Working with Industry: What Can We Do To Facilitate Contract Negotiation? NCURA Regions VI and VII Meeting Park City, Utah April 24, 2007 Jeri Muniz Director, Sponsored Projects University of California, Irvine

Working with Industry Getting to Yes… How Do We Get There? The Landscape The Landscape Understand Both Parties The Approach The Approach Do Your Homework Let’s Look at Specific Scenarios and Clauses Keys to Navigating the Gray How Do We Manage? UCI’s perspective UCI’s perspective

Understand your University Understand the motivations and authority of each major player: Faculty Faculty Sponsored Projects Sponsored Projects Technology Transfer Technology Transfer Vice Chancellor for Research Vice Chancellor for Research Legal Counsel Legal Counsel Build internal unity Coordinate internally; speak with one voice Coordinate internally; speak with one voice

Understand your University Communicate with the PI before the negotiation Gather info Gather info How did the project come about? Urgency of project (Has the work already started?) What does the PI expect out of the project? What do both parties bring to the table? Is there history with the Sponsor? Are we the only game in town? Answer questions Answer questions Explain Industry’s position and the impact on the research teamExplain Industry’s position and the impact on the research team Clarify university policies, if necessaryClarify university policies, if necessary

Understand your Partner Get to know the Sponsor’s negotiator Authority Authority Experience Experience Personality Personality Incentives Incentives Availability Availability Ask Why? Understand their motivations Understand their motivations What research results and IP rights do they expect? What will they contribute to the project? Timeframe

Do Your Homework Review the agreement Understand the project Understand the project Isolate the issues Compare with standard language and principles Compare with standard language and principles Compare with previous agreements with Sponsor Compare with previous agreements with Sponsor Inform PI of the potential issues (discuss timeframe) Develop analysis and rationale Explain why Explain why Identify alternative or fallback positions Identify alternative or fallback positions Offer to draft language/propose alternate language

Ready, Set, Go… Let’s look at specific clauses and scenarios…

Confidentiality Institutions want to: Limit confidentiality obligations Limit confidentiality obligations Deal with only one set of confidentiality terms Deal with only one set of confidentiality terms Comply with public records disclosure regulations and statues Comply with public records disclosure regulations and statues Industry wants: Absolute confidentiality Often extending to the budget, contract, other study-related documents, and research results No time limit on the obligation of confidentiality To hold PI to a personal confidentiality agreement To avoid having to mark confidential documents

Scenario #1: Confidentiality Project: Evaluation of a learning program at Sponsor’s facilities Type of Agreement: Sponsored Research Ag. Sponsor: Mid-size local company Sponsor’s Negotiator: Outside Legal Counsel University Negotiator: SP Office Extra Motivation: First agreement between University and Sponsor (PI considers this a critical partnership ~ with a potential for future funding) First agreement between University and Sponsor (PI considers this a critical partnership ~ with a potential for future funding) Work already started Work already started

Sponsor proposed the following language: “2.Confidential Information. University acknowledges and agrees that the names and addresses of the Sponsors Corporations’ benefactors, donors, corporate partners and affiliates (collectively “Contacts”) and all other confidential information relating to those actual or prospective Contacts as well as other information such as but not limited to curriculum material, learning tools or teaching methods that has or could have commercial or other value in the purposes for which the Sponsor or its Contacts are engaged or in which they contemplate engaging and the Sponsor’s student records, employee records, and the Sponsor’s and the Corporations’ corporate partner agreements, benefactors lists, donors lists, information relating to the Sponsor’s curriculum, teaching methods, copyrighted materials, software and graphics created for the benefit of the Sponsor, business plans, strategy plans, development plans, accounting/financial records (including, but not limited to, balance sheets, financial statements, tax returns, payable and receivable information, bank account information and other financial reporting information), and private information related in any way to correspondence, history,, photos, data, and other information not generally known by or available to the general public …” “2.Confidential Information. University acknowledges and agrees that the names and addresses of the Sponsors Corporations’ benefactors, donors, corporate partners and affiliates (collectively “Contacts”) and all other confidential information relating to those actual or prospective Contacts as well as other information such as but not limited to curriculum material, learning tools or teaching methods that has or could have commercial or other value in the purposes for which the Sponsor or its Contacts are engaged or in which they contemplate engaging and information, that, if disclosed without authorization, could be detrimental to the interests of the Sponsor or its Contacts (the “Confidential Information”), whether or not such information is identified as Confidential Information. By example, and without any limitation, Confidential Information includes the Sponsor’s student records, employee records, and the Sponsor’s and the Corporations’ corporate partner agreements, benefactors lists, donors lists, information relating to the Sponsor’s curriculum, teaching methods, copyrighted materials, software and graphics created for the benefit of the Sponsor, business plans, strategy plans, development plans, accounting/financial records (including, but not limited to, balance sheets, financial statements, tax returns, payable and receivable information, bank account information and other financial reporting information), and private information related in any way to correspondence, history, gossip, stories, facts, rumors, photos, data, and other information not generally known by or available to the general public …” NOTE: This is just the definition….they then went on to obligate us to keep EVERYTHING confidential. Scenario #1: Confidentiality Actual Contract Language

Scenario #1: Confidentiality Contract Issue(s): Everything is confidential! Everything is confidential! Relationship with Sponsor Existence of the agreement, and the specific terms and conditions Anything University personnel see while visiting the company’s facilities University shall not engage in gossip, rumors.. University shall not engage in gossip, rumors.. What’s your approach? What do you need to understand about the University? The PI? The Sponsor? The Sponsor’s negotiator? What do you need to understand about the University? The PI? The Sponsor? The Sponsor’s negotiator? What resources do you have available? What resources do you have available? What examples would you use to explain your position? What examples would you use to explain your position? How do you facilitate the negotiation? How do you facilitate the negotiation?

Patent Rights Institutions want to: Protect academic freedoms Protect academic freedoms Ensure that patentable inventions are diligently developed and advanced to market for public benefit Ensure that patentable inventions are diligently developed and advanced to market for public benefit Industry wants to: Own all ideas, inventions, patents, know-how Broadly protect their proprietary compound or device

Scenario #2: IP Project: PI-Initiated trial to treat psoriasis with an FDA approved drug (approved for the use to be studied) Sponsor : Big Pharma Industry Negotiator: Internal Legal Counsel University Negotiator: SP Office Extra Motivation: Parties negotiating for three months Parties negotiating for three months PI is anxious ~ VCR has been informed PI is anxious ~ VCR has been informed

Sponsor originally proposed ownership of all inventions but then proposed the following language: “6.PROPRIETARY RIGHTS All information resulting from the Study conducted under this Agreement, including all data, results, conclusions, discoveries, inventions, know-how and the like, whether patentable or not (“Data”) shall be fully disclosed by Institution and/or Principal Investigator to Sponsor. Sponsor shall have the unrestricted right to freely utilize all such Data in whatever manner it desires. All Data shall be the property of Institution. Institution hereby grants Sponsor an exclusive, irrevocable, fully paid-up, royalty free, worldwide license, with the right to sublicense, import, make, have made, use, offer to sell, sell have sold all such Data. Institution and/or Principal Investigator shall assist Sponsor, at Sponsor’s expense, in the preparation of all documentation necessary to effectuate and perfect Sponsor’s rights in such Data. ” Sponsor shall have the unrestricted right to freely utilize all such Data in whatever manner it desires. All Data shall be the property of Institution. Institution hereby grants Sponsor an exclusive, irrevocable, fully paid-up, royalty free, worldwide license, with the right to sublicense, import, make, have made, use, offer to sell, sell and have sold all such Data. Institution and/or Principal Investigator shall assist Sponsor, at Sponsor’s expense, in the preparation of all documentation necessary to effectuate and perfect Sponsor’s rights in such Data. ” Scenario #2: IP Actual Contract Language

Scenario #2: IP Contract Issues: Outright grant of an exclusive license to everything (inventions, data, know-how, etc.) Outright grant of an exclusive license to everything (inventions, data, know-how, etc.) What’s your approach? What do you need to understand about the University? The PI? The Sponsor? The Sponsor’s Negotiator? What do you need to understand about the University? The PI? The Sponsor? The Sponsor’s Negotiator? What resources do you have available? What resources do you have available? What examples would you use to explain your position? What examples would you use to explain your position? How do you facilitate the negotiation? How do you facilitate the negotiation?

Indemnification Institutions want to: Avoid third party liability (RAs) Avoid third party liability (RAs) Be recognized as a “skilled pair of hands” (CTAs) Be recognized as a “skilled pair of hands” (CTAs) Be held harmless from claims or damages resulting from following sponsor’s protocol or instructions (CTAs) Be held harmless from claims or damages resulting from following sponsor’s protocol or instructions (CTAs) Industry wants to: Contain costs Minimize liability By refusing to indemnify By shifting liability to others

Scenario #3: Indemnification Project: Development/Testing of a survey tool; surveying alleged victims of elder abuse Type of Agreement: Collaboration Agreement (No Funding) Sponsor: Mid-size local company Industry Negotiator: Contracts Specialist University Negotiator: SP Office Extra Motivation: Pressure from Sponsor to execute the agreement (“There’s no funding ~ so what’s the problem?”) Pressure from Sponsor to execute the agreement (“There’s no funding ~ so what’s the problem?”) Project linked to other ongoing projects Project linked to other ongoing projects

Sponsor proposed the following language: “UCI shall indemnify, defend with counsel approved in writing by the Sponsor, which approval shall not be unreasonably withheld, and hold the Sponsor, and their officials, officers, employees, agents (“SPONSOR INDEMNITEES”) harmless from and against any and all liability, loss, expense, or claims for injury or damages arising out of the performance of this Collaboration Agreement, but only in proportion to and to the extent such liability, loss, expense, or claims for injury or damages are caused by or result from the negligent or intentional acts or omissions including the actual or alleged sexual misconduct of UCI, its officers, employees, or agents. “UCI shall indemnify, defend with counsel approved in writing by the Sponsor, which approval shall not be unreasonably withheld, and hold the Sponsor, and their officials, officers, employees, agents (“SPONSOR INDEMNITEES”) harmless from and against any and all liability, loss, expense, or claims for injury or damages arising out of the performance of this Collaboration Agreement, but only in proportion to and to the extent such liability, loss, expense, or claims for injury or damages are caused by or result from the negligent or intentional acts or omissions including the actual or alleged sexual misconduct of UCI, its officers, employees, or agents. Sponsor shall indemnify, defend, and hold UCI, its officers, employees, and agents harmless from and against any and all liability loss, expense, or claims for injury or damages arising out of the performance of this Collaboration Agreement, but only in proportion to and to the extent such liability, loss expense, or claims for injury or damages are caused by or result from the negligent or intentional acts or omissions of Sponsor, its officers, employees, or agents. Scenario #3: Indemnification Actual Contract Language

Scenario #3: Indemnification Contract Issue: University is to indemnify, for all acts or omissions, including alleged or proven sexual misconduct or abuse University is to indemnify, for all acts or omissions, including alleged or proven sexual misconduct or abuse What’s your approach? What do you need to understand about the University? The PI? The Sponsor? What do you need to understand about the University? The PI? The Sponsor? What resources do you have available? What resources do you have available? What examples would you use to explain your position? What examples would you use to explain your position? How do you facilitate the negotiation? How do you facilitate the negotiation?

Keys to Facilitating Negotiations with Industry Understand your University Involve the PI Involve the PI Unify all stakeholders ~ speak with one voice Unify all stakeholders ~ speak with one voice Utilize the experts and/or decision makers Utilize the experts and/or decision makers Know the whys ~ use different examples to get your point across Know the whys ~ use different examples to get your point across Understand your Industry Partner Actively listen ~ Ask why? Actively listen ~ Ask why? Be proactive and responsive Don’t delay! Don’t delay! Be ready with multiple examples to explain your position Be ready with multiple examples to explain your position Be creative!

How do you manage it all??? UCI’s Perspective…

What can you do as an Office? UCI’s Perspective Workload Management System Workload Management System Electronic System to Track the Status of Negotiations Feed Information into a Research Portal (available to the campus/faculty) Day Status Reports Day Status Reports Awareness and management of negotiations Preventive medicine! Preventive medicine! Creates proactive game plans for the timely resolution of active negotiations Troubleshooting in a team environment to maximize learning opportunities in a group using real contracts/negotiations

What can you do as an Office? Officer Tool Kit Provides one-stop shopping for all resources related to topic/sponsor issues Provides one-stop shopping for all resources related to topic/sponsor issuesRationale Template language and agreements Access to internal/external guidance Previously negotiated agreements (and the corresponding history) Shared access Shared access Enhances consistency Self-updating

Thank you! More questions? Jeri Muñiz Director, Sponsored Projects University of California, Irvine