Contracts and Their Cousins

Presented by Terri J. Minatra, Esquire

Johnson City, TN (423) 791-1528

Learning Objectives

• Identify essential clauses of a contract, analyze what they are and learn what they mean.

• Understand why contracts are essential in research administration.

• Review types of contracts and agreements in research administration and identify any specific considerations.

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Drilling Down

• What is a contract generally?

• Why do contracts matter?

• What are specific types of contracts and agreements used in research administration?

• What are specific considerations for particular types of contracts and agreements used in research administration?

• What types of law impact agreements used in research administration?

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Contract vs. Agreement

• A contract requires agreement but not every agreement is a contract.

• An agreement is a mutual understanding between 2 or more persons regarding their rights and duties as to past or future performance.

• A contract is an agreement between 2 or more parties creating obligations that are enforceable or otherwise recognizable at law.

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What Is A Contract?

• A written agreement (mostly) that specifies:

–Who does what to whom

–Who does what for whom

– In what time frame

– For what reasons

– For what consideration (often $$)

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What’s required

Elements of a Contract

• Offer

• Acceptance

• Intent

• Consideration

Enforceability

• Elements all – in?

• Competent Parties?

• Written agreement?

• Lawful purpose?

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Freedom of Contract

• Allows the parties to make whatever agreements they choose to make.

• Issues that may affect this are:– Access to information

– Ability to bargain

– Ability to understand the bargain

– Public policy limitations

• An essential aspect of economic freedom is the freedom to make a bad deal.

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Important Terms

• Offer

• Counter-offer

• Acceptance

• Consideration

• Battle of the forms

• Warranty

• Modification

• Oral contracts vs. Statute of frauds

• Conduct

• Remedies

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Why Contracts and Their

Cousins Matter

• Defines expectations and obligations.

• Specifies how negative situations will be resolved.

• Ensures a certain level of service.

• Safeguards resources.

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Why Contracts and Their

Cousins Matter

• In research administration, contracts also indicate:

– Who owns the results.

– Who can use the results in what situations.

– What is confidential.

– What records will be kept, by whom, and who may access.

– Compliance and regulatory requirements.

– AND MORE !

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Why Contracts and Their

Cousins Matter

• Universities, hospitals and research centers conduct a lot of research that generates ground breaking inventions that save lives, and improve the way we live, work and play.

• Research has to be developed into a product that can be marketed and distributed.

• Contracts are the secret sauce in getting this done.

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Why Contracts and Their

Cousins Matter

• Technology transfers get research from the lab into corporate product development. Steps include:– Identifying new technologies.–Protecting them through patents &

copyrights.– Forming development and

commercialization strategies such as marketing and licensing to existing private sector companies or creating a new startup.

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Why Contracts and Their

Cousins Matter

• $518 Billion impact on USGDP from university/nfp licensing from 1996-2013.

• 3.8 million jobs created same time period.

• 914 start-ups in FY 2014; 5,000 since 1980.

• 965 new products based on research discoveries introduced to market in FY 2014.

• >80,000 patents issued to research institutions in last 20 years.

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Contracts and Their Cousins

In Research Administration

• Grants

• Cooperative Agreements

• Services Contracts

• Subawards/subcontracts

• Memorandums of Understanding

• Non-Disclosure Agreements• Continued

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Contracts and Their Cousins in

Research Administration

• Consulting Agreements

• Materials Transfer Agreements

• Sponsored Research Agreements

• Clinical Trial Agreements

• License Agreements

• Development and Collaboration Agreements AND MORE!

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Federal Agreements & Awards

Funding Agreements

• Grants

• Cooperative Agreements

• Contracts

Non-Funding Agreements

• Cooperative Research and Development Agreements (CRADA)

• Non-Disclosure Agreements (NDA’s, Confidentiality Agreements)

• Data Use Agreements

• Materials Transfer Agreements

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Federal Grants & Cooperative

Agreements

• Federal Grant: Used when financial assistance is issued from a federal agency to a recipient to carry out a public purpose where substantial involvement of the agency is not expected.

• Cooperative Agreement: Used when the agency intends to be substantially involved in the project.

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Federal Contracts

• Federal Contract: Used when a federal agency procures goods or services for the agency's own direct benefit.– Subject to the Federal Acquisition

Regulations “FAR” issues pursuant to the Office of Federal Procurement Policy Act of 1974 (Title 48, Chapter 1 of US Code of Federal Regulations)

– FAR 52.301 Solicitation provisions and contract clauses (Matrix)

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Cooperative Research and

Development Agreement

• The purpose of a CRADA is to make government facilities, intellectual property, and expertise available for collaborative interactions to further the development of scientific and technological knowledge into useful, marketable products.

• Federal Technology Transfer Act of 1986 (P.L. 99-502)

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Non-Federal Agreements

• Funding Agreements

– Grant Agreements

– Sponsored Research Agreements

– Clinical Trial Agreements

– Services Agreements

– Memorandums of Understanding

– Subawards and Subcontracts• Continued

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Non-Federal Agreements

• Non-Funding Agreements

– Non-Disclosure Agreements (Confidentiality Agreements)

– Data Use Agreements

– Materials Transfer Agreements

– Collaboration Agreements

– Consortium Agreements

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Common Key Provisions

• Parties to the Agreement -- Who is making the agreement and on the hook legally?

• Whereas – Sets out the background for the agreement

• Definitions – When you see the word ABC in the agreement, what does it mean?

• Purpose -- Why are you entering this agreement? Continued

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Common Key Provisions

• Scope of Work – What are you (or your substitute) committing to do?

• Budget/payment – What financial resources will support the project?

• Intellectual Property – Who owns and/or controls any intellectual property created?

• Confidentiality – What is considered confidential?

• Continued

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Common Key Provisions

• Compliance provisions – Is the project covered by export controls laws? Sunshine laws? Conflict of Interest?

• Regulatory requirements -- Animal research? Human subject research?

• Records – Labs, deliverables, records retention, study records

• Access – Sponsor right of inspection? Access to patients, records, data, etc.?

• Continued

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Common Key Provisions

• Publication – Can results be published? When?

• Audit – Does the sponsor have the right to audit?

• Promotional Activities – Names, trademarks, advertisements for patients, press releases

• Indemnification & Liability – How will the risk associated with the project be distributed among the parties?

• Continued

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Common Key Provisions

• Disputes – Methods, costs and fees, subcontractor disputes.

• Modifications

• Term and Termination – How long will the agreement be in effect? How does it end?

• Governing Law &/or Venue – If there is a lawsuit, where will it be adjudicated? Under whose laws?

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Sponsored Research

Agreements

• Universities receive funding to support their research from commercial entities who in turn receives preferential access or rights to IP.

• Bayh-Doyle: Universities must effectively and efficiently translate technologies to industry for commercial development that includes

– Fair access to information

– Rational licensing decisions

– Notification and reporting requirements

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Sponsored Research

Agreements

• Researcher’s academic freedom – limits placed on selection of topics or ability to share with colleagues?

• Dissemination of results - restrictions on timing of sharing results so sponsor can evaluate IP and/or filing patent application?

• Licensing rights to sponsor – no exclusive rights until sponsor commits to actively develop.

• Ownership – Who owns results?

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Clinical Trial Agreements

• Parties - PI or IND holder?

• IND - Who holds the IND? PI or Sponsor initiated trial?

• Subject Injury – Does the Sponsor provide coverage to any injured human subjects?

• Results - Who owns results?

• Indemnification and Product Liability – Any exclusions for negligence? Who defends 3rd party claims?

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NDA/CDAs

• Parties – If the parties are institutions, who is obligated to keep confidentiality?

• Purpose – For what purpose may the CI be used? What happens if it is used outside that context?

• Term of CI obligations under the agreement may exceed term of agreement.

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Material Transfer Agreements

• Scope of Work - What are the permitted uses of the material?

• IP – Who owns the IP created by using the material? Who owns modified derivatives? Any rights given back to the material owner?

• Termination – What happens to the material at the end of the term?

• Regulatory – What assurances must be in place before using the materials?

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Data Use Agreement

• Parties – Are both parties Covered Entities?

• Scope of Work – Is the Data being disclosed for research use?

• Regulatory – Is the data set PHI? Limited data set? Deidentified? Did the informed consent contemplate this kind of transfer?

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Types of Law that Impact

Research Agreements

• Basic contract law

• Agency

• Business organizations (corporate and partnership)

• Negligence – product liability and insurance law

• Continued

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Types of Law that Impact

Research Agreements

• Intellectual property law

• Public contract law and administrative procedures

• Bankruptcy

• Anti-trust

• Civil procedure

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Takeaways

• A contract is an agreement between 2 or more parties creating obligations that are enforceable at law.

• Technology transfers get research from the lab into corporate product development, and contracts are the secret sauce.

• Whatever the cousin’s name, it’s in the contract family.

• All contracts have basic key common provisions. • There are many types of law that impact agreements

in research administration.

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Comments and Questions

• Terri J. Minatra, Esquire• (423) 791-1528

• terriminatra@gmail.com

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