Contracts and Agreements to Support Partnerships
Topic Guide for Technology Transfer Managers

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: 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: 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: 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: 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.