WHO OWNS THE TECHNOLOGY?

Once a candidate technology has been identified, the owner of the intellectual property rights must be established. With all the recent changes, this may not be as simple as it seems. There are a number of potential claimants, and it may turn out that none has absolute ownership, but only holds title to a fraction of the rights. The possible owners include: the government, the institute, the design bureau, the inventor(s), privatized entities, and prior purchasers/assignees. In many situations, there are no clear answers, and the answer can vary from country to country. Furthermore, the answer may be different if the intellectual property was created before the breakup of the Soviet Union or after. The discussion below highlights some of the major issues.

The Soviet Union broke up into fifteen separate countries. In the process, the assets of the former Soviet Union were partitioned among the new countries. The institutes became the property of the country where they were located. The intellectual property of the institute became subject to the laws of that country. Sometimes, however, the inventions were the product of collaborative research that involved institutes that are now in different countries. The issue of ownership and applicable laws becomes murky.

Most institutes have a "design bureau" attached to them, which is responsible for designing and building the equipment that embodies the theory or process developed by the scientists at the institute. The design bureau and its engineers generally own the intellectual property associated with the equipment. Thus, if a license is obtained for a technology from an institute, it may not include a license to make the equipment necessary to practice the technology.

In some countries, the inventors retain rights to the intellectual property. The institute owns a percentage, and the inventor retains a percentage. This is in distinct contrast with common practice in the United States, where the employer owns all of the intellectual property developed by employees. Thus a deal struck with an institute may cover only part of the intellectual property rights. A separate agreement must be reached with the inventor. The process becomes complicated if one or more of the inventors is no longer with the institute and cannot be located.

Many institutes are privatizing some of the departments. The new privatized entity will often continue to rent offices at the institute and to reside there. To an outsider, it is often difficult to distinguish if the people he is dealing with are institute employees or privatized entity employees. The matter can become even more complicated since a person can be both. Always clarify which organization the individual is representing and whose intellectual property is being discussed. Sometimes if a westerner expresses a high degree of interest in a technology, he may find on subsequent occasions that a new private entity has been created based on the technology, and that he no longer is dealing with the institute, but with a private entity.

Lastly, be careful that the technology, or a close variant of it, has not already been licensed to someone else. This situation is very difficult to protect against. It sometimes helps to inquire who else from the West has been visiting the institute. A visit from one of your competitors warrants closer scrutiny to see it they have acquired technology that you are interested in. A relationship based on mutual trust is key to avoiding this pitfall.


Published: December 1994; WTEC Hyper-Librarian