4.2 - Developing IP through Collaboration

Within the HERC IP Framework, there are three research agreements: one in the Accelerated track, and two in the Standard track:

Accelerated Track

• Accelerated Research Agreement – when a university is engaged with a collaborator (either a government organisation or industry) on a fully funded or partly funded basis to undertake a low-risk research project. Further guidance on when it is appropriate to use this agreement is given below.

Standard Track

• Standard Research Agreement – as above but additionally where the project is higher risk and not suitable for the Accelerated Research Agreement. Further guidance on how to decide whether to use an Accelerated of Standard track agreement is given below
• Multi-party Collaboration Agreement – for the management of multi-party collaborations (3 or more parties)

Changes to research agreements after they are signed are not uncommon (for example, if additional funding is received, or the project is extended). In these circumstances, a Variation Agreement should be used to record the agreed changes. Templates are provided, one for amending the two-party research agreements (either the Accelerated Research Agreement or the Standard Research Agreement) and one for amending the Multi-party Collaboration Agreement.

Is my project a research collaboration or is it the provision of a technical (consulting) service?

A first step is to establish if your project is a research collaboration or whether you want to procure technical (consulting) services from a university partner. This is important as the different arrangements need very different approaches to how a project is structured and managed, IP ownership and rights to use the outcomes of the work, and risks/liabilities.

A collaborative research project involves:

• both parties being involved in planning the project and in deciding on the research plan
• the university, or both parties, contributing their intellectual property (Pre-existing IP) and/or tangible materials to deliver the project
• investigative research where the end result is not known at the outset, but could lead to a new process or product or just scientific knowledge. This research may make use of only university personnel and facilities, or could also involve research at the industry partner

In contrast, the provision of technical (consulting) services involves an industry partner accessing expertise at the university, for example to help a company test their product, with the work specified by the company. The output for the work is often a written report. For further guidance, please see the Providing Services and Equipment guidance pages.

Which research agreement to use?

If your research project involves three or more parties, then the Multi-party Collaboration Agreement must be used.

For two party research collaborations, both the university and the industry partner should consider the following factors to decide whether to use the Accelerated or Standard Research Agreement. Independent advice or further information from the other party may be needed to make an informed judgement.

The Accelerated template is intended for lower risk transactions, and is designed to be used with minimal customisation or negotiation. The Standard template is used for more complex, higher risk projects and provides greater flexibility to cater for different scenarios.

If you cannot agree on which agreement is appropriate, the Standard Research Agreement is recommended.

• Is the value of the activity or project less than $250,000? For most lower value projects, the Accelerated Research Agreement will be appropriate, and will streamline the process of negotiating and finalising an agreement, which can otherwise be costly and time consuming for both parties. However, if the risks in the project are high and/or specific risks are identified, then the Standard Research Agreement will be more suitable, for example, if:
  • the parties agree to include an indemnity
  • one party is a foreign entity
  • the project is complex (for example, in terms of the technical work being performed)
  • the proposed intellectual property arrangements are complex (for example, multiple types of intellectual property being licensed with different licensing approaches)
  • there are existing arrangements in place between the parties (for example, joint venture arrangements)
• What has your internal risk assessment returned? Before starting a project, each party should carry out their own risk assessment. Factors to consider include:
  • what is the potential legal exposure the project may create?
  • could this project lead to a breach of intellectual property rights, including patent or copyrights?
  • will this project involve significant physical or environmental risks?

If the internal assessment indicates a low to medium risk for the project, then the Accelerated Research Agreement would be appropriate. This risk assessment may also be used to determine an appropriate liability cap for the agreement, based on the assessed level of risk. For the Accelerated Research Agreement, the liability cap would generally not exceed $250,000. If the proposed liability cap is higher than $250,000, the Standard Research Agreement may be more appropriate

• Are indemnity or warranty provisions needed? If one or both parties require indemnity and/or warranty provisions, then it is recommended that a Standard Research Agreement is used, as this includes more comprehensive warranties and an indemnity clause that can be customised as required. The Accelerated Research Agreement only requires each party to warrant that, to the best of that party's knowledge and belief, it has the rights to vest ownership of, and grant licences to, the relevant IPR under the agreement 
• Are additional arbitration or mediation systems needed? The Accelerated Research Agreement has a simplified dispute resolution process and does not include an internal escalation mechanism or arbitration arrangements to help to resolve disputes. If these are needed, then the Standard Agreement is recommended

When to use a Variation Agreement?

• After signing, changes to the agreement may be needed during a project (for example because research results lead to a change in the future research plans, or if the parties need to extend the project). Any changes should be agreed and recorded in a Variation Agreement that is signed by all parties. This ensures that everyone knows what has changed and has given their written consent. The exception is changes to the project plan in the Multi-party Collaboration Agreement, which can be agreed by the Governance Committee
• A Variation Agreement should not be used to change the form of the agreement – for example, to include additional rights such as a licence to IP rights or new technical (consulting) services or access to equipment. A separate, additional agreement using the appropriate template will be needed

Key Considerations

The following table is provided as a guide to help the parties appreciate the key considerations that each party will have when negotiating any collaboration agreement.

Discussing and understanding each party’s needs and concerns up front will help you reach an agreement more quickly and will help you apply the applicable template to reach a fair agreement.

For organisations, particularly SMEs, that do not have any experience of collaborating with universities, this table will help you understand what key provisions of a collaborative research agreement and what you need to have considered before you start discussions with the other party.

Further information on how to complete each of the different research templates is provided with the respective guides and template agreements. Additional plain English guidance on the meaning of key clauses is provided in a separate annotated version of the template.

Resources

• Accelerated Research Agreement template and accompanying plain English guide - For low value and low risk projects between two parties
• Standard Research Agreement template and accompanying plain English guide - For two-party projects that are not suitable for the Accelerated Research Agreement
• Variation Agreement (two parties) and accompanying plain English guide – For recording changes to the Accelerated or Standard Research Agreements
• Multi-party Collaboration Agreement and accompanying plain English guide – For the management of multi-party collaborations
• Variation Agreement (multi-party) and accompanying plain English guide – For recording changes to the Multi-party Collaboration Agreement

Sources of further information

IP Australia provides further guidance that you may find helpful on how to make collaborations a success and a collaboration checklist to assist in systematically considering common collaboration issues:

• How IP can help make your collaboration a success
• Collaboration Checklist

This table sets out the key points each party needs to consider when entering a research collaboration. Understanding your own key considerations, as well as those of the other party, will help you to negotiate a fair and reasonable agreement that works for both parties. Further guidance on how each of these points is approached in the individual research agreement templates is given with the respective template

Key points	Research Agreement Provision	University	Collaborator
Details of the Project	A clear plan for the research project describing the aims, what work will be undertaken, by whom, and the expected outcomes (including any reports) Where milestones are included, a clear definition of what these are and what is needed to meet each milestone and the associated timelines Who the key personnel are that will manage and deliver the project What confidential information will be exchanged and how long this needs to be kept confidential for The frequency for reports and meetings	Be clear and realistic in what can be achieved, when and what the expected outcomes are Ensure that any risks and uncertainties are clearly articulated Ensure any milestones are realistic and achievable, particularly if funding is contingent on achieving these milestones Be clear on what information is considered confidential to each party Ensure the collaborator is kept appropriately informed of progress and involved in all major decisions relating to the project, without this becoming over burdensome	Ensure you know what will be delivered through the project and what the risks and uncertainties are Ensure that the funding is linked to suitable progress with the research, whilst recognising that research can be inherently risky and results are not always guaranteed Be clear on what information is considered confidential to each party Ensure you are kept appropriately informed of progress and involved in all major decisions relating to the project, whilst not becoming unnecessarily over burdensome to the academic party
Project Funding	A detailed breakdown of the funding that will be provided by the collaborator and when payments will be made, and if these payments are contingent on meeting milestones Details of any in-kind contributions to the project	Ensure all costs and contingencies in the research are covered through the funding Be clear on your liabilities if milestones have been agreed and a milestone is not delivered Ensure all in-kind contributions are documented and you can deliver these	Be clear on your financial liability and when payments will be due Ensure all in-kind contributions are documented and you can deliver these Understand what your financial responsibilities may be if the project terminates earlier than anticipated
Use of Third Party Intellectual Property Rights (IPR)	Details of any IPR owned by third parties that will be used within the Project The restrictions that apply to the third party IPR	Ensure the Collaborator is aware of any restrictions that might apply to the outputs from the research if you are using third party IPR, and that you are aware of any restrictions from third party IPR made available by the Collaborator	Ensure you know what restrictions might impact on your freedom to use the outcomes of the project before it starts This is important as you may be restricted from using the results without securing additional licences to the third party IPR
Use of Pre-existing IPR	Details of any IPR owned by either party before the project starts (called Pre-existing IPR) that will be used in the project Whether there are any restrictions on its use (particularly if access to this IPR will be needed to make use of the outcomes of the project)	Ensure the collaborator is aware of your Pre-existing IPR that you will be using in the Project Ensure you do not introduce any Pre-existing IPR into the project if you are unwilling or unable to grant the Collaborator a licence for them to use the results internally. As a default, the templates grant the collaborator a free licence to use the results for defined internal purposes, and unless otherwise agreed this will include rights to Pre-existing IPR If the collaborator is providing access to its Pre-existing IPR, be clear that you will only be able to use this for the specified project, and not for any future independent research	Ensure you know what restrictions might impact on its freedom to use the outcomes of the project and what additional licences might be needed either for internal use or for commercialisation
Ownership of IPR in the Project IP	Who will own the results generated by the Project (defined as Project IP) How these results will be protected and who is responsible for this	You should expect to retain ownership of the Project IP in collaborations where the university is providing the majority of the research and intellectual contribution to the project If the Project IP incorporates significant Pre-existing IPR owned by the industry partner and/or the industry partner has directed the research plan and the industry partner is fully funding the Project at a commercial rate, it would be reasonable for the parties to agree that the industry partner owns and protects the Project IP In multi-party collaborations, it is often preferable that one party owns the IPR in the results as this avoids complications from joint ownership Agree and document how any Project IP will be protected if formal registration (e.g., via a patent application) is expected. For example, who is responsible for filing the application(s) and who will pay the costs. Generally, the owner would expect to do this. It may be appropriate for the collaborator to contribute to the costs, especially if they have a right to negotiate commercialisation rights	Be confident the Project IP will be properly managed and protected when these are owned by the university Ensure you secure all the rights you need to use the outputs of the project. This could be through the right to negotiate a commercialisation licence (if this is important to you) Ensure you secure all the rights you need to use the Project IP, either through the default right to negotiate a commercialisation licence, or through ownership of the Project IP if the circumstances indicate this is reasonable and/or the parties agree that you are better placed to manage this process Ownership of the Project IP is less important than making sure you have all the access rights you will need to use the results internally and for your business activities. This can be achieved through a licence
Use of the Project IP (for internal use)	If the university is the owner of the Project IP, in recognition of their contribution to the project, the collaborator will expect to be granted a non-exclusive, free licence to use the Project IP internally for activities that fall within an agreed field It is important to define this field before starting the project. This is referred to as “the Purpose” in the templates If the industry partner is the owner of the Project IP, the university should ensure it has the necessary rights to use this for its future research and teaching purposes	Be clear on what a suitable field of use is for the collaborator’s internal use of the Project IP. This is usually confined to their active or expected research areas Ensure the university retains the necessary rights to use the Project IP that the industry partner owns	Ensure you have the rights you need to fully use the Project IP for your own internal uses
Use of the Project IP (for commercialisation – selling products or services)	Details of whether the collaborator has additional rights to commercialise the Project IP or not Generally, the collaborator would expect to have a first right to negotiate a licence to commercialise the Project IP owned by the university in addition to its licence to use the Project IP internally. This is particularly important for companies where the Project IP will form part of a commercial service or product	Be clear whether the collaborator will have a right to negotiate further rights to commercialise the Project IP and how this will be negotiated If the collaborator owns the Project IP, ensure it takes adequate steps to commercialise the Project IP. This might include providing a business plan that lays out the steps the collaborator will take to commercialise the Project IP with timelines and the resources it will commit to support this	Ensure you have a right to negotiate further commercialisation rights to the Project IP if these are likely to be needed
Liability	The financial limit of liability that each party will have arising from the project, except for those situations that are agreed to be excluded or that are specifically uncapped or cannot be limited by law It is important that the parties understand the potential liabilities that may arise from their collaboration and ensure this is limited (where they agree it is reasonable to have a cap) to acceptable levels	Generally, depending on the outcome of the university's risk assessment, this should be capped at the level of funding or a multiple of the funding provided by the collaborator or might be agreed to align with the organisation’s insurance limits The limit will usually be the same for both parties in a research collaboration unless it is agreed that one party is taking on a higher risk than the other	Generally, depending on the outcome of the collaborator's risk assessment, this should be capped at the level of funding or a multiple of the funding provided by the collaborator or might be agreed to align with the organisation’s insurance limits The limit will usually be the same for both parties unless it is agreed that one party is taking on a higher risk than the other
Indemnity	An indemnity is a contractual obligation of one party to compensate the other party for any loss incurred due to the acts of the first party. Indemnities form an important part of agreements where commercial rights are being granted In collaborative research agreements, indemnities are less often appropriate since the agreement does not generally include commercialisation rights	Very carefully consider whether giving an indemnity to cover the industry partner’s use of the results is reasonable and appropriate, particularly with respect to an indemnity for infringement of IPR Since most research project agreements do not include a right for the industry partner to commercialise the results, an indemnity from the industry partner is generally not appropriate. This would be included in a subsequent licence agreement	For many research projects the industry partner should not insist on an indemnity from the university to cover infringement of IPR from your use of the results for the agreed purpose. This is because the outcomes of a research project are often unknown at the start and therefore it is not reasonable, or sometimes even possible, to know whether the results might infringe third party rights or not
Dispute Resolution	It is important to have mechanisms agreed if the parties are unable to resolve any disputes amicably The template agreements include standard approaches to dispute resolution	Where this is a choice in the template, select the approach that works best for both parties. Most organisations will have a preferred approach In the absence of agreement, escalation to court proceedings should be the default	Where this is a choice in the template, select the approach that works best for both parties. Most organisations will have a preferred approach In the absence of agreement, escalation to court proceedings should be the default
Insurance	For larger projects, the templates allow the parties to determine the levels of insurance that are appropriate for the circumstances	Ensure your insurance levels meet the agreed levels A lower level of insurance, particularly for professional indemnity, may be appropriate if the company is a SME	Ensure your insurance levels meet the proposed levels in the template You may need to ask for the limits to be lowered