Meaning of an assignment of intellectual property rights
WILKINSON v LONDON STRATEGIC HEALTH AUTHORITY [2012]
Contracts for the development or customisation of software, for the production of training materials or the creation of a consultancy report often have to attempt to resolve the typical struggle regarding the ownership of the resulting intellectual property rights. The customer wants sufficient ‘ownership’ of the IPRs (usually by way of an outright assignment or an exclusive licence) and the supplier or consultant wants to limit the rights granted (usually by way of a non-exclusive licence) to ensure that it can freely exploit what it develops on behalf of its clients generally. Problems arise because, as the saying goes, very little, if anything, is completely original.
Facts:
- Certain training materials were written by W for use by NHS staff as early as the 1980s. These evolved over the years and became very well known within their particular field. W was the author of one of three main ‘variants’ of communications training courses for NHS personnel involved in communicating distressing and sensitive messages to patients and their relatives (“the Established Works”).
- In 2007 W was asked to sign a contract with the LSHA under which she would assist in creating a unified approach to such communications training, essentially creating one standard approach out of the three variants (“the Connected Programme”). The contract dealt with ownership of IPRs in a simple manner. It said “All intellectual property rights associated with any intellectual property rights arising from the performance of the Services and the documents and other work prepared by the Consultant pursuant to this Agreement shall belong to [the Health Authority]”.
- The materials that resulted from the unification programme included extracts from the Established Works which, according to the Judge, “would if they had been included without the consent of Dr Wilkinson, amount to infringements of Dr Wilkinson's copyright in those Established Works”. However, the Judge then went on to say, “the extent of this reproduction must not be over stated”.
- The dispute centred on the scope of the rights enjoyed by the LSHA. In particular, W claimed that the inclusion of parts of the Established Works in the Connected Programme materials was the subject of an implied licence which was limited in scope to the express purposes of the Connected Programme ie limited to personal use by the NHS in England and Wales and only in connection with cancer treatment. Specifically it was not intended for use in other clinical disciplines or countries and that licensing to third parties for ‘profit’ was also not permitted. In contrast, the LSHA contended that W had no right to control or limit the use or exploitation of the Connected Programme materials.
Decision:
- The first point to be decided was whether the slightly strange wording of the clause in question operated so as to assign to the LSHA copyright in the Established Works. The Judge gave this short shrift saying that he did not read the clause as referring to any then existing copyright at all but that, “much clearer wording would be needed … to assign property rights which were already in existence.” W was therefore free to continue exploiting the Established Works.
- The position may well have been different had the assignment been in relation to an already existing work but where the assignment is contained in a contract which provides for the creation of new works and deals with the copyright in those works, it is unlikely to act as an assignment of pre-existing works.
- The Judge then had to consider the scope of the implied licence in favour of the LSHA. He decided that any implied licence must not fetter the LSHA’s enjoyment or exploitation of the newly created copyright which had been assigned to it. As the copyright owner in the Connected Programme works, the LSHA was held to reasonably expect to be free to reproduce the Connected Programme works for any purpose.
- Thus, the LSHA was free to exploit those works in other clinical areas and in other geographies, to license third parties to use them and generate revenue from such exploitation. The implied licence from W was held to be irrevocable, royalty free and assignable (along with the LSHA's copyright). Also, if the LSHA granted a licence under the copyright it owned in the Connected Programme works, a sub-licence of W's copyright would be implied.
Points to Note:
- This seems to us an entirely sensible and appropriate conclusion. The Judge appeared to get the balance between the parties’ interests exactly right given the assignment wording.
- It means that:
- anybody granting an assignment in a similar situation must be conscious of the wide scope of rights being granted and if there are to be limitations imposed on future use and exploitation, these need to be expressly agreed;
- the recipient of an assignment must recognise that the assignment does not, at least in these circumstances, sweep up all pre-existing rights - the person granting the assignment remains free to use these and exploit them in competition with the assignee. If the intention is for such rights to be included and the assignment to be all-encompassing, then it would be wise to address this expressly.