module_8_27_

INTELLECTUAL
PROPERTY CONTRACTS

CERTIFICATE COURSE

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DEVELOPED BY

MODULE - 8

RESEARCH AND DEVELOPMENT
AGREEMENTS

8.1 WHAT IS RESEARCH AND DEVELOPMENT principal. This type of agreement is somehow
AGREEMENT? similar to subcontracting since there is a
hierarchy between the parties involved.
“Research and Development Agreement is a
systematic activity combining both basic and applied 2. Joint Research and Development
research, and aimed at discovering solutions to This is an agreement on cooperation between the
problems or creating new goods and knowledge.”
These agreements should clearly identify the project parties on research and development on an
itself, provide any necessary background information equal level. It belongs to the group called
related to the project, and describe the roles and horizontal agreements.
relationships among the project parties, including any
contributions by the parties. If there are issues or 8.2 PROPERTY RIGHTS AND RIGHT TO EXPLOIT
special circumstances that may reasonably be THE RESULTS
anticipated to impact the project, they should be
described. These Research and Development The clauses on the ownership of intellectual property
agreements may also incorporate non-disclosure rights must be drafted very precisely by the parties of
clauses and use of Intellectual Property clauses. the R&D agreement. The results of the joint research
In international business the research and and development, which might be extremely
development agreement as a term can be divided into valuable, must be thoroughly discussed and drafted
two types: by the parties. The following questions are of utmost
importance and are required to be considered while
1. Ordered Research and Development an R&D agreement is being drafted:
An agreement on an order given to an undertaking to
i. The questions about the ownership
perform research and development for a (whether the results will be owned by

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some specific participants or all 1. Parties to the agreement: The legal names of
participant), all parties to the agreement are specified,
ii. The terms of exploitation (free of charge, with identifying terms that will be used
unlimited in time or not and so on) and throughout the document.
other conditions should be decided by
both parties. This part of the agreement is 2. Intention clauses: This clause specifies
very important since a lot of disputes arise relationships and background information of
and good cooperation might be lost due to the parties to the agreement. This section
the imperfections, omissions, and may also reference how parties would be
impressiveness in the clauses. involved in the Project and any specific rights
iii. Contribution by each party: inventions to use the results of the research.
(description and origin)
iv. Contribution by each party: property 3. Purpose: This clause states the purpose of the
rights (description and origin) R&D agreement, and may reference a
v. Right to exploit the contributions, to what relationship to a funding organization, or the
extent expected deliverables of the Project.
vi. Results of the R&D (description)
vii. Right for the parties to exploit (use, 4. Definitions: This clause needs to define all
produce and/or sell) the results
viii. Exploitation by third parties (permitted or terms relevant to the R&D project. Typical
not, conditions)
ix. Licensing possibilities terms include the “Project”, “deliverables”,
x. Duty or prohibition to register the
inventions and in whose namei “confidential information”, “Intellectual

8.3 IMPORTANT CLAUSES IN R&D AGREEMENT Property”, “Principal Investigator”,

The following are the clauses that are required to be “students”, “research” and results”.
included in the R&D Agreement:
5. The Project: This clause identifies the scope
of the project, the Principal Investigator,
others to be involved in the project, the
project’s expected outputs, and the timelines
expected. A project work plan may be

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included in the appendixes, or be industry partner will make, what
incorporated into the body of the agreement. contributions are provided by external
The start and end date of the project are funding partners and how and when invoices
identified, the resources provided by each are to be rendered and paid.
party and any contributions by the parties.
8. Use and exploitation of IP: This clause will
6. Terms and conditions: This clause may identify ownership of any IP resulting from
include: the project, as well as the ability of partners
i) Responsibilities of or services and developers to use the results of the
provided by the developer. These may project activities. A separate IP agreement
include financial and human resource may be developed if there is a reasonable
management, support services, expectation of IP resulting from the project.
equipment contribution, provision of
space, liaison with funders, and 9. Liability: Warranties and indemnification
others. clauses are common in R&D agreements to
ii) Responsibilities of or services protect each party. The parties may warrant
provided by the Partner. These may that all IP they bring to the project is owned or
include the provision of human licensed by the party, and will not infringe on
resources, various investments of the IP rights of others. Limits to liability are
cash or in kind, and others. outlined, as well as a clause indemnifying the
iii) Freedom to Operate. A clause may be developer from any damages that may arise
included that the Partner either owns from the project.
or has licensed any IP that is to be
used in the project. 10. Dispute Resolution: Just like any other
agreement R&D agreements needs to have a
7. Financial contribution and external funding: dispute resolution process described in it.
This clause should specify the financial and in
kind contributions. This clause should 11. Termination: Termination of the R&D
identify what financial contribution the agreement prior to its specified end date may
be specified, as well as the conditions under

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which the agreement may be terminated such 14. General clauses: Agreements may include
situation may include (i) if a member of a general clauses that refer to the “entire
party’s key personnel may leave or be unable agreement”, “laws governing the agreement”,
to continue and the replacement is not “assignment of the agreement”, a “force
satisfactory (ii) Either party may fail to fulfill majeure” clause, and others.
one or more of its obligations under the
agreement (default). (iii) Funding support may 15. Term of agreement and effective date: The
be discontinued. length of time the agreement is in operation is
specified, along with the date upon which it
12. Relationship of R&D agreement to other becomes effective.
agreements between the Parties: This clause
should specify if the parties to this agreement 16. Designated Representatives/Contact
have a previous relationship and have signed
previous agreements and it may be wise to Persons: This clause should specify the name
indicate that the current R&D agreement
supersedes any prior agreements. of authorized representatives for information

13. Amendments: This clause specifies if and how and notices, along with contact information,
amendments to the R&D agreement are to be
made. including full mailing addresses, phone, and

email.

i Rigault, Didier. International Business Agreements. 3rd ed.
Oslo, The International Business Law Group. 2010

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