*This article was originally published by For the Record.
In order to improve patient care and internal IT operations, medical centers often need to enter joint development agreements with software companies and other technology vendors. Developing wearable medical devices, mobile and cloud-based services, and even "software as a medical device" requires a combination of the skills used to construct each of them.
However, joint collaborations can lead to unexpected intellectual property (IP) results and business outcomes. This article addresses those surprise outcomes, with special focus on the factors medical institutions must consider when structuring joint development agreements. Joint ownership of joint developments is a common approach, but it is not mandated nor is it always an ideal result. To avoid these risks, health care organizations can pursue specific contractual avenues.
Under IP statutes, each joint owner is free to grant nonexclusive license rights to third parties without the consent of the opposite party or an advance notice. The third party can be any entity, including another medical center or technology company. It also can be a joint venture.
If the medical center provided funding and the research time of its physicians, then the technology vendor will have effectively converted the medical center's investment into no-cost research and development that the vendor can use to enter into another venture to enhance the jointly developed product or develop an entirely new commercial product. Further, the medical center may have no voice in the course of future development. Also, it does not automatically obtain the economic fruits of future successes.
IP laws complicate matters. Most combined software and hardware products and services are covered by a combination of copyright and patent. The legal standard for determining which party is the creator of copyright and which is the creator of patentable subject matter may result in unexpected outcomes.
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