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.
NB: the german equivalent ist written under the the english glossary entry
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.
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.
Um auf Erfindungen von Dienstnehmerinnen/ Dienstnehmern (Angestellte und Arbeiterinnen / Arbeiter jeder Art) zugreifen zu können, muss es sich bei einer Erfindung um eine Diensterfindung im Sinne des §7(3) PatG handeln und es bedarf einer schriftlichen Vereinbarung, oder einer entsprechenden kollektivvertraglichen Regelung, dass der Dienstgeberin / dem Dienstgeber das Recht auf Anbietung und Aufgriff von zukünftigen Diensterfindungen eingeräumt wird.
Sind obige Voraussetzungen gegeben, so entstehen bei einer allfälligen Diensterfindung Rechte und Pflichten.
Die Erfinderin / der Erfinder hat die Pflicht, ihre / seine Erfindung der Dienstgeberin / dem Dienstgeber zu melden und die Rechte an der Erfindung anzubieten. Wenn die Dienstgeberin / der Dienstgeber die Rechte an der Erfindung aufgreift, hat die Dienstnehmerin / der Dienstnehmer gemäß §8 PatG einen gesetzlichen Anspruch auf angemessene besondere Vergütung.
Nimmt die Dienstgeberin / der Dienstgeber innerhalb der gesetzlichen Frist das Recht zur Übertragung der Erfindung nicht in Anspruch oder gibt die Erfindung frei, so erhält die Erfinderin / der Erfinder alle Rechte an ihrer / seiner Erfindung und kann sie auf eigene Kosten zum Patent anmelden und verwerten.
Seit Einführung des UG 2002 sind Universitätsbedienstete verpflichtet, eine Erfindung der Universität zu melden.
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.
As a rule, contracts and agreements define situations where it is no longer necessary to keep information confidential. The usual scenarios are:
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.
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.
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.
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.
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.
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.
To be complete, an invention disclosure should comprise the following:
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.).
Information on internal instructions or directives as well as on experience or work of the research institution used for the invention.
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.
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
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.
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.
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.
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.
Subjects of a licence may include
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 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
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.
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.
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).
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.
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 Applicable law
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.
In order to avoid liability risks, the following aspects should be considered and provided for:
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.
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!).
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:
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.