Advising a UK SME on a licence agreement with a US company

Ketonex offers the custom design and synthesis of high performance engineering thermoplastics for additive layer manufacturing (ALM) techniques. All their products are based on the polyetherketone platform, and Ketonex provides services such as: polymer design, synthesis and characterisation, polymer processing, composites design and manufacture, and the applications and commercialisation of related technologies.

Dehns has worked with Ketonex for seven years when we first filed a patent application on their behalf back in 2009. Dehns has also helped Ketonex with four patent families based on high performance thermoplastics.

Ketonex had been approached by a US company who wanted to use the Ketonex technology that had been patented (though Dehns) in the US. The US company had drafted a terms of agreement for a licence to use the technology, and which had been sent to Ketonex.

Ketonex approached us to review the document and provide advice.

Once we received the draft licence agreement, it was reviewed by Dehns Senior Associate Sara de Bresser, who noticed that there were several issues relating to financial compensation, royalties and payments which were outside Dehns’ core capabilities, so she instructed a solicitor’s firm to deal with that aspect.

On the technical IP side, Sara advised on the scope of the technology, the geographic scope of where could and couldn’t be covered by the Agreement, in addition to various activities that were covered under the US patent that would impact the Licence Agreement.

An unforeseen issue that Sara uncovered during this process was that Ketonex already had a prior agreement in place with another US company which allowed them exclusive use of certain aspects of the technology behind the process to create polymers.

As a result of this pre-existing agreement, Sara advised on the potential conflicts and issues that potentially offering two organisations exclusive rights would generate.

Having advised the client on these matters, including the addition of the financial elements of the agreement, Sara drafted and issued a revised version of the licence agreement.

The draft was submitted by Ketonex to the US company in June 2016, and, having been accepted, the Licence Agreement is now in effect between the two companies.