Table of Contents
Rationale2
ACKNOWLEDGEMENTS3
ABOUT UIDP4
Contract Accord 0:
Preamble - Good Faith in Fair Dealing 7
Contract Accord 1:
Statement of Work
8
Contract Accord 2:
Indemnification 10
Contract Accord 3:
Publications 11
Contract Accord 4:
Other Research Results
13
Contract Accord 5:
Background Intellectual Property 16
Contract Accord 6:
Foreground Intellectual Property
19
Contract Accord 7:
Export Control 25
Contract Accord 8:
Copyrights & Software 29
Contract Accord 9:
Confidential Disclosure Agreements 34
Contract Accord 10:
Material Transfer Agreements
43
These Contract Accords were approved by the UIDP Board of Directors
at its regularly scheduled meetings in December 2008 and April 2012.
table of contents
1
Rationale for Creation of Contract Accords
Acknowledgements
The following Contract Accords for University-Industry Sponsored Research Agreements were developed
by a strategically assembled and dedicated team of research administration professionals from academia
and industry with the goal of significantly adding to the current body of knowledge.
Contract Accords Working Group Members
When negotiating university-industry sponsored research agreements, there are common areas of
disagreement that can delay or derail projects if not addressed. These common areas can be highly
con­tentious, and the University-Industry Demonstration Partnership (UIDP) has approved the following
Con­tract Accords to address ten commonly recognized areas typically requiring additional time for resolution.
The Board gives special thanks and recognition to Jilda Diehl Garton from Georgia Tech and Connie
Armentrout, Monsanto for their leadership, and to Johannes Dapprich, who has served admirably for the
past few years as the Contract Accords Project Manager.
After several years of effort, the UIDP, its Contract Accords Working Group, and the general membership
have strategically crafted these Contract Accords to facilitate these sponsored research negotiations and
increase understanding on these subjects.
The objective of these Contract Accords is for each party to gain a greater understanding of how these
top­ics can be adequately addressed and allow for mutual benefit to each party during the negotiation of
spon­sored research agreements.
2
Contract Accord
University Champion Industry Champion 0
Preamble
Jilda Garton, Georgia Tech & Jennifer
Murphy, George Mason University
Connie Armentrout, Monsanto
1
Statement of Work
Jennifer Murphy, George Mason
University
Connie Armentrout, Monsanto
2
Indemnification
Kathleen Irwin, University of Wisconsin
3
Publications
Jilda Garton, Georgia Tech
Sid White, Essilor
4
Other Research Results
Kathleen Irwin, University of Wisconsin
Bob Gruetzmacher, DuPont
5
Background Intellectual
Property
Jilda Garton, Georgia Tech
Tyler Thompson, Dow
6
Foreground Intellectual
Property
Jilda Garton, Georgia Tech
Connie Armentrout, Monsanto
7
Export Control
Susan Burkett, Carnegie Mellon
8
Copyrights and Software
Cathy Innes, UNC Chapel Hill & Jennifer
Murphy, George Mason University
Julie Gerstenberger, Kodak
9
Confidential Disclosure
Agreements
Bill Catlett, University of Austin
Johannes Dapprich, Generation
Biotech
10
Material Transfer
Agreements
Steve Harsy, University of Wisconsin
Terri Welker, Monsanto
UIDP CONTRACT ACCORDS
The UIDP would like to thank all of the Working Group champions and members who wrote and reviewed
these Contract Accords and provided feedback to the Working Groups.
Isabel Acevado, Washington University in St. Louis; Connie Armentrout, Monsanto; June Blalock, U.S.
Department of Agriculture; Trina Brennan, Georgia Institute of Technology; Elaine Brock, University of
Michigan; Jerome Budai, UIDP Associate; Nancy Carr, University of New Mexico; Bill Catlett, University
of Texas at Austin; Johannes Dapprich, Generation Biotech / UIDP, Jesse Dambacher, Ashland; Chris
D’Urbano, Georgia Tech Research Corporation; Jilda Diehl Garton, Georgia Tech Research Corporation;
Bill Gathings, University of Alabama; Don Gerhart, Challenger Biosciences; Julie Gerstenberger, Eastman
Kodak; Robert Gruetzmacher, UIDP Associate; Steve Harsy, University of Wisconsin; Brian Hotchkiss,
Pfizer; Cathy Innes, University of North Carolina; Kathleen Irwin, UIDP Associate; Neil Iscoe, University
of Texas at Austin; Patrick Jones, University of Arizona; Sharon Koath, Arizona State University; Katerina
Kogan, Boeing; Bruce Kramer, National Science Foundation; Eugene Krentsel, Binghamton University; Gina
Lee-Glauser, Syracuse University; Lisa Lorenzen, Iowa State; Paul Lowe, Kansas State University; Carl
Mahler, University of North Carolina, Charlotte; Jinny Meade, Intel; Bill Mellon, University of Wisconsin;
Ivelina Metcheva, Virginia Commonwealth University; Sharell Mikesell, Ohio State University; Leslie Millar,
University of Illinois at Urbana-Champaign; Sylvia Mioc, Rensselaer Polytechnic Institute; Steve Mosier,
University of North Carolina, Charlotte; Jennifer Murphy, UIDP Associate; Juyong Pae, Ohio State; Michael
Pratt, Boston University; Brian Roe, University of California, Los Angeles; Carlos Romero, University of New
Mexico; Jeff Southerton, Pfizer; Terry Stout, Georgia Tech Research Corporation; Tyler Thompson, UIDP
Associate; Nuno Vaz, UIDP Associate; Wolf von Maltzahn, Rensselear Polytechnic Institute; John Warren,
Jr., University of Houston; Terri Welker, Monsanto; Sid White, UIDP Associate; Eric Whitters, Whitters
Consulting Group; Marianne Woods, University of Texas at San Antonio; Ray Yingling, Eastman Kodak;
Kathy Young, University of Illinois
We also thank all other working group participants who are not explicitly listed here.
Beth Judson - Beth will be remembered as the person who helped get the Contract Accord and
TurboNegotiator working groups started and for her constructive and tireless contributions to the initial
accords. Beth died with her husband in a small plane crash in October 2010.
UIDP CONTRACT ACCORDS
3
About UIDP
Mission
The UIDP supports mutually beneficial U.S. University-Industry collaborations encouraging U.S.
competitiveness by developing and disseminating strategies for addressing common issues between the
two sectors
Values
The UIDP values an honest and open culture that is characterized by:
STRATEGIC GOALS
• Promote education and research between companies, universities, and other research organizations
to improve U.S. competitiveness, advance the U.S. scientific knowledge base and create an
educated workforce by creating a forum to discuss collaborations in an environment of respect, open
communication and integrity.
• Provide professional development opportunities for contracting and research-performing practitioners
• Serve as a test bed and undertake demonstrations to experiment and model innovative approaches
to university-industry collaborative efforts
Respect:
The development of a deep understanding and respect of the diverse goals, missions, and cultures
among our universities and companies, and appreciation of the synergy that they can afford
Open communication:
An environment where mutual respect fosters candor and communication
Commitment to making a difference:
Innovation for the public good, maximizing to the greatest extent possible, the information and
products that will ultimately be available to the public
OPERATIONAL GOALS
•
•
•
•
•
Support organizations committed to high value, high return university-industry partnerships
Promote principled, transparent and timely negotiations
Collaborative efforts to accelerate cooperative, multi-dimensional, long-term partnerships
Pursue efficiency and effectiveness, seeking to streamline transactions
Maintain and grow a cross functional set of UIDP projects and demonstrations that serve the needs
of the members and other interested parties who sponsor and perform research
• Provide timely communications (both internally and externally) on relevant issues
Mutual commitment to shared scholarship, diversity, expertise, training and professional development
Alignment of the varied goals and cultures of university and industry in pursuit of innovation and
research
Strategic, result-oriented thinking and the development of practical, active demonstrations.
Recognition of the benefits of university-industry collaborations and the opportunity lost when
mutually beneficial agreements cannot be reached
Integrity:
A commitment to principled and transparent negotiations
4
UIDP CONTRACT ACCORDS
UIDP CONTRACT ACCORDS
5
DISCLAIMER AND COPYRIGHT
The University-Industry Demonstration Partnership (UIDP) operates as a semi-autonomous activity
convened by the National Academies and its Government-University-Industry Research Roundtable
(GUIRR). The views expressed herein are not necessarily those of the UIDP member institutions, National
Academies or GUIRR. Responsibility for the content of this publication rests entirely with the author and
the members of the UIDP.
Copyright 2012 by GTRC on behalf of the members of UIDP. While the UIDP encourages copying of this
publication to enable broad usage, reproduction for sale or profit is strictly prohibited.
Contract Accord 0:
Preamble - Good Faith in Fair Dealing
General Principles:
Industry funding is provided for the purposes of corporate responsibility, developing commercial
applications, or gaining a commercial advantage. The Sponsor needs to pursue its business model,
and the results of the research presumably further that goal.
Universities engage in industry-related research to provide relevant topics for research and student
support, to establish strategic partnerships that leverage Industry / University relationships for
multiple purposes.
The Sponsor has the right to information about the University’s research team relationships that might
reasonably appear to affect Sponsor’s access to the results of the sponsored project.
The University needs to inform investigators regarding Sponsor’s access and use rights to results of
the research.
Universities have a responsibility to confirm that rights, licenses or other transfers anticipated are
allowable within the context of other third-party agreements.
Conflicts of interest, real and potential, should be disclosed and reduced, eliminated, or managed.
A person from each party should be identified as “Principal Investigator” (PI) or “project champion”
and responsible for establishing effective and consistent communications with respect to the technical
aspects of the SRA.
A person from each party should be identified to be responsible for establishing effective and consistent
communications with respect to the administrative aspects of the SRA.
University Industry Demonstration Partnership - October 2012
6
UIDP CONTRACT ACCORDS
UIDP CONTRACT ACCORDS
7
Contract Accord 1:
Statement of Work
The Statement of Work (SOW) is an integral part of the sponsored research agreement. The SOW should
define the who, what, when, where, why, and how of the project effort, governing and providing direction for
the conduct of research.
Milestones and deliverables should be defined in the SOW or in the contract terms. Such milestones and
deliverables should be consistent with the parties’ expectations but are not guaranteed; however, the
University has an obligation to perform research on a reasonable efforts basis. The contract clauses and
the SOW should be consistent, but in the event of an inconsistency the contract clauses control and take
precedence over any statements made in the SOW. The SOW defines the specific aims and activities to be
undertaken; any significant or material changes or modifications should be reduced to writing and agreed
to by authorized representatives of the Sponsor and the University.
• The responsible administrative office at the University should review the SOW and any significant and
material changes after each redraft.
• The PIs should explain any known dependency on background IP in the SOW (See Contract Accord 5).
• The boundaries for any foreground intellectual property (FIP) (to which the Sponsor may have a license
or option) are set by the project description and by the contract dates. (See Contract Accord 6)
• No contract (legal) terms should be incorporated in the SOW.
Outliers:
• The University may, with the consent of the PI, agree not to accept funding from the Sponsor’s
competitors for closely related research.
• A master/blanket/umbrella agreement would generally set all contractual terms for several projects,
except those that are project-specific. The master agreement may allow modification of IP or other
terms by mutual agreement for a specific project.
• A project that involves extensive collaboration, exchange of personnel, access to the Sponsor’s
facilities, industrial internships for the graduate students, and so forth may require unusual terms
regarding the actual conduct of the research.
Explanation:
The Statement of Work should identify:
•
•
•
•
•
•
The principal investigator(s) (PI(s))
Project staffing
Project objectives
Description of the research to be conducted
Locations where the research work will be conducted
Deliverables and milestones, defined in a sufficient level of detail such that one can determine if they
are met
• The period of performance
• Any special resources required
• Timing and frequency of meetings and reports
Principles:
• The SOW should be sufficiently detailed as to define the project and distinguish it from other research
undertaken by the investigators.
• The SOW may include items that are subject to change due to the nature of the research (e.g.,
research activity).
• The SOW should define the research plan and not presume an outcome, but should address goals
and aims.
• The SOW needs to be aligned with the budget.
• The term “deliverables” should be used only when there is, in fact, tangible property, such as, but not
limited to, software, reports, computer hardware, or other engineered material that is expected to be
provided by the University to the Sponsor.
8
UIDP CONTRACT ACCORDS
UIDP CONTRACT ACCORDS
9
Contract Accord 2:
Indemnification
Contract Accord 3:
Publications
Specific indemnification depends on the type of project (e.g., basic or applied, clinical trial), the expected
outcomes and the potential risks of harm. Indemnification, if provided in the contract, should be triggered
by a defined event(s) or circumstance (such as the use of intellectual property, use of a drug or device
provided by the Sponsor, or the use of human subjects). Rather than offering indemnification, it may
be more appropriate for a party to offer to the other party a clause which provides that each shall be
responsible for the actions of its employees, its conduct of the research, and its use of the results.
Publications
Explanation:
Explanation:
• Indemnification and warranty clauses must be coordinated and consistent.
• Insurance and other representations should be referenced.
Principles:
• State institutions and universities often cannot be responsible for actions other than their own.
In some states it has been determined that indemnification is an unfunded liability, and only the
legislature has authority to obligate funds. Universities can be responsible for their own acts
and omissions.
• In an indemnification, the indemnitor will typically defend, pay damages, control litigation, control
negotiations to settle at its own expense, mitigate damages in a manner that won’t harm indemnitor
(or indemnitee); indemnitor will typically only have the right to approve a settlement on behalf of
an indemnitee when there is no admission of liability, wrong-doing or other potential harm to the
indemnitee.
• The indemnitor and indemnitee may agree to allow the indemnitee to manage the litigation and be
reimbursed for expenses including attorney fees and any judgment.
• It is reasonable for a University to expect a Sponsor to indemnify it against liability arising from the
performance of a company-designed study protocol.
• It is reasonable for a University to expect a Sponsor to indemnify it from any loss or damage arising
out of company’s use, commercialization, or distribution of information, materials, or products
developed by the University that result in whole or in part from the research.
• Required language regarding indemnification must be consistent in both the sponsored research
agreement and the protocol governing the study or clinical trial agreement as approved by the
University Institutional Review Board.
• Universities should not require indemnification for their own negligence.
Outliers:
• Indemnification as part of a patent license. For some industries this may be negotiated at the same
time as the research agreement and is often attached as part of the agreement.
• Material transfer agreements
(These are separate agreements and fact-specific.)
10
UIDP CONTRACT ACCORDS
Universities need to be free to publish, present, or otherwise disclose results in a timely manner following
review by Sponsors within a mutually agreed upon time frame. Sponsors have the right to require the
removal of any of the Sponsor’s confidential information. Upon request, an additional delay of publication
may be appropriate to allow time to file a patent application. Generally, the time a publication can be
delayed must be specific and limited.
The Sponsors’ need to protect commercially feasible technologies, products, or processes must be
balanced with the University’s public responsibility to freely disseminate scientific findings for the
advancement of knowledge and the academic freedom of faculty and students to publish the results
of their research.
Universities conduct research as tax-exempt organizations. Research conducted by tax-exempt
organizations must be performed for the public benefit and is expected to lead to information that is
published and available to the interested public. Research that is subject to restrictions on publication
may be considered a trade or business activity that is unrelated to the public purpose of the University.
Freedom to publish is a requirement for protecting the University’s fundamental research exclusion (FRE)
under export control regulations, which permits unreasonable delays only for patent prosecution.
Principles:
• The primary missions of a University are to educate, create and disseminate new knowledge.
• Universities have an obligation to protect identified confidential information that a Sponsor provides
to the University in connection with a sponsored project. It may also be reasonable for a Sponsor to
ask that such information be deleted from publication.
• The Sponsor’s right to restrict publication cannot be through inaction, i.e., the assumption that
results cannot be published until the Sponsor reviews will prohibit publication unless the review
period is specified. Sponsors should not be able to restrict publications that depend on information
that was not identified as confidential.
• Publication delays should not jeopardize academic progress of students.
• Universities and companies have a mutual interest in protecting intellectual property (IP).
• Universities and companies recognize that premature disclosure may jeopardize patentability.
• Publication of research results in a timely and appropriate manner can be beneficial to opening
markets and expanding product options.
• Preservation of open research environments is important.
UIDP CONTRACT ACCORDS
11
• Freedom to publish is beneficial to open dissemination of research results as contemplated in certain
open collaboration research agreements.
• In collaborative research, each party should be able to publish research. Sponsors involved in a
collaborative project may develop publications based upon the findings of the project if the University
decides not to pursue.
• All authors should be included in the publication subject to the principles of authorship customary for
the discipline.
• Any separate agreement between University and Sponsor researchers that is not part of the
documented contract may jeopardize the designation of research as being for the public benefit and
precludes the University’s exercise of the FRE.
• The concept of Trade Secrets is generally incompatible with the University’s publication objective.
Outliers:
• Rarely, and only at some universities, Sponsor approval of publication might be acceptable under
special circumstances.
• Publication delay of one site’s results from a multisite clinical trial is acceptable. The length of delay
should be defined. Provision for publication of site-specific results should be made.
• At many universities, publication rights in “fee-for-service” agreements, which are not creating new
knowledge, may be waived.
• What principles did you draw upon to remove these items from consensus?
• Any publication approval restrictions are categorically unacceptable for some universities.
• Partial reporting of data may not be scientifically valid.
• Fee-for-service is a service, not research.
• Some universities may accept national security and public health issues as justifying special
publication consideration.
Contract Accord 4:
Other Research Results (ORR)
Sponsored research may produce results in a variety of forms. Potentially patentable results are
addressed in Contract Accord 6. Copyrightable results, such as software, are addressed in Contract
Accord 8. For purposes of this accord, ORR include tangible (TORR) and intangible (IORR) products of
the research not addressed in those Contract Accords. This accord is concerned with the Sponsors’
rights to ORR.
ORR are often the results of open exchange of information, may have application in multiple research
projects and have potential to impact broad research programs. Sponsor ownership of research results is
not required so long as the Sponsor is granted appropriate access to the results both for the Sponsor’s
varied purposes (i.e. for commercial purposes, such as regulatory filings).
ORR that may be generated, developed or produced in the performance of sponsored projects include:
• Intangible research results such as, but not limited to, undocumented findings, conclusions, methods,
techniques and know-how.
• Tangible research results such as, but not limited to, findings, raw data or information recorded in any
medium, samples and prototypes, chemical intermediates, biological materials etc.
Principles related to intangible other research results (IORR):
• Control of and access to IORR should be treated separately from the intellectual property provisions
of the SRA.
• Premature disclosure of preliminary findings may jeopardize the patentability of inventions
• Generally the Sponsor is granted a free nonexclusive right to use IORR for any purpose consistent
with any other intellectual property provisions in the SRA that may include, but not necessarily limited
to further internal research and development, preparation of product information for customers,
qualifying products and processes with customers and government regulators.
The Sponsor’s rights in some IORR may be subject to regulatory constraints
• The University needs to consult with the principal investigator(s) regarding the Sponsor’s access and
use rights.
• The University retains the right to control use of the IORR for any purpose and to publish based on
the results of its use of such materials.
• The Parties may need to have access to the other Party’s data, know-how, etc., to do the research.
Such access may be subject to a separate nondisclosure agreement, material transfer agreement,
confidentiality agreement or use clause in the sponsored research agreement.
12
UIDP CONTRACT ACCORDS
UIDP CONTRACT ACCORDS
13
Principles related to tangible other research results (TORR):
• Control of and access to TORR should be treated separately from the intellectual property provisions
of the SRA.
• Premature disclosure of preliminary findings may jeopardize the patentability of inventions.
• The SRA should address the Sponsor’s rights to acquire and use TORR. Generally the Sponsor is
granted a free nonexclusive right to use TORR for any purpose consistent with any other intellectual
property provisions in the SRA that may include, but not necessarily be limited to, further internal
research and development, preparation of product information for customers, qualifying products
and processes with customers and government regulators.
• The Sponsor may have limited access to TORR that can be consumed without the potential for
renewing their supply. Examples of such results include but not necessarily limited to biological
specimens and samples, prototypes, and samples of difficult-to-synthesize small molecules. Such
products may be exhausted during the course of the research project, thereby restricting access
for validation of the science and other research uses. Access to such research results requires
special consideration.
• The Sponsor’s rights in some TORR may be subject to regulatory constraints such as Institutional
Review Board (IRB) oversight, human subjects protections such as privacy and consents, export control
or other limitations. These limitations should be described in the sponsored research agreement.
• The University needs to consult with the principal investigator(s) regarding the Sponsor’s access and
use rights.
• The University retains the right to control use of the TORR for any purpose and to publish based on
the results of its use of such TORR.
• The University shall retain physical custody of TORR.
• The Parties may need to have access to the other Party’s data, know-how, etc., to do the research.
Such access may be subject to a separate nondisclosure agreement, material transfer agreement,
confidentiality agreement or use clause in the sponsored research agreement.
14
UIDP CONTRACT ACCORDS
Outliers:
• In cases of applied research projects (clinical trials, agricultural field trials, testing agreements, feefor-service arrangements, etc.), the Sponsor may be accorded ownership of specified types of results,
including tangible research property, but the University should retain the right to use such results for
its own research and educational purposes.
• Applied research projects: It is unlikely that IP would be generated in the course of the work.
• Research data that contains confidential or proprietary information of other sponsors, or information
that should not be released because of privacy/HIPAA concerns must be addressed differently than
standard research results.
• Exclusive rights to other research results are rare and should be negotiated separately.
• Using terms such as “unpatented inventions” or “discoveries” in the list of Other Research Results,
must be considered carefully. They are difficult to define unambiguously, and the University usually
has no legal mechanism to restrict access or enforce limitations on such abstractions, especially
since the legally protectable category of “trade secrets” is generally thought to be incompatible with
the University environment and mission.
• While “know-how” could be considered to be an IORR, it is difficult to define and fraught with difficulty,
since know-how can be thought of as a characteristic of an individual scientist and not the intellectual
property of the University. This contract accord suggests omitting these terms from license provisions
in research agreements.
Additional Comments:
• What is covered by the agreement as “Other Research Results” will vary by industry sector.
• IP grant of rights should be specified in the research agreement. The clause may depend on whether
IP is contemplated that will be subject to a separate license agreement at some future date.
UIDP CONTRACT ACCORDS
15
Contract Accord 5:
Background Intellectual Property
University BIP can be further defined as follows:
Purpose:
Research may lead to discovery of new intellectual property (foreground intellectual property, or FIP) that,
in order to be practiced, may require access to background intellectual property (BIP) that is owned or
controlled by the University, the Sponsor or by a third party that exists prior to, or outside of, a sponsored
research agreement (SRA). The purposes of BIP clauses in agreements are:
• To clarify and manage the expectations of the parties
• To provide a framework for disclosure of BIP, and
• To provide access to the BIP, if it is needed for the Sponsor to exercise its license rights for newly
discovered IP.
The BIP clauses help to mitigate the risk that the Sponsor or University may not have access to BIP which
is needed to practice IP that results from the sponsored project. BIP clauses help licensors understand
and track the obligations they are making in the agreement with respect to pre-existing IP or that which
arises outside a SRA. BIP is an important asset to both parties and should be recognized and handled
as such.
Principles:
• Identifying the technical relevance of BIP to proposed research is a shared responsibility among the
sponsored research office, technology transfer professional, the principal investigator (PI), and the
Sponsor’s technical and contracting representatives.
• The scope of rights (and terms) of BIP clauses needs to be addressed in two contexts: the sponsored
research agreement and the license agreement, as applicable. The sponsored research agreement
needs to define the rights of access to BIP for the performance of the research as well as the
breadth of commercial rights in BIP a Sponsor can expect to obtain in the license agreement.
• The parties should consider the extent to which they may require access to the other Party’s BIP in
order to practice the FIP and negotiate those rights explicitly.
University BIP IS:
University BIP IS NOT:
Formal invention disclosures submitted to the
University’s responsible office
IP developed under individual consulting
agreements to which the University does not have
ownership rights
Patent applications in preparation or filed; issued
patents
Results of ongoing research that have not been
disclosed to the University administration (or the
University’s responsible office)
Licensable intellectual property (inventions or
software)
IP not owned or controlled by the University unless
explicitly incorporated into the research project and
for which the University has obtained rights
IP that might be necessary for the practice of FIP
Research results that are not subject to patent or
copyright laws
Common expectations:
Identification of relevant BIP will involve the University’s sponsored research office, the tech transfer
office, the PI and the Sponsor’s technical and contracting representatives.
Because exclusively licensed IP may become relevant BIP in the future, Universities are expected to follow
licensing practices that retain a research right to use and are mindful of potential future uses beyond
the interest of the licensee. In order to achieve the broadest possible application of the technology,
exclusive licenses may be used. For research tools resulting from government-funded projects, recipients
will ensure consistency with the Bayh-Dole Act and requirements of the funding agency. These tools are
expected to be made available to the research community for the public good. Any license issued will
contain language to appropriately address dissemination or distribution of the research tool.
Universities’ Expectations
Sponsors’ Expectations
BIP is not necessarily available for free.
The Sponsor will have freedom to operate, and will
not be blocked from commercializing technology;
“no surprises.”
University discoveries will benefit the public.
The University is willing to facilitate discussions with
others for third party licensing if necessary.
The Sponsor needs to negotiate with the authorized
institution office (no private deals with PIs).
The University should use reasonable effort to
identify and disclose known University-owned BIP
along with its availability for licensing.
The University may expect to recover patent costs.
The University preserves rights to use licensed
technology for research and educational purposes.
IP and BIP clauses in SRAs are reviewed by
someone in the University with technology licensing
expertise.
.
16
UIDP CONTRACT ACCORDS
UIDP CONTRACT ACCORDS
17
Solutions for the two BIP contexts:
Context One
Contract Accord 6:
Foreground Intellectual Property
For consideration at the time of SRA negotiations:
• Disclosure obligation only applies to IP that has been disclosed to the University’s responsible office.
In the case of a multi-campus university system, or a University that assigns IP to a cooperative
nonprofit entity, this means the office with responsibility for managing campus IP that results from
that campus’ research contracts.
• Limit disclosure obligations to a reasonable, manageable and identifiable segment of the University,
e.g., to laboratory, or contract performers (PI et al).
• Disclosure timing
• Before execution of the SRA and during the project as needed (University and Sponsor technical
representatives agree on scope of review).
• As potentially blocking background intellectual property becomes known or is intended to be
incorporated into the research activity.
• In the SRA the University will agree to provide the Sponsor with a license to University BIP in
the field of use of the FIP to the extent that it is needed and still available at the time the license
is negotiated.
• If potentially blocking University BIP is identified and available, the Sponsor may request a formal
option to ensure that the University BIP will be available later.
Context TWO
Throughout these documents, “University” refers to the university participant in a specific Sponsored
Research Agreement (SRA) and “Sponsor” refers to the industry sponsor of the SRA.
Definition:
Foreground Intellectual Property (FIP) means potentially patentable inventions conceived and reduced to
practice during performance of the sponsored research agreement (SRA) covered by the SOW.1
Purpose:
The purposes of FIP clauses in agreements are:
•
•
•
•
•
To
To
To
To
To
set out the expectations of the parties with respect to resulting intellectual property.
provide the requirements for reporting and disclosure of FIP.
provide the framework for protection of FIP.
provide a pathway for Sponsors to benefit from the FIP.
provide a mechanism to ensure that the FIP benefits the public.
The FIP clauses help to assure that the Sponsor has clearly defined access to results from the sponsored
project. FIP clauses describe for licensors, research administrators, and Sponsors the obligations they
are making in the agreement.2
For consideration for future license negotiations:
• The University will agree to disclose known blocking University BIP and, if available, license it for the
same field-of-use as FIP.
• The University will agree to affirm that, to the best of its knowledge at the time, it has fully disclosed
all blocking University BIP owned or controlled at the time of license execution.
The FIP clauses help to ensure that new inventions have the opportunity to be commercialized or further
disseminated to the benefit of the public.
Principles:
• Inventorship is a legal determination made pursuant to controlling patent law. Patents must name all
inventors3 and cannot name persons who are not inventors. Incorrect inventorship can jeopardize the
validity of a patent.
• Ownership of FIP is a contractual determination, subject to the policies of the inventors’ respective
employers, and in some cases, other contractual commitments. Ownership of FIP should not be
confused with inventorship.
1 Note that potentially patentable inventions that have been conceived but not reduced to practice are covered in Other Research Results
Contract Accord 4. Inventions conceived but not reduced to practice outside the scope of research described in an SRA are covered in the
Background Intellectual Property Contract Accord 5. Copyrightable materials are covered in Contract Accord 8. SOW is covered in Contract
Accord 1.
2 The University administrators who negotiate FIP license option language in the SRA are often not the same people who will actually
negotiate the license or license option for FIP, or who will actually administer the FIP license.
3 www.uspto.gov “The threshold question in determining inventorship is who conceived the invention. Unless a person contributes to the
conception of the invention, he or she is not an inventor. Insofar as defining an inventor is concerned, reduction to practice, per se, is irrelevant
[except for simultaneous conception and reduction to practice, Fiers v. Revel, 984 F.2d 1164, 1168, 25 USPQ2d 1601, 1604-05 (Fed. Cir.
1993)]. One must contribute to the conception to be an inventor.” www.hollandandhart.com: Consequences of Inventorship Errors: patent may
be invalidated, considered unenforceable, and involve significant cost and time to defend.
18
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• The SRA establishes the pathways for the Sponsor to access the FIP, and the limitations, if any, on the
University’s continued access and use or it.
• The SRA generally does not include terms that would be found in a license agreement, e.g., royalty
rates, liability, milestones and diligence requirements.
• The SRA should address the parameters and breadth of rights in FIP that a Sponsor can expect to
obtain in a license agreement. Such rights in FIP may include the right to make, have made, use,
have used, sell, offer to sell, import or other right to transfer through assignment or sublicense of
those rights.
• The SRA should address the parameters and breadth of research and educational rights retained
by the University in FIP, which may include licensing to other non-profit organizations and to other
commercial entities. Such rights should not conflict with rights previously granted to SRA sponsor.
• The parties should consider the extent to which they may require access to the other party’s
background intellectual property (BIP) in order to practice the FIP and negotiate those rights explicitly.
(See Contract Accord 5)
• Rights for defined affiliate organizations of the Sponsor are generally included under the same terms
and conditions as those of the Sponsor.4
• Generally, the Sponsor expects, and the University will assure, that all personnel that will be involved
in the sponsored research are subject to the University’s IP assignment policy or have separately
entered into an assignment agreement that allows the University to convey rights to the Sponsor,
unless otherwise explicitly agreed.
• The parties should recognize that if certain persons, e.g., unpaid participants, visiting scholars,
undergraduate and graduate students, interns, are inventors of the FIP, ownership of the FIP may not
wholly vest with the University. To the extent possible, the parties should identify such individuals
prior to their participation in the project.
• University should inform the Sponsor of any proposed third party funding or resources to be used in
the project and how they might affect FIP.
• The agreement should contain an adequate description of the invention disclosure process between
the parties. The process should describe the obligation to disclose, to whom to disclose, who the
contacts are, and the timeline and process for disclosure and election of rights.
• The SRA will not convey rights to the Sponsor to results of future related research not funded by
the Sponsor.
Common Expectations Regarding FIP in SRAs
FIP Terms in SRA Generally
The inclusion of an FIP clause is at the option of the Sponsor. Absent an FIP clause, the Sponsor acquires
no rights in FIP invented by the University in performance of the research, except as a result of the operation
of law, e.g., the Sponsor would generally have joint ownership rights in FIP that is jointly invented by
employees of the University and the Sponsor. FIP terms in an SRA typically provide for the following:
Minimum Rights to the Sponsor. At a minimum, University grants the Sponsor the right to a non-exclusive
royalty-free (NERF) license to use the University FIP within its own organization for any internal purpose.
4 Consider export control implications if there are foreign affiliates. See Contract Accord 7.
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UIDP CONTRACT ACCORDS
The scope of this automatic grant of right is generally limited to internal research use by the Sponsor. The
scope can be adjusted by mutual agreement of the parties depending on the research project. Access to
full commercial rights is addressed below in the “licensed term section”.
Option Period. There is generally a specified period of time during which the Sponsor may elect to
enter into.
• A confirmatory license5 for the nonexclusive rights granted in the agreement;
• A formal option agreement extending the period of the option so that the Sponsor has sufficient time
to determine its interest in obtaining a commercial license; or
• An exclusive or non-exclusive commercial license as described in the agreement.
Patent Application Control and Reimbursement. The University prefers to control prosecution of patent
applications covering FIP to insure that the patent application maximizes the scope of the protection and
potential ability to license the invention.
The University does not want to be obligated to expend funds to protect FIP unless it is reasonably
assured the funds can be recovered from a licensee.
Provisions covering the process for determining if and when a patent application covering FIP will be filed
may include terms addressing:
•
•
•
•
•
Patent Control – which party files and oversees patent applications
Right to review – the scope of the non-filing party’s right to review the application, office actions etc.
Choice of counsel – the party’s respective roles in choosing, reviewing or approving patent counsel.
Patent costs – who pays and when.
Default or discontinuance - what happens when the party that is paying patent costs or handling
prosecution discontinues doing so
• Provisions might also be included that require the University to reimburse patent expenses paid by
the Sponsor if the option is ultimately not exercised and the FIP is licensed by the University to a
third party.
The provisions above are negotiable in circumstances in which control is more logically exercised by
the Sponsor, e.g., the FIP is an improvement to Sponsor-owned IP. In cases where the Sponsor files the
patent, the University may seek assurance that the attorney chosen by the Sponsor will represent the
University as an equal client, and can do so without a conflict of interest.
Reservation of Rights. The University generally retains rights in FIP for its own purposes to include at
least continued research and education. The inclusion of this provision is generally not negotiable since
it protects the University’s ability to continue to conduct research, teaching, and other activities related
to the FIP even after the FIP is exclusively licensed. Such use should not conflict with rights previously
granted the SRA Sponsor.
5 A separate document formally conveying the rights promised in the research agreement.
UIDP CONTRACT ACCORDS
21
Option or License
License Terms
Universities typically prefer to grant an option to the Sponsor to negotiate a license to rights to FIP rather
than addressing all the provisions that would be contained in a license agreement. This provision allows
the parties to negotiate terms of a license that are consistent with and based on the value of the FIP that
is ultimately disclosed. Terms and conditions of these licenses are to be negotiated in good faith and
agreed upon between the University and the Sponsor, and should reflect that Sponsor has funded the
research that led to the FIP.
While specific details of licensing terms are generally not included in an SRA, variations in option and
licensing rights may include the following:
Negotiation of a royalty rate prior to disclosure of the related FIP may have negative tax consequences to
the University.6 While uncommon, a range of royalty rates may be included if the scope of the project is
such that it is possible to anticipate the nature of the FIP with reasonable certainty.
The University is interested in getting a decision from the Sponsor as soon as possible so that if the
Sponsor is not interested, the University is able to pursue support from another sponsor or license the
FIP to a third party without undue delay.
Non-exclusive commercial use by Sponsor of University FIP. Some common variations on nonexclusive
commercial rights licenses provided in SRAs include:
• NERF (Non-Exclusive, Royalty-Free license) to use FIP for commercial purposes subject to limitations
and considerations such as commercial use tied to field of use, fully-funded process patents,
promotion of a strategic relationship, or provision of significant programmatic support;
• Non-exclusive in exchange for patent cost reimbursement, royalty, fully paid fee, other fee, etc.; or
• Unlimited non-exclusive with no further consideration beyond the research support e.g., for research
tools and other precompetitive types of FIP.
Exclusive rights to Sponsor in University FIP. These rights are generally contingent on patent cost
recovery and may also be.
• In exchange for consideration (royalty, fee, equity, etc.),
• Limited to a field of use,
• Limited to a territory of use.
Joint FIP. Collaborative research projects create the opportunity for the creation of joint intellectually
property. As previously noted, joint ownership of intellectual property is controlled by the SRA
terms while joint inventorship is controlled by patent law.7 In the event that a Sponsor wishes to
commercialize joint FIP exclusively, the Sponsor typically is expected to pay full patent costs for
protection and maintenance and is given an option to negotiate an agreement to acquire sole rights
to the University’s undivided share.
Third party rights and sublicensing. For non-exclusives, sublicensing is not generally considered. The
University typically will not grant a nonexclusive licensee the right to sublicense since it can grant those
licenses itself and prefers to do so.
For exclusives, the right to sublicense is sometimes included in the rights available to the Sponsor under
the option clause.
Affiliates of the Sponsor as defined by the SRA have the same rights as the Sponsor.
Federal government may have reserved rights and universities may have reporting requirements in BIP
related to the FIP.
6 Refer to Rev Procs 97-14 and 2007-47.
22
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7 Ownership of inventions is generally assigned to the inventor’s employer.
UIDP CONTRACT ACCORDS
23
Assignment of Ownership of FIP. Assignment by the University of ownership of FIP including assignment
of the University’s rights in joint IP is uncommon and would be negotiated on a case-by-case basis and
would be dependent on unique circumstances. Note that the ability of the University to enter into some
assignment agreements may be limited by statutory requirements.
Contract Accord 7:
Export Control
Export Control Regulations and the Fundamental Research Exclusion
Outliers:
This FIP Contract Accord does not address a number of situations. Some of these are addressed by
professional organizations and associations that have particular expertise in these areas of research.
•
•
•
•
•
•
•
Sponsor-Initiated Clinical Trials
Consortia8
Faculty Consulting Agreements
Non-disclosure Agreements – see Contract Accord 9
Material Transfer Agreements9 - see Contract Accord 10
Field Trials and Fee for Service Agreements – see Contract Accord 11
Gifts and Donations related to Research – see Contract Accord 12
In some University-Industry Research agreements, “Foreground Intellectual Property” may be defined as
potentially patentable inventions conceived or reduced to practice during performance of the SRA” rather than
those potentially patentable inventions conceived and reduced to practice during the Research. In negotiating
such agreements, the parties should consider the following scenarios and address them in the SRA:
• An invention conceived but not reduced to practice prior to the effective date of the Research
Agreement may be considered Background Intellectual Property (BIP) belonging to one of the parties
(see Contract Accord 5) or it may be covered by a non-disclosure agreement (see Contract Accord 9).
• An invention conceived during the research but not reduced to practice before the project concludes
may later be reduced to practice.
• Sponsors may fund further research at the University to reduce the invention to practice.
• The Sponsor may conduct research under its internal NERF (Section A.1 above) that reduces the
invention to practice resulting in a jointly-developed invention.
• The University may conduct research that reduces the invention to practice (Section A.4 above)
using the University’s funds, federal funds, or funds from another company. Unless an option right is
extended, the Sponsor may not have rights to the invention’s reduction to practice.
• In the case of collaborations during which University researchers and Sponsor researchers jointly
conceive an invention that is not reduced to practice prior to the conclusion of the Research, the
parties generally have a joint and undivided interest in the invention and either party may conduct
research to reduce it to practice.
Therefore, it is in both party’s interest to determine whether any inventions related to the subject matter
of the proposed research have been conceived by researchers of either party to be prior to the project
start date, and see to it that they are included in the SRO.
Overarching Principle: Cooperative Compliance
The UIDP comprises U.S.-based Sponsors, Industry, and Universities; therefore most UIDP members are
subject to U.S. Export Laws & Regulations. The two agencies that most commonly govern U.S. Export
Controls are the Department of Commerce and Department of State which utilize Export Administration
Regulation (EAR10) and International Traffic in Arms Regulations (ITAR11), respectively. Additionally, the
Department of Treasury’s Office Foreign Assets Control (OFAC) administers and enforces economic and
trade sanctions including the embargoed country and restricted entity list. While universities strive to
conduct research in an unrestricted academic environment and broadly publish their research results,
most industrial organizations strive to gain competitive advantage by restricting access to information,
technologies and product characteristics and maximize revenues. All parties must balance these cultural
differences and comply with their respective obligations under the export laws and regulations. It is the
goal of UIDP to assist in meeting these obligations in a spirit of cooperative compliance.
Fundamental Research Exclusion
Fundamental Research, as defined by the regulations,12 is excluded from EAR and ITAR.13 Such research
can be distinguished from proprietary research and from industrial development, design, production
and product utilization, the results of which ordinarily are restricted for proprietary reasons or specific
national security reasons.14 This Fundamental Research Exclusion (FRE) applies to information (but not
to export controlled physical items or software) resulting from “basic and applied research in science
and engineering” conducted at an “accredited institution of higher education” (EAR) or “higher learning”
(ITAR) “located in the United States” that is “ordinarily published and shared broadly within the scientific
community” and that is not “restricted for proprietary reasons or specific national security reasons” (EAR)
or subject to “specific U.S. government access and dissemination controls” (ITAR).
10 Export Administration Regulations: The Export Administration Regulations (EAR) is found at Title 15, sections 730-774, of the Code of
Federal Regulations (CFR). These regulations implemented by the Department of Commerce control the export of goods and services identified
on the Commodity Control List (CCL), Title 15 CFR 774, Supp. 1. Goods and services on the CCL are not inherently military in nature; they are
primarily commercial. Note: The EAR regulates items designated for potentially commercial purposes but that can have military applications
(“dual use”).
11 International Traffic in Arms Regulations: The International Traffic in Arms Regulations (ITAR), found at 22 CFR, sections 120-130,
implement Section 38 of the Arms Export Control Act (22 USC 2778). These regulations implemented by the Department of State control the
export of articles, services and related technical data that are inherently military in nature, as determined by the State Department. These
“defense articles,” “defense services” and related “technical data” are listed on the Munitions List (USML), 22 CFR 121.
12 15 CFR 738.8
24
8 For specific guidance, consult, for example, www.erc-assoc.org
13 22 CFR 120.11
9 For specific guidance, consult, for example, www.cogr.edu
14 15 CFR 734.11(b)
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This exclusion generally permits U.S. universities to allow members of their communities who are not
U.S. citizens or permanent residents to participate in research projects on campuses in the U.S. where
research will be made publicly available. The FRE avoids the need to secure a deemed export license.15
Both the EAR and the ITAR treat fundamental research as a subset of the “publicly available” or “public
domain” exemptions.16 The EAR provides that research conducted by scientists, engineers or students
at a university normally will be considered fundamental research (15 CFR 734.8(b)(2)through (6)). The
ITAR does not contain that affirmative statement, but instead states that university research will not be
considered fundamental research if the information resulting from the project or activity or the research is
funded by the U.S. Government and specific access and dissemination controls protecting the information
resulting from the research are applicable and/or the University or researchers accept restrictions on the
publication of the resulting technical data (22 CFR 120.11(a)(8)).
The FRE essentially incorporates the provisions of the National Security Decision Directive (NSDD) 18917
issued in September 1985 and reaffirmed by the Bush Administration in 2001. The Directive states, “[i]
t is the policy of this Administration that, to the maximum extent possible, the products of fundamental
research remain unrestricted. It is also the policy of this Administration that, where the national
security requires control, the mechanism for control of information generated during federally-funded
fundamental research in science, technology and engineering at colleges, universities and laboratories
is classification.” Further, “[n]o restriction may be placed upon the conduct or reporting of federallyfunded fundamental research that has not received national security classification, except as provided
in applicable U.S. Statutes.” In a Memorandum, entitled Fundamental Research, for Secretaries of the
Military Departments, issued May, 2010, the Department of Defense (DoD) issued clarifying guidance
to ensure that DoD would not restrict disclosure of the results of fundamental research unless such
research efforts were classified for reasons of national security or otherwise required by applicable
statutes, regulations or executive orders, and to ensure that DoD grants, contract and negotiations
with the research community were fully compliant with NSDD 189. This Memorandum extended earlier
guidance to include subcontracts.
According to the memo, contracted fundamental research includes research performed under grants and
contracts that are (a) funded by budget Category 6.1 (Basic Research), whether performed by universities or
industry or (b) funded by budget Category 6.2 (Applied Research) and performed on-campus at a university.
“This means that DoD awards for the performance of contracted fundamental research should
not involve classified items, information, or technology other than in exceptional circumstances.
Furthermore, unclassified contracted fundamental research awards should not be structured, managed
or executed in such a manner that they become subject to controls under U.S. statutes and regulations,
including U.S. export control laws and regulations. The performance of contracted fundamental research
also should not be managed in a way that it becomes subject to restrictions on the involvement
of foreign researchers or publication restrictions. There may be exceptional cases in which these
guidelines should not be applied . . . but these cases will be extremely rare. . .”
Principles
Industry and universities have an obligation for export control compliance and should designate a
responsible official or Point of Contact (POC). This person is normally different from the technical POC
or principal investigator. It is recommended that all parties working on a research award that could be
related to export controls should establish an export control policy within their organization.17
Primary mission. The primary mission of universities in the U.S. is to create and disseminate new
knowledge. That unique mission is recognized by export control laws and regulations.
A primary mission of industry is to develop products or services that generate revenue for the company
and shareholders.
The FRE is a vital organizing principle that reflects global collaboration among scholars and the
international nature of graduate education. Freedom to publish is a requirement for protecting the FRE.
The FRE enables the timely submission of scholarly publications, graduate theses and dissertations.
University-based research conducted by scientists, engineers, or students normally will be considered
fundamental research when conducted at an accredited institution in the U.S. This exclusion may not
apply to collaborative research with foreign entities.
Not all research conducted at U.S. universities qualifies for the FRE and may be restricted based on
several factors. For example:
• Confidential Information restrictions
• Flow down clauses from federal awards, e.g., restrictions on publications, export controls,
participation of foreign nationals
• Movement of personnel from university to industry may result in the loss of the FRE and may require
a license (including outside consulting, SBIR/STTR, students, interns, visiting scientists, etc.).
15 A deemed export is a term as used by the Commerce Department to describe the situation where a foreign national on U.S. soil may be
exposed to, or have access in any manner to, an export-controlled item or export controlled software or information.
16 15 CFR 734(b) (3); 22 CFR 120.11(a)
17 http://tinyurl.com/9c38d9f
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17 The export control regulations are dynamic. This Contract Accord was updated on December 7, 2010 based on then current regulations.
Readers are encouraged to refer to current regulations and policies.
UIDP CONTRACT ACCORDS
27
Under certain conditions, industry may have the FRE under EAR; however this does not apply to projects or
data whose results are not going to be in the public domain. The need to innovate, develop, manufacture
and sell products and services worldwide presents challenges under the export control regulations.
Ultimately each party is responsible for its compliance with U.S. export regulations.
Summary:
It is important that the contractual relationships between universities and industry recognize and respect
the different compliance obligations and/or exemptions permitted under these laws and regulations, to
ensure balance between the parties’ strategic, research and organizational objectives. Industry needs
to recognize most universities cannot conduct restricted research under agreements that include the
following provisions as these terms could compromise the FRE:
Guidelines
As early as possible and throughout the project, all parties should identify18 and disclose any export
control implications or issues, especially where the parties are sharing confidential or proprietary
information with one another.
Universities should engage in conversations early on in the collaborative relationship with industry so that
industry can work with its federal sponsors to request flow down clauses related to export controls that
will permit the parties to claim benefit of the FRE. It is important that industry has the opportunity to do
this before they accept a federal award.
If the parties transfer export controlled items (software, equipment, technology, materials, background IP,
etc.), the providing party should notify the receiving party if the item is controlled by EAR or ITAR. If EAR,
the Controlled Commerce List (CCL) category should be provided; if ITAR, the United States Munitions
List (USML) category should be provided. The providing party should be responsible for categorizing and
marking the materials before sending as part of cooperative compliance effort.
If the parties involved identify a potential export control violation, they should work collaboratively to
submit simultaneous Voluntary Self Disclosures, as appropriate.
All parties should prohibit informal side deals between one of the parties and individual employees of the
other which may make activities subject to export control.
• The research requires the incorporation of export controlled information or materials into the
research results;
• The terms restrict publications by requiring the sponsor’s approval of publications or public release of
research results; or
• The project limits researcher participation by citizenship.
As a general rule, universities obtain few, if any, export licenses due to their desire to maximize use of the
FRE and their adherence to policies that do not restrict research participation according to citizenship.
Most universities rely on industry and/or vendors for classification of the items they regularly export.
Properly understood, compliance with the export control regulations allows universities and industry to
work collaboratively in the best interests of both.
Appendix 1
Examples of key clauses under federal awards that present potential compromise of the fundamental
research exclusion include:
FAR 52.227-17 Rights In Data –Special Works
http://tinyurl.com/8d9po8e
DFAR 252.204-7000 Disclosure of Information
Prior to providing access to export controlled projects or information, each party should ensure that
individuals who are not their employees will be properly screened for denied parties/entities.
http://tinyurl.com/2cczyhn
DFAR 252.204-7008 Requirements for Contracts Involving Export-Controlled Items (April 2010)
http://tinyurl.com/992rmgg
18 NDA, RFP, MTA, etc.
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Contract Accord 8:
Copyrights and Software
Note:
Throughout this document, “Institutions” refers to the universities, national labs, and/or non-profit
research organizations in a specific Sponsored Research Agreement (SRA) and “Sponsor” refers to the
industry funding entity of the SRA.
Copyright Considerations:
As defined in 17 USC, copyright works include any original works of authorship that are fixed in any
tangible medium of expression19, now known or later developed. The categories of works eligible for
copyright protection include:
• Literary works including aspects of software that can be fixed in any tangible medium of expression.
(Examples of “medium of expression” are found at the end of this Contract Accord.)
• Musical works, including any accompanying words;
• Dramatic works, including any accompanying music;
• Pantomimes and choreographic works;
• Pictorial, graphic, and sculptural works;
• Motion pictures and other audiovisual works;
• Sound recordings; and
• Architectural works.
A copyright exists upon creation and fixation in a tangible form of a work automatically and requires no
formal registration. The initial owner of a copyright is the author unless the work is owned by the author’s
employer when the work is created within the scope of employment (“works made for hire”) unless there
has been a written agreement to the contrary signed by both the employer and the employee. Under very
limited circumstances, a third party may own works as “works made for hire” if such works fall within the
nine categories enumerated in 17 USC, and there is a written agreement between the initial owner and
the third party.
The owner of a copyright has, subject to the limitations in 17 U.S.C. Chapter 1, the exclusive rights:
•
•
•
•
•
To
To
To
To
To
reproduce the work;
make derivative works based on the work;
distribute copies of the work to the public;
perform the work publicly; and
display the work publicly.
The owner of the copyright may license each of these five rights individually or together. The right to create
derivative works and whether a work constitutes a derivative work are legal determinations.20
In order for the title to copyrights to be held jointly, the creators of the work must have had a stated
intent to create the work together. Absent such an agreement, each creator owns his or her own specific
contribution, and the whole work can only be used by either creator by agreement with the other.
Under the law, if copyright in a work is held jointly, each owner has all these rights and an obligation to the
other owners to share income from the exercise of these rights.
Copyrights considered for this contract accord are those copyrightable works that are created in the
performance of the work outlined in the SOW of a Sponsored Research Agreement (SRA).
Purpose:
The purposes of clauses that cover copyright rights in SRA’s are to:
• To make a clear differentiation between contract clauses governing patentable works (inventive
works) and copyright works (works of authorship);
• To provide a pathway for Sponsors to benefit from copyright works created under their sponsorship;
• To set out the expectations of the parties with respect to the exercise of the copyright.
Principles:
Researchers in Institutions typically own the copyrights in their scholarly works, including journal articles,
presentations, textbooks, curricula, and works of art. Therefore, Institutions may not have sufficient rights
in all copyright works to assign or license to third parties.
The policies governing disposition of ownership of copyrights in software and digital works varies among
Institutions. In some cases software is treated as Institutional works and in some cases as scholarly works.
Sponsors should inquire as to the particular Institution regarding the Institution’s policy.
19 “when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to
be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. A work consisting of sounds, images, or
both, that are being transmitted, is “fixed” for purposes of this title if a fixation of the work is being made simultaneously with its transmission,”
17 USC 101
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20 “The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished
from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such
work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the
preexisting material.” 17 USC 102.b
UIDP CONTRACT ACCORDS
31
Copyrights are a unique and distinct form of intellectual property that should be managed by clauses and
provisions specific to their nature as distinct from clauses and provisions that manage patent rights.
The SRA should address the parameters and breadth of rights in copyright protected works that a
Sponsor intends to acquire. Provisions regarding copyrights resulting from an SRA should address all five
of the rights granted in a copyright. In particular, the Institution and Sponsor must clearly define rights in
and to derivative works.
Institutions need to retain a minimum of non-commercial rights for academic and research purposes. See
Contract Accord 6.
The SRA should be explicit about the use of third party software, including open source software, that
might be derived, modified, or incorporated in software developed under the SRA. This information should
include details regarding the license(s) to the third party rights.
Because open source software licenses vary widely in their terms and such terms of use could be
onerous on the Sponsor (i.e.: post or make available to the public all developments under its use), the
parties may need to agree that either no open source software will be included on the deliverables, or
that it be properly identified on the SRA before the project starts.
If software is involved in the project, the SRA should address various limitations and prohibitions to provide
clarity, including whether there is access to source code, whether reverse compiling is permitted, etc.
The SRA should attempt to capture the deliverables anticipated under the SRA in the SOW.
The Institution and the Sponsor should clearly articulate the form of the work(s) that the parties desire
and whether rights are available in those works. An example would be the inclusion of language to
indicate whether the sponsor needs the source code or only the executable.
Title to the copyright of a work does not include title to the data described in the work; just the expression
of that data. Data rights are considered under Contract Accord 4; Other Research Results.
Outliers:
This Accord does not address;
Institutions and Sponsors have explicitly designated signature authority. The Institution and Sponsor
administrators who negotiate copyright language in the SRA are often not the individuals authorized to
transfer rights in copyrights that result from the SRA. 21
If the SOW of the SRA calls for collaboration in creating a copyrightable work, there should be a provision
in the agreement that addresses joint authorship and ownership of the work.
Ownership of copyrighted works should be a contractual determination, subject to the policies of
the author’s respective employer, and in some cases, other contractual commitments. Ownership of
copyrighted works should not be confused with authorship.
Typically the types of works created under SRA’s do not qualify as eligible works for “work made for hire”
as established by copyright law.
The SRA establishes the pathways for the Sponsor to access copyrighted works, and should include any
limitations on the Institution’s continued access and their use.
The parties need to determine whether there is background intellectual property to be used in the project.
Such background intellectual property will need to be handled differently than foreground copyright works.
•
•
•
•
•
•
Copyrights derived from fee for service or work for hire arrangements.
Copyrights developed under foreign (non-United States) law.
Copyrights that may also be subject to patent rights.
Compilations of data, such as a database, where the database may or may not be protectable.
The scope or applicability of Fair Use22.
Implications regarding terms that are common to the use of open source software.
Forms of “any tangible form of fixed expression”
Covered
Literary Works: Books, Periodicals, Manuscripts, Phonorecords, Computer Programs, Film, Tapes, Discs
Musical and Dramatic Works: Musical Compositions (including lyrics), Stage Plays, Screenplays,
Television, Plays, Pantomimes and Choreographs, Motion Pictures, and other Audiovisual
Pictoral, Graphic, and Sculptural Works: Fine Art, Graphic Art, Applied Art, Photographs, Prints and
Reproductions, Maps, Globes, Charts, Technical Drawings, Diagrams, Models, Sculptures, Statues,
Figures, Forms
Sound Recordings: Music, Spoken Work, Sound Effects
21 Typically, researchers cannot obligate the Institution, or the Institution’s rights in intellectual property, including copyrights. See Contract
Accord 0 (Preamble) for more information
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22 http://www.copyright.gov/fls/fl102.html
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Not Covered
The concepts related below are not covered; the expression of these concepts in any fixed medium can
receive copyright protection.
•
•
•
•
•
•
•
•
•
•
•
•
Ideas
Procedure
Process
System
Method of Operation
Concept
Principle
Discovery
Facts
Titles
Names
Short phrases
Contract Accord 9:
Confidential Disclosure Agreements
Overview
Industry and Academia diverge sharply with respect to their perspectives on disclosing and sharing
information with individuals and organizations. Industry wishes to generate market value and be
profitable; therefore, it needs to maintain the secrecy of certain information. Universities (and the
researchers and students that pursue scholarly activities) create and disseminate knowledge; therefore
the ability to publish and share information is critically important to a University’s academic research
mission. The parties may hold differing views and interpretations of certain provisions of a confidential
disclosure agreement (CDA). Thus the basic assumptions and practical implications regarding a
confidentiality agreement should be discussed to ensure that all parties’ expectations, both short term
and long term, are addressed. CDAs should not restrict publication but may allow a party to delete its own
confidential information.
Not all interactions between Industry and university may require a CDA. However the contractual
mechanisms by which Industry and Academia share confidential information are commonly referred
to as a Confidential Disclosure Agreement (CDA), a Non-Disclosure Agreement (NDA), or a Proprietary
Information Agreement (PIA). For the purposes of this contract accord, only the term CDA will be used.
Industry Perspective
Industry seeks to keep information confidential to protect essential proprietary information and thereby
ensure a competitive advantage in the marketplace for as long as possible or as needed. In order
to maintain a competitive advantage, Industry often seeks technologies or expert advice available at
Universities. Pursuit of these relationships may require Industry to disclose its proprietary information.
Industry faces a conundrum in that it must disclose its own confidential information in sufficient detail
for University researchers to understand that information, while at the same time the confidential nature
of the information must be preserved. Once the information is disclosed, Industry is at risk that its
confidential information may be shared with others and its valued competitive advantage may be lost.
Thus Industry needs to ensure that certain core information will remain confidential for a sufficient length
of time – perhaps indefinitely – in order to preserve the value of the information in the market place. An
agreement ensuring confidentiality of proprietary information may be the only means available to Industry
to protect that information in situations when it must be disclosed.
University Perspective
Universities have a culture of openness and shared knowledge, as their mission includes educating
students and publishing research results for the public good. However, Universities may benefit from
receiving confidential information from an Industry partner as well as by keeping their own discoveries in
confidence for some period of time.
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Universities typically avoid CDAs in which shared information must be maintained as confidential in
perpetuity because of efforts and costs associated with ongoing monitoring and compliance or a lack of
mechanisms to do so, and because they have no ability to control students after graduation or employees
who leave the University.
Universities are experienced in maintaining the secrecy of certain types of information related to patients
and students and are required to do so by law. They may also have the need to maintain confidentiality
of other types of information, such as unpublished data or inventions not yet covered by a patent, as
discussed above. A faculty member who is engaged in research may want to disclose his or her research
results to Industry in hopes of having Industry sponsor all or a part of a research project or with the hope
that Industry may license and commercialize a University-based invention.
A CDA allows Universities to manage the receipt or disclosure of confidential information. Each CDA
should be tailored to match the requirements of a specific situation.
Principles
CDAs enable the sharing of confidential information for the purpose of exploring potential interactions
between two prospective partners while protecting the information from uncontrolled dissemination and
possible subsequent disclosure. A CDA follows non-confidential interaction and typically precedes other
agreements (e.g., sponsored research, membership, licensing). This means:
• Confidential information should not be exchanged unless and until a CDA has been executed, and
it should always be limited to the scope of the CDA. Information shared outside of the scope is not
protected.
• The CDA should define the scope and permitted uses of the information as well as duration and
obligations of the parties. The scope of the CDA must be sufficiently narrow and clear to meet the
purpose(s) of the exchange of confidential information. If necessary, the scope should be updated as
necessary to reflect any potential change in the interaction between the partners.
• Trade secret information, or other information that should be kept confidential in perpetuity, should
never be disclosed.
• Confidentiality in perpetuity would be inconsistent with the University’s fundamental research
exemption.
• No work or research that could result in invention and the creation of intellectual property should be
performed under a CDA. Such work or research should only be performed under a separate, formal
agreement.
• Discussions or brainstorming sessions that may lead to the creation of intellectual property (IP)
should be avoided, but if such discussions are anticipated, then the CDA should include provisions
for protecting such IP.
• Any exchange of confidential information under consulting arrangements involving individual faculty
members are not covered by CDAs that have the University as a party.
• The agreement must be enforceable and meaningful. It is good practice to designate a Disclosure
Coordinator for each party who is responsible to ensure proper procedure by and thus protection for
the participants in a CDA.
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• Termination terms may not be appropriate in a CDA: neither party should be able to terminate any of
the obligations, and the disclosure period can be terminated at any time by either party refusing to
talk or listen. In the event that termination terms are applicable, the parties need to insure that the
confidentiality obligations survive throughout the Protection Period.
Common Considerations in CDAs
Purpose of the CDA. In many jurisdictions the disclosure of information from one party to another without
specifying and limiting the purposes for which the receiving party may use the information constitutes a
license to use the information for whatever purpose the receiving party desires, even though the recipient
must preserve the confidentiality of the information.
It is therefore generally recommended that the CDA specify the reason why the parties are exchanging
information, the ways in which the receiving party may use the information, and clearly state that the
receiving party may not use the information for any other purpose.
Scope of Disclosure. In many cases neither party intends to disclose all of its confidential information,
nor does it wish to undertake obligations to ensure the confidential handling of more information than is
necessary. Moreover, it is often impractical to compile an exhaustive list of the information to be shared
that will be subject to the obligations of confidentiality.
Two useful techniques are (a) to specify the range of subject matter that the parties to the agreement
anticipate being received and held in confidence and (b) to specify that information is only subject to
the terms of the agreement if either (i) it is provided in writing suitably marked as confidential or (ii)
if it is disclosed other than in writing, it is designated as confidential at the time of disclosure (some
organizations do not require this), writing, marked as confidential, and delivered to the other party within a
specified period of time, e.g., 30 days.
It is important to keep in mind that the Scope of Disclosure cannot limit what is disclosed, but only
what is legally protected if disclosed. If a party chooses to share confidential information that is outside
the Scope, then the receiving party legally has no obligation to protect that information and could use
the information for any purpose. In the interest of preserving a positive collaborative relationship, the
receiving party should therefore verify with the disclosing party whether the scope of the CDA should be
changed to cover this information, or whether the information should be returned or destroyed.
Duration of the Confidentiality Agreement and Confidentiality Period. Generally, the duration of
confidentiality is understood as the period of time information must be kept in confidence. However, two
time periods are frequently involved in a confidentiality agreement.
One is the disclosure period, i.e., the period during which information subject to the obligation of
confidentiality will be disclosed. The disclosure period begins on the effective date of the agreement and
ends when the agreement expires.
The other is the protection period, i.e., the period of time information must be kept confidential. The
UIDP CONTRACT ACCORDS
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protection period usually begins with actual disclosure of confidential information and ends as specified
in the agreement (typically 3-7 years).
The protection period should reflect the actual useful life of the confidential information. Industry may
desire longer protection periods, at least long enough to evaluate and file for IP protection. In contrast,
Universities typically prefer shorter time periods, primarily because they often do not have mechanisms in
place to ensure campus-wide compliance with such an agreement and because they prefer to have a cutoff date after which they are free to use and publish any information related to the project.
Individuals Covered by the CDA. Confidential information should be provided to individuals on a “need
to know” basis. Universities usually see the CDA as being specific to a particular researcher or project,
e.g., evaluating specific information in contemplation of a collaborative research project or technology
licensing opportunity. But since the disclosing party will expect all individuals who receive its confidential
information to be covered by the obligations of confidentiality, care should be given as to who actually
receives this information.
This is particularly true if involved who are not employees of the University or parties to the agreement.
CDAs should require all individuals receiving confidential information to acknowledge and agree to be
bound by the confidentiality obligations defined in a CDA, even if they are not University employees or
parties to the CDA.
It is best practice to name the individuals who are authorized or present to receive information in the
agreement and have them sign an acknowledgment that they have read and understood the CDA.
Individuals who are not employees of the University can agree to be bound by the agreement on their
own behalf. An addendum may be required to update both the scope (i.e. the definition of the confidential
information) and the list of individuals who receive confidential information as necessary as the
discussions or the project may progress). Exceptions. Exceptions are typically made for the confidentiality obligations and for potential charge of
liability in case of disclosure where the information was:
• Within the public domain prior to disclosure by the disclosing party to the receiving party or thereafter
becomes part of the public domain other than as a result of breach of the CDA by the receiving party;
• In the possession of the receiving party on or before the date of disclosure, as evidenced by
competent written records;
• Acquired by the receiving party from a third party not under an obligation of confidentiality, as
evidenced by competent written records;
• Independently developed by the receiving party without reference to the confidential information of
the disclosing party, as evidenced by competent written records;
• Disclosed pursuant to operation of the law or a legal process.
Export Control. Export control laws apply to everyone, including Universities. Confidential information
transferred under a CDA is not covered by the fundamental research exclusion as defined in 22 CFR
120.11(8). Loss of this exclusion could require the University to obtain export licenses to allow certain
foreign students or employees to receive confidential information. Failure to comply exposes the
employees of the parties to personal criminal liability. See Contract Accord 7.
Copy Retention. CDAs often state that upon expiration of the term of the agreement, or at the disclosing
party’s written request, the receiving party will either return all confidential information to the disclosing
party or destroy all copies of the confidential information in their possession. The receiving party is
generally allowed to retain one archival copy in its records, but in order to prevent unauthorized use of the
confidential information, these copies are generally kept in offices other than those of the individuals who
initially received the information (for example, the archival copy may be kept in the office of the receiving
party’s legal counsel).23
The parties should consider a single point of contact for the exchange of confidential information, i.e. a
Disclosure Coordinator responsible for each party, and they should refrain from exchanging confidential
information directly with unauthorized individuals. This practice is very valuable in order to keep any
disclosures clear in terms of maintaining adherence to the intended scope and ensuring proper follow-up
documentation, storage etc. It is common to see behavior - from both Industry & University participants
- that assumes that a CDA provides the protection when it really just provides the framework for the
participants to ensure protection. In other words the important part is not getting a CDA signed but being
disciplined in defining & reinforcing what is or is not confidential during any project-based interaction. The parties may reserve the right to refuse acceptance of confidential information, for instance if they
believe this could compromise their IP position or put them into an untenable situation with regards to
export control.
23 The parties should bear in mind that universities frequently have obligations to maintain laboratory notebooks in order to verify the
integrity of work performed and results published. For this reason it is good practice to avoid including confidential information obtained from
another party in a laboratory notebook.
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Trade Secrets. A trade secret is information that provides a key economic advantage to its owner and
for which reasonable measures of secrecy are maintained, typically in perpetuity. The parties should
avoid providing or accepting trade secret information under a CDA. Universities do not generally have
mechanisms in place to implement extensive security provisions or keep information confidential
indefinitely and have virtually no control over students after graduation or employees who leave the
University.
Arbitration or Mediation. In many cases arbitration or mediation may be more desirable than trying to
assert a party’s rights through litigation in a dispute. Some universities are prohibited from participating
in binding arbitration either because of policies, legislation or principles of state sovereignty. Also, some
companies are averse to engaging in binding arbitration. In such cases it may be advisable to require
representatives of each party to participate in non-binding mediation prior to initiating litigation. Many
states court rules require mediation in cases meeting a certain monetary threshold.
Delegated Signature Authority. Industry employees generally understand that they are unable to sign
documents that are legally binding upon their employers. University faculty members are not always
cognizant that the documents they sign may purport to bind the University but that they personally lack
the capacity to sign such agreements. Industry should consult with the University’s relevant office, e.g.,
office of sponsored programs or technology transfer, to determine who has the authority to sign a CDA on
behalf of the University.
Limitation of Liability. The disclosing party has valid concerns about the possible consequences of
the recipient party violating its obligations under a CDA. To address these concerns, language in a CDA
may seek to place financial obligations on the party violating the terms of that agreement. In some
circumstances, particularly when dealing with a state University, the liability of one party may be controlled
by statute24 limiting the liability of any state agency, including its Universities. Any such limitation of
liability should be clearly stated in the CDA.
“Open Record Laws” and State Universities. State-supported Universities may be subject to a state’s
“open record” or “public record” laws. These laws require a University to make information in its
possession available under “freedom of information” requests filed by third parties. These requests can
be used to compel a University to disclose information unless that information meets specific criteria set
forth in the law. In such situations, it is good practice to indicate that the University has a duty to inform
the company so that the company has an opportunity to request some form of protection from whatever
body that is requesting the information.
Injunctive Relief. Industry may wish to include language in a CDA to ensure adequate remedy for breach
or threatened breach of the confidentiality obligations including the right to injunctive relief or specific
performance, as is customary in the commercial environment. Such language may include wording to the
effect that all parties agree that monetary damages would not be sufficient to remedy a breach.
Such laws override the obligations of confidentiality in CDA between the University and Industry even
if the CDA does not specifically call out the applicability of the law (since contracts requiring parties to
break a law are not enforceable,) so care must be taken in drafting CDAs to ensure that they comport with
those laws. In these situations the University should provide specific reference to any such laws that are
applicable so that Industry can properly evaluate the risk of disclosure of its confidential information.
Controlling Law and Jurisdiction. Generally both parties to a CDA will be most knowledgeable about
the laws of their home state and therefore prefer that agreements be governed by those laws. State
Universities may be prevented from entering into agreements that are subject to the laws of other states
or of foreign countries. Similar prohibitions may apply to agreements specifying or allowing jurisdiction in
courts outside of the University’s home state. Many agreements do not specify the legal venue even if
controlling law is specified.
Universities may find such wording unacceptable, as it may constitute a violation of principles of state
sovereignty or be construed as an open door to additional litigation or contractual admission of fault.
If this is the case, any such limitation by a state University should be brought to the attention of the
prospective industry partner.
Industry should be aware that the inclusion of language specifying that the parties may seek injunctive
relief - rather than language stating that the parties are entitled to injunctive relief - may be misleading
because the actual ability of Industry to successfully obtain injunctive relief when dealing with a State
University may not really exist.
Additional Considerations
Inclusion of confidential information and potential embargo of Student Publications, particularly works
that are required for obtaining a degree, are a particular concern as Universities have an obligation to
ensure that they do not enter into agreements that prevent or impede students from graduating. Such
work should never require the use of another party’s confidential information unless it is clear to everyone
that the student will be able to complete publication of the work without violating a CDA.
It should be noted that jurisdiction and venue are most important to the parties in the event of a
breach of a CDA but do not generally affect the terms or performance other than as noted above.
The parties to a CDA may agree to remain silent as to controlling law or specify the laws of a neutral
jurisdiction. Companies that do business nationally may be more willing to specify venue in a state
other than their home state, while Universities are reluctant to be subject to the venue of a state in
which they do not do business.
24 Example: “Tort Claims Act”
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Many Universities allow their researchers to enter into Consulting Agreements with industry. In these
situations the researchers are allowed to work as private contractors rather than as employees of the
University. The researchers have an obligation to ensure that they abide by the terms of any CDA into
which they enter as private contractors and to realize that disclosure in the course of their academic work
of the information gained under such agreements may be a violation of those agreements.
Control over Authorship on Scholarly Articles lies solely with the principal investigators rather than
with the University. The content of a publication, at least to the extent that it contains any confidential
information, may, however, be subject to the terms of the CDA between the University and the Company.
The University would be expected to compel its employees to abide by the terms of the CDA.
In some cases it may be possible to provide a receiving party with protected or Trade-Secret information
embedded in a Product or Service with a prohibition on reverse engineering of materials. The advantage
of this arrangement is that it allows the receiving party to publish its research results in compliance with
the terms of the CDA.
The parties should avoid language concerning Residual Information - i.e. information that is kept in nonwritten form in a person’s unaided memory - or at least carefully consider the use of a Residual term in a
specific circumstance because of the inability to protect ambiguous or undefined information and control
its later use. This pertains in particular to company confidential or trade secret information that another
individual may learn as a result of a collaboration or a visit to the other party’s facilities. Residuals terms
are typically contentious. If one side values and insists on them, the best advice for the other party is to
very carefully consider the motivation for and the potentially very significant consequences of including
such terms.
Summary
The goal of a CDA is to protect the information from uncontrolled dissemination. Confidential information
provides its holder with a competitive advantage, be it academic or economic, that may be lost if the
information is disclosed.
Procedures of working with Industry and obligations on the part of academic researchers to keep
information confidential are often unclear or non-existent in an academic environment. Industry may
request specific safeguards which might be unusual in agreements between business entities. Such
safeguards may include spelling out specific measures that need to be observed, for instance how
confidential information is received and controlled and secured by the University and how the initial
disclosure as well as any subsequent sharing of the information with others should be tracked to properly
protect it.
The reputations of University researchers depend upon them being the first to publish significant
findings from their work; therefore, it is important for University researchers to ensure that confidentiality
agreements with Industry will not compromise their ability to be the first to publish, whether via a patent
application or a peer-reviewed journal.
An incremental exchange of information is often a better way to proceed by allowing the parties to
become familiar with each other’s norms and potential incompatibilities while minimizing risks associated
with sharing proprietary information. This approach may be prudent if the parties are not certain that they
share similar perspectives on the identification, sharing and handling of sensitive information.
For both Industry and Universities, the disclosing party may want to avoid “Contamination” through
Inadvertent Exposure to confidential information that it does not own or have rights to use. For
example, a party disclosing a confidential new product may not wish to be informed about the receiving
party’s ideas for improving that product for fear of “contaminating” the disclosing party’s own planned
improvements for that product. Thus the parties should consider whether the situation warrants explicitly
specifying certain types of information that, if possible, should not be disclosed in order to avoid such
contamination, and whether a one-way or a two-way agreement may be more adequate for the situation.
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Contract Accord 10:
Material Transfer Agreements
Material Transfer Agreements (MTAs) considered under this contract accord are contracts which govern
the transfer of tangible materials from industry to academia for use in research – no company funding is
provided, other than a nominal fee to reimburse the provider for its preparation and distribution costs.
Relevant sections of the contract accord apply to Sponsored Research agreements when materials
are also being provided. Tangible materials may include chemical compounds, living organisms, seeds,
devices, and biological materials such as proteins, antibodies, cell lines and tissues etc., that are
consumed in the course of the research. Since this contract accord deals with a type of contract rather
than a specific contract issue or term, only those issues that bear specifically on MTAs will be addressed
here, and principles dealt with in other contract accords will otherwise apply.
Principles:
• In general, companies are under no obligation to share their proprietary materials with academic
investigators. When they do so, however, they should recognize that any constraints they put on the
use of the materials should be consistent with principles outlined in other contract accords.
• Publications by industry or academic scientists describing results which are dependent upon
a unique material creates an obligation, or at least an expectation or desire on the part of the
authors to make those materials available to other researchers on terms similar to those they
agreed to when receiving the materials, and/or on terms consistent with this Contract accord, so
that the integrity of published research is maintained by allowing other scientists the opportunity to
reproduce reported results.
• The university’s freedom to publish should not be compromised by use of a company’s material in the
research. Terms in the MTA that limit disclosure of the material or associated company information to
the extent that publication of the research would be precluded are not appropriate. (Contract Accord
3 describes the parameters under which publication may be delayed.) The parties should recognize
that there may be cases in which the material is considered so valuable to the company that it
cannot be provided for use in university research.
• The material to be transferred should be defined in terms that are significant and relevant to the
research that is being conducted in the MTA, since terms allowing access to foreground IP (“FIP”
see Contract Accord 6), and ownership of and accompanying rights to new materials created by the
Recipient are often dependent upon the way the material is defined.
• A company’s concerns about compromising its competitive advantage may lead it to expect
intellectual property rights similar to those for sponsored research (See Contract Accord 6), although
the scope of these rights would typically be more narrow and related in a specific way to the material.
• It is reasonable for the university to accept liability for claims brought against the University based
on the University’s actions while using the material, and for the company to accept liability for any
damages caused by the company’s gross negligence.
• The allowed uses of the material should be defined in a scope of work, and a termination date
specified, upon which the material and any Confidential Information provided by the company is either
returned or destroyed.
• The university should ensure that funding agreements used to support the work do not contain
obligations which conflict with the terms of the MTA.
• If the material is subject to export control regulations, the parties should agree to assist each other
on complying with those regulations. The provider of the material must be prepared to provide the
information necessary to enable the receiver to comply with US Export Control Regulations (See
Contract Accord 7).
• Companies should be aware that University may not be able to effectively protect trade secrets, so
companies should be wary of providing Materials that are protected by trade secrets.
Common Expectations:
Definition/Control of Material
Should be limited to the original material provided, unless provision of biological material requires
inclusion of progeny25 and unmodified derivatives.26
Defining materials as inclusive of “derivatives” and “improvements” without further definition should be
avoided due to the lack of precision of those terms.27
New materials created by the university which contain the original material should not be included within
the definition of “Material,” because rights and obligations relating to those new materials will vary from
those related to the original material.
The company should retain ownership and/or control of any of the original material contained in the new
material and any properties of the new material which are derived from the original material.
FIP (Foreground Intellectual Property)
In some cases the University may agree to grant a NERF (Non-Exclusive, Royalty-Free license) to IP that
is dependent upon the material as defined. For example, IP could be that which “necessarily uses or
incorporates the Material,” which is a “new use of, improvement to, or new formulation of the Material,”
or IP that is needed for Company to “make, use, or sell the Material.”
Please refer to Contract Accord 6, Foreground Intellectual Property, for further foreground IP rights not
dealt with herein.
25 Progeny as defined by the National Institutions of Health in the Universal Biological Material Transfer Agreement (the UBMTA) are
unmodified descendants from the originally provided material, such as virus from virus, cell from cell, or organism from organism
26 Unmodified derivatives as defined by the National Institutes of Health in the UBMTA are substances created by recipient which constitute
an unmodified functional sub-unit or an expression product of the originally provided material. Some examples include subclones of unmodified
cell lines, purified or fractionated sub-sets of the originally provided material, proteins expressed by DNA/RNA supplied by provider, monoclonal
antibodies secreted by a hybridoma cell line, sub-sets of the originally provided material such as novel plasmids or vectors.
27 See a discussion of the use in of these terms in material transfer agreements in “Principles and Guidelines for Recipients of NIH Research
Grants and Contracts on Obtaining and Dissemination Biomedical Research Resources, Federal Register Vol. 64, No. 246, p. 72090.
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Use of Material Outside the Scope
In some cases, when proprietary materials are of high value and in active development, a university’s
work outside the scope of the MTA can damage or destroy the commercial value. Additional provisions
may be discussed to mitigate these concerns.
Outliers:
These situations are not addressed by this Contract Accord:
• Software – Transfer of software is covered in Contract Accord 8, Copyrights & Software
• Data – Transfer of data is covered in Contract Accord 9, Confidential Disclosure Agreements
• Clinical trials – Material provided for use in a clinical trial will be covered in Contract Accord 14,
Clinical Trials
• Gifts of material – Material provided as a gift will be covered in Contract Accord 15, Gifts
• Loaned equipment – equipment that is provided with the expectation that it be returned at the
termination of the contract will be covered in Contract Accord 16, Loaned Equipment
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Contract
Accords
Supplement
Numbers 11 - 15
Table of Contents
RATIONALE2
ACKNOWLEDGEMENTS2
PROJECT CONTRIBUTORS3
CONTRACT ACCORD 11:
GIFTS
4
CONTRACT ACCORD 12:
BUDGETING 7
CONTRACT ACCORD 13:
SPECIALIZED SERVICES/TESTING AGREEMENTS
11
CONTRACT ACCORD 14:
DATA USE AGREEMENTS
15
CONTRACT ACCORD 15:
CONFLICT OF INTEREST
19
These Contract Accords were approved by the UIDP Board of Directors at its regularly scheduled
meetings in 2013.
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Rationale for Creation of Contract Accords
ACKNOWLEDGMENTS AND RATIONALE FOR CREATION OF CONTRACT ACCORDS
When negotiating university-industry sponsored research agreements, there are common areas of
disagreement that can delay or derail projects if not addressed. These common areas can be highly
con­tentious, and the University-Industry Demonstration Partnership (UIDP) has approved the following
Con­tract Accords to address five commonly recognized areas typically requiring additional time for resolution.
The following Contract Accords for University-Industry Sponsored Research Agreements were developed
by a strategically assembled and dedicated team of research administration professionals from academia
and industry with the goal of significantly adding to the current body of knowledge.
After several years of effort, the UIDP, its Contract Accords Working Group, and the general membership
have strategically crafted Contract Accords 11-15 to facilitate these sponsored research negotiations and
increase understanding on these subjects.
The objective of these Contract Accords is for each party to gain a greater understanding of how these
top­ics can be adequately addressed and allow for mutual benefit to each party during the negotiation of
spon­sored research agreements.
The University-Industry Demonstration Partnership (UIDP) operates as a semi-autonomous activity
convened by the National Academies and its Government-University-Industry Research Roundtable
(GUIRR). The views expressed herein are not necessarily those of the UIDP member institutions, National
Academies or GUIRR. Responsibility for the content of this publication rests entirely with the author and
the members of the UIDP.
Copyright 2013 by GTRC on behalf of the members of UIDP. While the UIDP encourages copying of this
publication to enable broad usage, reproduction for sale or profit is strictly prohibited.
To Members of the University-Industry Demonstration Partnership (UIDP) Community
We are pleased to provide you this latest compilation of Contract Accords developed by UIDP members.
This supplement contains Contract Accords 11-15 and should be used in conjunction with the 2012
Contract Accord booklet (available on the UIDP website (uidp.org )).
The development of these contract accords was the first UIDP project and these accords are widely used
by academic and corporate researchers and negotiators who seek pragmatic approaches to grant and
contract terms. As the project co-chairs, we are most thankful for all of the hard work and dedication
displayed by the large number of people who volunteered their time and talents to help with the creation
of these Contract Accords. An illustrative (albeit not exhaustive ) list of individuals is given on page 3.
University-Industry Demonstration Partnership - October 2013
UIDP CONTRACT ACCORDS
3
Project Contributors:
We would also like to thank two individuals who have provided outstanding project management support
this initiative during the past few years. Dr. Johannes Dapprich served as project manager and is now
dedicating his time and energy to make a success of his start-up, Generation Biotech. Ms. Elaine
Brock had a distinguished career as a senior research administrator at the University of Michigan and
possesses a wealth of experience negotiating contracts between the sectors. We are most fortunate to
have these individuals playing such a critical role in the development of these accords.
Finally, we seek any suggestions or ideas for improving the value of these accords and welcome your
participation in the development of future accords.
Connie Armentrout (Monsanto)
Jilda Garton (Georgia Tech)
CONTRACT ACCORDS WORKING GROUP MEMBERS
Najib Abusalbi, Schlumberger; Ryan Anderson, University of Nebraska-Lincoln; Connie Armentrout,
Monsanto; Aylin Regulski, University of North Carolina; Rod Bailey, Michelin; Bill Barker, University of
Wisconsin; David Bond, Rochester Institute of Technology; Dina Brachman, Pfizer; Elaine Brock, Contracts,
Compliance, and Conflict of Interest Authority, LLC; Teresa Carey, Texas State University; William Catlett,
University of Texas- Austin; Kristina Chinn, Boeing; Jeff Coney, Northwestern University; David Conrad,
University of Nebraska; Melea East, University of Louisville; Leslie Fox, Pfizer; Jilda Diehl Garton, Georgia
Tech; Bruce Gingles, Cook Medical; Johannes Dapprich, Generation Biotech; Kristin Duffy, Northern
Illinois University; Jennifer Easley, Mississippi State University; Kirt Fuller, Oregon State University; Don
Gerhart, Challenge Biosciences; Sheryl Goldberg, Rutgers University; Jennifer Haaga, Kansas University;
Linda Hansen, University of Oregon; Chris Harris, Vanderbilt University; Matthew Hawthorne, University of
Louisville; Chip Hay, Northwestern University; John Hickman, John Deere; Caroline Himes, University of
Colorado; Tracy Hoffman, Arizona State University; Mary Holz-Clause, University of Connecticut; Catherine
Innes, North Carolina State University; Jeff Kanable, Purdue University; Evan Kharasch, Washington
University; Dave King, University of Louisville; Jennifer Lassner, University of Iowa; Linda Learned,
University of Illinois; Hwasu Lee, Samsung; Lisa Lorenzen, Iowa State University; Misty Madero, University
of California- Riverside; Carl Mahler, University of North Carolina Charlotte; Goran Matijasevic, University
of California-Irvine; William Mellon, University of Wisconsin; Orca Merwin, University of Oregon; Tom
Mildenhall, Kimberly Clark; Sylvia Mioc, Rensselaer Polytechnic Institute; Jennifer Murphy, UIDP Associate;
Ron Newbold, Pfizer; Michael Newborg, University of Connecticut Health Center; Mike Nichols, American
University; Nancy Nisbett, Rice University; Luba Pacala, Rice University; Katie Petersen, Kauffman
Foundation; Mike Phillips, Semiconductor Research Corporation; Michael Rakijas, Raytheon; Andrew
Revies, University of Pittsburgh; Janet Scholz, Alliance for Commercialization of Canadian Technologies;
Jay Schrankler, University of New Mexico; Judith Sheft, New Jersey Institute of Technology; Toby Smith,
Association of American Universities; Jeff Southerton, Pfizer; Tony Stanco, NCET2; Jeff Steltzer, Georgia
Tech Research Corporation; Terry Stout, Georgia Institute of Technology; Ivar Strand, Research Foundation
State University of New York; Richard Swann, Mississippi State University; Adrian Timms, Hersheys; Nuno
Vaz, UIDP Associate; Wolf von Maltzahn, Rensselaer Polytechnic Institute; Jeffry Waldin, Infoed; Denitta
Ward, University of Colorado; George Ward, University of Kentucky-Coldstream; Terri Welker, Monsanto;
Tim Wester, University of New Mexico; James Weyhenmeyer, Georgia State University; Chuck Williams,
University of Oregon; Joanne Williams, Cornell University.
4
UIDP CONTRACT ACCORDS
Contract Accord 11:
Gifts
Definition
Gifts and donations to Universities and other academic institutions can take many forms but are often in
the form of a monetary gift or tangible equipment for use in laboratory research.
For the purposes of this Contract Accord, “Gifts” are defined as something of value provided by an
industry donor (Company) to a university donee (University) with no or few conditions on use, with no
expectation of direct benefit to the Company, and with little accounting to the Company by the University
for use of the Gift beyond stewardship. The essence of a Gift is the donative intent of the donor.
The following are some items often donated to Universities as Gifts: 1) financial support for University
initiatives; 2) excess laboratory equipment; 3) financial support for graduate student poster sessions or
seminar programs; 4) financial support for an endowed faculty chair position.
If the Company expects to receive a commercial benefit or has any material expectations in return for
providing the ‘Gift’, then in almost every instance the University would define this as something other
than a Gift. Different Universities have different views on the factors that would differentiate a Gift from
something else, such as a research grant.
University perspective
Gifts are usually a small fraction of the total funding provided by a Company to a University. Primarily,
this is because companies typically prefer to either place some conditions or restrictions on the funding
they provide or, alternatively, expect some kind of benefit from the University in return for contributing
this support. For example, a Company will often provide funding to support a particular research project
and in turn expect to receive certain rights to use the results of that research (see e.g., Contract Accord
6: Foreground Intellectual Property.) These transactions are usually not Gifts and instead are considered
research grants, sponsored research contracts, or collaborative research agreements.
When companies do make Gifts of money or laboratory equipment, they usually do so with no or minimal
strings attached. In this way, the Company might request that the Gift be used to support research in
a very broad area (e.g., diabetes, nanotechnology) and allow the University to use the money at their
discretion in support of the general research area. The Company may ask the University to accept liability
for use of the Gift (especially in the case of equipment, cell lines, genetically engineered animals, or other
non-monetary gifts whose use may pose some inherent risks) but not to provide indemnification for such
UIDP CONTRACT ACCORDS
5
use. The University should provide a receipt for the Gift (without describing its value) so that the Company
can account properly for the donation.
When making Gifts, both parties prefer the associated paperwork to be minimal and straightforward.
Internal policies and politics that may affect how the University processes and allocates Gift funds
across different departments or colleges within the University should not affect the Company. However,
the University reserves the right to decline to provide a Gift receipt if the transaction does meet the
University’s definition of a Gift. In some cases, the transfer of material goods with value from the
Company to support University research even with no expectations of reciprocal benefit may best be
managed using a material transfer agreement. (see Contract Accord 10: Material Transfer Agreements.)
The conditions and restrictions included in the material transfer agreement and the policies of the
receiving University may have an impact on whether the transaction is a Gift, or something else.
Universities typically cannot give reciprocal Gifts to Companies because they are non-profits. The
University expects the Company donor to properly account for anything of value that the University
provides to the Company, such as football tickets, parking passes, access to libraries, or courtesy titles.
Certain situations or conditions are in conflict with the treatment of a transaction as a Gift, such as:
access by Company personnel to research labs or specialized equipment; Company oversight of the use
of the Gift; required progress reports; detailed budgets or specific statements of work related to use of
the Gift; Company access to commercial use of results; return to the Company of unexpended funds;
review of draft publications based on use of the Gift; required protection of the Company’s confidential
information by the University; inclusion of boiler plate terms, such as in a purchase order; required costsharing or expenditures by the University.
Company perspective
Company researchers should work closely with University personnel when they are considering making
either a Gift or a research grant because of the different views Universities have in this area. Some
Universities may consider money directed to a professor to continue or advance work in a general
research area a Gift. Other Universities will call that a research grant. The Company should consider the
specificity with which it needs to define what the funds are to be used for. If the Company is comfortable
with a general description of the research area without a defined statement of work, deliverables, or
budget, a Gift may be appropriate.
The best course for Company researchers is to describe to the University what they want done with the
support and what, if anything, they expect in return. They can then work with the University to determine
how to classify the transaction and what paperwork is needed to go forward.
Company researchers should be aware that some professors may encourage a Company to fund or
otherwise support research as a Gift because that may provide the professor more freedom in the use
of the funds. It is important to talk with the appropriate office at the University that handles Gifts and
grants to make sure they agree with the professor’s assessment of how the funding should be handled. In
instances when the Company has been advised by University faculty or staff members of the University’s
6
UIDP CONTRACT ACCORDS
affiliated or independent philanthropic or research foundation to direct their support though an entity
other than the University, it is important for the Company to consult with the appropriate University
personnel – typically in the office of sponsored programs or business and finance – before transferring
funds or material to benefit the University to ensure proper consideration of the transaction by an
authorized representative of the University.
Similarly, Companies should not view the making of a Gift as a potential way to avoid University facilities
and administrative charges that would otherwise apply to a sponsored project (See Contract Accord
12: Budgeting). Use of Gifts to inappropriately curry favor with a researcher or secure other benefits or
business from the University may prompt questions about the Company’s donative intent or be viewed
as unethical. Gifts to Universities that benefit faculty that have personal financial interest in the donor
Company may raise questions of conflict of interest that require disclosure and management.
Principles
• Company researchers should describe to the University what they want done with the support they
intend to provide and what, if anything, they expect in return and then work with appropriate University
representatives to determine how to classify the transaction and what paperwork is needed to go
forward.
• Gifts of money or laboratory equipment are to be provided with minimal, or no, strings or conditions
attached.
• A Company may ask the University to accept liability for use of some kinds of non-monetary Gifts.
• A Gift is not an appropriate way to avoid University facilities and administrative charges that would
otherwise apply to a sponsored project.
• Cash Gifts and ‘unrestricted grants’ that are directed to a particular professor, lab or research should
be reviewed by both Company and the University administrators.
• Universities should acknowledge Gifts by providing a Gift receipt.
• Companies should properly value a Gift by taking into account anything of value received by the
Company from the University in recognition of the Gift.
• A University may decline to provide a Gift receipt if the transaction does not meet the University’s
definition of a Gift.
Outliers
• Endowments - or gifts that are distributed over time
• Gifts from corporate foundations
• Funds for scholarships and individual student donations are also gifts but these are not considered
here
UIDP CONTRACT ACCORDS
7
Contract Accord 12:
Budgeting
Establishing the Budget is a key step in determining whether it is feasible to proceed with a sponsored
project. The University’s project Budget (Budget) must clearly articulate the funding required to
successfully undertake the proposed project and allow the industry funder (Sponsor) to assess whether
the Budget is consistent with the funds they have available (See Contract Accord 1: Statement of Work
(SOW)). If the University‘s Budget exceeds the Sponsor’s available funds the University and Sponsor
should assess whether it is possible for either party to seek additional funds from other sources such
as another company with complimentary goals, cost-sharing from the University’s funds, or other third
party sources such as the state or federal government. Alternatively, the parties should modify the
SOW to fit within the available funds. The Budget should clearly identify the various cost components
and give sufficient detail to ensure that the Sponsor can easily correlate the Budget with the SOW. The
Budget should cover total costs of the project both direct and indirect costs (also called Facilities and
Administrative or F&A costs) and, for cost-reimbursable projects, should identify both direct and indirect
cost Budget components.
Direct Costs:
• Direct costs are the costs that can be readily and specifically identified with a particular sponsored
project with a high degree of accuracy. The direct costs will vary widely depending on the type of
project being proposed, e.g., animal research, clinical research, prototype development, literature
review, routine testing. Other factors will affect the direct cost as well such as; the collaborative
nature of the project, the level of expertise required, the need to purchase or pay to access
equipment, the inclusion of student research assistants, and the duration of the project.
• For projects supported, in whole or in part,by the federal government, Universities must comply
with Office of Management and Budget Circular A-21 (OMB A-21) which prescribes the allowability
of certain costs and the assignment of those allowable costs as direct or indirect costs. By policy,
and in order to assure consistency across financial systems, many Universities extend the principles
in OMB A-21 to other sponsors, including industry Sponsors. With certain limitations, OMB A-21 is
intended to enable the University to recover full costs on projects.
• Budgeting of personnel is very different between Universities and most industry Sponsors.
Universities usually state the amount of time required for faculty and research staff to perform the
work on a project as a percent of their overall effort rather than as an hourly rate. Related salary
expenses may include fringe benefits though for some Universities these are considered indirect
costs. Calculation of fringe benefits is often determined from past experience of the University and
can be expressed as a percent of salary or as a line item with or without further details about each
component of the benefits.
8
UIDP CONTRACT ACCORDS
• Salary for other personnel including postdocs, students, technical staff and dedicated administrative
support needed for the project should be included and calculated either as a percent of overall
effort for academic staff or as an hourly rate. Note that salary costs for administrators require
particular Budget justification if the funds are ultimately being charged by the Sponsor to the federal
government since these costs are generally included in and recovered by the University as indirect
costs.
• The Budget may include a line item for purchase of equipment. However, it should be noted that
many Sponsors are attracted to certain Universities because they already have the type of equipment
necessary to undertake the proposed project. Since the acquisition of equipment may be a big
ticket item, the University and Sponsor should discuss the need to purchase new equipment versus
alternatives such as; using less up to date equipment or providing the University with access to
the Sponsor’s or a third party’s equipment, leasing, or borrowing equipment. Title to any Budgeted
equipment is generally retained by the University after completion of the project though this should be
discussed and clearly stated in the sponsored project agreement.
• The costs of travel associated with the project performance or presentation of results by University
personnel or participating students may be included, such as travel to the Sponsor’s site to
collaborate, access equipment or provide updates, or travel to professional meetings.
• When graduate students are paid a salary to perform work on a sponsored project, tuition is often
included as part of the student’s overall compensation package. Depending on the University’s
policies tuition may be shown as a benefit or separate line item.
• Other direct costs, such as for software, subject reimbursement, materials and supplies required for
performance of the project, may also be included.
Facilities and Administrative (Indirect) Costs
• In addition to the direct costs, University Budgets will include facilities and administrative (F&A) costs
(commonly referred to as indirect costs.) These are real costs to the University but cannot be easily
associated with a specific project. Some common examples of University indirect costs include;
facility operation and maintenance costs, central administrative office costs, general office supplies,
and library operation expenses.
• Generally the F&A cost will be calculated as a percentage of the modified total direct costs (MTDC.)
This MTDC base excludes some direct costs, i.e., equipment, capital expenditures, charges for
patient care and tuition remission, scholarships, and fellowships, as well as the portion of each
subgrant and subcontract in excess of $25,000.
• Universities are obligated to treat like costs consistently and are governed by the principles in OMB
Circular A-21 when determining what costs are direct versus those that are part of their F&A (indirect
cost) rate.
• To better understand the calculation of a particular University’s indirect costs charged to a project,
the Sponsor can ask for a copy of the University’s negotiated rate agreement. The negotiated rate
agreement is a written document mutually agreed between a University and its cognizant federal
agency that records the F&A rate that the University can charge to the federal government over the
period defined by the rate agreement. This agreement is re-negotiated periodically. The negotiated
rate does not necessarily reflect all allowable costs and is generally several percentage points below
the University’s actual F&A rate.
UIDP CONTRACT ACCORDS
9
• Some Universities have higher rates for iIndustry Sponsors than for federal sponsors that include any
allowable costs that the government does not agree to cover in the negotiation of the F&A rate.
• Using an F&A rate to allocate indirect costs to projects enables the University to recover these
indirect costs in a consistent manner that distributes the recovery of these costs across projects and
reflects the University’s total cost of doing business.
Principles:
• Payment terms can be negotiated and may be tied to milestones and deliverables that are defined in
the SOW or in the contract terms as agreed between the parties.
• The University’s proposed Budget should be the best estimate of the component costs needed to
successfully perform a project.
• Budgets may be renegotiated if there are significant modifications to the proposed project but the
changes should be agreed to in an amendment or formal modification of the sponsored project
agreement.
• The Sponsor should have a clear understanding of what funds are being requested for each Budget
item but may not be entitled to non-public information.
• When negotiating the Budget, the Sponsor should focus on the potential value of the research and
compare this value to the requested cost.
• The Industry Sponsor should not rely on the principal investigator (PI) to provide Budget information
or approval unless properly authorized to do so by the University.
• The University and its personnel should not rely on the Sponsor’s scientists or unauthorized
individuals to approve funding on behalf of the Sponsor.
• Universities should be given appropriate flexibility to make changes among the line items of a Budget
during the proposed project period as necessary in order to increase the likelihood of success.
• Since research possesses significant uncertainty, the University’s principal investigator should
regularly communicate with the Sponsor on the project’s progress and explain any significant
modifications to the SOW that may be requested as well as ay significant deviations to the Budget if
the project agreement requires compliance with a detailed Budget. Periodic project review meetings
between the parties should be scheduled throughout the project period.
• Internal funding from the University as cost sharing is unusual for industry-sponsored projects and
must be documented and approved by an authorized individual of the University.
• Sponsors and Universities should agree in advance on how payment will affect ongoing performance,
e.g., will the University require cash in reserve in order to proceed or continue to perform in the event
that the Sponsor’s payment is delayed.
• Universities and Sponsors should determine in advance and formalize in the agreement whether the
project costs will be recovered based on invoices for actual expenditures (i.e., cost reimbursement) or
as a fixed price based on milestones, dates or other basis unrelated to expenditures.
• University researchers frequently request an extension of the project period without asking for
additional funds. These no cost time extensions must be agreed to by authorized representatives of
the Sponsor and the University.
10
UIDP CONTRACT ACCORDS
Outliers:
• Consulting arrangements with individual researchers
• Dedicated user facilities that have an established cost structure (menu) for services (See Contract
Accord 13: Specialized Services/Testing Agreements)
• Projects that are funded by a third party and incorporate terms that set conditions on the Budget
• Costs that are regulated by the government, e.g., Stark Law, Medicare Secondary Payer regulations,
Office of Foreign Asset Control
UIDP CONTRACT ACCORDS
11
Contract Accord 13
Specialized Services/Testing Agreements
This contract accord addresses agreements that fall outside traditional industry sponsored research
agreements and go by various titles depending on the institution or organization involved.
Specialized services agreements, testing agreements, fee for service agreements, no IP agreements all
refer to contracts for projects whereby a special capability exists within the University (University) and a
company (Sponsor) seeks to access this capability (Testing Projects). These special capabilities of the
University may include specialized equipment, facilities, or expertise that the Sponsor may not possess
or have the expertise or ability to operate. Frequently, the Sponsor provides the materials and a protocol
that the University uses to conduct the testing using its specialized equipment, personnel, or facilities.
Another common situation requires the University to provide direct access to its specialized facilities
or equipment for the Sponsor to conduct their own testing with limited technical assistance from the
University. A third situation involves the Sponsor providing materials for the University to use with its
specialized techniques, methods, or parameters to provide results to the Sponsor. One common factor of
Testing Projects is that they do not generally produce results that the University intends to publish.
These projects frequently involve the Sponsor’s existing background intellectual property (IP) and the
University’s role is routine testing of a sample of materials or data without requiring any analysis by
University research faculty or staff, i.e., the University performs the tests and provides the results to the
Sponsor. Since the testing does not involve methods unique to the particular Testing Project and the test
materials belong to the Sponsor the likelihood of the University making an inventive contribution during
conduct of the project is quite limited. Therefore, IP can be addressed using pre-determined terms that
require a limited amount of negotiation or not addressed at all.
If IP provisions commonly contained in Testing Project agreements say that title to rights in any project
foreground IP associated with the Sponsor’s existing background IP or test materials will be assigned to
the Sponsor even if University personnel are determined to be inventors1. Should there be a serendipitous
invention made by the University during the project that is unrelated to the Sponsor’s background IP,
then rights to such project foreground IP will belong to the University unless otherwise specified. These
serendipitous inventions may be more likely if the University’s role goes beyond routine testing and
involves other budgeted services such as evaluation and assessment of test results or data.
Facilities and administrative (F & A) costs for these projects may be different from on-campus research
rates that Universities negotiate with their federal cognizant agency. The direct costs of these services
may be a standard industry rate based on a fixed rate per unit of activity and may not be negotiable
depending upon the University’s policies. (See Contract Accord 12: Budgeting) 1
If the Sponsor is using federal funds to support the Testing Project assignment of Foreground IP may not be allowed. See Contract Accord 6:
Foreground Intellectual Property for a general discussion of IP rights in sponsored research agreements. Also see, the Bayh-Dole Act (P.L. 96517, Patent and Trademark Act Amendments of 1980) http://www.law.cornell.edu/uscode/text/35/part-II/chapter-18
1
12
UIDP CONTRACT ACCORDS
Because timing of these projects is often critical to the Sponsor’s on-going research, pre-determined
contracting vehicles are used in order to “fast track” the negotiation and execution of the agreement.
These projects fall closest to the area of applied research on a continuum of basic, theoretical research
to applied and product testing research since there is a low investment for both parties, a low probability
of invention
SPONSOR PERSPECTIVE:
• An industry research and development program often needs testing expertise, equipment, or facilities
that are not available within its organization.
• Ongoing internal projects frequently depend on the results of externally sponsored testing in order to
be validated and to continue (i.e., feedback from ‘beta test sites’ and then ‘early adopters’).
• Testing Projects often need to be initiated quickly which requires a contracting vehicle that is easy to
negotiate and an expedited process.
• Master agreements for these Testing Projects are desirable.
• Testing Projects are usually low dollar investments with no expectations of patentable IP.
• Testing Projects are normally conducted in a short (3-9 months) period of time.
• Sponsors expect to own all foreground IP developed by University personnel that is associated with
any of their existing background IP involved in the Testing Project.
• In addition to owning the results of the Testing Project, the Sponsor may need University expertise
to evaluate and assess the data and results that are produced during such projects and these
extension activities may be subject to different terms than those contained in the Testing Project
agreement.
• The Sponsor expects confidential treatment of all the information and materials it provides as well as
for the testing results.
UIDP CONTRACT ACCORDS
13
UNIVERSITY PERSPECTIVE:
• Universities have developed unique equipment, facilities, methods, and techniques using funds
from various sources that they can make available to others outside the University who would not
otherwise have access to these capacities.
• Universities offer the excess capacity they have in these unique facilities, equipment, and expertise in
methods and techniques to support these capacities when they are not being use for the University’s
core missions of education and research.
• University sponsored programs offices prefer to offer access to specialized services/testing efforts
with agreements that require little or no negotiations.
• Universities often have fixed rates for use of these capacities.
• Universities participate in Testing Projects to create relationships with Sponsors that may then
fund additional research projects at the University, recruit students, or provide other benefits to the
University.
• Universities do not normally expect to produce publishable results from Testing Projects. Since
publishable material is not likely to be generated in Testing Projects the agreement may be silent
on publication, may expressly prohibit publication, or may subject publication to Sponsor approval.
At a minimum any publications should be reviewed by the Sponsor for the purpose of removing any
confidential or proprietary information from the publication. Proper credit would be given to the
Sponsor for its support.
• The University will provide a final report to the Sponsor and often exclusive rights to use the report
and data for any purpose. The University retains the right to use the data contained in the report
for internal teaching and education purposes but does not retain the Sponsor’s actual proprietary
information or data for its own uses.
• Universities may retain the right to utilize results of Testing Projects for educational and teaching
purposes.
• University cannot endorse any products or services tested for Sponsors.
• Generally Universities will not agree to warrant services performed or to re-perform services at no
cost should the Sponsor not be pleased with the results. Most academic institutions (especially
state Universities) do not have the resources or reserves to provide warranties or to perform services
without reimbursement.
• To comply with applicable Internal Revenue Service procedures, the University is not supposed
to provide any services that are in competition with such services that are offered by commercial
laboratories.
• Net income generated from Testing Projects may be taxable to the University as unrelated business
income.
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UIDP CONTRACT ACCORDS
PRINCIPLES:
• It is unusual for intellectual property to be developed under these agreements and the Testing Project
agreement may be silent on IP. However, if IP is developed:
• he Sponsor maintains ownership of any IP related to its protocols, materials, or background IP used
as the basis for the Testing Project, and foreground IP that may be developed by the University in
relation to the intended solution that is the purpose of the testing.
• The University maintains ownership of anything related to its protocols, methods, or otherwise related
to the unique services or capabilities being provided, or that is unrelated to the Sponsor’s protocols,
materials, or background IP.
• The Sponsor maintains ownership of the data and results of Testing Projects.
• Time -to-contract should be as short as possible and streamlined to facilitate quick initiation of
Testing Projects.
• Deliverables vary depending on the nature of the special services but generally include a report of the
results, data, and/or a processed material sample. Testing Projects are frequently carried out using
proprietary protocols or materials provided by the Sponsor.
• The data produced by the University in performance of a Testing Project is not intended to be
published, but may be by mutual agreement of both parties.
• The Sponsor is expected to pay the full cost of the Testing Project, including applicable F&A costs.
• The University is not permitted to use the samples or protocols for anything other than the intended
purpose under the Testing Project agreement. Reverse engineering may be expressly prohibited.
• The University has to keep faculty and researchers performing under the agreements appraised of
the terms, including confidentiality, non-use and avoidance of potential conflict of interest in case of
multiple projects that are similar in scope.
• Liability of the University is usually limited under Testing Project agreements but liability of each party
should be addressed in the agreement.
• Results are not guaranteed, warranted or endorsed by the University conducting the Testing Project.
OUTLIERS:
Situations where equipment or expertise may be so exotic/expensive that only a company is able to
provide it and the University wants to access that capacity. This type of work is not discussed here,
although many of its characteristics would be closely related to collaborative research efforts which have
been discussed under previous contract accords.
•
•
•
•
•
Field trials are specific arrangements where one party grows regulated materials for another
Clinical trials in human subjects
Animal studies
Testing done under capstone or undergraduate coursesFaculty consulting agreements
Work for hire not involving unique capacities of Universities
UIDP CONTRACT ACCORDS
15
Contract Accord 14:
Data Use Agreements
Data is often a necessary component or the result of a research project. For purposes of this Contract
Accord, “Data” means a proprietary set of recorded information that is provided by one party to another
party for use under defined conditions.1 Data can take many forms, originate from various sources, and
have different levels of sensitivity due to a variety of factors. A “Data Use Agreement” or “DUA” refers to
a legally binding agreement, separate from a sponsored research or Material Transfer Agreement, which at
least defines the Data, the terms and conditions of use of the Data, and the rights and obligations of the
parties related to the use of the Data. The DUA is both a means of informing the User of requirements
regarding the Data and a means of obtaining the User’s agreement to abide by these requirements.
Virtually any organization can be a provider or user of Data depending on the situational context. This
Contract Accord will call the parties to a DUA “Provider” and “User”.
Data is often proprietary to the Provider so many of the same elements and concerns that are present
in Confidential Disclosure Agreements are also commonly addressed in DUAs.2 Unlike Confidential
Disclosure Agreements, however, where the Provider claims ownership or exclusive control of the
Confidential Information, Data ownership may be difficult to ascertain particularly if the Data is in the form
of a database that contains raw or source data obtained from different sources.3 In those cases DUAs
often do not contain Data ownership provisions though the Provider of the Data takes on a stewardship
role that assumes control of the Data and the right to enter into DUAs regarding its use.
To determine whether Data can be shared, the Provider needs to know:
• Where the Data came from, e.g., derived from laboratory tests, results of interviews with human study
participants; provided by others;
• Who needs or wants the Data, e.g., students, foreign nationals, clinicians; academic researchers;
• What does the User want to do with the Data, e.g., comparative research, validation, marketing,
patient support;
• What institutional, legal or regulatory requirements related to the provision of the Data, e.g., HIPAA,
Common Rule, Export Controls, are applicable;
• What is the proprietary value of the Data to the Provider, e.g., a database that would be costly to
replicate.
• What other contractual conditions restrict the Provider from sharing the Data with User; e.g.,
Data may be unstructured or structured. Examples include: technical data pertaining to the operation of a motor, device, system, etc.; financial
data; economic data; proprietary business information; records from governmental agencies or corporations; student record information; human
research subject data and healthcare data. Data could refer to the source data, a set of data, or compilations of data (databases) .
1
Some of the provisions of DUAs are similar to confidentiality agreements, and, in some cases, a Confidential Disclosure Agreement format
may be used to transfer data. Another alternative may be the use a Proprietary Information Agreement. See Contract Accord 9: Confidential
Disclosure Agreements.
2
The Data may be facts or ideas that are or may be unprotectable under copyright law., Databases are generally protected by copyright law as
compilations (a collection and assembling of preexisting materials or of data that are selected in such a way that the resulting work as a whole
constitutes an original work of authorship).
3
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UIDP CONTRACT ACCORDS
developed under a sponsored research agreement in which the sponsor controls third party use of
the resulting data.
The Data User also needs to answer some questions to determine if they can receive and use the Data:
• What Data is needed to accomplish a desired purpose, e.g., aggregate data or source data,
personally identifiable or de-identified data;
• What is the scope of the intended use, e.g., research only, commercial use, redistribution;
• Who will need access to the Data, e.g., requestor only, students, other researchers, subcontractors;
• What legal or regulatory requirements related to use of the Data are in place, e.g., Institutional
Review Board (IRB) approval, Privacy Board approval under HIPAA, license under export control
regulations;
• Which portions of the Data will need to be disclosed if the User publishes results of their use of
the Data.
Once the Provider and User have converged on what Data is being shared and the scope of the use they
can address questions about terms that protect the sensitivity of the Data. Data security provisions fall
into four general categories:
• Authorization or privilege management – identification of individual Users who are allowed to use the
Data;
• Authentication or identity management - confirmation that the authorized User is really the authorized
User; and
• Monitoring and enforcement – validation and assurance that use of the Data is consistent with
authorized use and conditions of use such as keeping the Data separate from other Data, in a secure
location, or not on a linked computer.
• Data Protection – instructions regarding any special infrastructure required to store and restrict
access to the Data (dedicated and isolated servers and lock-cabinets)4; special control processes to
protect the integrity of the Data, track the location(s) of the Data, track the release of the Data and
the reasons for its release; archiving and/or disposing the Data at the prescribed times.
Principles:
• The Provider of Data is responsible for analyzing the source, sensitivity, legal and regulatory aspects
of the Data to determine what provisions are needed in the DUA.
• The Data User should clearly explain the intended use of the Data to the Provider.
• The Provider and User are responsible for complying with regulatory requirements related to Data and
their respective rights and obligations under the DUA.
• A DUA that involves performance of research by a university should include a process to allow
the Provider to preview publications before public disclosure, to identify and modify or remove any
The National Institutes of Standards and Technology describes requirements for implementation of different levels of information security. See
http://csrc.nist.gov/publications/CSD_DocsGuide.pdf, Guide to NIST Information Security Documents.
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confidential information or personally identifiable information that has not been properly de-identified
so that the author can adjust the publication appropriately (see Contract Accord 3: Publications).
• The Provider and User should clearly describe any special requirements, e.g., privacy, confidentiality,
information security standards, that the User is expected to meet.
A DUA generally addresses at least the following points. The DUA Provider should consider these
provisions in the context of the anticipated Data transfer and include the relevant terms in a DUA:
• A clear description of Data to be provided
• The permitted uses for the Data and any regulatory requirements that the Provider needs to have in
place
• The names or general descriptions of individuals who can access or receive the Data
• Conditions under which the User can provide the Data to other Users and under what conditions
• The length of time the Data may be retained or used
• The method of Data disposal at the end of the DUA period (returned or destroyed)
• The User’s obligations regarding new data generated based on the Data originally provided
• The management of new intellectual property created using the Data
• Instructions on how the Data should be aggregated, encrypted, anonymized, or de-identified.
• Safeguards required to protect confidential, private, sensitive information
• The process for review by the Provider of publications resulting from use of the Data
• Practical aspects of the Data transfer.
• Statement of ownership of the Data if it is proprietary, and the provenance and authenticity of the
Data if that require confirmation.
A Data Use Agreement may NOT be required in some circumstances:
When Data is publically accessible and in the public domain, i.e., the Provider has dedicated any
copyrights that may exist in the compilation of the Data to the public, it may be downloaded from the
internet or received from a Provider without restrictions on use or redistribution.5 It should be noted that
public accessibility is not equivalent to being in the public domain and Users should be careful to read
the copyright and other information about potential use restrictions that may be described on a website
before using or redistributing such Data. Data that is not subject to legal, regulatory, or other restrictions
of use may be made available by the Provider without a DUA.
Additional Considerations in DUAs involving Data derived from humans:
A DUA is required in some cases involving the use of Data derived from human subjects.6The DUA
assures that the use of the Data is consistent with the informed consent obtained from the human
participants or the confidentiality assurances provided to non-clinical human participants. The DUA helps
Acknowledging the source of the copyrighted material does not substitute for obtaining permission. The safest course is to get permission
from the copyright owner before using copyrighted material regardless of the form of the Data.
5
Health Insurance Portability and Accountability Act of 1996 (HIPAA; Pub.L. 104–191, 110 Stat. 1936, enacted August 21, 1996); HIPAA
overview: http//www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/index.html
6
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to prevent the inappropriate use of protected or confidential information that could cause harm to the
research subjects providing the data.
Data about students may be subject to federal law that protects a student’s right to privacy about grades,
behavior and other factors. Student or parental consent may be required prior to disclosure of such
information by a Provider even if the User’s intended purpose was non-profit research.7
Data Consortia:
Providers and Users with shared interests may enter into consortium membership agreements that
describe the conditions under which members may deposit, access, use , store, and share Data.
Membership in a Data consortium may be free or have a charge for membership or services. Various Data
consortia are maintained by for-profit and non-profit organizations as well as by the federal and some
state governments.8Data consortia provide an expedited way to provide and receive Data among a limited
group of trusted colleagues. The Data consortia often also describe conditions for review of publications
resulting from use of the Data and occasionally address rights in intellectual property resulting from use
of the Data. The consortium may be subject to bylaws or other use provisions that are referenced but
not fully contained in the DUA. Providers intending to join a Data consortium should read all relevant
conditions of membership before making a commitment to both understand how membership facilitates
their objectives as well as to avoid conflicting obligations regarding the Data.
Outliers:
• Classified Data, Technical Data and export restrictions on Data (See Contract Accord 7: Export
Controls)
• Residual information (information retained in unaided memory)
• Fair Use of copyrighted databases
• Data Management Plans, federal agency requirements
• Registration of clinical trials and reporting of clinical Data, (FDAAA)
• Data registries
• Free licenses to use Data (See also Contract Accord 8: Copyrights and Software)
• Data Storage and information security requirements
• Implications for university Facilities and Administrative costs
• Tangible material or samples, e.g., geological samples (See also Contract Accord 10: Material
Transfer Agreements).
The Family Educational Rights and Privacy Act (FERPA) requires a written agreement to disclose Personally Identifiable Information (PII) from
educational records without consent. These written requirements must meet DFR 99.31(1)(6)(iii)(C) or 99.35(a)(3).
7
Examples of Data consortia include: IXI Services database; Higher Education Data Sharing Consortium; Linguistic Data Consortium; Interuniversity Consortium for Political and Social Research (ICPSR); The Public Health Data Standards Consortium (PHDSC); The Encyclopedia of
DNA Elements (ENCODE) Project Consortium; The International Cancer Genome Consortium (ICGC); The Material Data Management Consortium
(MDMC); National Institute on Drug Abuse Genetics Consortium.
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Contract Accord 15:
Conflict of Interest
Overarching Principle: Objectivity in Research
Financial Conflict of Interest (“COI”) is a fact of life that arises from the many and varied roles and
relationships between University researchers and industry Sponsors. These relationships often promote
mutual understanding of each other’s needs and culture and lead to other kinds of beneficial relationships such as collaborative or sponsored research, student placements, material transfers, and data exchanges, and institutional gifts (note, however, that recent focus on perceived negative effects of conflict
of interest stemming from donations in some areas such as medical research have decreased the likelihood of institutional gifts). In the medical device and pharmaceutical industry, direct clinical evaluation of
new technologies by conflicted inventors may present a COI challenge but expert opinion, feedback, and
involvement of inventors may be indispensable to the efficient and ultimately successful development
of medical technologies. However, personal financial gain may be a motivator for “bad” behavior as well
and if left unchecked, for instance, could cause a researcher to bias research results to promote their
personal interests. What situations are covered by University COI policies may not be well understood by
industry Sponsors. Similarly, University researchers may not understand the kinds of relationships that
their industry Sponsors or collaborators would like to know about. This Contract Accord helps to provide
a mutual understanding of the University’s and Sponsor’s perspectives about COI as it relates to sponsored research and intellectual property (IP) to help ensure a research environment that promotes faithful
attention to high ethical standards and provides the Sponsor with a clear path to commercialization of any
existing or newly created IP.
Examples of Federal Regulations
Both Universities and Sponsors are subject to federal regulations that govern disclosure and management of personal financial conflict of interest including who must disclose what to whom and when, as
well as, where disclosed information will be maintained and whether it will be made publicly available.
In August of 2012 revised regulations went into effect on Responsibility of Applicants for Promoting
Objectivity in Research for which PHS Funding is Sought (42 C.F.R. Part 50, Subpart F) and Responsible
Prospective Contractors (45 C.F.R. Part 94) impacting organizations that receive grants or contracts from
the United States Public Health Service (PHS). i.e., virtually all Universities as well as their subrecipients.
Several foundations and other non-profit organizations have also adopted compliance with these regulations as part of their grant policies. Since the consequences of bias in research involving or intended to
benefit humans is significant, many University COI policies use these PHS regulations and the related
implementing guidelines published by the National Institutes of Health (NIH) as the basis for their own
internal policies. NIH Director, Dr. Francis Collins describes the need for such regulations: “The public
trust in what we do is just essential, and we cannot afford to take any chances with the integrity of the re-
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search process.”(http://grants.nih.gov/grants/policy/coi/). Other federal agencies also have COI policies
that grantees and contractors should be aware of when accepting funds.
For Sponsors, federal regulations include Section 6002 of the Affordable Care Act (42 CFR Parts 402,
403) which creates greater transparency around the financial relationships of manufacturers, physicians,
and teaching hospitals by requiring that information be reported annually to the Centers for Medicare &
Medicaid Services (CMS). Information required to be reported by applicable manufacturers of covered
drugs, devices, biologicals, and medical supplies for which payment is available under Medicare includes
payments or other transfers of value manufacturers make to physicians and teaching hospitals. Applicable manufacturers and applicable group purchasing organizations (GPOs) must report certain ownership
or investment interests held by physicians or their immediate family members. Applicable GPOs must also
report payments or other transfers of value made to physician owners or investors if they held ownership or an investment interest at any point during the reporting year. CMS intends to collect, aggregate
and publish the data they receive on a public website. CMS explains the motivation for this legislation,
“Collaboration among physicians, teaching hospitals, and industry manufacturers can contribute to the
design and delivery of life-saving drugs and devices. However, while some collaboration is beneficial, payments from manufacturers to physicians and teaching hospitals can also introduce conflicts of interests.”
(http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-TransparencyProgram/index.html).
Industry Perspective
Sponsors need to know that the project that they are sponsoring or the intellectual property that may
result or that they are licensing is not complicated by relationships that a PI may have with the Sponsor’s
competitors. Sponsors expect that a University’s policies require disclosure and mitigation of risks that
may result from a researcher’s personal financial interests and that the University has processes in place
to implement the policies. Sponsors would like access to information obtained from these policies and
related processes before they commit to supporting a sponsored or collaborative project or licensing a
technology.
Researchers who enter into consulting or other agreements in exchange for a personal financial benefit
generally are asked to perform services within the same area of expertise that was developed and is
used in their University employment. Consulting agreements usually prohibit disclosure of information,
including results, that the researcher generates or obtains in performance of the consulting activities and
often require the researcher to assign any Intellectual Property (“IP”) resulting from the consulting activity
to the Sponsor or company they are consulting to. Therefore, statements of work or descriptions of services in consulting agreements entered into by researchers should be sufficient to distinguish the consulting
activities from those of the researcher acting within the scope of his/her employment. Overbroad statements of services in consulting agreements are more likely to overlap with employment obligations or activities of a researcher inside the University making it difficult to sort out the circumstances under which
an invention is made in order to provide the Sponsor or company that hired the consultant with clean title
to the invention. Sponsors and companies engaging University researchers as consultants expect that the
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researchers are aware of this issue and that they structure both their sponsored project activity as well as
their obligations to competitor companies to avoid overlap and that they seek appropriate counsel from
their relevant COI, sponsored projects office, technology transfer office or personal legal counsel before
entering into agreements. Sponsors and other companies typically make it clear in a consulting agreement that the contracted party should not disclose any information to the Sponsor that the consultant
has no right to disclose or that the Sponsor/company cannot use freely.
In some situations the participation of experts who have a financial interest is deemed essential to
meaningful deliberations that relate directly to the subject of their financial interest. For example, a Food
and Drug Administration review panel may require the expertise and insight of an inventor with a financial interest in a drug or device being reviewed. Key to the participation of such conflicted experts is full
disclosure of the financial interests and careful assessment of the potential bias that may be inherent in
their participation.
Sponsors expect that they can develop strategies together with their University collaborators that provide
the Sponsor with the expertise it needs from University faculty but also address the potential risks posed
by personal, financially beneficial relationships between the Sponsor and the faculty researcher who is
also conducting related projects in their University employment capacity. For example a risk-reducing and
transparent mitigation strategy might include preservation of the researcher’s or inventor’s personal role
in technical evaluation research but under the direct observation of a mutually acceptable independent
“chaperone” to monitor in key phases of product research and assessment such as appropriate patient
enrollment, appropriate use of students, conduct of research procedures, recording of events and outcomes, and preparation and presentation of academic manuscripts and lectures.
Sponsors expect that the University’s policies extend to all personnel involved in a sponsored project or
license including trainees, students, technicians, and University personnel responsible for reviewing and
approving sponsored projects and licenses.
Breach of a fiduciary duty that a researcher acting as an officer, director, or manager owes to the Sponsor
that they are associated with could cause serious damage to the Sponsor’s intellectual property, competitive position, or good will. Sponsors expect that a researcher understands the significance of this fiduciary
duty and that these obligations are consistent with their University employment as well as with any other
consulting agreements the researcher might have. Sponsors expect that researchers engaged in projects
are held to at least as high a standard of ethical conduct as that to which the Sponsor’s employees are
held. Companies often wish to include a provision in a sponsored project agreement requiring that the
University employees engaged in the sponsored project abide by the Sponsor’s COI (or Code of Business
Conduct) and ethics policies.
University Perspective
The activities of University researchers are subject to a myriad of federal, state, and local government
laws and regulations as well as the policies or their employing University, and the guidelines, ethics and
norms of their individual professional associations These regulations and laws describe who and what
situations are to be disclosed, when and to whom the disclosure are made, how and when disclosed situ22
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ations must be managed, public availability of certain disclosed information, and consequences of failure
to comply with the regulations and laws. . In addition, it is increasingly common for Universities to encourage their faculty to participate in entrepreneurial activities both through their employment as well through
external relationships with companies.
Many Universities have developed COI policies that incorporate a presumption of innocence and integrity
of the researcher while participating in entrepreneurial activities that require disclosure by the researcher.
Disclosure of an outside activity is not equivalent to admission that the activity constitutes a COI. Education of faculty is a key component of University COI management to avoid discouraging industry-sponsored
or collaborative research, consulting, or other beneficial relationships with industry Sponsors and licensees. Violation of University COI policies is generally handled as an employment issue and does not automatically rise to the level of research misconduct, i.e., plagiarism, misrepresentation, fraud.
The goal of a University conflict of interest review and management system is to ensure that the personal
interests of an individual do not unduly influence their primary obligations to science, Sponsor, University,
colleagues, patients, or students. University conflict of interest committees are charged with reviewing
disclosures submitted to them and rendering reasonable judgments as to whether the financial interests
disclosed could directly and significantly affect the design, conduct, or reporting of the proposed project
[or other projects]. If an inapproproate conflict is deemed to exist, the committee, with suitable consultation and notification, attempts to design an administrative oversight or other mechanism needed to manage the specific conflict situation.
Universities require disclosure of external activities of their faculty and staff if the activity is related to
their University employment. Universities also require disclosure of personal financial interests in conjunction with the University’s processes for review and approval of proposals to conduct sponsored research,
prior to acceptance of an award, issuance of a subaward, or granting of a license to University owned
technology. University policies and practices vary on these points both across Universities as well as
within Universities. For instance, many Universities hold research using human subjects to a more stringent COI standard than other research.
Timing of the researcher’s consulting relationship with a Sponsor may affect whether or how the potential
COI is managed. For instance, a researcher may be asked to provide advice to a Sponsor about how the
theoretical aspects of their University research might be applied to a particular problem that the Sponsor
is facing. Provided that the researcher does not violate confidentiality obligations to his/her University
employer or to other sponsors of the theoretical research, and that they do not disclose details of unprotected IP or IP licensed to a third party that belongs to the University, the researcher would likely be able
to engage in this consulting activity .
Participation of the researcher who developed the invention that serves as the base of a new company
poses unique challenges for the new company as well as for the University and the researcher. The
success of the new company may be dependent on the ongoing participation of the researcher in the
further development of the technologies as well as in the promotion of the company to investors and
other participants. The University should carefully assess and manage any COI related to the researcher’s
participation, the researcher’s financial and fiduciary interests in the company particularly with respect
UIDP CONTRACT ACCORDS
23
to ongoing use of University facilities, the company’s employment of students, and the time commitment
of the researcher. Many Universities have developed policies and procedures for handling COI stemming
from personal financial interest as well as institutional interests in these start-up companies.
Universities do not generally ask about how a particular industry sponsored project might affect or benefit
the competitors of the Sponsor. Similarly most University COI policies ask for disclosures of outside
activity related to the Sponsor of the research and subcontractors engaged on the project by the University and may not ask for disclosure of relationships that the researcher may have with competitors of the
Sponsor. Universities would not necessarily know who a Sponsor’s competitors are. However, the statement of work, the intellectual property license or option provisions, and the publication review clauses,
if strategically prepared, allow a Sponsor to assess the affect of publication of results, for instance, on
their competitors.
Most University COI policies recognize and enforce some set of general principles that define “good
citizenship” for their employees and provide a basis for assessing the affect and scope of a conflict of
interest. A typical set of these principles might be:
• Full-time employees owe their primary loyalty and effort to the University.
• Employees should not use their position to benefit self, family, or business associates or to the
detriment of the University.
• Use of University resources requires explicit agreement and payment.
• Intellectual property generated in the performance of an employee’s duties is owned by the University
and appropriate disclosure to the University is expected.
• Faculty members are expected to abide by the rules of their own units or departments in addition to
University policies, state and federal laws.
• Disclosure to supervisors, colleagues, trainees of outside interests related to one’s work is expected.
• A University employee should not disclose or use the University’s confidential information for the
benefit of outside entities or interests.
• A University employee should not disclose an outside entity’s confidential information to other
University employees without appropriate formal agreements.
Universities use a variety of mechanisms to manage COI including requiring:
• Disclosure of financial interest to the public, other research participants, and subjects.
• Disqualification from participation in all or part of the research.
• Divestiture of all or part of the significant financial interest.
• Limiting participation of students or human subjects; and monitoring or verification of research by independent reviewers.
Universities will generally not agree to comply with a Sponsor’s internal COI, Code of Business Conduct
or ethical programs. To do this University research staff would be subject to widely varying standards and
processes in addition to the policies and practices of their University employer. It would be extremely
difficult for the University to become sufficiently familiar with such standards for each Sponsor and to
monitor select faculty for compliance with the particular standards of the particular Sponsors. Faculty with
multiple industry sponsored projects would be potentially subject to conflicting standards.
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Principles:
• COI disclosure and management helps to preserve the public trust in the knowledge discovered and
•
•
•
•
•
•
•
•
•
•
•
disseminated by the University and also to protect the University, the researchers, and their research
sponsors from the appearance of bias or other forms of undue influence affecting the research results.
University researcher’s and industry sponsor’s employees’ dual roles with the other party must be dis
closed and managed (i.e., a researcher consulting to the Sponsor of his/her research project.)
Faculty support both from sponsored projects inside the University and personal agreements with the
Sponsor or competitors designated by the Sponsor should be disclosed to a Sponsor upon request
Personal relationships of a person’s spouse, significant other, dependent children, and business partners are presumed to affect that person in the same way that their own personal relationships do.
Decisions made by Universities to spend funds, e.g., to subcontract part of a sponsored project to
another University or other external entity, should be unbiased, e.g., competitively bid or justified under
University procedures for sole source purchases, subcontracts, consultants.
Conflicted persons both in Industry and Universities should disclose their personal financial interests
and may be required to recuse themselves from deliberations or decisions that may promote their
personal financial benefit
Review and finalization of agreements should be done by objective representatives of both parties as
an arm’s length negotiation .
Researchers’ financial and management interests in their own companies, should be disclosed to their
Sponsors.
Universities should be clear about management of COI involving University employees acting as consultants particularly recognizing the timing of the consulting with the Sponsor, i.e., before, during, or
after the conduct of the sponsored project.
Agreements should clarify applicability of University or Sponsor policies, including COI policies, when
using faculty on sabbatical; scientific visitors from companies (see Contract Accord 5: Background
Intellectual Property, Contract Accord 6: Foreground Intellectual Property)
Sponsor and University researchers should be aware of potential delays and considerations of COI
committees that may affect their project.
The Sponsor should respect that University interactions with companies are not all centrally recorded
so that the sponsored projects or tech transfer offices or the research team may not know all the relationships a University has with a Sponsor or its competitors.
Outliers
• Institutional or Organizational COI
• Roles of Students/Trainees in Faculty owned businesses
Notes
http://grants.nih.gov/grants/policy/coi/
http://grants.nih.gov/grants/policy/coifaq.htm
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