Home > Topics > Contracts and Agreements to Support Partnerships > Specific Issues with Material Transfer Agreements > Editor's Summary, Implications and Best Practices

Traditionally, scientists have freely shared research materials. However, with fundamental research and commercial development merging ever closer, in both health and agricultural research, materials that once would have been used exclusively for only fundamental research are increasingly seen as having direct commercial value. Therefore, universities, for-profit corporations, and non-profit research institutions now realize that they must obtain proprietary protection for their research materials. Unrestricted transfers of research materials between scientists are becoming more and more uncommon, particularly transfers that take place between scientists in industry and those in academia. Biological materials are still transferred, though not as freely as before, and always with conditions attached.

This chapter thoroughly discusses material transfer agreements (commonly referred to as “MTAs”), which are legal instruments that are very important to the life sciences. MTAs delineate the terms under which tangible biological materials will be transferred between two or more parties. Technically, MTAs are bailments because they involve the transfer of possession but not of title. In other words, the party that transfers the materials retains full ownership over them, and the party that receives the materials holds them “in trust”; an analogy for such a transfer might be the act of leaving a watch at a watch-repair shop or a suit at a drycleaner. Ideally, the MTA specifies the term of the transfer, delineates how the materials may and may not be used, and other related issues, such as confidentiality. An MTA may also contain licensing provisions for the transfer of embedded intellectual property (IP) rights (such as patent rights). Thus, an MTA can be a hybrid instrument, covering the transfer of both tangible property (via bailment and contract) and intangible intellectual property (via licensing of patent rights). Unsurprisingly, MTAs are increasingly complex documents.

Many types of biological materials are transferred using MTAs. These include, but are not limited to: reagents, cell lines, antibodies, various research tools, insertional mutant populations, genome sequence databases, novel vectors, and plant genetic resources. MTAs typically contain the following sections:

1. The Preamble lays the groundwork for the MTA and sets the stage for the legally binding terms and conditions that follow.
2. Definitions specify terms such as “Materials”, “Use of the Materials”, “Modifications”, or “Inventions”.
3. Use of the Materials specifies how the recipient can and cannot use the material. It may prohibit the use of the material in research that has IP rights held by third parties, with other materials from third parties, or transferring the material to third parties or even to other researchers within the recipient’s institution.
4. Confidential Information specifies the “[i]nformation, data or material in written or other tangible form related to the material” that is covered by the agreement.
5. Intellectual Property Rights describes the rights that will be covered, disclosure of inventions, prosecution of patents and plant variety protection certificates, and granting of options and licenses.
6. Warranties are rarely specified. MTAs nearly always stipulate that the material in question does not come with any warranties whatsoever.
7. Liability and/or Indemnification states that the recipient of the materials will assume all liability for damages that may arise from the recipient’s use, storage, or disposal of the material and modifications.
8. Publication of research should not be hindered by the provisions of an MTA. The MTA should enable the recipient of the materials to publish or present the results of any research that uses the materials. Typically, however, the provider of materials is allowed to review and comment on manuscripts before publication and request the removal of any confidential information.
9. Governing Law may or may not be specified in an MTA. This section states that the agreement is governed by the laws of a particular jurisdiction.
10. Termination specifies the date that the agreement ends. The term of an MTA can always be extended by mutual agreement.
11. Signatures are usually the last part of an MTA. The document may be signed by authorized officials and researchers of all the organizations involved in the agreement.
12. Exhibits or Appendices are optional. They may include a detailed description of the research, a protocol, or a long list of materials.

It is less problematic for university scientists to share materials than it is for materials to be transferred between industry and academia. If a problem does occur, it is usually because IP rights attached to the material(s) transferred have been exclusively licensed and the terms of that agreement impose constraints on the institution providing the material. Material transfers between private- and public-sector institutions are typically much more complex than those that occur between two universities. They are also much more prone to failure, particularly when the direction of transfer is from a private-sector company to a university. It is important to understand such issues as the following: determining who has the rights to either retain or disseminate, who has the rights to any research results (including potentially onerous reach through provisions), how to deal with conflicting legal obligations, the importance of maintaining the public benefit of university research, and assuring fair consideration.

The chapter ends with several excellent examples of MTAs. These include 1) the NIH’s “Simple Letter Agreement for the Transfer of Materials,” which is a short, easy-to-understand one-page MTA, and 2) the standard MTA used by the University of California, Davis, which is an example of the type of MTA that a university might use to transfer materials to another university.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• It is necessary to use material transfer agreements (MTAs) whenever researchers share biological materials with each other (whether within the public sector, or between the public and private sectors). These sorts of agreements are now ubiquitous because biological materials have gained commercial value.
• If a country wishes to encourage domestic and international collaborations between researchers, the legal system ought to include laws that govern contracts, intellectual property, and tangible property. MTAs define bailments of tangible property: that is, transfer of possession but not of title (subject to contractual obligations).
• Suppliers of biological materials will only have confidence that their property rights will be protected if laws are enforced. Such confidence is good for collaborative research, and especially international collaboration.

For Senior Management (university president, R&D manager, etc)

• MTAs will allow university researchers to access biological materials that are critical to the success of their programs. The opposite is also true: MTAs allow universities to provide biological materials to public and private organizations.
• The University ought to have guidelines for how MTAs should be drafted and negotiated, who signs them, what types of terms/provisions to avoid, and how to derive the most benefit from biological transfers.
• It is important to build awareness regarding how to manage valuable, university-owned biological materials. Personnel should be instructed in proper IP management, the essentials of contract formation, and how to distinguish between tangible and intangible property rights, such as how to tell the difference between the right to use/possess a tangible piece of DNA (tangible property right) and the right to use it as a promoter sequence (IP right).

For Scientists

• Your exchanges with colleagues—regardless of whether you are receiving or providing biological materials—will increasingly involve MTAs. Therefore, be aware of what kinds of property rights MTAs confer.
• MTAs should not be viewed as a barrier to materials access. In fact, they are a tool for gaining greater access to materials from a wider range of colleagues (scientists from the public and private sectors, both in your own country and abroad).
• It is important for scientists and their staffs to know their university’s policy regarding transfer of materials. They should know, for example, who has authority to negotiate and sign for transfers, how to find out how materials can (and cannot) be used, and what to do if a problem (such as unauthorized access) arises.

For Technology Transfer Officers

• Your office will need to implement a university-wide policy governing the execution and implementation of MTAs.
• Make a number of of sample/template MTAs available in your office. These templates can be modified as deemed necessary.
• Your office should be the official signatory and repository of all MTAs dealing with incoming and outgoing biological materials.
• It will be particularly crucial to conduct ongoing IP and tangible-property training for the university’s employees. Such training will raise awareness of proper IP management and ensure that researchers know how to handle biological materials, no matter who they belong to.