Contract negotiation
Many projects require agreements to be put in place between the University and the sponsor or any collaborating parties. R&IS will draft the appropriate research agreement and send a copy to you before issuing it externally for comment. Often, the University will receive agreements from partners for research projects, which will also be reviewed by R&IS. Below is a summary of the key points that are considered during the contract negotiation stages.
Project details
We will check the details of the project with those you have provided us with to ensure that all parties agree on the work programme. We will, where possible, ensure that an agreed document such as the proposal or description of work is included in any agreement. Please remember that although the Contracts Team have extensive experience of negotiating contracts, and will have some information about your project, we may still need your input at this stage to ensure that our information is correct and complete. We understand that the smallest error can have substantial consequences on the project and its intended results.
Timescale
We need to make sure the timescale for carrying out each stage of the project is adequate for the work that needs to be done. We will use the information you have provided in the Initial Enquiry and in URMS to check this is correct. If at any stage we are concerned that the timescale is too strict, we will liaise with you. If timescales cannot be adhered to this could lead to delayed payments or, in the worst case, breach of contract and termination.
Financial and budgetary details
We will check any figures against those entered in URMS to ensure that the award is for the correct amount. We understand that some sponsors may not be able to cover the full economic cost of the project, but we generally expect commercial organisations to pay full economic cost. If the project costs are more than you have been awarded, and we would expect to recover full economic cost, then we will put forward your case for approval by your Faculty Pro-Vice Chancellor who will consider, strategically, whether the faculty will agree to the shortfall. Where we know that the sponsor will not cover full economic cost (charity, Research Council) we will not require faculty approval.
We will also check that the payments are not linked to any outputs or results, since these may not materialise and thus leave the University in deficit on the account.
Where the University has not worked with an organisation before we will carry out a full credit check to determine how payments will be required. For example, if you are receiving income from a new company then we will normally request payment in stages in advance, but if your grant is from a recognised charity we will accept payments in arrears.
Ownership of results and arising IP (Foreground IP)
The University acknowledges that where a company has commissioned a specific piece of contract research, they will normally seek ownership of the Foreground IP. We also accept that the contracting company will often be in the best position to protect and commercialise this IP. Provided the contractor has agreed to pay a price acceptable to the University, we will normally concede on ownership of Foreground IP.
In circumstances where the interaction can be described as truly collaborative, with each party contributing intellectually and financially, the University has an obligation to the public interest (given that much of its funding is from government, research councils, the TSB etc.) and will therefore seek to protect its commercial as well as its academic interests. In these circumstances the University will discuss with the sponsor and any other partners involved in the project which party(ies) should own the Foreground IP and the terms under which any assignment of rights shall be made. Where a company provides the most appropriate route for exploitation we will seek to reach a fair compromise over ownership.
In all situations, the University's primary objective will be to ensure that high quality research is carried out and the knowledge it generates is transferred for wider benefit, whilst achieving a fair balance in financial benefit for those parties involved in the research. Regardless of rights to commercially exploit Foreground IP, the University will invariably exercise its rights to use Foreground IP for internal teaching and research purposes as this enables us to fulfil our obligations to HMG in respect of maintaining academic excellence. This will be properly expressed in any contract or agreement and we will be receptive to allied confidentiality issues. We will also ensure that no agreement requires any author to waive their moral rights in connection with any documents produced for the sponsor.
University know-how/pre-existing knowledge (Background IP)
Often an organisation will wish to work with the University because we already possess know-how and pre-existing knowledge ("Background IP") necessary for the undertaking of a new piece of research. In the majority of situations the Background IP required to undertake a piece of research is self-evident from the beginning and, where appropriate, we will undertake to identify it in the contract. Where our Background IP is required to commercialise Foreground IP, the University will normally undertake, subject to other third party obligations, to negotiate a fair and reasonable licence on that Background IP to a sponsor.
Confidentiality
The University understands that when working with other organisations the parties may need to exchange confidential and commercially sensitive information. We routinely issue and accept confidentiality agreements to protect early stage discussions. We need to ensure that confidential information is treated as such by all parties as there could be implications if applications are made for patent or other IP Rights protection. In addition, we need to ensure that other organisations are aware that we are subject to the Freedom of Information Act 2000. More information on the Freedom of Information Act 2000 and the University obligations under this Act can be found at http://www.shef.ac.uk/foi/
Publication
In order to maintain both our and your academic excellence and reputation now, and in the future, it is important that our academic staff are able to publish the results of their research wherever possible. Therefore, when undertaking research, the University will normally seek to reserve its right to publish the results of that work. We do however understand that in many cases the sponsor will need to use the Foreground IP commercially and we will normally agree to delay publication for a reasonable period to allow patents to be lodged and to liaise with the sponsor over the presentation of any commercially sensitive results that are in a proposed publication. We will also ensure that any students working on a research project are entitled to submit papers, including theses for examination.
Warranties, guarantees and indemnities
As a University, it is our practice to use reasonable endeavours to ensure all work is carried out to the highest standard (that is how we maintain our position of excellence). However, results of research can never be guaranteed and it is our policy not to offer any kind of warranty or guarantee that specific research objectives can be met, but rather to undertake to work with the company to agree alternative routes when research generates unanticipated results. Furthermore, we will not normally accept any liability for use a company may make of the results of our research, although we will of course endeavour to work co-operatively to mitigate any problems they may encounter.
Recently we have had a number of organisations request indemnification from the University for claims of infringement of IP rights from third parties. This area of law is very difficult to regulate and therefore complicated and expensive to defend any such claim. In the event that an organisation requests such indemnity, we will normally suggest that we will ensure reasonable enquiries are made to establish whether any third parties may potentially have cause to claim but that we cannot provide an indemnity. As we do not have an unlimited pot of money to pay out in the unlikely event of a lawsuit, we will ensure that all claims are limited to direct loss only. All these factors are important to ensure the University does not have to use its resources dealing with legal actions and can instead use those resources to maintain our position and reputation.
Termination
Results of research are never guaranteed therefore it is vital that when things do not quite go as planned the parties discuss how to take the project forward. Sometimes the only solution might be to terminate the project. We try to ensure that all agreements allow termination to be imposed by any party but only after a reasonable period has been given for discussions and attempts to remedy any issues. We suggest all research projects to set up a project management group and procedure to make sure problems are identified at an early stage rather than once they can no longer be remedied. We need to check contracts with directly incurred staff give sufficient notice periods for termination to comply with the terms of the contracts of employment. Normally where the sponsor decides to terminate a project for any reason other than failure by another party, they will cover all costs already allocated or incurred in connection with the project.