Commingled Intellectual Property–Like Peanut Butter And Jelly?

Who doesn't like the favorite sandwich of childhood - peanut butter and jelly? The two substances blend and meld together, creating a delectable gooey, messy, sticky and sweet treat.

In the life sciences, commingled intellectual property can also create "gooey," messy and sticky problems for companies. Unfortunately, there's nothing sweet about commingled IP and the complications that can arise from it, and you can be sure that an experience arising from claims of commingled IP will leave a sour taste in your mouth. Here we discuss proactive or preventative steps that companies can take to reduce the risk of commingling IP.

In layperson's terms, commingled IP arises when intellectual property belonging to one party becomes incorporated into a proprietary creation belonging to another party, or is used by the second party in developing the second party's proprietary intellectual property.

How might this happen?

An R&D company might in-license the use of certain materials or processes for use in its own R&D program. Typically, in a licensing agreement, the licensor will allow the licensee to use the licensor's proprietary materials or IP in connection with the licensee's pursuit of a specific research project. However, scientists in research companies and universities commonly confer with one another; collaboration and exchange of ideas is a hallmark of scientific innovation. This sharing of information about materials and processes used by one research group may influence a group of colleagues to use the same materials or processes in an unlicensed project.

A clear hypothetical example of commingled IP involving materials could be a situation in which Company A licenses the rights to use stem cells produced by Company B in developing a biologic drug or vaccine relating to prevention of shingles. Scientists at Company B confer with colleagues and due to absence of appropriate safeguards in the license and/or deficiencies in Company B's IP management, the colleagues use the licensed stem cell strains on a project, which leads to development of a biologic drug for a condition other than shingles.

Another hypothetical example would be one in which there is a proprietary process ("know how") which is licensed by Company B to use in connection with its shingles biologic drug development. In regular scientific roundtables, scientists on the shingles biologic drug team discuss their methodologies, including the steps which constitute the licensed...

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