Home > Topics > Contracts and Agreements to Support Partnerships > How to Draft a Collaborative Research Agreement > Editor's Summary, Implications and Best Practices

Contractual terms and provisions form the core of any intellectual property (IP) license agreement. It is important to remember that, at base, contracts are based on relationships, and they can reflect all of the ambiguities, pitfalls, and excitement that are characteristic of human interactions. As these two chapters point out, it takes skill, knowledge, attention, and patience to negotiate and draft a contract. A contract should define, as precisely and objectively as possible, the bargain that the parties are entering into.

When drafting contracts, scrupulously avoid stilted, legalistic jargon; instead, use direct, simple, accurate language. The importance of simple grammar and vocabulary is demonstrated in Chapter 7.5, which relates the story of a recent commercial dispute in Canada worth C$2 million; the dispute was resolved when it was discovered that a comma had been put in the wrong place.

Chapter 7.5 cautions against using generic templates for IP licensing agreements. No generic template will be appropriate in every cultural and legal climate: the laws of California, U.S. are not the same as the laws of Uttar Pradesh, India. Also, when working internationally, it is important to remain aware of the two broad legal jurisdictions, common law and civil law, and how these differ in terms of contract interpretation, enforcement, and litigation.

However, all contracts of the same type will share the same basic form. A research contract, for example, would include the following:

• Article 1: the license
• Article 2: payment terms and process
• Article 3: dispute resolution if problems arise or escalate
• Article 4: intellectual property emerging from research (where applicable)
• Article 5: confidentiality and publication rights
• Article 6: legal terms, such as what to do in case of an act of God or other intervention, timing issues, and notification procedures
• Article 7: definitions

After the main elements of the bargain are laid out, the rest of the document should include definitions and clauses that clearly indicate which local law applies to the contract. For better or worse, lawyers must draft such clauses in light of local legislation and court decisions. The best contractual documents are those that, once signed, are never looked at again because the agreement between the parties has been made crystal-clear.

The basic outlines of a collaborative research agreement or a sponsorship agreement are more complex. A collaborative research agreement, for example, involves multiple partners (who are often a mixture of private- and public-sector actors) working together on a particular research project. The partners each put a certain amount of money, talent, and technology into a central “pot” that they all draw from.

A collaborative research agreement has five major parts:

1. The statement of objectives explains what the parties want to accomplish together and why their collaboration is important. It should clearly specify the issues that will be addressed by the collaboration. It should be concise and avoid techno-talk and legalese. It should unambiguously specify the short- and long-term goals of the collaboration.
2. The statement of work should be a well-drafted research plan. It outlines approaches and methodologies. It also specifies who is responsible for work product, and delineates timeframes, benchmarks, and delivery dates. This is indubitably the most important part of the agreement.
3. General provisions cover various legal aspects of the agreement: for example, the mechanisms of the collaboration and the rules that will govern it, including provisions addressing publications and disclosure, confidentiality and management, and the ownership of intellectual property.
4. The budget outlines the resources that each party will contribute to the collaborative effort. The budget will take into account both staff wages and money to be spent on tangible resources (such as workspace, equipment, and supplies).
5. The list of materials recounts all of the tangible property and resources that each party brings to the collaboration. Because collaborative R&D endeavors are dynamic, this list may be amended from time to time.

For a collaborative research agreement to work, it must be mutually beneficial and built on a foundation of trust, cooperation, and shared vision. A well-written agreement will build and strengthen a productive scientific and business relationship. Intellectual synergy can occur when researchers enter into long-term collaborative partnerships. Such synergy will, in turn, spur innovation.

A sponsorship agreement is a research contract instigated by an actor (usually in the private sector) for the benefit of that actor. However, when the researcher or research organization being hired is in the public sector, the agreement normally also creates knowledge for that organization or the research community in general. In sponsorship agreements, it is important to specify whether the sponsor or the researcher will retain the rights to any intellectual property that is created from the research.

Sponsorship agreements and collaborative research agreements are more complex, and hence more challenging, than the more generic agreements that cover one-way flows of technology from the owner to a researcher. Obviously, the more complex the contract, the clearer the language and structure should be. A clearly written agreement increases not only the chance that the parties will comply with it, but it will also increase the chance that courts (and/or alternate dispute resolution forums such as mediation or arbitration) will resolve disputes in conformity with the fundamental intentions of the parties to the contract.

The challenges and complexities of the more ambitious agreements should be seen as opportunities. In-licensing of technologies is simpler, but collaborations and sponsored research will bring far greater rewards.

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

• In the post-TRIPS world, most discussions center on intellectual property. However, one ought to never forget that the legal foundation for implementing nearly every aspect of IP law is contracts.
• It is important that the courts adjudicate contract disputes fairly and with the support of the government. The quality of the courts will influence the quality and quantity of your country’s international partnerships and agreements.

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

• Do not use legal jargon in contract agreements. Instead, use short, clear sentences that are free of vague adjectives and are written in the active voice. The vocabulary should be accessible both to business people (who have extensive technical knowledge but limited legal knowledge) and judges (who have limited technical knowledge but extensive legal knowledge).
• Do not use standard form contracts without altering them to suit your purposes. They may contain provisions that are unsuitable for your particular culture or context. Using an unaltered template may save time now, but it may cost you later.
• Your staff should be trained to deal with contracts. They should understand the basic principles of contracts, how to read them, and how to draft them.

For Scientists

• It may seem counterintuitive, but a license to an invention does not necessarily mean that a researcher is entitled to use that invention. The invention may require regulatory approval before it can be used, or it may not be useful until it is used alongside other inventions which themselves may need to be licensed and approved.
• If you are responsible for delivering the materials specified in a contract, be certain you understand your role, your duties, what you need to deliver, and when you need to deliver it. The success of your institution, and your research program, might depend on what you do (or fail to do).

For Technology Transfer Officers

• Do not use legal jargon in contract agreements. Instead, use short, clear sentences that are free of vague adjectives and are written in the active voice. The vocabulary should be accessible both to business people (who have extensive technical knowledge but limited legal knowledge) and judges (who have limited technical knowledge but extensive legal knowledge).
• Contractual documents should be tailored to fit local customs and business practices. Be sensitive to cultural and linguistic differences between parties to the contract. Misunderstandings should be sorted out before the contract is set in stone.
• A tricky question is how broadly the term confidential information should be defined. Too narrow of a definition may leave out important information. Too broad of a definition may prevent the parties from getting on with their work. Therefore, all parties to the research contract should review the definition carefully and ensure that they concur on what the definition means and entails.
• Contracts are the very foundation of your operation, so make sure that the staff of your office are thoroughly familiar with all types of contracts.