In Oxford University Innovation Ltd v Oxford Nanoimaging Ltd [2022] EWHC 3200 (Pat) Daniel Alexander KC in a lengthy judgment eventually held for the University in a dispute on the validity of the University’s contractual terms claiming intellectual property over research students’ work. The case is of interest to the blog in that it contrasts the consumer provisions in the ‘Brussels (conflict of laws) regime’ with those of substantive consumer law.
[8] The thrust of ONI’s case is that Oxford’s approach to allocation of the commercial fruits of research is unfair to DPhil students and, more particularly, unfair to Mr Jing, the young researcher, in the circumstances of the case. More specifically it is said that Oxford’s policies are unfairly weighted in favour of the University and senior academics, who may have contributed less to the detail of the work than more junior researchers or inventors.
Applicability or impact of consumer protection legislation on terms relating to intellectual property rights of students is core to the case. The Unfair Terms in Consumer Contracts Regulations 1999/2083 – UTCCR are derived from the European Directive on Unfair Terms in Consumer Contracts 93/13, the ‘Unfair Consumers Terms Directive’ UCTD, which is retained EU law and the CJEU authority on same is retained EU case law [240] . They only apply to contracts between a “consumer” and a “seller or supplier”. Was Mr Jing such a ‘consumer’?
UK courts regularly made recourse to Brussels Convention and later Brussels Ia cases in the absence of much CJEU UCTD authority. The judge correctly holds [242] that one must be cautious with such approach pro inspiratio, as indeed I have also pointed out on this blog before, and discusses ia CJEU Benincasa, Gruber, Schrems, Milivojevic, albeit not CJEU Reliantco, and the UK cases of Standard Bank v Apostolakis, AMT Futures v Marzillier and Ang v Reliantco. In the discussion on whether the Brussels case-law has an impact on the UCTD, he refers ia to Weco Projects. [288] he points out that when later CJEU authority did interpret the term ‘consumer’ in the UCTD directly (eg Karel de Grote), it made fairly little reference to Brussels authority. [306] he decides the UCTD approach to ‘consumer’ is ‘more expansive’ and ‘not as strictly’ as under the Brussels regime and [310] rejects Oxford’s submission that it is necessarily the right approach to this case under the UCTD to adopt the framework of analysis of dual-purpose contracts of the Brussels Convention/Regulation case law. This also includes [320] a different approach to the burden of proof.
[410] the final conclusion is that a ‘DPhil student is normally entitled to be treated as a consumer under the UCTD and that it does not matter for this purpose whether the student is undertaking that educational qualification with a view to her career, profession and/or professional advancement’ and [425] that ‘Oxford has not shown that Mr Jing’s circumstances were such that it would be wrong to treat him as a consumer in entering into the DPhil Contract he did.’ However eventually [639] the terms were not judged to be ‘unfair’.
Many of the issues raised are new and one assumes permission to appeal may have been sought.
Geert.
EU private International Law, 3rd ed. 2021, 2.231 ff.
gavc law - geert van calster 
Mr Daniel Alexander KC wrote about the contract signing process of Mr Jing’s internship:
(1) On 6 February 2013, when he started, he signed an undertaking that was countersigned by Professor Kapanidis on 7 February 2013. The handwritten dates on the Undertaking state that its terms applied from 1 March 2013 to 30 September 2013.
(2) Paragraph 4 of the Undertaking provide das follows:
“I accept that the terms of the University Statutes relating to intellectual property apply to me; and that the University will be entitled in accordance with those terms to claim ownership of intellectual property which I produce. “
(3) On 11 March 2013, after Mr Jing had started work as an intern, Professor Kapanidis confirmed that his laboratory would pay Mr Jing £6,000 for his internship in an e-mail.
“OK. I will pay you £6000 for a 7-months internship (although the employment will appear as a casual 3-month contract to make hiring easier), which will include your summer vacation. OK? There will be a single payment.”
(4) On 15 April 2013, Mr Jing signed a formal letter of engagement, a greeing to work as a Research Intern in Professor Kapanidis’ laboratory. This included the following:
“1. Type of work
You will provide your services as a Research Intern as and when required‚
As regards the performance of your services, you will:
(a) be responsible to Dr A Kapanidis (your “supervisor”) or as otherwise specified;
11. Intellectual Property
By agreeing to the terms of this letter, you expressly agree that the terms of the University Statute and Regulations (see attached list of University Statutes and Regulations) relating to intellectual property apply to you; and that the University will be entitled in accordance with those terms to claim ownership of intellectual property which you produce while carrying out work for the University”.
Comment:
From the process that Mr Daniel Alexander KC wrote, we can clearly know:
1. The approach by which the contractual relation between Oxford and Mr Jing was signed is uncommon.
2. Some terms used in the Undertaking, letter and e-mail are unfair.
3. These terms are contrary to the requirement of good faith.
4. These terms result in the existence of a significant imbalance, to the detriment of Mr Jing.
5. These terms result in the significant imbalance between the rights and obligations of Mr Jing under the contract.
1. Mr Daniel Alexander KC ignored the key facts (see below), therefore, the Judgment is unfair:
Everyone knows that PhD students come to universities, want to study there and to get a doctor title that is good for their career. Therefore, PhD students have to accept The “DPhil Contract” which operated to transfer title to the University in the relevant inventions made by PhD students. But in fact, Mr Jing has worked in Oxford for 39 months, that is three years and three months (research intern between February – October 2013, Mr Jing was paid £6000 for eight months, how did he live in the eight months?), (DPhil researcher between October 2013 – May 2016) and even though “the bulk of the detailed development work which resulted specifically in the patents in issue was undertaken by Mr Jing”, he did not get any doctor title. Oxford did not give Mr Jing any compensation. Thus, the operation of the “DPhil Contract” should been changed in this case according to the actual situation. At least, Mr Jing should own the major part of the intellectual property rights.
1. ONI was spun out in Juni 2016 and Oxford retained a 50 per cent stake at the beginning (according to the judgment). That means that ONI is a very young company. ONI has to pay 700000 Pound for the royalties from February 2019 to Spring 2021 (for only two years), that is certainly an excessive financial burden for the neu company.
2. Oxford holds, in addition, a licensing agreement that dictates OUI is entitled to a sliding royalty of 3.5 per cent to 6 per cent of ONI’s net sales. That means, when the company does not get any profit, just as many companies in the past two to three years due to Coronavirus pandemic, OUI has still right to claim a sliding royalty of 3.5 per cent to 6 per cent of ONI’s net sales. This sounds too greedy, which is somehow not fit well with the name of the world’s most esteemed academic institution, The University of Oxford.
Mr Jing has been working on the Nanoimager for 10 years (from Fubrurary 2013 to now), He “was instrumental in turning that nascent technology into a shoebox-sized microscope capable of observing tiny processes happening in cells in real time” within three years and three months. In 2016, he and professor Kapanidis spun out Oxford Nanoimaging. As research intern, Mr Jing could work without any holidays for eight months with one pay of 6000 pound (February 2013 to September 2013, it is conceivable that he must economize during these eight months). As PhD student Mr Jing had worked for two years and seven months (October 2013 to May 2016), he “left the University without completing his DPhil to focus on commercial development of the Nanoimager”, when the technology was spun out. These evidences demonstrate that Mr Jing could give up his personal benefit (His decision could lead to him being hurt a lot, for example, not having a doctorate title) to focus on more important things that he thinks. Mr Jing wrote in his email to professor Kapanidis On 4 November 2012: “…, which could become a fast and reliable method to detect cancer at the single cell level. Such advancement in medical diagnostics would lead to earlier and more precise detection of cancer and enable more prompt and specific treatments, thereby making tangible improvements in everyone’s lives”. ONI says “our mission” is “To help accelerate human discovery and fight disease by enabling everyone to see and understand the microscopic details of life” (ONI’s website). It is logical to say that Mr Jing’s stand is, just as he said, to free his company from an excessive financial burden, not for his benefit. Many inventors and entrepreneurs are very talented, intelligent, versatile and creative. But these are not enough, they have to overcome many difficulties, to work hard for many years for a clear goal: to solve the global problem, to improve everyone’s lives. Unfortunately, their efforts are oft downplayed, distorted, are dragged by excessive financial burden. “Some founders agree. In a database of dozens of testimonies collected by Benaich, they tell stories of “egregious” equity expectations torpedoing funding rounds. Others describe “painful” spinning-out processes that took years.”
As you see from my posts on the blog, YingIan, I tend to focus on the technical aspects of international litigation, less so on the content outcome of the actual case. Thank you for engaging, forgive me for not discussing the facts, with which I am less au fait.