2. General Principles

2.1 - Background

The HERC IP Framework helps to reduce the complexity of research organisations and industry partners working together by providing:

1. Information and guidance to help organisations (the parties) better understand each other’s positions, and reach agreement more quickly and at lower cost
2. Fixed agreements for lower-risk transactions which can help speed up transactions (Accelerated Track)
3. Templates for more complex, higher-risk transactions, which can be the starting point for the parties to reach a final agreement (Standard Track)
4. Plain English guidance documents for each of the Accelerated and Standard track template agreements that explain the key legal terms

The Framework’s template agreements incorporate the following approaches:

1. The agreements are drafted to be applicable for all universities and public sector research organisations as well as Commonwealth entities and for companies
2. The agreements balance the needs of both parties (research organisation and industry partner) with respect to the protection of confidential information and IP that each party already owns or controls (Pre-existing IP)
3. IP which is generated during the project (Project IP) is owned by the party who creates it and who is best placed to manage the IP. In most cases this will be the research organisation performing the work. The exception is for the provision of technical (consulting) services where the party requesting the services would be expected to own the outputs
4. The parties are able to select templates that will give them the rights that they will need to be able to use Project IP for their future research activities. This also includes flexible rights to Pre-existing IP that may be required in order to use the Project IP. The templates help to guide the parties to a position that is balanced, so that companies and investors have a clear route to market, and research organisations can continue their academic research. The intent is to enable a fair reward to be agreed for each party’s contributions
5. The agreements provide a compromise and balanced position for both parties in relation to warranties and liabilities, which are important and which can be significant points of negotiation.  Parties should consider the risks of the transaction to ensure they are appropriate to the template position.
6. Templates are provided in two tracks, suitable for different types of projects and scenarios:
   1. Accelerated templates for lower risk transactions, which can be used with minimal negotiation
   2. Standard templates for more complex (including multi-party), higher risk projects that are not suitable for the Accelerated templates. These provide greater flexibility to cater for different scenarios

The Framework recognises that there will be projects where the use of the template agreements is not appropriate. For these situations, it is expected that parties will continue to seek independent legal advice and adopt their own agreements.

2.2 - Approaches to Commercialisation

Collaborations to commercialise the outputs for academic or government research can take many different forms and may involve one or more businesses. Examples include:

• carrying out a research project together
• testing or validating a company’s new technology, products or service using expertise or facilities at the university
• licensing or assigning IP developed by a research partner for a company to develop into a new product or service
• creating a new spin-out company to develop new products or services

Most commercialisation activities will need a dedicated agreement to ensure a fair, well-managed collaboration and a solid plan for moving forward.

The best commercialisation collaborations benefit all the participants and help the parties achieve their respective goals more effectively and quickly.

The HERC IP Framework builds on an understanding of the different drivers that each party has, whilst recognising that many of the key requirements are the same for both parties.

It is important that the parties discuss their aims for the project as early as possible. Agreements can take three to six months or more to negotiate and sign, particularly for research and licence agreements, so the earlier you engage in discussions with the other party or parties, the better.

As part of the process of planning a collaboration, it is also important that each party understands what IP they may use in the collaboration including both unregistered IP rights (e.g., confidential know-how, software) and registered IP rights (e.g., patented technologies). If you are unclear about what IP you may have and how this may be relevant to the collaboration, IP Australia provides guidance about the different kinds of IP, how they apply to you and how to make them work for your business.

The table below is a guide to help the parties appreciate the key requirements and areas of potential concern that the other party may have. Discussing and understanding these will help you reach an agreement more quickly.

For commercial organisations, particularly SMEs, that do not have any experience of working with universities, this table will help you understand the key requirements that you need to have considered prior to entering discussions with the other party.

Partner	Key Requirements	Key Areas of Potential Concern
University	Clear project plan and definition of key deliverables and milestones Freedom to carry on academic research using the outputs from the research Rights to publish except in limited circumstances Clarity over what IP is being contributed to the project and how new IP will be owned and managed Clarity over commercialisation plans and the academic party’s rights to share in any value created	Restrictions over future research activities Unrealistic expectations with deliverables when undertaking research Undefined and not controllable potential liabilities Contributions are not fairly rewarded The partner not taking forward the research to market
Industry Partner	Clear project plan and definition of key deliverables and milestones Rights to ensure its confidential information and/or materials is respected and protected Clarity over what IP is being contributed to the project and how new IP will be owned and managed  Clarity over IP ownership and management Clarity over commercialisation plans and the industry partner’s right to use the outputs	Ability to monitor progress and ensure deliverables are being met Having freedom to use the results without restrictions from unknown third-party rights Losing control over proprietary material shared in the collaboration Having a fair return for the investment being made in the research

Whilst planning for success, it is important to:

• Take the time to discuss the other party’s drivers, concerns and goals
• Be well prepared before you enter into detailed collaboration negotiations
• Think about any risks of sharing your ideas, information and insights with others
• Ensure that everyone understands their responsibilities and what they can expect from the collaboration
• Understand that research is inherently risky and outcomes cannot be guaranteed
• Consider all the risks that entering into a commercialisation arrangement may entail. The HERC IP Framework has been created to reflect legal risks and to highlight specific accounting risks. Many arrangements that may be entered into under the HERC IP Framework will also carry specific commercial risks that both parties should consider
• Consider what will happen if the relationship does not reach its goals or if there is a change to one of the collaborators
• Discuss how to mitigate against risks if things do not go as expected
• Record all of the key decisions in an appropriate agreement

2.3 - Using Indigenous Knowledge

Indigenous Knowledge is an important asset belonging to Aboriginal and Torres Strait Islander people, their communities and their organisations or businesses. Indigenous Knowledge can reflect and identify a community’s history, cultural and social identity and its values. Indigenous Knowledge covers a range of knowledge and culture held and developed by Aboriginal and Torres Strait Islander peoples, including Traditional Knowledge (know-how, practices, techniques and skills), and Traditional Cultural Expressions (visual imagery, performance, design, words and names). If you are working with research based on Australian plants or animals or with other information collected or obtained from Aboriginal or Torres Strait Islander people, you may be working with Indigenous Knowledge.

The misuse of Indigenous Knowledge can be disrespectful and offensive to Indigenous people. It can undermine cultural practices and may also affect the economic opportunities available to Indigenous communities. Some Indigenous Knowledge is regarded as secret and sacred and should not be used commercially at all. Some other knowledge could be used commercially, but consent from the Traditional Owners must be sought, and protocols attaching to its use should be observed. Use of Indigenous Knowledge without proper attribution is also problematic.

Many issues concerning the use of Indigenous Knowledge can be addressed by obtaining consent from the Traditional Owners. ‘Free, prior and informed consent’, or FPIC, is a principle established under international human rights law. It refers to conditions where people can negotiate the terms of an action or policy which will directly affect their interests, and they have the option to give or withhold their consent. Obtaining consent before proceeding to use Indigenous Knowledge is good practice to conduct research in an ethical way and avoid causing cultural harm or offence.

When engaging in research commercialisation which could involve the use of Indigenous Knowledge or material, it is important to engage in conversation with the Traditional Owners at the beginning to receive consent as well as agreeing to how the source of Indigenous Knowledge can be attributed, and any benefits shared back (which could be financial or other benefits). Contracts can include specially drafted terms or separate agreements can be made to set out these issues. Where material is being collected from land, relevant State/territory laws should be consulted as they may also contain procedures that need to be followed.

Relevant Sources

To find out further information about how to engage the potential commercialisation of Indigenous Knowledge or material, please visit existing government material.

• CSIRO’s Our Knowledge Our Way.

The Australian Institute of Aboriginal and Torres Strait Islander Studies also provides information about how to engage with Traditional Owners and obtain Free, Prior and Informed Consent through the snapshot.

• Engaging with Traditional Owners

General information for people who are seeking to work with Indigenous Knowledge as part of a business or within intellectual property rights can be found at IP Australia.

• Indigenous Knowledge IP Hub