Collaboration has always been a vital part of the Life Science and Medical Device sectors. In the current demanding economic conditions, effective partnering and collaboration arrangements are key for small Scottish companies in developing the next generation of products.
Collaborations take many forms. Large companies with extensive research budgets may work with smaller companies developing niche products. Small companies may collaborate to allow faster product development and increase market access. Academic institutions work with corporations of all sizes across the country.
Successful collaboration is all about communication. It is essential that the parties take time at the outset of the project to consider how they will approach and resolve the key issues:
- who will own the intellectual property contributed to the project?
- who will own the new intellectual property created as a result of the collaboration?
- what the roles of each party are in the collaboration?
- who will manage the project?
- how will parties communicate with each other and with third parties?
- how will decisions be taken?
- what are the consequences of termination or default?
- what are the dispute resolution mechanisms?
Discussing these issues with partners at the outset of a project will be seen as taking a proactive and commercially responsible approach to managing the collaboration. If the project requires grant or bank funding a formal collaboration agreement is likely to be a precondition of access to that cash.
There are endless possibilities for structuring collaborative/partnering relationships which allows an agreement to meet the individual needs of any project. As a starting point the most common models in relation to research collaboration are as follows:
- The university owns the new IP and grants a non-exclusive licence to its partner to use this IP in a specified type of business or location.
- The university owns the new IP and licences its partner to use this in a specified type of business or location and the partner also has a right to acquire an exclusive licence /assignment of that IP.
- The Partner owns the new IP but the university retains the right to use and publish this for academic purposes provided that ability to obtain a patent is not affected.
- The partner owns the new IP and the university has no right to publish or use it at all.
Moving away from research type contracts, other collaborations are often multi-party arrangements. Again, these can be specifically tailored for the needs of each individual project. The starting point for discussions is usually as follows:
- Each party owns the IP and results it creates and grants the other party's a non exclusive licence to use the results for the purposes of the project and for any other purpose thus allowing any party to exploit the results.
- If an exploitation strategy has been agreed in advance and it is intended that one of the partners carries out the exploitation the other party's can assign their IP and results to that party who undertakes to exploit and pays them either a share of the revenues generated due to that exploitation, or lump sum payments.
- Appropriate commercial terms can be agreed relating to the exploitation of those results.
- It is possible that each participant will wish to own the IP and results that it creates and grant the other parties non-exclusive licence to use them for the purposes of a specific project only. If any member wishes to use the IP for something else, it will have to negotiate a licence at the appropriate time. This is more than likely where no exploitation strategy for the end results of the project is agreed in advance.
In all collaboration agreements, it is important to ensure that the terms of the collaboration are acceptable to any funders including those providing grants or other public sector funding.
Partnering, collaboration and joint ventures will continue to increase in popularity during the current economic climate as they provide a cost effective and efficient way to move projects forward and can shorten the route to market.
Getting good legal advice at an early stage can allow agreement to be reached more quickly and ensures that the commercial interests of all parties are properly protected.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.