Bundesministerium für Wissenschaft, Forschung und WirtschaftBundesministerium für Verkehr, Innovation und TechnologieNational contact point (NCP)Austria Wirtschaftsservice

Glossary

The brochure „Verträge in Forschungsprojekten“("Contracts in Research Projects") by PROvendis GmbH provided a rich source to explain relevant terms in a simple way. We would like to thank the PROvendis team of authors for the permission to use text passages from this brochure.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Applicable law                   // Anwendbares Recht//

With international agreements or contracts, it is a good idea to define which law is to apply to such agreement or contract. Quite understandably, each party would like to see its own law applied, as well as its own language and jurisdiction by its own courts. One way to solve this problem while not giving a home advantage to any party is to opt for the law of a third country. If foreign law is accepted as being applicable, it is advisable to seek assistance from competent advisers who are familiar with the relevant law and jurisdiction.

Academic research results                         //Hochschulergebnisse//

When licensing academic research results, it is not only important to clarify whether the university is the owner of the licensed technology, but also to pay special attention to the question of whether the university has already granted rights that would prevent the licensing of these results. The following aspects must be considered:

• financial support provisions (external funding, e.g. public subsidies)

• existing R&D agreements

• co-ownership together with other inventors

• third-party IP rights

• third-party licensing

Characteristics of universities as licensors:

Firstly, licence agreements often impose guarantees and obligations on the licensor that are very difficult to fulfil based on a realistic assessment of circumstances. Academic researchers, for instance, traditionally enjoy greater freedom than industrial researchers; the freedom of publication, in particular, plays a major role here. In practice, the university depends on the cooperation of the university researchers, especially university teachers, in order to be able to comply with certain elements of the >licence agreement (e.g. transfer of know-how). A further aspect to consider is that the university is far less willing and able to take economic risks than industrial companies. It is, after all, public money that is at stake. Therefore, universities have to be very careful in entering into obligations and guarantees under licence agreements.

Anti-trust law                   //Kartellrecht//

There is an area of conflict between the legal institutions of patent protection and anti-trust law. In a broader sense, anti-trust law includes all legal rules aimed at preserving unhindered and multi-faceted competition. Even though there are exceptions for >patents, some licence agreements may, under certain circumstances, be in conflict with anti-trust law.

Access right                       //Zugangsrecht//

 

The possibility to access >pre-existing results or new project results. Access rights can be granted to pre-existing results or >new results. In many cases, the results of an R&D project are still a long way from a marketable product. For this reason, having a right to use one’s own pre-existing and new results is crucial with respect to further developments and new externally funded projects.

B

Background IP                  //Background//

See Pre-existing results

C

Contract research                           //Auftragsforschung//

Contract research is frequently understood to mean the commissioning of a research project to a university-level institution by a commercial enterprise. The enterprise specifies a problem or a desired solution and contracts the university institution with solving the problem or implementing the solution. The institution uses its expertise and infrastructure to come up with the solution. The enterprise pays money to the institution for performing the work and gets an R&D result in exchange.

Indicators include: Target-oriented, open and unbiased, defined implementation path, frequently costs defrayed in full by the enterprise commissioning the research, knowledge and R&D transfer rather unidirectional from the university to the enterprise, the enterprise commissioning the research is interested in short-term results or results according to a specified schedule, often no obligation to achieve a certain result, as success cannot be guaranteed and outcomes cannot be predicted, the university may have publication interests.

Confidentiality agreements                       //Geheimhaltungsvereinbarung//

See Non-disclosure agreement

Confidential disclosure agreements (CDAs)       // Confidential disclosure agreements (CDAs) //

See Non-disclosure agreement

Contract of service (Dienstleistungsvertrag)      //Dienstleistungsvertrag//

Where the university acts within the scope of contract research, it is legally relevant whether it carries out research under a contract of service or under a contact for work and services (Werkvertrag). The rule of thumb in this context is as follows: Research work is more likely to be commissioned under a contract of service (e.g. funding of doctoral or diploma theses), while development work tends to be commissioned more often in the form of a contract for work and services. However, in the final count, it is always the details of each individual case that are decisive.

If no outcome of the research is specified, but merely the competent provision of the research work is agreed, this will probably be a contract of service. To unambiguously lay down what has to be done by whom within the scope of a research project, it is advisable to describe the subject matter of the contract in detail.

As it is rarely possible with research work to know the outcome in advance, the person providing the research work will be well advised in most cases to promise only a certain type of activity and not a specific outcome. Remuneration should be agreed to be contingent upon completion of certain work activities and not on the outcome, i.e. a certain research result.

Copyright                           // Urheberrecht//

The protection afforded by copyright takes automatic effect once the work that is eligible for copyright protection has been created or completed. Such work may be a piece of literature or music, but also the source code of a computer program, which for copyright purposes is regarded as text. (In contrast to a patent, copyright protection extends only to the ‘text’ of the computer program as such, but not to the technical teaching involved, i.e. the abstract algorithm). Other than in the case of >patents, copyright protection arises without any formal registration with a public authority; the work is not verified, entered into a directory or registered.

At first sight, this lack of formal effort involved in creating a copyright may appear to be an advantage. However, as there is no official verification and registration, it can be extremely difficult in some cases to defend one’s copyright against third parties.

The fact that a competing product with identical effect is created does by itself not constitute sufficient proof that one’s copyright has been infringed, in contrast to the regulations applying to patents. As a rule, such proof can be furnished only if the actual embodiment of the products can be compared. It is quite obvious that such a comparison will in most cases be very difficult to carry out in practice, in some cases only after corresponding court proceedings.

Construction or interpretation of a contract       // Vertragsauslegung//

Contracts or agreements come about through declarations of intent, which means that their contents are determined by the intentions of the contracting parties. The contents of a contract or agreement should be understood by the persons signing it and the persons fulfilling it. Contracts or agreements help avoid disputes from arising.

Contracting party                            //Vertragspartnerin / Vertragspartner//

A contract or agreement coordinates and regulates social behaviour by means of the mutual acceptance of obligations by the parties. A contract is made voluntarily between two (or more) parties.

In the contract, each party promises to the other party to perform or omit specific actions (and thus provide something the other party desires). All of this makes the future more predictable for the parties.

If one party breaches the contract or agreement, this may result in the other party being released from its obligation to fulfil the contract, in whole or in part.

Both parties must understand the content of the contract or agreement in the same manner. If they do not, the contract will be construed or interpreted differently, and the purpose of the contract, which is coordinating future behaviour, will not be achieved. The voluntary agreement to fulfil obligations, as promised in the contract, presupposes that the party in question is able to assume responsibility with respect to the subject matter of the contract and that it is able and authorised to speak for himself/herself, i.e. the party in question must be legally competent to contract. In addition, each of the parties must in general be able and authorised to act as promised. This implies that the parties must be autonomous and authorised to take decisions as required for the contract. If the party is a legal entity, it must be represented by a natural person authorised to sign on its behalf.

Contract clauses with more far-reaching effects                             //Weiterführende Klauseln//

>R&D contracts often contain clauses that risk to run counter to anti-trust law. Such clauses should be treated with caution and should always be shown to specialists for assessment. Such clauses include:

• No competition clauses

• Non-challenge clauses

• Exclusive dealing provisions

• Allocation of customers

• No active distribution policy

• Quantitative restrictions

• Restrictions on pricing (resale price maintenance), restrictions on the freedom to determine price components and discounts and the freedom to select customers.

Contract for work and services (Werkvertrag)                  //Werkvertrag//

If the university owes the principal a particular research outcome in exchange for the funding provided, this will generally be the subject of a contract for work and services. (See also >Contract of service)

Competition law                             //Wettbewerbsrecht//

There is an area of conflict between the legal institutions of patent protection and competition law. In a broader sense, competition law includes all legal rules aimed at preserving unhindered and multi-faceted competition. Even though there are exceptions for >patents, some licence agreements may, under certain circumstances, be in conflict with competition law.

D

Definitions                         //Definitionen//

It is advisable to define the subject matter of an agreement and various key terms such as IP rights subject to the relevant contract, contract territory, fields of application, licensed product, net sales price, etc. in detail and set out these definitions at the beginning of the licence agreement. These definitions can then be referenced throughout the remainder of the agreement or contract. The wording of such definitions requires utmost care. The definition of the licensed product for instance has far-reaching effects on the royalty rate – is the licensed product the licensed screw or the entire machine built using it?

An exact definition of the net sales price, i.e. of the deductions to be made from the gross sales price, plays a major role as a reference for determining the royalty rate.

Designs                               //Geschmacksmuster//

A design under the Design Act (Geschmacksmustergesetz) is a two-dimensional or three-dimensional outward appearance of a product. The appearance results from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product. In other words: A design only protects the reproduction of a product’s outward appearance. A ‘product’ in this context means any industrial or artisanal item, including packaging, get-up, graphic symbols and typographic typefaces.

A special design is an important factor for a product’s success on the market. Therefore, protection should be obtained as soon as possible to prevent that third parties make use of or apply for such design themselves. A design application encompassing all countries that belong to the European Community may be filed in the form of a so-called Community design with the Office for Harmonisation in the Internal Market (OHIM). When obtaining a European Community design, a 12-month grace period is granted for prior own use and publication. Protection of a design may be obtained for a maximum of 25 years.

Disclosure which is not prejudicial to novelty     // Nicht-neuheitsschädliche Offenbarung//

>Novelty is a material prerequisite for obtaining >IP rights (e.g. >patents); maintaining confidentiality is essential. The following are not prejudicial to such novelty:

• In writing: Submission of a funding application, e.g. Austria Wirtschaftsservice (aws) / Austrian Research Promotion Agency (FFG)

• Orally: Discussions with colleagues from the working group/from the institute in a very small circle, discussions with external partners on the basis of a non-disclosure agreement

Dispute resolution          //Streitbeilegung//

As an alternative to having an agreement or contract verified by courts in the case of a dispute, it is also possible to opt for alternative dispute resolution through mediation or arbitration tribunals. 

E 

External funding              //Drittmittelgeberin / Drittmittelgeber//

In an academic research context, external funding refers to those parts of the funding of specific research projects which are not provided from the university budget (primary funding). External funding is provided not only by private businesses, but also from public-sector research grants.

Public-sector external funding is provided by, for instance, regional or federal government authorities or the EU in an effort to support research projects from the public purse. As a rule, such investment of tax money is made to achieve a specific public purpose, such as promoting and funding research and innovation, technology transfer, SMEs (small and medium-sized enterprises), the mobility of scientists, etc. To ensure that the relevant public purpose is being fulfilled, the party receiving the funding will have to meet certain conditions on to how to conduct the research project and what to do with the results. These conditions differ from one external funding body to the next, with different rules in place even at one and the same organisation or body for specific fields of research and types of projects.

In publicly funded research projects, the funding bodies frequently set out conditions in the relevant funding agreement or contract.

Exclusive licence              //Exklusive Lizenz//

In the case of an exclusive licence, the licensor grants a right of use to one single licensee. The right of use is limited in terms of subject matter, territory and time. The licensor must not grant an identical exclusive licence more than once and is also prohibited from using the licensed product him/herself. If the licensor reserves the right to exploit the licensed product for him/herself, the exclusive licence will be referred to as sole licence. The exclusive licensee has the right to take action against any infringers and to grant sublicences without the licensor’s consent.

F

Freedom of publication                               //Publikationsfreiheit//

When compared to publications, scientific events or consulting activities, patents play a rather minor role in the transfer of knowledge from universities. The interests of university staff in prompt and comprehensive publication of results is in direct conflict with industrial enterprises’ interests in keeping research results confidential for as long as possible. Therefore, the industrial partners will either have to recognise publication within the scope of a doctoral or diploma thesis at a given point in time or exclude doctoral or diploma candidates from participation in a project right from the outset. Another area of conflict in this context is when the industrial partner publishes the result before the doctoral thesis on the same subject is published; the thesis would then no longer be considered an original work.

I

Invention disclosure                      //Erfindungsmeldung//

The university may claim service inventions for itself and may also transfer the relevant rights to third parties. The university is under the obligation to notify the inventor within 3 months of invention disclosure whether it claims the invention and, if it does so, offer adequate compensation to the inventor.

• Invention disclosure should take place in writing.

• Where several employees are involved in an invention, they can jointly draw up and submit the invention disclosure.

To be complete, an invention disclosure should comprise the following:

• Personal data (names and company/organisation address of all the inventors involved)

• Share of the inventors in the disclosed invention; where possible percentage values indicating the share of each inventor.

• Information about the technical task, how it has been solved and how the invention came about (third-party rights, etc.).

• Existing documentation as far as necessary for understanding the invention.

Information on internal instructions or directives as well as on experience or work of the research institution used for the invention. 

Intellectual property (IP)                            //Intellectual Property (IP)//

Intellectual property is a legal concept that refers to intellectual creations for which exclusive rights are claimed. It connects the creative creation with standardized legal instruments, making intellectual property tradable independently of its creator. Intellectual property generally takes the form of industrial >IP rights or >copyrights. Examples of industrial IP rights are >patents, >utility models, >plant variety rights, >semiconductor rights but also >trademarks, >designs (designs and models).

Intellectual property rights (IPRs)                           //Schutzrechte//

Industrial property rights aka formal intellectual property rights include >patents, >utility models, >designs, >trademarks, >plant variety rights and >semiconductor rights.

Patents and utility models are technical intellectual property rights where the invention of an apparatus or a technical process for solving a specific task is disclosed. Other industrial property rights protect specific features such as outward appearance (design, trademark), colouring (design, trademark), designation of the product or service (trademark), plant variety (plant variety rights) or topography (semiconductor rights).

Upon being granted the right, the holder of the IPR can, within the area and the territory to which such protection applies, take steps against imitations or copies made by unauthorised third parties (negative right = right to exclude).

A patent thus will not necessarily grant its holder the right to also use his/her invention (no positive right of use), as he/she may depend on third-party rights or be subject to statutory bans.

J

Joint inventions                                              //Gemeinschaftserfindungen//

Where several inventors are involved in an invention, they are co-inventors and, initially, also co-owners. An employer may only claim the inventions of its own employees. If employees from several employers are involved in the invention, this means that there are several co-inventors and, consequently, several co-owners. If, however, a co-owner intends to license the invention, he/she may only do so with the consent of all co-owners. Even if a co-owner wants to use a co-invention for his/her own purposes, e.g. manufacture the subject matter of the invention himself/herself in a factory, he/she would do well to reach an agreement with the other co-owners in that regard.

Universities usually do not set up production or distribution facilities of their own. In the case of R&D projects with potential co-ownership, however, it is possible to provide for the possibility of licensing without requiring the partner’s consent in order to generate revenue from the exploitation of the invention. Furthermore, the university - like any other co-owner - may dispose of its co-ownership share of the invention (not the invention as a whole). It is also possible to agree that the co-owner who does not exploit the invention receives a share of the exploitation proceeds obtained by the co-owner exploiting the invention. Important: If the co-owners do not expressly agree on such a participation in the proceeds, the co-inventors are not entitled to claim any such participation.

K

Know-how                         //Know-how//

See Pre-existing results, Application-specific practical knowledge

Knowledge                         //Knowledge//

See New results, Context-related knowledge

L

Legal provisions on inventions by employees                   // Arbeitnehmerinnen- / Arbeiternehmererfinderrecht//

To ensure access to inventions made by employees (white or blue collar workers of any type), an invention must satisfy the criteria of being a ‘service invention’ as defined in section 7(3) of the Austrian Patent Act (PatG) and there has to be a written agreement or a provision under a relevant collective bargaining agreement in place granting the employer the right to be offered and claim future service inventions.

Where these requirements are met, a service invention will give rise to rights and obligations.

The inventor is obliged to report the invention to the employer and offer the employer the rights in the invention. If the employer chooses to claim the rights in the invention, the employee has a statutory claim for adequate special compensation under section 8 of the Patent Act.

If the employer chooses not to claim the right to transfer the invention within the period prescribed by law or if the employer relinquishes the invention, the inventor will have all rights in the invention and may file for a patent at his/her own expense and exploit the invention.

Since the entry into force of the Austrian University Act 2002 (UG 2002), university employees are under the obligation to report any invention to the university.

Liability                                //Haftung//

In order to avoid liability risks, the following aspects should be considered and provided for:

• Who bears the risk in case the desired research objective is not reached? In the case of contract research, the question of whether the underlying contract is a contract of service (Dienstleistungsvertrag) or a contract for work and services (Werkvertrag) is decisive with regard to liability for any full or partial failure in achieving the desired outcome of the research. A contract of service does not provide for any liability for a particular outcome, as the contractor only owes the performance of research. In this case, the risk of fulfilment of the contract lies with the party commissioning the research (industrial partner). If the underlying contract is a contract for work and services, the contractor is liable and owes a particular outcome. In this case, the risk of fulfilment of the contract lies with the contractor. It is possible to amend the statutory liability regime.

• Partners conducting the research should exclude liability for consequential loss or damage caused by a defect (e.g. production failures suffered by the industrial partner due to a mistake in the research result) and limit the amount of liability (e.g. limited to the contract total).

The exclusion of liability in cases of wilful misconduct or gross negligence will, however, be invalid in most cases, as such an exclusion would be contrary to public policy.

• It is also important to consider the issue of what happens if the use of the research result infringes third-party rights. Are the contracting parties obligated to know about and inform the other party of conflicting rights of third parties? The partner conducting the research could become obligated to make enquiries, find a workaround solution or obtain a licence. It should be clearly stipulated who is to pay for such alternatives and what is to happen if these options do not work, but the continued use of the research result is impossible without infringing third-party IP rights.

Letter of Intent (LOI)                    // Letter of Intent (LOI)//

Especially before complex and time-consuming transactions, potential contracting parties will often draft what is known as a letter of intent. In most cases, the letter of intent is not legally binding, but is intended to emphasise the moral and psychological importance of the transaction and may include the following:

• name of the contracting parties

• expression of interest to carry out the designated transaction

• summary of the outcome of previous discussions

• details on the envisaged transaction

• time schedule

• deadlines, conditions and reservations

• confidentiality obligation with regard to the information received, definition of exceptions, if appropriate, sanctions in case of violations (penalties)

• right to recover possession of documents or to have such documents destroyed

• reference to the fact that the LOI is not legally binding

• reasons for termination of on-going negotiations

• regulations on reimbursement of costs

• exclusivity clause

If a letter of intent is entered into and signed by several contracting parties, this is also referred to as a Memorandum of Understanding (MOU).

Licences                              //Lizenzen//

An >IP right entitles its holder to prohibit the use of the protected subject matter (e.g. the patented method, the registered trademark) by others. Third parties are therefore not entitled to use the protected subject matter as long as the holder of the IP right does not permit them to do so. Such permission is granted by issuing licences.

A licence is a positive right of use for a limited time.

Licence agreement                        //Lizenzvertrag//

A licence agreement is made between the licensor and the licensee. The licensor is the holder of a particular research result and the licensee is interested in using this research result. Unlike a sale and purchase agreement (where ownership of the research result passes entirely to the buyer), the licence agreement provides that the licensor remains the owner of the research result. The licensee is merely granted a right of use, similar to renting a flat or leasing a car.

As far as the contents of a licence agreement are concerned, there are hardly any mandatory legal provisions (with the exception of anti-trust law) that cannot be modified by mutual agreement of the parties.

The contracting parties should make use of the possibility to set forth provisions regulating their interests in a licence agreement to ensure maximum legal certainty so that the contracting parties’ intention actually takes effect.

A licence agreement may relate to intellectual property rights such as >patents, >trademarks, >utility models, >designs, >copyrights, >semiconductor rights or >plant variety rights. In this context, it is irrelevant whether the IP right has already been granted or whether it has been applied for in different countries. Industrial IP rights are limited to a particular territory, i.e. they only have effect in the country for which they were granted. Furthermore, >know how can also be licensed. 

M

Material Transfer Agreement (MTA)     // Material Transfer Agreement (MTA)//

An MTA deals with the exchange of materials between researchers of a public or private research organization. The agreement is made between the owner or licensor of material, the provider of material, on the one hand and the recipient of such material on the other hand.

Memorandum of Understanding                            // Memorandum of Understanding//

See Letter of Intent (LOI) 

N

Non-exclusive licence                   //Einfache Lizenz//

In the case of a non-exclusive licence, the licensor grants the licensee a right of use while being free to grant further licences to third parties or using the licensed product him/herself. Where third parties use the licensed product without being authorised to do so (infringers), only the licensor has the right to take legal action. If the licensee in turn wants to grant licences to third parties, he or she may do so only with the licensor’s consent.

Non-disclosure obligation                           //Geheimhaltungsverpflichtung//

See Non-disclosure agreement

Non-disclosure agreement                        //Geheimhaltungsvertrag//

A non-disclosure agreement governs how >secret information is disclosed to other parties. In this context, secret information may be disclosed by just one party to one or more other parties (unilateral exchange of information). Alternatively, secret information may also be exchanged between two or more parties so that all the parties disclose their secret information (bilateral or multilateral exchange of information). Non-disclosure agreements (NDAs) are also referred to as non-disclosure obligation, confidentiality agreements or confidential disclosure agreements (CDAs).

In addition to the obligation to keep the information secret, there is also an obligation to not use such information. This does, of course, not apply to using the information for an agreed purpose, such as the evaluation of research results with a view to entering into a >licence agreement or future >research collaboration. Without any prohibition of use, the recipient of the information could be entitled to draw economic benefits from the >secret information as long as he/she does not publish or disclose such information to third parties. See also >waiver of non-disclosure obligation.

New results                       //Neuergebnisse//

New results are results which are first created within the contractually agreed research project. New results are also referred to as foreground, new IP rights, knowledge and the like.

The following have to be distinguished and (with regard to rights of use) provided for:

• Industrial results

• Academic research results

• Joint results

both in the case of >contract research and >research collaboration.

Novelty                               //Neuheit//

An invention must be novel in order for an >IP right to be granted. In the world of patents, this is often referred to as ‘absolute novelty’. This means that an invention must not have been previously disclosed anywhere else in the world if a patent for that invention is applied for (different rules in the US and Japan).

This is based on the common agreement that somebody who applies well-known teachings, which, given the modern means of communication, are publicly accessible to anybody, does not deserve to be rewarded with a patent.

Disclosure which is prejudicial to novelty             //Neuheitsschädliche Offenbarung//

The following are considered prejudicial to novelty under the Patent Act:

• In writing: Scientific article in a specialist journal, presentation on a website, billposting, publication of a doctoral thesis

• Orally: Presentation at a congress, discussions with other companies without a non-disclosure agreement, part of the doctoral exam that is open to the public

New IP rights                    //Neuschutzrechte//

See New results

O

Obligation of use                            //Nutzungsverpflichtung//

In the case of exclusive >licences, the licensor has to rely on the fact that the licensee will actually exercise the relevant licence. There is no other way for the licensor to capitalise on his/her >research results. Therefore, it may be a good idea to subject the licensee to an obligation of use. The main problem here is finding objective indicators reflecting the use of the subject matter of the license. It is, for example, possible to require certain minimum sales revenues, a minimum number of products sold or a certain stage of development of the product at a given moment.

Provisions should also be made for what happens if the licensee does not comply with the obligation of use.

In the case of publicly funded research, there may also be an obligation of exploitation for exploitable results in addition to the reporting obligation to the funding body (e.g. funding bank).

Option agreement                         //Optionsvertrag//

An option agreement affords the opportunity to gain time to consider whether or not to make a purchase. If the purchaser agrees to pay the option price, he/she can then decide, within a specified period, whether or not he/she wants to make the purchase. The purchaser’s option binds the seller for a certain period of time; he/she must not sell the >IP right to any other party than the option holder. If the purchase is made, the option price often serves as a down payment.

The option agreement or preliminary agreement sets out major terms of the main agreement.

P

Pre-existing results        //Altergebnisse//

At the start of any cooperation, it is important to clearly distinguish who already holds which intellectual property rights and who contributes what information to a solution and who is to be entitled to use these under which conditions. The term ‘pre-existing result’ refers to research results from previous research or from a research project being conducted in parallel, but without any connection to the present research project. With a view to differentiating pre-existing results clearly from >new results, it is crucial to define the subject matter of the contract in as much detail as possible. Often, the new project can only be carried out if pre-existing results are used. Pre-existing results are also referred to as background IP, pre-existing intellectual property rights, pre-existing know-how or similar.

Pre-existing intellectual property rights                                              //Altschutzrechte//

See Pre-existing results

Place of jurisdiction                       //Gerichtsstand//

Contractual provision stipulating which court shall have jurisdiction in the event of any dispute in connection with the agreement. It is always better, since more cost-efficient, to apply to a court nearby. On the other hand, it may be better to agree on a court that is competent for the subject matter of the dispute or not to change a court that has been assigned under statutory provisions. See also >Applicable law

Patents                               //Patente//

A patent is a monopoly, granted by the government and afforded the protection of the law, for the exclusive exploitation of an invention. A patent is granted if the patent application discloses, to a sufficient extent, that the invention is a novelty, is based on an inventive step and has a commercial or industrial application. Within the meaning of the Patent Act, an invention is deemed new or novel if it is not present state of the art. This means it has not yet been described in patent literature, exhibited at a trade show or published in any other way (for instance in a newspaper article or via the internet). The requirement of an inventive step is deemed fulfilled if the solution to a technical problem as described in the invention is not obvious from prior art to the average person skilled in the respective art. All patent authorities verify these requirements within the scope of patent granting procedures.

The effect of a patent is that the patentee, for a period of not more than 20 years, has the exclusive right to dispose of his/her invention. Within this period of time, he/she can prevent others, in the country or region for which the patent was granted, from producing the patent commercially, placing it in the market, offering or using it. Moreover, the patentee can prevent others from importing or owning the invention protected under patent law.

 

Preamble                           //Präambel//

The preamble is technically not a part of the contract or agreement as such. The contracting parties can use it to describe the purpose, the circumstances and the history of the agreement or contract. In addition, the preamble may also state the parties’ interest in the project and include references to other agreements or contracts. For this reason, the preamble constitutes a useful aid in interpreting or construing the agreement or contract at a later stage.

 

Pre-existing know-how             /Pre-existing Know-how//

See Pre-existing results

Project results                  //Projektergebnisse//

See Research results

Plant variety rights                         //Sortenschutz//

A plant variety can be registered with the plant variety register (Federal Office for Food Safety (BAES)) on the basis of the Act on Plant Variety Protection (SortSG), provided that the variety fulfils the conditions of novelty, distinctness, homogeneity and stability and that it is designated by a variety denomination suitable for registration. The effect of such protection is that only the holders of the plant variety right or their legal successors have the right to market, produce for such purpose or import propagating material (plants or parts of plants, including seeds) of a protected variety or a variety derived from it. The term of protection for trees and vines as well as for hops and potatoes is 30 years from the date of plant variety protection being granted; for all other varieties the term is 25 years.

Publication                         //Veröffentlichung//

See Disclosure which is prejudicial to novelty / Disclosure which is not prejudicial to novelty.

Preliminary contract or agreement                        //Vorvertrag//

Pursuant to section 936 of the Austrian Civil Code (ABGB), a preliminary contract is an obligation to enter into a contract with a certain content. The subject of the agreement is to conclude a main contract. The person to which rights arise under the preliminary contract must sue for conclusion of the main contract within a period of one year. There is a fundamental difference between a preliminary contract and an >option agreement, which confers only a right to conclude a contract but does not give rise to an obligation to do so.

R

Research results                             //Forschungsergebnisse//

Ideally, an R&D project will generate R&D results. In a first step, it is necessary to distinguish between >pre-existing results and >new results and to agree on the respective ownership of and mutual exploitation rights in pre-existing and new results.

As to research results, a distinction can be made between

- tangible objects

- protected intangible results and

- unprotected intangible results.

Depending on whether research is conducted as a service, on contract or in a collaboration, different contractual arrangements will be made with respect to the rights to exploit and own the research results. 

Research collaboration                 //Forschungskooperation//

Within the scope of a research collaboration, both the university and the commercial enterprise join together in finding and implementing potential solutions. On the basis of a collaboration agreement, both apply their knowledge, their resources and their >pre-existing results and contribute to the research in an effort to obtain joint results.

R&D agreement                              //FuE-Vertrag//

A research and development (R&D) agreement lays down the rights and obligations of the parties within a research project. When compared to a movie project, it would correspond to a script or screenplay for the collaboration. In addition, it also defines how the marketing rights are to be distributed. R&D agreements can be concluded between two or more commercial enterprises, two or more research institutions, between a commercial enterprise and a research institution or between any number of commercial enterprises and research institutions. Different agreements will be used depending on whether a >research collaboration, an R&D contract or a research service is aimed for. The parties of an R&D agreement should be obligated to claim >new results under the >legal provisions on inventions by employees where inventions are eligible for protection and one of the parties is interested in exploiting the result. The obligation to claim results may be extended to include registration and maintenance of >IP rights. As registering and maintaining IP rights is expensive, it is important to decide not only on protecting one’s own rights, but also on which rights to waive and what costs are involved.

Rights of use                     //Nutzungsrechte//

The right of use is a (not necessarily exclusive) right to use physical objects and rights. See >Licence agreement.

Rights in research results                           //Rechte an Forschungsergebnissen//

In a >research collaboration, the following will apply unless other provisions have been agreed upon: following joint and specialised research or development and the exchange of knowledge, the results are owned by the partner that generated or discovered them and may be used by all partners.

In >contract research, the following frequently applies and/or is usually expressly agreed upon: The results are owned by the party who pays for the research. Attaining this status either involves a transfer of title or takes the form of <licences. However, the granting of rights to project partners must not prevent university partners from conducting further externally funded projects. Universities have an interest in using existing resources and existing knowledge to generate new results and use these in turn.

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Subject of a licence                        //Gegenstand einer Lizenz//

Subjects of a >licence may include

• an invention (even without registration)

• an IP right registered in Austria or abroad

• an >IP right granted in Austria or abroad

• secret know-how

The >right of use granted through the licence is defined in terms of subject matter/field of application, territory and time. In any event, this right should be defined in as much detail as possible so as to avoid any doubt about what the subject of the licence really is. It needs to be clarified in particular whether ‘just’ rights in ‘just’ an IP right or also rights in further know-how are being granted.

Secret information                         //Geheime Informationen//

Secret information is information designated by one partner or by both partners as information not to be disclosed or information which the recipient of the information had reason to believe from the circumstances that it should not be disclosed and which

• was verifiably known to the recipient of the information before being disclosed, or

• was known to the public before being disclosed, or

• was accessible to the public, or

• became known or accessible to the public after being disclosed, but through no action or fault on the part of the recipient of the information, or

• largely corresponds to information that was disclosed or made accessible to the recipient of the information by an authorised third party at some point in time in the past.

With a view to potential exploitation of shared work results, any and all knowledge should be deemed as not for disclosure which was obtained based on experience, experimentation and research, such as software source code, chemical formulas, result data, technical drawings and designs, business data, minutes of negotiations, algorithms or non-disclosed inventions. 

Semiconductor protection                         //Halbleiterschutz//

Topographies as referred to in the Semiconductor Protection Act (Halbleiterschutzgesetz) are three-dimensional structures of micro-electronic semiconductor products (= chip topographies) and also include the semiconductors produced with their help (= chips). The technical function or the material composition of a semiconductor product is irrelevant in this context. The protection extends exclusively to the geometrical design.

In substance, this IP right falls more within the scope of copyright law rather than patent law, as the topography must satisfy the conditions that it is not commonplace and is the result of its creator's own intellectual effort. The protection does not extend to the concepts, processes, systems, techniques embodied or information stored in the topography. To ensure the protection of confidential information, parts of the documents can be marked as ‘confidential’, meaning that only limited inspection of such information is allowed.

Semiconductor protection is granted for a maximum of 10 years, but commences on the day of first commercial exploitation in cases where the relevant applications are filed subsequently (unlike in the case of patents!).

Severability clause                         //Salvatorische Klausel//

A severability clause governs the legal effects that occur when, after the conclusion of the agreement or contract, specific parts of the agreement or contract turn out to be ineffective or unenforceable or key aspects have not been provided for.

In the severability clause, the parties express their intention to continue the agreement so that the economic or commercial success intended to be achieved by means of the agreement can be achieved.

Software                            //Software//

IPRs potentially applicable to software include:

• Copyright: program source code

• Patent: (to a limited degree) procedures and algorithms of the software program

• Trademarks: designation and logo of the software program

• Designs: user interface and icons

Support by the licensor                               //Unterstützung durch den Lizenzgeber//

It happens quite frequently that the licensee needs support from the licensor, in particular from the researcher. Such support may consist in introductory information, instructions, help with assembly, etc. Support services should be limited in time and in fact. Where desirable, it is possible to add provisions on the cost of support and the place where support is to be provided, etc.

Subject matter of the contract                 //Vertragsgegenstand//

To ensure that the research project runs smoothly, it is crucial to flesh out the subject matter of the contract in as much detail as possible. It is absolutely vital to describe the obligations of the two partners in detail. In the contract itself, it is sufficient to provide a short description. However, all the required activities, partial activities, time schedules, milestones, persons involved, materials needed, locations, etc. should be defined in an annex or appendix. This definition can be complemented by customer requirements specifications, functional requirements specifications, technical details, expectations of the partners, problems to be expected, access rights for the staff of one partner to the facilities of the other partner, and similar matters. It is also worth considering whether all the work has to be carried out by the contract parties themselves or whether they should be allowed to subcontract parts of the work.

Obligations should be listed for both partners. Even if the industrial partner’s contribution seems at first sight to be limited to paying for the research, it might be necessary, in the interest of achieving a good research result, for the industrial partner to contribute information (e.g. in the form of specifications), activities (e.g. in the form of instructions pertaining to prototypes or the provision of machinery) or data.

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Terms of payment                         //Zahlungsmodalitäten//

In addition to defining how payments should be made, it is also necessary to define the terms of payment.

• When does a claim to payment arise?

• When is a payment due?

• Is the licensee subject to book-keeping obligations?

• When does the licensee have to provide a statement of accounts and what must be included in such statement?

• Is the licensor entitled to inspect the licensee’s books or to rely on other forms of control and verification?

• Will minimum royalties be offset against turnover royalties?

• Can payments be reclaimed for any reason?

Termination                      //Kündigung//

In addition to the planned duration of a contract, the possibility of early termination of contract must also be considered.

A contract may be terminated for good cause even without appropriate provisions being contained in the contract, if the continuation of the contract is no longer reasonable. Advantage should also be taken of the opportunity to give examples of what constitutes good cause in the contract. Such examples include, amongst others:

• public funding is discontinued

• the continuation of the project would result in an unreasonable economic burden due to technical problems

• the relevant employees leave the project

• the anticipated outcome becomes worthless due to legislative changes

• new economic circumstances arise which preclude exploitation

• the remuneration is not paid.

Apart from termination for good cause, the parties may also make arrangements for ordinary termination with due notice. 

Type of licence                                //Lizenzart//

Basically, there are two different types of licences:

the >non-exclusive licence and the >exclusive licence.

The extent of the licensor’s and the licensee’s obligations toward one another varies, depending on whether the licence is non-exclusive or exclusive. A non-exclusive licence allows the licensor to spread the risk of exploitation, and thus also the risk of drawing sufficient benefits from the research result, among several licensees. An exclusive licence requires the licensor to rely on the fact that the single licensee exploits the research result in a proper manner.

Trademark                         //Marke//

A trademark is a sign capable of distinguishing a company’s goods or services from those of other companies.

Signs which are commonly used for describing such goods or services (e.g. ‘power’ as a trademark for electrical or electronic goods) are regarded as incapable of performing the functions of a trademark.

Signs which are devoid of any distinctive character or which must remain freely usable as a necessary designation of certain goods or services may not be monopolized by way of trademark protection. Where an official examiner registers a trademark despite its being devoid of distinctive character or in cases where there is an existing need for it to be allowed to remain available for general use, such trademark may be cancelled or declared invalid even at a later point. A wide variety of trademarks may be protected under trademark law. Trademark protection can, in particular, be granted for words including personal names, and slogans, images, letters, numerals, acoustic signs, three-dimensional forms, including the shape of goods or of their packaging and other aspects of their presentation, including colours and colour combinations. 

Term of protection                        //Schutzdauer//

The term of intellectual property rights is limited:

• Patents: 20 years

• Utility models: different rules; 10 years in Austria

• Trademarks: 10 years, can be renewed any number of times

• Designs: 5 years, can be renewed to up to 25 years

• Copyright: author’s life + 70 years

Term of contract                             //Vertragsdauer//

Contracts or agreements come into force upon being signed by all the contracting parties. However, it is possible to have the term of a contract or agreement start before or after this date. In this context, avoid pre- or postdating the signature date. It is preferable to just set out an earlier or later date for the contract to come into force.

Just like the entry into force, the expiry date of a contract should also be subject to regulation. With both dates, it is important that they can be determined without ambiguity. To ensure this, one can use dates, periods of times or measurable events, such as ‘the expiry of the patent subject to the contract’. What should be avoided is ambiguous wording, such as ‘satisfactory completion of tests’.

In addition to the scheduled end of a contract (expiry), it is also possible to include possibilities for terminating the contract before completion, either with or without defined notice periods. Where anti-trust law regulations apply, patent licence agreements cannot have a term that is longer than that of the licensed patent. A frequently used approach is to include a clause stipulating that the contract expires upon expiry of the patent with the longest validity term. Know-how may be licensed only as long as it has not been disclosed. It is always possible to agree on shorter terms.

The contract should also stipulate what is to happen with the documents, the IP rights, the products already produced, sublicences or improvements when the contract term ends.

Terms of payment                         //Zahlungsmodalitäten//

In addition to defining how payments should be made, it is also necessary to define the terms of payment.

• When does a claim to payment arise?

• When is a payment due?

• Is the licensee subject to book-keeping obligations?

• When does the licensee have to provide a statement of accounts and what must be included in such statement?

• Is the licensor entitled to inspect the licensee’s books or to rely on other forms of control and verification?

• Will minimum royalties be offset against turnover royalties?

• Can payments be reclaimed for any reason?

U

Utility model                     //Gebrauchsmuster//

Utility models are sometimes also referred to as ‘petty >patents’. The main difference with respect to patents is that utility models are granted for a limited period of time (not more than 10 years) and that the Patent Office will check applications for utility models only for formal (and not substantive) registration criteria. What is more, in Austria, utility models are subject to a grace period. This means that a utility model can be registered, and granted, as ‘new’ for as long as six months after publication of an invention provided that the publication is based on the documentation prepared by the person or entity filing for the patent or their legal predecessor.

In contrast to patent law, the law on utility models has not been harmonised yet, neither in Europe nor worldwide. Some countries do not use the concept of utility model at all, while others do, but in each case involving highly varying requirements and consequences.

V

W

Waiver of non-disclosure obligation                      //Ausnahme von der Geheimhaltungsverpflichtung//

As a rule, contracts and agreements define situations where it is no longer necessary to keep information confidential. The usual scenarios are:

• The information was verifiably known to the recipient of the information before being disclosed.

 • The information was known or accessible to the public before being disclosed.

 • The information becomes known or accessible to the public after being disclosed, but through no action or fault on the part of the recipient of the information.

 • The information largely corresponds to information that was disclosed or made accessible to the recipient of the information by an authorised third party at some point in time in the past.

 • The information must be disclosed to a court or a public authority under the law or upon instruction by such body.

In the latter case, the recipient of the information can be obligated to immediately notify the provider of the information of such obligation to disclose in order to enable such provider to take action against such instruction.