Bionome vs Clearwater: into the weeds of collaboration agreements

Posted: 10/07/2025

The background

Weeds present a perennial problem for gardeners and landscapers everywhere. How do you go about removing weeds safely and effectively en masse? Using a trowel takes time; chemical herbicides can have a disastrous effect on the environment; domestic flamethrowers are increasingly popular but those come with their own self-evident risks. 

In 2019, Dennis McCarthy and John Clearwater invented an innovative fix to this problem: a method of shooting a high pressure solution of water and sugar/sugar alcohol at the offending weeds, inducing osmosis to safely destroy their cells while minimising harm to the surrounding environment. A patent was applied for and subsequently granted by the UK IPO in 2022. 

However, there was a problem: McCarthy and Clearwater disagreed over the question of ownership under the terms of a collaboration agreement that they entered together in 2019. There was no question they had invented it together but who was the proper owner of the rights to the patent? This dispute would eventually be heard before the High Court (citation [2024] EWHC 3155 (Ch)) and judgment was handed down in December 2024.

The judgment confirms the golden rule in legal agreements: clarity and certainty of terms are paramount to ensure that differences in interpretation do not require the cost and expense of a court's intervention as in this case, especially if the differences relate to valuable IP such as a patented invention. 

The collaboration agreement

The inventors' disagreement is rooted in the interpretation of the collaboration agreement. Collaboration agreements vary wildly but are all, in essence, a declaration where multiple parties make clear their intention to work together on a project or joint venture. Parties use these agreements to set out their common goals or respective roles to keep each other's information confidential or decide who owns (or will own) which IP. 

Because these agreements are entered into at the start of a collaboration, many items are parked until details such as specific funding or licensing terms become more apparent for which parties can enter separate contracts later on with the risk that these terms represent simply an unenforceable 'agreement to agree'. 

In the case of McCarthy and Clearwater, their collaboration agreement was entered into while they were still developing their invention. It broadly contained the standard provisions you would expect, like agreeing to co-operate on research and disclose their knowledge to each other. However, there were four key provisions that would become the subject of dispute: 

• That there were 'milestones' McCarthy and Clearwater were to pursue together first, including to i) share their expertise and technology ii) determine if the product is commercially viable iii) run tests, etc.
• That after these 'milestones' were achieved, they 'will agree to proceed to a patent application'.
• That they would incorporate a new jointly owned company together following legal advice.
• That both McCarthy and Clearwater had 'intent to transfer any IP applied for into the entity at the earliest time'.

The dispute

In late 2019, with their invention developed, the relationship between McCarthy and Clearwater broke down after differences emerged between them about their respective contribution to the project. There was also a divergence in understanding from this point onwards. McCarthy considered the collaboration agreement to continue to bind them both while Clearwater treated it as being 'void'. 

In March 2020, McCarthy incorporated the company Bionome and was its director and sole shareholder without Clearwater's direct involvement. McCarthy did so with the understanding that he was taking the lead on setting up the company that would in turn apply for the patent. Bionome subsequently applied for the patent a few weeks later. 

Significantly, Bionome was named as the sole owner on the patent application. Why was Clearwater not named as a joint owner? The starting point of the Patents Act 1977 is that the inventors are the owners unless an agreement says otherwise. McCarthy's understanding was that the collaboration agreement had the effect of assigning Clearwater's ownership of the patent from himself to Bionome, given that the clause stated their mutual 'intent to transfer any IP applied for into the entity at the earliest time'.

Even though Bionome was solely owned by McCarthy, he wished to honour the spirit of collaboration agreement such that, as soon as Bionome became commercially viable, he would transfer an equal shareholding of the company to Clearwater. 

When the patent application was made and Clearwater saw that Bionome was named as the sole owner, he brought a claim in the IPO to be added to the patent as another owner. The IPO decided in Clearwater's favour, requiring that he be added as a joint owner to the patent. Bionome then appealed to the High Court and it is in those proceedings that judgment was handed down last year.

The judgment

Bionome/McCarthy's argument on appeal was that the patent should be owned solely by Bionome. The crux of their case was that the collaboration agreement constituted an assignment or a clear agreement to assign Clearwater's ownership of a part of the patent to a new jointly owned company. Clearwater disagreed and argued that, although the collaboration agreement does state his intention to assign his part ownership of part of the patent to the new company, that intention was contingent on the achievement of various 'milestones' which he argued had not been achieved. Therefore, no assignment could have taken place and he, Clearwater, would still own his share of the patent.

The judge upheld the judgment of the IPO and decided in Clearwater's favour, dismissing Bionome's appeal. The collaboration agreement did not constitute an assignment nor an agreement to assign Clearwater's ownership of part of the patent. The agreement's wording was not nearly explicit enough to create an automatic assignment and it leaves 'too much uncertainty and too many intervening future steps or pre-conditions'. The decision for McCarthy and Clearwater on whether to assign their rights would arise only after those 'milestones' in the agreement were completed and any number of them could have failed.

The judge also rejected Bionome/McCarthy's argument that Clearwater's shares in Bionome are held on trust for him by McCarthy and nothing could be found to establish that an actual trust existed at the time. 

The decision requires Clearwater's name to be added as joint owner to the patent. The judge encouraged the two inventors to resolve their differences out of court if they wished to follow their original intention of jointly controlling and exploiting their invention.

Lessons for collaborators

For those thinking of entering collaboration agreements, it is very important to draft provisions to agree who is or will be entitled not only to any existing IP but to the rights in any subsequent IP that might arise or be developed under the collaboration agreement. 

Any assignment, agreement or other mechanisms must be clearly set out to prevent the kind of dispute that befell McCarthy and Clearwater. Their 'intent to transfer any IP applied for into the entity at the earliest time', following a series of 'milestones', was too uncertain to have any effect. It is better to use certain and specific wording such as the clause: “I hereby assign and agree to assign…” which was deemed to effect a valid assignment in a similar 2010 case.

In any agreement it is important to distinguish between overarching 'intentions' or 'objectives' which are non-enforceable and simply give the parties a general sense of direction vs specific clauses and provisions that are clearly drafted and are binding for all parties. McCarthy and Clearwater's agreement created uncertainty because it was unclear on when or how a jointly owned company would be formed and IP assigned to it and also how any party could go about exiting from the agreement. 

Any collaboration agreement should be drafted with as much specific detail as possible. It should provide clear mechanisms for assignment of IP created for the formation of any new entities and associated shareholdings and also specify clear provisions on variation or termination. 

Please find publicly available the Patent, the first instance IPO decision, and the High Court Judgment.

This article was co-written with Ryan Yao-Smith, trainee solicitor in the commercial, IP and IT team.

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