unstuck

Two recent decisions of the Courts of England & Wales demonstrate the difficulties encountered in determining ownership of innovation and illustrate the importance of clearly reflecting the intention of the parties in drafting collaboration agreements and service agreements with R&D individuals/employees. The first (Bionome v Clearwater) involved the determination of the construction of a collaboration agreement; and the second (Hill v Touchlight) a situation where the inventor was transferring from being an independent contractor to an employee and the point in that timeline at which the invention was created, and the implications for the ownership of that invention flowing from this. 

Key takeaways

The conclusion to be drawn from these disputes is that the Courts of England & Wales will look at the ordinary meaning of the relevant words (taking in to account the whole context) to come to their conclusion on interpretation. An assignment of IP rights can fail to have effect for a variety of reasons, including failing to comply with the legal formalities and on a finding that (on the proper construction of the document) it was not clear that the IP rights were intended to pass.

Assignment provisions should be drafted carefully, and drafters should bear in mind the possibility of future disputes to sharpen the context of such drafting. In this regard, it may be appropriate, and good practice, for employers to require that individuals/employees working in R&D disclose any relevant inventions that they consider that they "own" before commencing any consultancy or employment. This should mean that those parties are clear on, or can agree on, the inventions which are excluded from a company's/employer's claim of ownership. If there is a disagreement as to the ownership of any IP rights in the future, then the parties can refer to those disclosures (or lack thereof).  

Bionome Technology v Clearwater

Late last year, in Bionome Technology Ltd v Clearwater [2024] EWHC 3155 (Ch), the High Court addressed several significant issues regarding patent entitlement and the construction of a collaboration agreement to determine ownership.

The dispute centred on the ownership of patent applications relating to a method for controlling vegetation growth. Whilst it was accepted that Dr Clearwater was an inventor with a rightful claim to a share of the applications, Bionome argued that it held Dr Clearwater's shareholding on trust pursuant to the collaboration agreement.

The High Court rejected Bionome's argument, ruling that the agreement did not constitute an assignment. It was deemed to be no more than an expression of intention to assign once certain criteria had been performed (which had not been performed). Furthermore, the agreement did not give rise to an express or implied trust through conduct. Consequently, the patent applications were held to be jointly owned.

A key issue in the case was the construction of the collaboration agreement, particularly whether it imposed an obligation on Dr Clearwater to assign his rights. The agreement contained multiple references to "futurity" and contingencies, reinforcing the court’s view that it was not a binding assignment. For instance, the "Objectives" section stipulated that the parties would “agree to proceed to a patent application” only once certain "first milestones [had] been achieved". This language indicated a conditional obligation dependent on future events rather than an immediate commitment to assign rights.

Similarly, the "Initial Timetable" section of the collaboration agreement outlined a plan to establish a jointly owned entity, with legal advice to be sought on the best jurisdiction for this entity. Crucially, this section only expressed an "intent" to transfer any IP applied for into the entity at the earliest time. The High Court noted that the reference to seeking legal advice suggested that the parties themselves did not intend the agreement to be binding. Instead, it reflected an understanding that further formalisation and legal steps were necessary.

Ultimately, the High Court concluded that there was "too much uncertainty and intervening future steps or preconditions" within the agreement for it to be considered an assignment or an agreement to assign.

Hill v Touchlight

In January 2025, the Patents Court considered the construction of a service agreement with an individual in relation to R&D. Hill v Touchlight Genetics Ltd and other companies [2025] EWHC 107 related to a synthetic DNA vector and its enzymatic production. The relevant IP in this case were patents that disclosed a process for making so-called "doggybone" DNA (or dbDNA), referred to "the Close-Ended Process" and a version of the Close-Ended Process in which the starting material was dbDNA, referred to as "the dbDNA Template Process" (the "Patents").   

Dr Hill was employed by Touchlight as its Chief Scientific Officer under a service agreement that took effect in September 2008 (the "Service Agreement"), with Touchlight being a business that produces DNA using dbDNA and an enzymatic manufacturing processing. Dr Hill brought proceedings against Touchlight, claiming that she was jointly entitled to (ie, the joint owner of) the Patents. Dr Hill sought various forms of relief, including registration as owner of the Patents, the grant of a retrospective exclusive licence to her in respect of the operation of manufacturing processes under mesophilic conditions (ie, temperatures between about 20^oC and 45^oC) and financial compensation. She claimed that Touchlight had infringed her rights in the Patents by operating its manufacturing processes under mesophilic conditions in the UK and by granting licences to third parties to operate those processes. 

The facts of the case were complicated and substantial evidence was submitted by both sides to support the facts on which they relied on.

Of most interest from a contractual perspective is the issue surrounding the construction of the Service Agreement. Dr Hill accepted that the Service Agreement assigned to Touchlight some of her rights in the invention that was the subject of the Patents. However, she claimed that the assigned rights were limited to the processes operated under fully thermophilic conditions (in practice, a temperature above ~45^oC). Although the Patents Court was not required to decide the proper construction of the Service Agreement and its assignment provision (given its findings on the timing of when the Close-Ended Process and the dbDNA Template Process were devised meant Dr Hill's claim failed on that basis), it nevertheless did so. The relevant extracts of the Service Agreement are set out at the bottom of this post.

Pursuant to the Service Agreement, Dr Hill assigned to Touchlight all "rights and interests of whatsoever nature in and to the Intellectual Property Rights", which included "all such rights, applications, copyright, know-how and confidential information relating to the Projects owned or created by or in the knowledge of [Dr Hill] prior to the commencement of the Employment”. The dispute concerned the definition of "Projects" and whether it extended to the Close-Ended Process and the dbDNA Template Process when operated under conditions that are not thermophilic. Dr Hill claimed that the use of the term "Projects", which referred to projects described in an Information Memorandum, meant that the assignment was limited to processes operated under thermophilic conditions.

The Court analysed the Information Memorandum and all relevant provisions of the Service Agreement. They found that (at paragraphs 250 and 251):

"The natural and ordinary meaning of the clause is that it assigns to [Touchlight] all Dr Hill’s rights relating to the Projects, being those based on the use of thermophilic bacteria described in the Information Memorandum. Neither the Service Agreement itself nor the description of the projects in the Information Memorandum limit those rights to ones in processes carried out under wholly thermophilic conditions. If an invention relates to the Projects but is temperature-agnostic, then it is covered by the natural and ordinary meaning of the relevant clause. There are no other provisions of the Service Agreement which suggest otherwise.

The overall purpose of the clause and the Service Agreement, in so far as relevant, was to ensure that [Touchlight] had the rights which it needed to take the Projects forward, including, but not limited to, rights which could form the basis of patent protection….

It would accord with commercial common sense for [Touchlight] to hold the rights in such a process, so that it could develop its process using the mesophilic protelomerase, and continue to use it if a suitable thermophilic protelomerase could not be obtained."

The Patents Court then went on to consider further issues which were raised by the parties (even though this was not necessary as Dr Hill's claim had already failed), including whether the facts gave rise to an estoppel preventing Dr Hill from asserting any of her rights that she might have had in the investion. On the estoppel issue, the Patents Court made only findings of fact so that if this case did go further on appeal and it became necessary to resolve it, the Court of Appeal could refer to those findings and apply the law to determine this issue. 

Extracts from the Service Agreement in dispute in Hill v Touchlight  

Clause	Provision
11.2 – Assignment of rights	“[Dr Hill] acknowledges that [Touchlight] is the sole owner of any and all Intellectual Property Rights and insofar as any of the Intellectual Property Rights are not vested in [Touchlight] and in consideration of the salary payable to [Dr Hill] under the terms of this Agreement, [Dr Hill] assigns to [Touchlight] with full title guarantee, the entire copyright (including future copyright) and all other rights and interests of whatsoever nature in and to the Intellectual Property Rights and any products of the Employment together with the right to take proceedings and recover damages and obtain all other remedies for past infringements in respect thereof throughout the world for the full period of copyright (and of any analogous rights) and all revivals renewals extensions and novations thereof and thereafter (so far as possible) in perpetuity, together with the rights to the same in any manner and through any media as [Touchlight] shall in its absolute discretion decide.”
Intellectual Property Rights definition	“all rights in or arising from industrial and intellectual property rights including without limitation patents trade marks and/or service marks (whether registered or unregistered) registered designs unregistered designs copyright and database right and rights of a similar nature by whatever name they are known in any country of the world together with any applications for any of the foregoing in any part of the world and the copyright in all drawings plans specifications designs and computer software and all know-how and confidential information created by [Dr Hill] in the course of the Employment together with all such rights, applications, copyright, know-how and confidential information relating to the Projects owned or created by or in the knowledge of [Touchlight] prior to the commencement of the Employment."
Projects definition	“the projects based on the use of thermophilic bacteria described in the Information Memorandum issued by [Touchlight] in April 2008 and any other projects which [Touchlight] and [Dr Hill] agree should be included within this definition”.