The secret to a good commercial IP contract: An interview with Appleyard Lees’ Amritjot Jethwa
For Amritjot Jethwa, clarity, pragmatism and a thorough understanding of your client’s aims are key to the drafting and negotiation of a successful contract.
Appointed as Appleyard Lees’ first head of commercial IP contracts in November 2023, Amritjot’s arrival in Cambridge broadened the range of capabilities the intellectual property law firm can offer its clients.
The importance of getting contracts in place and right at the outset of a commercial relationship is hard to underestimate for inventors, founders and CEOs of start-up and scale up companies, not least those involved in early-stage technology.
With a wealth of great ideas and innovation swirling around the city, Amritjot’s role is akin to a guiding hand ensuring the agreements surrounding them are clear on ownership and support development of the same.
So what is a commercial IP contract?
“It’s a commercial contract that governs a relationship between two entities that involves intellectual property - either the protection, development or exploitation of it,” explains Amritjot.
“As an umbrella term, it includes quite a lot of different types of contracts. It is well understood that patents and trademarks protect IP, but perhaps lesser known is the role that contracts play in protecting IP.”
The agreements companies require evolve with, and are determined by, the lifecycle of a product or invention.
“Going beyond conception of an idea developed in a university’s lab, for example, into development that could benefit from greater funding, an inventor may seek to take a licence under the existing IP into a new vehicle,” says Amritjot.
“Or there could be a confidentiality disclosure agreement (CDA) between an early-stage company that has potentially found an entity with complementary technology to collaborate with to evaluate such technology in the first instance.
“As development of the invention progresses, but perhaps before there is sufficient material for a patent filing, the company might enter into a service agreement with a lab or research organisation to provide more data, and in parallel, data use or data-sharing agreements.
“A company could start to consider strategic collaboration agreements as it moves from focusing purely on development towards avenues that allow them to commercially exploit their IP.
“So there is a use for IP-rich contracts through all the stages of technology development, and company growth.”
One of the benefits of engaging IP specialists promptly to handle such agreements is that it can help companies and individuals avoid undermining the future commerciality of the IP.
“Even with a CDA in place, if confidential information about early-stage technology is disclosed to a resource-rich company and it is later found to have used it outside of the agreement, then any legal recourse - for example, through a claim for breach of contract or obtaining an injunction - may be prohibitively expensive for the start-up, and so not a realistic course of action,” notes Amritjot.
“So not only are we advising on the legal terms of a contract or agreement, we are also offering pragmatic advice. It might be very exciting to have a company with deep pockets and the offer of investment at your door, but we might say that such an approach should be viewed with caution and to be mindful and selective with what you actually disclose.
“As solicitors, we can usually find a solution, but with early advice it is far better to be prepared and so prevent falling foul of the pitfalls.”
What, then, does a good commercial IP contract look like?
“It needs to be very clear who the parties are, in its definitions as to what the intellectual property is, each party’s obligations and the intended outcome,” replies Amritjot. “You need to be careful about the language used, carving out what each party is actually contributing and sharing, and accurately defining, for example, the IP that existed prior to the relationship could be important to avoid any later dispute as to invention.
“It’s good if there is clarity on what the expected deliverable is, and the ownership and rights of use of such deliverables need to be firmly established.”
She adds: “The perception with contracts is that they have lots of complicated language and concepts. I should be able to explain each clause to my client, its purpose and effect.
“Take a wordy assignment clause, for example. If a collaborating company is bought out by a company with potentially conflicting interests, would it be in the best interests of the client to allow them to have use of your confidential information?”
When it comes to making money from your invention, perhaps by selling or licensing it, either to an exclusive or multiple parties, there are further agreements to make.
“If you didn’t want to or were not in a position to manufacture or distribute products developed using your IP, then you can license the right to do so to others which can bring in revenue such as upfront fees, and royalty payments,” notes Amritjot.
“If you’ve reached a certain level in the product development and then you give the exclusive right to a third party to undertake further development you would want to make sure your agreement has due diligence clauses, to ensure that your IP is commercially exploited to achieve maximum value and a return on your investment .
“Then when the product hits certain development milestones, for example, regulatory approval in the US, you may see more return on your investment via milestone payments.
There are ways of realising value from your IP without necessarily having to sell it but the exit strategy of a technology company differs from company to company.”
Amritjot’s involvement can cover the whole lifespan of IP, from inception to value realisation.
“I think by having that early input and going on the journey with the client, I can keep in mind from the outset where the client’s strategy which informs how we go about protecting and exploiting the IP,” she points out.
“What you sometimes find with contract negotiations is that they can become protracted as people get stuck on certain points. If you know what your client’s end goal is and what they want to achieve, you can appreciate the sensitivities and advise your client that much more expertly to work through some of those negotiation difficulties.
Having read law at UCL in London, before a master’s in international business, Amritjot found she was attracted by the problem-solving side of legal practice.
“I trained at a law firm in London and was going to be a disputes-focused solicitor - problem-solving. The work I was involved in made me feel like I was having real time impact,” she says,
“Since moving to Cambridge, I have felt very fortunate that I found a practice area which allows me to feel the same way. I like that new technology is by its nature cutting-edge, leading the way and has the potential to have real impact.
“I have worked with a range of companies both in terms of technology and stages of growth. I like working for early stage companies and founder CEOs, as they are very passionate about what they do. It’s really exciting and you can get caught up in that.
“When they sign a heads of terms agreement that they are going to base their next funding round on, you feel you are contributing to the company’s growth and absolutely part of the team.”
Amritjot joined the judging panel this year for the Cambridge Independent Science and Technology Awards, at which Appleyard Lees sponsored AI Company of the Year.
She has expertise in drafting bespoke collaboration agreements to support clients with AI-based platforms and a client roster that ranges from start-ups and SMEs to charitable organisations and universities, including international institutions and tech transfer offices, along with multinational pharmaceutical and technology companies and government departments.
Some larger firms may have in-house counsel to call upon, but Amritjot says Appleyard Lees aims to offer similar benefits, particularly following the establishment of the firm’s commercial contract team, which also includes specialist IP solicitors Chris Hoole, Robert Cumming, Daniel Bailey and Christopher Thomas.
“I find the functionality of an external ‘in-house’ counsel is popular with some set-ups. Perhaps they don’t have the resources for a full-time solicitor or legal director, but they can use somebody like me who understands the business strategy, the IP portfolio and IP strategy and can look after those interests, which invariably goes to the core of the business,” says Amritjot.
“It’s a cost-effective way of delivering a highly personalised service tailored to the company’s stage of growth and objectives and I’ve been able to act as such with a number of companies and, when new investors come in or resources are less constrained, assisted such companies to go and build their own legal teams.”
It is a natural step for companies seeking the firm’s patent and trademark advice to seek help with their commercial IP contracts too.
“Appleyard Lees is a one-stop IP law firm,” notes Amritjot, who also draws on a broader network for clients’ other needs.
“With a contract that might have international issues, or specialist regulatory issues, I’ve found it’s been appreciated by clients that they are able to access my network with relative ease to allow them to receive all the advice rather than piecemeal through the engagement of multiple lawyers.
“It’s important to build up a network and in Cambridge I’ve worked with some really good solicitors.”
Dispute resolution is handled by other members of the team at Appleyard Lees, but Amritjot’s work on contracts is designed to help prevent such problems occurring in the first place.
Amritjot spent a number of years living abroad and describes that period as “instrumental” in her personal development, helping her to understand other cultures in a way that has been helpful with the international nature of technology businesses.
Now settled in Cambridge, she finds the process of helping the city’s great ideas gain traction and lift off to be engaging.
“You’re constantly learning, meeting new people and being introduced to new ideas. I really enjoy that,” she says.
