Contracts and Agreements to Support Partnerships

Abstract: Public-sector research institutions can use a variety of agreements to protect and manage intellectual property. These agreements are powerful tools to foster competition in the private sector and reduce prices for consumers in developing countries. This chapter provides an overview of the following types of major agreements—confidentiality, material transfer, development (in which the licensee is responsible for further development), co-development (in which two parties collaborate on continued development), and distribution—explains the functions of those agreements, and suggests strategies for their effective use. The chapter also discusses the meaning and usefulness of the standard elements and formulas found in such agreements. It explains the meaning and significance of the terms and language used and discusses such key issues as product liability, fees and royalties, and arbitration. The chapter emphasizes the importance of establishing and maintaining trust when negotiating and implementing agreements.

Abstract: Confidentiality agreements (also called nondisclosure agreements, confidential disclosure agreements, and secrecy agreements) are contracts that govern the disclosure of confidential information by one party (the disclosing party) to another party (the receiving party). Confidential information is exchanged for a promise of secrecy. The disclosure may be unilateral, bilateral or multilateral. Confidential information disclosed in a confidentiality agreement might pertain to scientific research results and data, chemical compositions and formulas, software development information, recipes, laboratory methodology, and manufacturing techniques trade secrets (in the form of valuable know-how and/or show-how). The confidential information has value precisely due to the fact that is known to only a few, that is, open disclosure will be injurious to this value. Confidentiality agreements often precede licensing negotiations or the acquisition of IP (intellectual property) rights and serve to strike an appropriate balance between the needs of the disclosing and receiving parties. A confidentiality agreement can either stand alone or be included as part of a broader agreement. An appropriately drafted confidentiality agreement should contain a list of standard provisions and exceptions. In special cases, where the disclosing party wishes to carefully protect the confidential information, the agreement might also include extra strong clauses and articulated security provisions.

Abstract: In the health and agricultural sciences, biological materials were once freely and widely exchanged. But more and more, these materials have gained commercial value. Public sector institutions, as well as private companies, have recognized, therefore, that proprietary protection of these materials may be necessary. Material transfer agreements (MTAs) are legal instruments that define terms for the transfer of tangible biological materials between or among two or more parties. MTAs are bailments that transfer possession but not title: the party who transfers the materials retains full ownership; the party who receives the materials holds them in trust. Transfer is governed by contract, ideally specifying the term of the transfer, how the materials may and may not be used, and other related issues, such as confidentiality. In addition, an MTA may contain licensing provisions for the transfer of embedded intellectual property (IP) rights (patent rights). Hence, an MTA can be a hybrid instrument, covering the transfer of both tangible property (via bailment and contract) and intangible property (via licensing of patent rights). Biological materials transferred using MTAs include reagents, cell lines, antibodies, research tools, insertional mutant populations, genome sequence databases, novel vectors, and plant genetic resources. Due to divergent institutional priorities, material transfers between the private and public sectors are generally more complex than those between public sector institutions.

Abstract: A collaborative research agreement has five major parts: (1) statement of objectives, (2) statement of work, (3) general provisions, (4) budget, and (5) list of materials. This chapter provides a step-by-step discussion of the issues that need to be addressed in each part of the agreement, emphasizing the importance of crafting an agreement that is mutually beneficial and, above all, clearly written. Whereas all parts of any agreement are important, for collaborative research agreements, extra care should be taken in describing the objectives and work of the collaboration, the research plan, and the mechanisms for agreeing on changes in the research plan. Partnerships grow and change; this invariably leads to the need for amendments. Arguably, many of the best collaborative research agreements need numerous amendments in order to reflect the evolving needs of the parties involved.

Abstract: Best practices in IP (intellectual property) management are built on a foundation of licensing and contracting expertise. A contract defines a bargain that parties enter into, and, as such, defines the relationship and the expectations of the parties. It is therefore critical to carefully draft contracts that clearly, and objectively, indicate the intentions of the parties. Avoid stilted, legalistic jargon when drafting contracts; instead, strive for direct, simple, and accurate language. In written agreements, be sure to include the terms and provisions covering the grant itself, such as payments, dispute resolution, intellectual property emerging from the R&D, IP ownership and confidentiality, and other related legal terms and definitions. However, remember that generic templates do not exist. The relationship and goals of the parties will define how the agreement is structured. The actual document will also vary, depending on whether the parties are public or private sector entities, on whether the license is a collaborative-research agreement or a sponsorship agreement, and on the business and legal culture.

Abstract: Nonassertion covenants (nonasserts for short) grant permission to third parties to practice a patent they would otherwise infringe. Legally, nonasserts are patent-infringement settlement agreements that are designed and drafted with the purpose of preemptively resolving future infringement disputes. Nonasserts can take three forms: (1) an agreement between two parties, (2) an agreement among several parties, or (3) a public statement. A non-assert can specify the release of only certain patent rights or fields of use, or it can be broad and specify release for entire patent families, including future inventions in a certain area. Public statements effectively place rights to patents, or elements thereof, into the public domain. Nonasserts nevertheless need to specify, precisely, which rights are granted in order to avoid ambiguity that could lead to equitable estoppel.

Nonasserts can have wide-ranging implications in terms of enhancing public sector R&D. One application could be with patent rights covering research tools that are critical for accelerating the development of essential biotechnological applications. Specifically targeted non-asserts can also be effective instruments for industry to permit the use of patented inventions anywhere in the world, provided such use is for the express purposes of addressing specific humanitarian needs in developing countries. This could have broad-ranging and significant positive impact, as this approach reduces transaction costs, encourages innovation to help the poor, and accomplishes this without any loss of commercial opportunities.

Abstract: The Convention on Biological Diversity (CBD) contains rules that clarify the rights and responsibilities of parties accessing biological resources from member nations. One aspect of the convention addresses the system that governs access to genetic resources and how the benefits arising from their use are shared. This legislation is commonly called the Access and Benefit-Sharing (ABS) program. Anyone pursuing collection activities, whether of tangible materials or intangible information, may be subject to these new regulations. Especially targeted are scientists and researchers who make significant use of proprietary genetic resources, biological matter, and related information, such as traditional knowledge and farming know-how. Therefore, it is important for all potential collectors to be familiar with the fundamental principles of ABS law as well as the procedures that must be followed in order to be fully compliant with the rules and regulations of the countries where collecting occurs. Well in advance of any collection activities, researchers should review the ABS situation, determine who could best answer questions about ABS, find authorized partners in the country of interest, locate relevant information on the specific ABS regime, and, most importantly, execute the documents, letters and agreements necessary to proceed with collection activities.

Abstract: The National Institutes of Health Office of Technology Transfer (NIH OTT) administers technology licenses for the NIH, generating substantial royalties (in the millions of dollars). Although this revenue flow is important, the NIH OTTs principal mission is the timely introduction of new products and technologies into the marketplace to ensure that the fruits of NIH research and development are made commercially available to serve the greater public good. The NIH OTT utilizes six types of technology licenses:

• commercial evaluation licenses (also known as options)
• patent commercialization licenses (either exclusive or nonexclusive)
• nonexclusive patent licenses (for internal use)
• biological materials licenses
• software licenses

The NIH OTT insists that licenses are drafted with well-defined financial terms and clearly delineated reporting obligations, so that both parties to the license (NIH as licensor and, for example, a biotech firm as licensee) understand their respective obligations. The NIH OTT seeks to build cooperative relationships with its licensees in order to facilitate problem solving discussions, resolve outstanding issues, and identify possible opportunities for advancing commercialization of products and/or services. As a best practices licensor, the NIH OTT carefully manages license administration by monitoring commercial development performance benchmarks, reviewing sales reports, and enforcing other license obligations. The office will also, if necessary, impose sanctions in license enforcement and implement procedures for dealing with infringement of its patents. The policies, protocols, and procedures of the NIH OTT have broad applicability to both developed and developing countries; scientists, administrators, technology managers, intellectual property professionals, and even attorneys can learn from the NIH OTT, a good example of an office operating effectively, efficiently, and profitably by employing best practices.

Abstract: An independent nonprofit research institution, the Donald Danforth Plant Science Center has an international mission to address global challenges in human health, nutrition, agricultural sustainability, and the environment. The Danforth Center contributes to fulfilling this mission through collaborative research, training, and capacity building. As part of this objective, the Office of Technology Management and Scientific Partnerships at the Danforth Center, lead by the author of this chapter, has emerged as a leader in developing and implementing terms for humanitarian access to technology and has been actively involved in licensing enabling technologies for humanitarian projects. These activities include active participation and support for the creation of PIPRA, among other nonprofit organizations. The current chapter discusses the Danforth Center’s philosophy with respect to the protection and sharing of IP (intellectual property) rights, the reservation of rights for humanitarian projects, and best practices to enhance and maximize value creation through technology licensing. The chapter provides examples of the Danforth Center’s best practices and model documents for the establishment of interinstitutional and international collaborations and scientific partnerships. Included with the chapter are specific examples of the Danforth Center’s humanitarian-use language, interinstitutional agreements, nonasserts, enabling technology licenses, memorandums of understanding (MOUs), and other framework documents.

Abstract: An option to acquire rights in university intellectual property (IP) may be encountered in several guises: as a stand-alone agreement, as a clause within an agreement (for example, a sponsored research agreement or a material transfer agreement), or as a “pipeline,” or IP framework, agreement for a university spinout company. Although the grant of an option may often form quite a small part of a larger agreement, the grant can raise important issues in terms of an organization’s IP commercialization strategy. This is especially true of pipeline agreements that are, effectively, a specialized form of option agreement. The purpose of this chapter is threefold:

1. to provide an introduction to options, and their uses, and including legal, practical, and negotiating issues
2. to provide suggested templates along with guidelines concerning completion of the templates
3. to consider and discuss some of issues that are problematic or of particular concern to universities.

The chapter attempts to provide information that is useful for both the beginner and the experienced research-contracts or technology transfer professional. The breadth of material covered may give the mistaken impression that university contracts are wrought with legal and commercial difficulties. Usually, this is not the case. But sometimes differences of expectation, practice, or legal culture can arise between parties negotiating an agreement, particularly in international transactions.

Abstract: Fundación Chile is a private, non-profit organization active in developing applications of biotechnology that can improve productivity and add value to existing agricultural and natural resource products of Chile. Fundación Chile seeks to create technology-based companies that would have significant economic and social impact in Chile. This case study details Fundación Chile’s initiative in grape biotechnology: globally assessing the availability and priority of different technological components and initiating efforts to access, license, and transfer those key technologies for the initiative.

Abstract: Though similar in many ways to other kinds of license agreements, agri-biotech licenses have some unique elements that require special attention. Considering first the similarities, this chapter looks closely at the typical boilerplate language that all license agreements share and outlines the basic structures and concerns of all such agreements. The chapter then turns to the singularities of agri-biotech licenses, focusing on such issues as multiple property types that often cover a single technology and/or product, freedom to operate issues that drive anti-royalty-stacking provisions, philanthropic- and humanitarian use clauses, and stewardship obligations.

Abstract: License negotiations involve substantial real or potential value. They therefore should be supported by a team of experts. The essential skills and expertise needed for conducting successful negotiations include: business strategy and development for leading the negotiations, marketing for estimating commercial potential, law for evaluating IP and patents and carrying out a variety of related tasks, science and medicine for evaluating new and potential health products, manufacturing and production know-how to determine equipment and additional training needs, and finance for analyzing input from other experts on the team to combine into a comprehensive report. The strength of such a team is in its interdisciplinary composition; each of the skill areas can complement the other. From the perspective of international licensing, licensors can seek to improve the availability of health products in developing countries, possibly moving from the “traditional” approach to licensing toward one that incorporates public sector needs. The best approach for a public sector organization negotiating an agreement with a private sector entity is usually to offer initial terms that the organization would be willing to agree to if it were on the other side of the table. Negotiating a fair licensing agreement should not be seen as a process of “bargaining.” Rather, a licensing agreement is establishing, in written form, the rules of operation for an ongoing relationship where mutual trust and confidence will be necessary for success.

Abstract: Agreements and contracts are not just pieces of paper to be signed before money changes hands; they are vitally important documents. If an organization hopes to properly fulfill the terms of its contracts, to say nothing of negotiating future contracts, it must have a system for organizing and managing its contracts. Such a system must make data accessible as well as keep it secure. Resources and tools should be incorporated wherever possible to design and implement a system within the available budget. After it is implemented, the effectiveness of the contract management system should be continuously monitored and evaluated.

Abstract: Based on the averages, there is a good chance that your country has decided to fulfill its TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement commitments by selecting an “effective sui generis system” over patents for plants, something more commonly known as plant breeders’ rights. This chapter attempts to explain what plant breeders’ rights are by describing the organization and function of the plant breeders’ rights system. Covering the objectives, scope, protection requirements, and examination provisions, the chapter compares the plant breeders’ rights system with the patent system and attempts to clarify specific puzzling issues. These include concerns that the latest UPOV Act does not address farmer seed savings (the choice is left to individual countries, with virtually all countries choosing to allow seed saving). Plant breeders’ rights are less puzzling once the intent and structure of the system are understood. The system is, in fact, one with very specific, if narrow, objectives.

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