Convention on Biological Diversity (close)
An international agreement articulated at the 1992 Earth Summit in Rio de Janeiro, the Convention seeks to establish a comprehensive strategy for sustainable development, setting out commitments for maintaining the world’s ecological underpinnings in light of increasing business and economic development. The Convention established three main goals: the conservation of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits from the use of genetic resources.
The section of the patent that defines an invention (the technology that is the exclusive property of the patentee for the duration of the patent) and is legally enforceable; that is, the claims set the metes and bounds of the patent rights. The patent specification must conclude with a claim, particularly pointing out and distinctly claiming the subject matter that the applicant regards as the invention or discovery. The claim or claims are interpreted as set forth in the specification: the terms and phrases used in the claims must be sufficiently described in the specification, that is, patent claims must read in the light of the specification. The specification discloses and the claims define the invention.
The process of taking an invention or discovery to the marketplace. It involves working the idea into a business plan, consideration of protection options, and determining how to market and distribute the finished product.
A second patent application containing a disclosure identical to one in a previous (parent or grandparent) application filed by the same applicant as the original application, while the original application is still pending, and that is entitled to the filing (priority) date of the original application.
An exclusive right conferred by the government on the creator of a work to bar others from reproducing, adapting, distributing to the public, performing in public, or publicly displaying said work. Copyright does not protect an abstract idea; it protects only the concrete expression of an idea. In order to obtain copyright protection, a work must have originality and some modicum of creativity.
Creative ideas and expressions of the human mind that have commercial value and are entitled to the legal protection of a property right. The major legal mechanisms for protecting intellectual property are copyrights, patents, and trademarks. IP rights enable owners to select who may access and use their intellectual property and to protect it from unauthorized use.
The creation of a new technical idea and of the physical embodiment of the idea or the means to accomplish it. To be patentable, an invention must be novel, must have utility, and would not have been obvious to those possessing ordinary skill in the particular art of the invention.
A grant of permission to use an IP right within a defined time, context, market line, or territory. There are important distinctions between exclusive licenses and nonexclusive licenses. An exclusive license is “exclusive” as to a defined scope, that is, the license might not be the only license granted for a particular IP asset, as there might be many possible fields and scopes of use that can also be subject to exclusive licensing. In giving an exclusive license, the licensor promises that he or she will not grant other licenses of the same rights within the same scope or field covered by the exclusive license. The owner of IP rights may also grant any number of nonexclusive licenses covering rights within a defined scope. A patent license is a transfer of rights that does not amount to an assignment of the patent. A trademark or service mark can be validly licensed only if the licensor controls the nature and quality of the goods or services sold by the licensee under the licensed mark. Under copyright law, an exclusive licensee is the owner of a particular right of copyright, and he or she may sue for infringement of the licensed right. There is never more than a single copyright in a work regardless of the owner’s exclusive license of various rights to different persons.
material transfer agreement (MTA) (close)
nonexclusive license (close)
A license under which rights are granted to the licensee but not exclusively to that licensee; the licensor reserves the right to give the same or similar rights to use the licensed materials to other parties.
A formal sign or notification attached to items that embody or reproduce an intellectual property assset—for example, the presence of the word patent or its abbreviation, pat., together with the patent number, on a patented article made by a patent holder or his/her licensees. The formal statutory notice of U.S. trademark registration is the letter R inside a circle: ®, Reg. U.S. Pat. & Tm. Off., or Registered in U.S. Patent and Trademark Office. Many firms use informal trademark notices, such as Brand, TM, Trademark, SM, or Service Mark, adjacent to words or other symbols considered to be protectable marks. Notice of copyright consists of the letter C in a circle symbol: © or the word Copr. or Copyright, the copyright owner’s name, and the year of first publication.
A grant by the federal government to an inventor of the right to exclude others from making, using, or selling his or her invention. There are three kinds of patents in the United States: a standard utility patent on the functional aspects of products and processes; a design patent on the ornamental design of useful objects; and a plant patent on a new variety of a living plant. Patents do not protect ideas, only structures and methods that apply technological concepts. Each type of patent confers the right to exclude others from a precisely defined scope of technology, industrial design, or plant variety. In return for the right to exclude, an inventor must fully disclose the details of the invention to the public so that others can understand it and use it to further develop the technology. Once the patent expires, the public is entitled to make and use the invention and is entitled to a full and complete disclosure of how to do so.
plant variety protection (PVP) (close)
A form of patent-like protection for sexually propagated plants, as well as hybrids, tubers, and harvested plant parts. The Plant Variety Protection Act of 1970 is administered by the U.S. Department of Agriculture and not the U.S. Patent and Trademark Office (which does issue plant patents).
public domain (close)
The status of an invention, creative work, commercial symbol, or any other creation that is not protected by some form of IP right. Items that have been determined to be in the public domain are available for copying and use by anyone.
research tools (close)
The term research tool includes the full range of tools that scientists may use in the laboratory, including cell lines, monoclonal antibodies, reagents, animal models, growth factors, combinatorial chemistry and DNA libraries, clones and cloning tools (such as PCR), methods, and laboratory equipment and machines. There is concern about the patenting of research tools, because such patents may inhibit the free undertaking of research.
(1) A word, slogan, design, picture, or other symbol used to identify and distinguish goods. (2) Any identifying symbol, including a word, design, or shape of a product or container, that qualifies for legal status as a trademark, service mark, collective mark, certification mark, trade name, or trade dress. Trademarks identify one seller’s goods and distinguish them from goods sold by others. They signify that all goods bearing the mark come from, or are controlled by, a single source and are of an equal level of quality. And they advertise, promote, and generally assist in selling goods. A trademark is infringed by another if the second use causes confusion of source, affiliation, connection, or sponsorship.
Your source for expert commentary on IP management issues.
CHAPTER NO. 7.3
Bennett AB, WD Streitz and RA Gacel. 2007. In Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices (eds. A Krattiger, RT Mahoney, L Nelsen, et al.). MIHR: Oxford, U.K., and PIPRA: Davis, U.S.A. Available online at www.ipHandbook.org.
© 2007. AB Bennett, WD Streitz and RA Gacel. Sharing the Art of IP Management: Photocopying and distribution through the Internet for noncommercial purposes is permitted and encouraged.
Specific Issues with Material Transfer Agreements
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.
There is a long history of sharing biological materials, such as plant germplasm or genetic stocks, and for the most part this has been done freely and often without any form of a legal agreement.
This has not typically been the case in health research, where reagents, cell lines or antibodies that have potential therapeutic implications have been transferred under specific agreements that define the terms of the transfer. In both agricultural and health research, the increasingly sophisticated research approaches that rely heavily on access to biological or bioinformatic resources created by other researchers have dramatically increased the need for researchers to share research tools. This trend has been advanced further by the investment of federal agencies (notably the National Science Foundation [NSF] and the National Institutes of Health [NIH]) and private companies in the development of genomic resources that are intended primarily as vehicles for further discovery of gene function and/or gene regulation. These types of biological and bioinformatic resources (such as insertional mutant populations, genome sequence databases, and novel vectors) are the most problematic with regard to sharing, because they are the research tools that can lead to potentially valuable discoveries, invariably leading to the question of who will own or control those downstream discoveries.
The NIH considers the sharing of research tools so important to future research progress that the agency issued strong guidelines on the appropriate terms for transfer of research materials that contribute to, or result from, NIH-funded research.1 Similarly, the NSF has issued guidelines for data and materials release and requires investigators to describe the timing, constraints, and means of release of materials developed, particularly for programs (such as the Plant Genome Research Program) that focus on the generation of research resources and tools.2
Plant genetic resources represent another area of increasing concern regarding how freely these resources can be exchanged. Even those plant genetic resource centers that are most committed to the free exchange of germplasm now utilize specific agreements to govern the transfer of seeds, if only to specify that the recipient cannot seek intellectual property (IP) rights on the materials (the African Rice Center, WARDA; Box 1 [see end of chapter])3 or to ensure that the recipient understands that there is no warranty on the transferred material (Tomato Genetics Resource Center; Box 2 [see end of chapter]).
Scientists have traditionally shared research materials freely, and, indeed, an important criterion for scientific publication has been the ability of other researchers to experimentally reproduce and thereby test published results. The ability to replicate results will often rely on access to the underlying biological materials or information, but that access is not assured today. So what has changed? Probably the most significant change has been the narrowing of the gap between fundamental research and commercial developments, particularly in health research, but also in agriculture.4 Materials that at one time would have been useful almost exclusively for fundamental research purposes are increasingly seen as having direct commercial value, and this trend has generated a new breed of researchers and companies that focus on leveraging novel research tools to discover new commercially valuable traits, genes, or compounds. Particularly, in the case of companies, they may be reluctant to share their “crown jewels” without making sure that their business interests are protected. As a result of the Bayh-Dole Act, many universities actively use the patent system as a means to transfer research results to industry. In addition, universities increasingly conduct research that is sponsored by industry. As a consequence, they may have concerns similar to those of private companies. So a company that traditionally had little concern over a university’s use of its property may now be appropriately concerned that its proprietary materials may lead to valuable inventions or even to fueling a competitor’s business interests. Universities and nonprofit research institutions have also become much more aware and protective of research materials. The result has been a slow but steady evaporation of unrestricted transfers of research materials between scientists, in general, and particularly between industry scientists and those in universities.
With growing regularity, the sharing of research materials takes place under material transfer agreements (MTAs). MTAs are legal agreements (bailments) that govern the transfer of a tangible property between parties. For example, the University of California, Davis, executed over 470 MTAs in 2005, and this number had been increasing every year since 2001. At the same time, the complexity of MTAs is increasing dramatically, with restrictions and obligations potentially reaching far beyond the material itself, to data or inventions made using the material and/ or to derivative materials. As a consequence, each MTA has begun to take on the complexity of a license agreement, and a high level of skill and time are required to ensure that the MTA can be executed without compromising key principles and will not conflict with other agreements. Hence, an MTA can be a hybrid instrument: covering the transfer of both tangible property (via bailment and contract) and intangible IP (via licensing of patent rights). To complicate things even further, provisions of an MTA may stipulate how any future IP rights, arising from the use of the materials transferred, will be allocated.
Because MTAs are contractual agreements between two or more parties, the agreements typically do not have the geographic or temporal limitations of patented technologies (patents are territorial, issued by countries, with limited terms, typically 20 years from filing) and, consequently, can be much farther reaching than the scope of patent rights. It is interesting to note that an evaluation of the property rights associated with “GoldenRice” indicated that 44 patented products or processes and at least 15 materials, many of which were governed by MTAs, were potentially used in its development.5 In navigating the intellectual and technical property landscape surrounding “GoldenRice,” Potrykus reported that the restrictions imposed by one MTA had been particularly problematic.6
Just as universities are experiencing an increase in the use of MTAs for receiving and disseminating materials, so are companies. One large pharmaceutical company indicated that it had six administrators dealing with more than 1,000 MTAs in the year 2000 and that many of these agreements required lengthy negotiations. Some companies have questioned whether it is worth their while to exchange research tools with university scientists at all.7 In our own experience, agreements for transfer of research materials from industry to the university often have a low priority for attention within company legal departments, particularly because such transfers are often only incidental to, or may actually compromise, their main commercial interests. We estimated that 10%–25% of MTAs received from industry for incoming materials to the University of California were never executed because the terms compromised fundamental academic principles or created legal obligations that the university cannot fulfill. An example of a deal-breaking term in an MTA is one that specifies that the provider maintain ownership of data resulting from use of the materials. This term could prevent publication or prevent the continuation of the very research that the material was intended to advance. Thus, universities in general are in a situation in which the exchange of research materials is of increasing and indeed critical importance, but both universities and private companies are having difficulty finding easy ways to share these resources. As Eisenberg summarized “Although there are many points on which they disagree, most people from each of these quarters seem to agree that the problem is growing rather than diminishing.”8
2. What is a Material Transfer Agreement?
Fundamentally, an MTA is a bailment, that is, a transfer of tangible property without transfer of title. Under such an agreement, the provider maintains ownership of the property transferred. Transferred property is held by the receiving party according to terms stipulated in a legally binding contract. The contract, therefore, governs the transfer of tangible biological materials between two or more parties. In addition to the tangible property rights being owned by the provider, the material(s) may be the subject of a patent or patent application. In this case, the MTA may need to account for the transfer of IP rights as well as the transfer of tangible material. Transfer of IP rights would be in the form of a license, for example, to make, use, sell, and so forth, that is, a license is permission to do what would otherwise violate the provider’s IP rights. This chapter deals with materials that are intended to be used for research purposes, usually in the absence of planned research collaboration between the provider and recipient. Such a collaboration could be accommodated by a separate collaboration agreement that would accompany the MTA. The MTA defines the rights of the provider and recipient with respect to the materials and derivatives of the materials.
At most institutions, researchers themselves are not authorized to sign either outgoing or incoming MTAs for their institutions. The MTAs must be reviewed and approved by an authorized institutional official. Agreements that are not signed by an institutional official may not be valid or enforceable. These functions usually reside in the Office of Research Administration (Sponsored Programs) or the office that manages IP and technology transfer for the institution. Because the researcher utilizing the material(s) is ultimately responsible for fulfilling the obligations of the MTA, most MTAs require the signature of the recipient of the material acknowledging their recognition of their responsibilities and duties under the agreement.
3. Structure of a Material Transfer Agreement
An MTA can range in size from a few hundred words on one page to several thousand words on more than a dozen pages. The NIH’s “Simple Letter Agreement for the Transfer of Materials” (Box 3 [see end of chapter]) is an excellent example of a short, easy-to-understand, one-page MTA. The Simple Letter Agreement requires no negotiation and is used by academic institutions throughout the United States to transfer materials, and, in the case of research consortia composed of multiple academic or nonprofit institutions, this type of agreement can be modified to provide an umbrella for easy transfer of materials between consortium members. On the other end of the spectrum, a complex and lengthy MTA from a company willing to provide innovative and highly proprietary materials can take years to negotiate.
The standard MTA used by the Davis campus of the University of California (Box 4 [see end of chapter]) represents an MTA that a university would use to provide materials to another university. An MTA, regardless of its length and complexity, may incorporate many if not all of the following:
3.1 The preamble
The preamble of an MTA is like an abstract of a manuscript or a prologue to a novel. The preamble lays the groundwork for the MTA and sets the stage for the legally binding terms and conditions that follow. The preamble identifies parties to the agreement and specifies the MTA’s effective date. It may also include the addresses of the parties. It may even contain recitals or whereas clauses describing the material, the goal of the research, and the intent of the parties.
An MTA may have a separate section to define specific terms such as materials, use of the materials, modifications, or inventions. On the other hand, an MTA may define these terms as they first appear within the agreement. In a third approach, an MTA may define the terms that will be used throughout the agreement in a separate section for definitions and define the terms that are used only in one or two sections as they first appear within the agreement.
The definition of materials should be limited to that of the actual materials being transferred, including progeny and unmodified derivatives, and should not include substances or inventions created by the recipient of the materials. Progeny, as defined in the Uniform Biological Material Transfer Agreement (UBMTA), are unmodified descendents of the original material. Progeny can include a virus from a virus, a cell from a cell, or an organism from an organism. Unmodified derivatives, according to the UBMTA, are substances created by the recipient that constitute an unmodified functional subunit or an expression product of the original material that was provided. Unmodified derivatives can include purified or fractionated subsets of the original material; progeny or products thereof; subclones of unmodified cell lines; transcription and translation products, such as RNA and protein derived from provided DNA; reverse transcription and reverse translation products, such as DNA synthesized on a template using provided RNA; monoclonal antibodies secreted by a hybridoma cell line; and chemically synthesized copies. Since a provider usually asserts ownership of materials, the definition of materials should not overreach to modifications, derivatives, crossbred progeny (in animals), mutants, or other substances that are not being provided by the provider.
3.3 Use of the materials
An MTA specifies how the recipient can and cannot use the material. Usually, the MTA contains a blank space for the researcher to include a description of the research use with the material. Sometimes an MTA has a separate appendix with a very detailed description of the intended research use. An MTA will usually prohibit the recipient from using the materials in a manner other than that intended by the original research. An MTA will also typically prohibit provider’s material from being tested in humans and used in plants and animals consumed as food. Other prohibitions may include using the material in research that has IP obligations to third parties, or with other materials from third parties, or transferring the material to third parties or even to other researchers within the recipient’s institution. Finally, most MTAs have prohibitions for the material to be used for commercial purposes.
3.4 Confidential information
Often, providers of materials include, on the MTA form, proprietary or confidential information. Therefore an MTA may contain a provision to protect the provider’s confidential information. Confidential information can be defined as “information, data, or material, in written or other tangible form related to the material, that is identified as confidential at the time of disclosure.” However, confidential information should not include information that is:
The MTA should include language to make clear to the provider that the above information is not considered confidential.
An MTA may also specify that the recipient of the confidential information treat it as confidential and maintain it in confidence for a certain period of time. A long period of nondisclosure, for example, over five years, may be very difficult for a university to manage. Generally, an MTA may require that all confidential information be marked “Confidential” and be reduced to writing. Reducing confidential information to writing places an additional administrative burden on both parties, but it does make it easier for the recipient to know precisely what information must be kept confidential.
The MTA may stipulate that the recipient can disclose the provider’s confidential information only to the recipient’s own personnel who have a need to know and who use the confidential information. The MTA may also require that the recipient take the same steps and use the same methods to prevent the unauthorized use or disclosure of the provider’s confidential information as the recipient would take to protect its own confidential information. Requirements such as these are generally appropriate when confidential information is being exchanged.
3.5 Intellectual property
Nearly every MTA will address IP matters such as the disclosing of inventions, the prosecuting of patents and plant variety protection certificates, and the granting of options and licenses. IP rights language is perhaps the most challenging language to negotiate. An MTA may contain overarching IP language that can reach to a researcher’s and/or institution’s past inventions and future inventions, which may have little or nothing to do with the materials provided, and could impact the researchers ability to continue doing related research.
The MTA may specify that the recipient disclose, assign, and/or license any inventions to the provider, free of any royalties and fees. While most institutions will agree to certain licensing rights, they are generally unable to assign an invention because doing so may violate:
It is generally reasonable to grant a limited subset of IP rights to the provider of the materials. For example, to the extent that the recipient is legally able to do so, the recipient could grant a nonexclusive royalty-free research license to any inventions that necessarily use or necessarily incorporate the material and are conceived and first actually reduced to practice in the performance of the research. The recipient, in many cases, may be able to grant a first right or an option to negotiate a non-exclusive or exclusive commercial license to such inventions. In some cases, when a provider provides innovative and valuable compounds, a recipient may have to grant a nonexclusive, royalty-free research license to such inventions if the provider is concerned about being blocked from practicing new uses for its materials especially when the provider is performing or sponsoring similar research.
An MTA nearly always stipulates that the material does not come with any warranties. A typical warranty clause, usually written in capital letters, may read:
PROVIDER MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE MATERIAL WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS.
The language is nearly always written in uppercase letters to make the clause stand out.
3.7 Liability and indemnification
An MTA usually stipulates that the recipient of the materials assumes all liability for damages that may arise from the recipient’s use, storage or disposal of the material, and modifications. In addition, many providers will stipulate that the recipient indemnify, hold harmless, and defend the provider against any claims, costs, or other liabilities that may arise as a result of recipient’s use, storage, or disposal of the material. A number of state institutions, for example in Alabama, Georgia, Kentucky, New York and other states, are prohibited from indemnifying other parties and must limit their indemnification to the extent permitted by state law. In addition to recipient liability, some MTAs will make the providers liable for losses, claims, or demands made by the recipient, or made against the recipient by any other party, that are due to the provider’s negligence or misconduct.
An MTA should enable the recipient of the materials to publish or present the results of the recipient’s research using the materials without the approval of the provider. An MTA can require that the recipient send the provider a copy of any proposed manuscript, abstract, poster session, or presentation prior to such publication or presentation so that the provider can review it, provide any comments, or request the removal of the provider’s confidential information. A review period of 30 to 45 days is sufficient for most providers and is acceptable to most academic recipients. The MTA may require that the publication or presentation be delayed for an additional period of time to allow for the filing of patent applications. An additional period of 30 to 45 days is sufficient for most providers. An MTA can also require the recipient to acknowledge the provider for providing the materials in any publications or presentations.
3.9 Governing law
An MTA may specify that it is governed by the laws of a particular jurisdiction, state, or country. This may present a problem in cases in which the provider and the recipient are located in separate jurisdictions, states, or countries. Most providers and recipients will agree to be silent on governing law.
An MTA should specify an expiration date for the agreement. Otherwise, the recipient’s obligations will continue forever. The parties should be able to terminate the MTA earlier by providing advance, written notice. When the MTA expires or terminates, the recipient is generally required to stop using the material and may be required to return or destroy any remaining material. A termination clause may also delineate certain obligations that survive termination. These surviving obligations may be related to areas dealing with confidentiality, IP, warranties, liability, and indemnification. The MTA can always be extended by the mutual agreement of both parties.
The signature section is usually the last part of an MTA. A typical MTA may have the signatures of the following individuals:
Some MTAs may require only the signature(s) of the authorized official and/or the researcher of the recipient of the materials. Researchers may sign as acknowledging, reading, and/or understanding the MTA but should not sign as legal parties to the MTA. Doing so could place them at risk of being personally liable and being sued in a court of law.
3.12 Exhibits or appendices
An MTA may include an exhibit or appendix that is attached to the end of the agreement. In many cases, the attachment is a detailed description of the research, a protocol, or a long list of materials. Sometimes confidential information is put in the exhibits or appendices so that it can be redacted more easily than if it were put into the agreement.
4. Material Transfer Between Universities
Sharing of materials between university scientists is generally less problematic than transfers between industry and academia, primarily because the cultures and motivations of each institution involved in the exchange are similar. In the United States, most universities readily transfer materials for academic research purposes under terms that typically have no restrictions other than a requirement not to transfer the materials to third parties without approval or notification. These transfers are often accomplished using the NIH-facilitated UBMTA9, the NIH’s Simple Letter Agreement, or an equivalently benign agreement. The UBMTA incorporates a very narrow definition of the material to be transferred and the agreement does not give a provider rights beyond the “original material, progeny and unmodified derivatives.” This narrow definition and the lack of “reach through” to new materials and to new research results is the hallmark of agreements between universities that greatly facilitates these transfers.
When a problem does occur in a transfer between academic institutions, it is usually because the material has been exclusively licensed and the terms of that agreement impose some constraints on the institution providing the material. However, this problem is usually avoidable, particularly if such exclusive licenses specifically reserve the right to use the materials for internal research purposes and to transfer the materials for research at other academic institutions. For example, the University of California routinely incorporates the following clause into its exclusive license agreements:
Nothing in this Agreement will be deemed to limit the right of The Regents (i.e. University) … to make and use the Invention … and associated technology and allow other educational and nonprofit institutions to do so for educational and research purposes.
5. Material Transfer From Private Companies to Universities
Material transfers between private and public sector institutions are typically much more complex than transfers between two universities and are much more prone to failure, particularly when the transfer is from a company to a university researcher.10 What are some of the features of these MTAs that create difficulties, particularly for universities? Contrary to popular belief, the primary issues for most universities do not concern the ability to profit from licensing future inventions, but center on:
These issues primarily reflect most universities’ concern with protecting the fundamental mission of the institution and their low tolerance for financial or legal risk.
5.1 Dissemination of research results
The single most obvious and fundamental principle for the university and university researchers is to preserve the unrestricted ability to publish their research results. The freedom to publish can be restricted by MTAs when the provider requires editorial rights in a publication or the right to approve and, by inference, to disapprove a publication. Publication restrictions can show up in MTAs in indirect ways as well. For example, the material itself may be specified as confidential, making a meaningful publication impossible. Of particular concern are the serious consequences that a publication restriction can have on students, whose future depends so heavily on publication. Clearly, this is one principle a university cannot compromise and the principle is so widely recognized that one would think it would not even be on the table for discussion. However, it occasionally is.
Typically, the material provider’s underlying concern is not to restrict academic publication but to protect its confidential information related to the material and to preserve patentability of inventions. Both are legitimate concerns and can usually be met by agreeing to remove a company’s confidential information from publications and to delay publication for a limited time (usually 60 to 90 days) to permit the evaluation of potentially patentable inventions and to file patent applications, when appropriate. Universities readily agree to these types of provisions, but further restrictions on publication rights are typically nonnegotiable.
5.2 Rights in research results
Universities also need to preserve the ability of their researchers to use their own research results in future research. This may seem obvious, but if a provider of material insists that it own the results of research conducted with its material (sometimes including data, inventions, and reports), researchers and universities can lose all access to these products of their own research, making it difficult, if not impossible, to perform any follow-on research. An example of how this appears in an MTA would be a case in which a provider asserts ownership of new substances created by the university researcher while using its proprietary material, sometimes reaching to substances or compositions that don’t contain the original material in any form (often referred to as reach through rights). This type of provision could have an impact on publication as well, since many journals require that materials discussed in a paper be made available for replication of the research. Yet in this case such availability would be controlled by the material provider, not the researcher. In many cases, a for-profit provider may have a legitimate reason to insist on retaining ownership of any modifications of its original material. For example, if a vector that took years to create could now be easily modified to incorporate new functions, the provider would be understandably reluctant to relinquish rights to improvements that can now be relatively easily incorporated. In these cases, it may not be appropriate or possible to share this material. However, in many cases this kind of provision is the result of a provider using too broad an approach to ensure no possible loss of its own rights. Negotiations can often identify a balanced solution in which the provider is assured that it maintains ownership of its proprietary material, and while a recipient may own the narrow improvement it created, the provider would still own the original material if it continued to be included as a component.
5.3 Conflicting legal obligations
Perhaps the most difficult issue presented by MTAs is the potential for entering into agreements that create conflicting legal obligations. This situation routinely arises because, while the material is coming from one source, the funding for the research is usually provided by a different source, typically public agencies but also, potentially, other private companies. To the extent that the MTA and relevant funding sources carry IP obligations, it is easy to see how conflicts can arise. While such obligations are typical of private research support, public funding also carries legal IP obligations to the government. The most prominent of these obligations includes requirements in the United States under the Bayh-Dole Act, such as, a prohibition on assigning title to inventions to third parties, the provision of a nonexclusive license to the government to practice or have practiced the invention on behalf of the government, and the right of the government to march in. Clearly, the university cannot enter into an MTA that creates a new obligation that is in conflict with such obligations of law or its contractual obligations to others. For example, if access to a particular research tool or material requires that the provider be offered an exclusive license to inventions, then this restricts the project from receiving any other material or research funding that carries a similar obligation—exclusive access to inventions from the same project can be given only once! The university and its researchers need to be very careful in determining how important are specific inputs to the project, and they may need to decide which IP rights can be apportioned to research sponsors and/or material providers and prioritize those rights. It is clear from the complexity of inputs to research projects and the increasing complexities of ownership of research tools and materials, that access to the full set of tools for certain projects may simply be impossible. This situation is analogous to that which has been described as the “tragedy of the anticommons” where the fragmentation of IP ownership becomes so complex that no single entity can acquire all the rights it needs to develop products.11 In a similar sense, the fragmented ownership of research materials or information can impact the practical ability to conduct fundamental research or at least to do so using the most efficient research tools.
5.4 Public benefit of university research
Universities, particularly public universities and those whose research is supported largely by public funds, have an obligation to see that their innovations are made available to the public in a diligent and timely manner. In the United States, this obligation is based on the Bayh-Dole Act, which has a stated objective “to promote … public availability of inventions,” as well as on the philosophical missions of most universities. One means of accomplishing availability is through the licensing of inventions to private companies that can invest the often substantial additional R&D effort required to produce real products. The public benefit obligation can be compromised by MTAs that require the granting of a nonexclusive, royalty-free license to inventions back to the provider. If the company were not interested in commercializing the invention, the existence of its nonexclusive, royalty-free license could prevent other companies from entering into a license, because they would lack the exclusivity needed to allow them to invest in the development of the technology, effectively “shelving” the technology. A solution that is often acceptable is involves linking such a license very narrowly to inventions that are dependent on the company’s material. These inventions represent the company’s legitimate business interest and are inventions that, typically, only the company providing the material would be in position to commercialize. While broader language seeking a license to inventions less closely linked to the material will not necessarily prevent a university from signing an MTA, such language should certainly provoke a careful evaluation of the situation.
5.5 Fair consideration
Most universities seek a financial return in exchange for the commercial use of their research results. Public institutions, in particular, are concerned that the public funds that are used to support the institution should not be used to indirectly support private companies. These considerations color the expectations of universities, particularly if the provider of a material seeks free license to resulting inventions. Here, the interests of the university’s administration and researchers may diverge, with researchers needing, primarily, to gain access to the material to advance their research and with the administration seeking to preserve the fundamental principles of the university and avoid costly legal battles. Where interests are divergent, the situation can become very complex. In our experience, a common underlying interest of all parties is to enable and accelerate research progress, and in most cases solutions can be developed that satisfy the essential needs of all parties. Unfortunately, developing these solutions can take a long time and, as mentioned earlier, for many private companies, negotiating MTAs for university researchers is a low priority in relation to the many IP-related transactions that may be more critical to the company’s primary business interests.
Overall, the transfer of materials between researchers has been getting more difficult, and it appears that the days of open exchange of materials, particularly from researchers in industry to academic researchers in the life sciences, are over. While some domains of free exchange continue to thrive, and some funding agencies and foundations are actively promoting open exchange of materials, these are becoming exceptions rather than the rule. Both universities and private companies have legitimate interests, which they are trying to support when engaging in material transfers. When these interests collide, it can be difficult to find common ground. However, the mutual interest of both research-based private companies and of universities is to support research advances; and when both parties keep this overarching objective in mind, material transfers usually are possible.
BOX 1: MATERIAL TRANSFER AGREEMENT (MTA) FOR PLANT GENETIC RESOURCES HELD IN TRUST BY THE AFRICA RICE CENTER (WARDA)1
The plant genetic resources (hereinafter referred to as the “material”) contained herein are being furnished by Africa Rice Center (WARDA) under the following conditions:
The material is supplied expressly conditional on acceptance of the terms of this Agreement.
1. This MTA covers materials which are being transferred before the entry into force of the International Treaty on Plant Genetic Resources for Food and Agriculture. The Treaty envisages that Africa Rice Center (WARDA) will enter into an agreement with the Governing Body of the Treaty, once the Treaty enters into force. Africa Rice Center (WARDA) has indicated its intention to conclude such an agreement with the Governing Body. This agreement, in line with the Treaty, will provide for new MTAs and benefit-sharing arrangements for materials transferred after the entry into force of the agreement. The attention of the recipient is drawn to the fact that the details of the MTA, including the identity of the recipient, will be made available to the public.
2. This does not prevent the recipients from releasing the material for purposes of making it directly available to farmers or consumers for cultivation, provided that the other conditions set out in this MTA are complied with.
All referenced Web sites were last accessed between 1 and 10 October 2007.
1 Marshall E. 1999. New NIH Rules Promote Greater Sharing of Tools and Materials. Science 286: 2430–2431.
2 Silverthorne J. 2003. Ensuring Access to the Outcomes of Community Resource Projects. Plant Physiology 132: 1775–1778.
3 The sample agreements found at the end of this chapter are also available for free download at www.ipHandbook.org. An Adobe® Acrobat® reader or Microsoft® Word® are required. The Web site also contains many additional IP sample agreements.
4 Rai AK and RS Eisenberg. 2001. The Public and the Private in Biopharmaceutical Research. In Proceedings of the Conference on the Public Domain, Duke Law School: Durham, North Carolina. www.law.duke.edu/pd/papers/raieisen.pdf.
5 Kryder RD, SP Kowalski and AF Krattiger. 2000. The Intellectual and Technical Property-Components of Pro-Vitamin A Rice (Golden Rice™): A Preliminary Freedom-to-Operate Review. ISAAA Briefs No. 20. ISAAA: Ithaca, New York. www.isaaa.org/kc/Publications/pdfs/isaaabriefs/Briefs%2020.pdf.
6 Potrykus I. 2001. Golden Rice and Beyond. Plant Physiology 125: 1157–1161.
7 Eisenberg RS. 2001. Bargaining over the Transfer of Research Tools: Is This Market Failing or Emerging? In Expanding the Boundaries of Intellectual Property: Innovation Policy for the Knowledge Society (eds. RC Dreyfuss, DL Zimmerman and H First). Oxford University Press: New York. pp 223–249.
8 See supra note 6.
11 Heller MA and RS Eisenberg. 1998. Can Patents Deter Innovation? The Anticommons in Biomedical Research. Science 280: 698–701.
Bennett AB, WD Streitz and RA Gacel. 2007. In Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices (eds. A Krattiger, RT Mahoney, L Nelsen, et al.). MIHR: Oxford, U.K., and PIPRA: Davis, U.S.A. Available online at www.ipHandbook.org.
© 2007. AB Bennett, WD Streitz and RA Gacel. Sharing the Art of IP Management: Photocopying and distribution through the Internet for noncommercial purposes is permitted and encouraged.