Definitions

Academic Party

For the purposes of illustration we have assumed that there are two universities involved in the Project, but the Agreement may be amended to allow for more universities or public research organisations.

Academic Publication

As a charity, the University's objectives will include the dissemination of learning or knowledge for public benefit. In addition, it's important to the career prospects of many academic researchers that they publish articles and participate at conferences. Therefore, the University and its academics will nearly always wish to publish information about the Project. All of the five Research Collaboration Agreements apart from Agreement 5 (Contract Research) allow for this.

This Agreement

It is important that changes to the Agreement are properly recorded in writing and signed on behalf of each party in order to avoid any misunderstandings about each party's commitments. A copy of the document recording the change should be kept with the original signed copy of the Agreement.

Background

It is likely that each party will make available for use in the Project, information, software or materials that already exist or that are developed independently of the Project. Clause 5.2 provides for each of the parties allowing its Background to be used for the purposes of the Project but not for any other purpose, although negotiations may result in Background being used, where necessary, to exploit the Results. The second alternative set of wording in clause 5.2 of Agreements A, B and C (but not Agreement D) provides a licence for the use of specific background to the extent necessary for the commercialisation of the Results. That licence may be royalty free or may be in return for payment as set out in the Payment Plan.

Specified and Specific Background

Although it may not be necessary or possible to identify all of the Background at the start of the Project, if the success of the Project depends on one or more of the parties making certain Background available, this needs to be identified and described in Schedule 2.

Note that unless identified Background is included in Schedule 2, as one of the items that a party is obliged to provide under clause 2.2 that party is not obliged to provide any Background. That will not prevent it providing Background if it wishes to do so.

Where a party is prepared to license the use of its Background where that is necessary to allow the commercialisation of the Results, that Background should be identified. (See the definition of Specified Background in Consortium Agreements A, B and C.)

Sensitive Background

If any of the Background is sensitive or for some other reason should not be disclosed beyond the researchers working on the Project, this should be identified either before, or at the time, the Background is made available. While academic researchers may want to publish Background as part of their academic publication of the Results, it may be important that the Background of another party remains confidential. It is important that this issue is resolved at the outset. Please refer to the notes on Confidential Information and Academic Publication.

Business Day

If either party is not in England, consider whether to change England in this definition. For instance, public holidays in Scotland are different.

Commercial Party

For the purposes of illustration we have assumed that there are two commercial parties involved in the Project, but the Agreement may be amended to allow for more commercial parties.

Confidential Information

Some parties may take the view that all of their Background is commercially sensitive and must be kept confidential. If that is the case, the words in square brackets should be deleted. Alternatively, if the intention is that only Background that is identified as being confidential is to be treated as such, the words in square brackets should be included. Whether or not those words are included, any information or material that is to be kept confidential should be marked "Confidential". An example of a Confidentiality Notice may be found in the Useful resources section.

Exclusive Period

You will need this definition if the party or parties responsible for exploiting the Results have an exclusive licence that is limited in time.

Exploitation Strategy (Consortium Agreements B and C only)

Consortium Agreements B and C have been drafted on the basis that the parties will have agreed an exploitation strategy. That strategy should be set out in Schedule 5. Key to deciding that strategy will be a consideration of which party or parties will exploit which of the Results of the Project in which territories and in which fields. In order to encourage innovation the party who is best placed to exploit certain of the Results should do so, provided the other parties receive an adequate return on their investment (financial and other) in the Project.

For the purposes of illustration, Consortium Agreement C has been drafted on the basis that one of the Universities (AAA) is best placed to exploit the ABC Results and one of the Commercial Parties (XXX) is best placed to exploit the XYZ Results.

There is no Exploitation Strategy in Consortium Agreement A because the scenario envisaged there is that all of the parties will have the right to exploit all of the Results if they wish to do so, and there are no Funding Conditions that require either an exploitation strategy or a commitment to exploit.

Freedom of Information

Simply stating in the Agreement that Background is to be kept confidential and/or marking it as confidential will not guarantee that will be kept confidential. As from 1 January 2005, members of the public have had the "right to know" under the Freedom of Information Act 2000 (the FOIA). This means that Universities will be obliged to disclose information on request unless:

• the information was provided by another person to the University in confidence and its disclosure would mean that the University would be in breach of confidence and could be sued by the person whose information id disclosed (that is that the disclosure would be an actionable breach of confidence on the part of the University); or
• the information is a trade secret; or
• the disclosure would harm the commercial interests of the University or another person.

Even if information is a trade secret or commercially sensitive when it was disclosed to the University, this may have changed in the interim and, whenever a request is made under the FOIA, Universities have to decide whether the information falls within one of the exemptions under the Act at the time the request is made. In practice that will often mean that the Universities will need to consult the person who made the information available before deciding whether or not they have to comply with the request.

More information on the FOIA can be found on the Information Commissioner's website.

External Funding

All of the Consortium Agreements are suitable for use where there is no External Funding if references to that funding, the Funder, the Funding Terms and the Monitoring Officer are stripped out. For that reason those references appear in square brackets throughout the Consortium Agreements.

State Aids

If any funding is provided from the public purse, e.g. any government department, the Ministry of Defence, a Research Council, a Higher Education Funding Council, JISC, a Regional Development Agency, or the European Commission, there will be conditions attached to that funding and there may be State aid issues that affect the ownership and exploitation of IP.

Any aid granted by a Member State of the European Union or through state resources in any form, and which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, in so far as it affects trade between member states of the European Union, is incompatible with the Common Market. As a result of this, public organisations that fund R&D may impose terms designed to ensure that there is no distortion of competition. It is important to look at the State aid implications, especially if services are being provided or IP is being licensed at less than market price; the recipient of unlawful State Aid may have to repay it.

Funding Conditions

Equally, where funding is provided by any third party, such as a charity, there are likely to be conditions attached to that funding.

It is important that the terms of the Agreement do not conflict with any terms imposed by the provider of the funding. The party receiving the funding (often, but not always, a University) should check that the terms of the funding and the terms of the Agreement are consistent. The Agreements may not be suitable for your purposes if the funding agreement or conditions impose conflicting terms.

Consortium Agreements B and C have been prepared with the requirements of Technology Strategy Board's Collaborative R&D Programme (formerly the DTI's Technology Programme) in mind. That Programme requires the parties to have an agreed exploitation strategy and to undertake to exploit the Results of the Project. If you want to use either of those Agreements in different circumstances, you should amend the words in square brackets in the "Background" and in the definition of External Funding and the Funding Terms.

Consortium Agreements A and D are appropriate where the parties have no exploitation strategy (although they should try to agree one) and may be useful, for instance, where the Project is funded by a Regional Development Agency (but you should check the terms of the External Funding before using it).

Some (but not all) Funding Bodies will insist that the party receiving the funding ensures that its collaborators comply with those terms.

Good Data Management Practices

It is important that people can rely on the integrity of the research data and that adequate records are kept, not only for the purposes of filing patents but also to be able to demonstrate who created the Results for the purposes of establishing the ownership of other Intellectual Property.

Group Company

One or more of the Commercial Parties may be part of a group of companies and its R&D may be carried out across various companies in the group. Therefore group companies are granted rights in clause 5.2 in relation to the use of Background for the purposes of the Project.

Intellectual Property

The ownership and exploitation of Intellectual Property is one of the most difficult issues and the parties should try to resolve it early when negotiating the terms of the Agreements. An explanation of the different types of IP is available.

Key Personnel

The definition of Key Personnel in the Consortium Agreements should give the names of any people whose involvement is important to the success of the Project. Where most of the work is being done by one party, for example, a University, the Key Personnel may all be University researchers, but where a Commercial Party is making a substantial "human" contribution to the research activities, some Key Personnel may be provided by that Commercial Party. The significance of the Key Personnel is that if one of them leaves and is not replaced, the Agreement may be terminated under clause 10.2.

The Lead Exploitation Party

This the party chosen by the members of Consortium Agreement B to be best placed to exploit the Results of the Project. It may or may not be the same as the Lead Party that is responsible for the research project.

The Lead Party

The Lead Party acts as the "banker" for the Project, submitting claims to the Funding Body. The Lead Party is also the contact with the Funding Body. The Lead Party and the Lead Exploitation Party in Consortium Agreement B will often be different organisations because their roles are different. The Lead Party appoints the Project Manager.

The Payment Plan

In return for having the right to exploit the Results (whether by virtue of its ownership of the IP or under a licence) the Lead Exploitation Party (Consortium Agreement B) and AAA University and XXX (Consortium Agreement C) will make payments to the other parties in accordance with the Payment Plan. The Agreements leave the amounts and nature of those payments open for the parties to negotiate.

It is envisaged that when negotiating the Payment Plan, the parties will take into account the contribution that each party has made to the Project, on the basis that the greater a party's contribution (financially or otherwise), the greater should be its return from the exploitation of the Results.

Consortium Agreement A provides for each party having a royalty free, non-exclusive licence to exploit the Results, but if the parties agree that any party should pay any of the others in return for having the right to exploit, a Payment Plan and clause 4.11 should be included in Consortium Agreement A and the words "fully paid-up, royalty free" should be deleted from clause 5.9 of Consortium Agreement A.

The Project

One of the most important parts of the Agreement is the description of the Project in Schedule 2. That Schedule and clause 2.2 determine what is to be done and the resources that are to be provided; the nature of the IP created will flow from the description of the Project and its outputs or results. It is the cornerstone of the Agreement and it is important that the researchers give serious thought to the contents of Schedule 2 so that it is complete and accurate.

The success of the Project may depend on the participants having all necessary regulatory and ethical licences and consents; and the successful exploitation of the Results may depend on proper records being kept. Therefore each party is obliged to obtain any such licences that may be necessary to allow it to make its Contribution to the Project and each party is required to keep proper records and comply with good data management practices. The need for licences and consents should be considered when the Project Plan is prepared for Schedule 2 and whenever that plan is updated.

The Project Manager

The Lead Party will appoint the Project Manager. Some Funders may insist on having the right to approve that appointment.

The Results

Consortium Agreement C envisages that one party will be interested in exploiting some of the Results and another party will be interested in exploiting other Results. For ease of reference these have been referred to, respectively, as the ABC and XYZ Results, but you should given them more relevant names, and by way of illustration it has been assumed that one university and one commercial party will be responsible for exploitation.

Although the three Consortium Agreements do not, in the given the scenarios, contain specific restrictions to certain fields or territories, when deciding which Results are to be exploited by whom you might consider allocating exploitation rights among the members of the Consortium by reference to fields and/or territories. In effect that will be the result of defining the ABC and the XYZ Results for the purposes of model Consortium Agreement C.

The Exploitation Strategy will be key to how the rights to exploit the Results are divided among the parties, and those best placed to exploit should have the rights to do so.

In defining the fields and territories care should be taken to make sure that there is no unintentional overlap where different parties are to exploit in different fields/territories.

R&D Tax Credits

The definition of the Project will also be important in determining what work constitutes research and development for the purposes of the Sponsor claiming R&D tax credits. Sponsors should consult their accountants about the possibility of claiming R&D tax credits.

Specified Background

You should delete this definition if the parties are willing to license the other parties to exploit all their Background under clause 5.2 or if the parties are not willing to license the other parties to exploit any of their Background.

The Steering Committee

Each party should be represented on this Committee and some Funders may wish to be represented on it. Its terms of reference will depend on the nature and complexity of the Project.

Conflicts

Ideally there should be no conflicts or inconsistencies between the Consortium Agreement and the Funding Conditions but, just in case something has been overlooked, the Funding Conditions are to take precedence so that members of the Consortium are not in breach of the terms on which the External Funding is provided.