Slides from Session

Post Award:
Award Negotiation,
and Receipt
MUHAS, Dartmouth, UCSF
Tuesday October 21, 2014
Common Agreement Terms
During this training we will provide:
Purpose and Importance
Examples of Acceptable Clauses
Examples of Unacceptable Clauses
For the following Common Agreement Terms:
- Publication Rights
- Governing Law (Sovereign Rights)
- Payment Terms & Invoicing
- Confidentiality
- Use of Name
- Termination
- Indemnification
- Insurance
- Intellectual Property
- Citizenship Restriction
- Terrorism
- Export Control
Publication Rights
What Are Publication Rights?
 “Publication rights” are the parts of the agreement that define what
the policy and process is for publishing the results generated under
the agreement.
Why are Publication Rights Important?
 Publication is the cornerstone of academic freedom, and affects most
of Academic Institutions principles. University research results are
disseminated principally through peer-reviewed publications,
conferences, and other forms of open communication.
 Publication rights can affect the legal status of the Institution.
 Loss of Fundamental Research Exclusion (FRE) at USA Institutions
 Critical for faculty to advance their careers.
 May be required for students who need to publish dissertation to
receive degree.
Publication Rights
What are Standard Positions on Publication
Must be able to publish research results in a timely manner
Sponsor gets time limited period to review and comment on
proposed publications. Time limit should typically be 30 days.
We can extend the time limit 90 days if patentable material is
identified by the Sponsor.
Time limit may be extended to 18 months to allow completion of
an initial publication on a multi-center clinical trial.
We can agree to give the comments fair consideration, but
cannot give editorial rights to publications.
Do not give away ownership of the results generated at the
Publication Rights
Examples of problematic publication language:
 Publications:
University must obtain prior written
approval of Grantor before publishing any material
relating to the grant.
 Publication: University must provide manuscript to
sponsor 30 days prior to submission. Sponsor has the
right to edit the manuscript to ensure the data is
accurately presented. University and Investigator
agree to incorporate any changes requested by
Governing Law (Sovereign Rights)
What Is Governing Law?
 The governing law or choice of law clause
specifies that the laws of a mutually agreed upon
jurisdiction will govern the interpretation and
enforcement of the terms of the contract.
Why is Governing Law Important?
 If an agreement is signed under the jurisdiction of
another state or entity, the University may lose its
sovereign rights under name governing law.
Payment Terms & Invoicing
What Are Payment Terms & Invoicing?
 Provision in a contract which defines the payment method, amount,
and invoicing (from how often to the information that should be
included in the invoice). Sets billing requirements:
Fixed-Priced: Used when award billing is not based on costs incurred.
Cost-Reimbursable: billing based on actual expenses incurred and
posted to the General Ledger, including Indirect Costs (IDC).
The term may include elements critical to creating a valid invoice such as:
Invoice forms/formats
Invoice details
Electronic form or paper
Number of copies
Payment Terms & Invoicing
Why Are Payment Terms & Invoicing Important?
 Defining Terms for payment and invoicing creates an
expectation and defines the requirements UCSF must
meet in order to be paid.
What are some standard positions on payment terms
and invoicing?
These terms must be reasonable, achievable, and within the
University’s practiced limits:
Monthly billing is due in 30 days for pervious month expenditures.
A final financial report must be submitted to Sponsor NOT LATER THAN
sixty (60) days after award end date.
Payment Terms & Invoicing
Example of preferred payment terms and invoicing language:
Payment Terms & Invoicing:
Prime Recipient shall reimburse Subrecipient not more often than monthly for
allowable costs. All invoices shall be submitted using Subrecipient's standard
invoice, but at a minimum shall include current and cumulative costs (including cost
sharing), subaward number, and certification as to truth and accuracy of invoice.
Invoices that do not reference Prime Recipient's Subaward Number shall be
returned to Subrecipient. Invoices and questions concerning invoice receipt or
payments should be directed to the appropriate party's Contact as shown in
Attachments 3A & 3B.
A final statement of cumulative costs incurred, including cost sharing, marked
"FINAL" must be submitted to Prime Recipient's Contact, as shown in Attachments
3A & 3B, NOT LATER THAN sixty (60) days after subaward end date. The final
statement of costs shall constitute Subrecipient's final financial report.
All payments shall be considered provisional and subject to adjustment within the
total estimated cost in the event such adjustment is necessary as a result of an
adverse audit finding against the Subrecipient. Prime Recipient reserves the right
to reject an invoice.
Payment Terms & Invoicing
Example of unacceptable payment terms and invoicing
Payment Terms & Invoicing:
University shall invoice Sponsor not more often than
quarterly, and Sponsor retains the right to retain 10% of
the approved funded amount until a satisfactory final
scientific report is submitted.
What is the Confidential Information Section?
The confidential information part of the contract defines
what information related to the grant or contract is
protected from public disclosure.
Why is the Confidential Information Section Important?
Confidential information section protects both Parties from
inadvertent disclosures of information that can have
negative impact on both parties interests.
 Inadvertent public disclosures can block a Universities ability
to patent discoveries.
 Poorly worded confidential information section can block a
Universities ability to publish the research results.
What are Recommendations on the Confidential Information Section?
The main points that should always be addressed in Confidentiality provisions:
 A defined termination date --- usually 5 years or less but maximum of 7
 Should always include the five exceptions to Confidentiality:
Is already in the public domain;
Becomes public knowledge without breach of the agreement;
Is already in the possession of the University or its employees at the time of
disclosure and was not obtained from the disclosing party;
Is received from a third party that did not receive the information under a
confidential agreement;
Is independently developed by the University or its employees.
The CI should only be sent to the Principal Investigator or designee (need to
know basis);
Should be marked Confidential or proprietary.
The definition should NOT include:
 The agreement itself, else violation of Government
Public Records Act
 Research results - otherwise, it’s a publication restriction
 University’s data - this restricts future research
 Know‐how = Knowledge developed with experience;
difficult to establish that a PI developed “know‐how”
through sponsor’s confidential information.
 Trade secrets = Information that the owner takes
reasonable efforts to keep confidential. Universities don’t
typically have “trade secrets”
Example of preferred confidential information section:
“The Institution shall maintain the confidentiality of all information which is disclosed by Sponsor, to the
Institution’s Principal Investigator, in a writing marked as “Confidential” or, if orally disclosed, is reduced to a
marked writing by Sponsor and provided to the Institution’s Principal Investigator within thirty (30) days of oral
disclosure (“Confidential Information”). During the term of this Agreement and for a period of five (5) from the
expiration or earlier termination thereof, the Institution shall not disclose Confidential Information to any third
party, other than employees, students, and agents of the Institution, who have a need to know such information
for the performance of the project under this Agreement and who have been informed of the obligations of
confidentiality hereunder.
The obligations of non‐disclosure do not apply to information:
which is in the public domain or comes into the public domain through no fault of the Institution;
learned by the Institution from a third party not subject to an obligation of non‐disclosure of such
developed by the Institution independently of knowledge or information obtained by the
Investigator from Sponsor;
already known to the Institution before receipt from Sponsor, as shown by the Institution’s prior
written records; or
which the Institution is required by law to disclose, provided that, in any such event, Institution will
provide Sponsor with reasonable prior written notice so that Sponsor may seek a protective order,
and Institution shall furnish only that portion of the Confidential Information that its counsel advises is
required to be disclosed by law.”
Example of unacceptable confidential information:
Confidential Information, for the purposes of this
Agreement, includes any information related to the
agreement, including without limitation any data
generated in the performance of the agreement, and
the terms of this Agreement.
Standard of Care
May agree to use the same standard of care to protect CI
as University utilizes to protect its own CI (nothing higher).
 Universities typically do not have clear processes or
controls to guard the access and use of CI.
 Do not agree to hold CI in strict confidence.
Acceptable: “University will use the same degree of care
to prevent the unauthorized use, dissemination, or
publication of the CI as the University uses to protect its
own confidential information, but no less than reasonable
Use of Name
What is the Use of Name Clause?
 The Use of Name clause defines when the parties can use the other party’s name or
trademark in advertising or publicity.
Why is the Use of Name Clause Important?
 Use of name clause protects the Universities reputation by preventing outside
parties from making claims on the Universities behalf without Universities consent.
What are University Standard Position on Use of Name?
 Sponsors cannot use Universities name in advertising, press release or publicity
without permission from the their designee. Questions on press releases should be
sent to your Public Affairs Office or equivalent. This protects Universities from
having their name used by Sponsor to endorse products.
Use of Name
Example of preferred use of name language:
Neither party will use the name or derivative thereof of the
other party or its employees, contractors or affiliates in any
advertisement, press release, or other publicity without prior
written approval of the other party. Participant understands
that the California Education Code section 92000 provides
that the name “University of California” is the property of the
State and that no person will use that name without permission
of Chancellor or designee.
What is Termination?
 Provision in a contract which allows for its termination
under specified circumstances.
 The provision is used to set terms for any material
breach of or default or failure to perform under the
Why is Termination Important?
 It is the right of a party to completely or partially end
performance under the provisions of the contract termination
What are some Recommendations for a Universities
Standard Position on Termination?
 Prefer that either party can terminate
 For any (or no) reason
 Advance written notice strongly advised
 Usual University obligations: (i) mitigate costs, (ii) furnish final
cost report, and (iii) reimburse excess funds to Sponsor
 Sponsor pays: (i) actual direct and indirect costs (incurred
through date of termination) and (ii) noncancellable obligations
Example of preferred termination language:
Grant Termination: Either party may terminate this Agreement in whole or in
part for any reason that the party considers significant upon giving thirty
(30) days written notice to the other party. CHCF shall pay Grantee the
full cost of documentable non-cancelable obligations properly incurred by
Grantee prior to termination.
Example of problematic termination language:
The Foundation may terminate the Grant, and demand
reimbursement of payment of any portion of the grant, at any
time because of the failure of the Grantee to comply with the
conditions of the grant.
What is an Indemnification Clause?
Indemnification section outlines who is responsible if either the Sponsor or UCSF suffers a
loss as a result of the grant. Also known as assumption of risk or hold harmless.
Why is the Indemnification Clause Important?
If something goes wrong, a contract/agreement often addresses who will be financially
responsible. The answer to who pays is found in the Insurance and Indemnification
provisions of the agreement. The indemnification section protects the Entity from taking
responsibility for matters that are not covered under the self insurance program.
Protects Entity from unfunded liabilities.
What are some Recommended Standard Position on Indemnification?
Check your laws, and Entity Policies
The University has standard indemnification language that requires each party to the
contract to assume financial responsibility for liabilities that arise from its own acts or
Example of preferred indemnification language:
 Each party shall be responsible for its negligent acts or
omissions and the negligent acts or omissions of its
employees, officers, or director's, to the extent allowed
by law.
 To the extent permitted by law, UNIVERSITY shall be
responsible for its own negligence and that of its
officers, employees and agents.
 Each party to this Agreement agrees to be responsible
for the liabilities arising out of their own conduct and
the conduct of their officers, employees and agents.
Examples of alternate acceptable indemnification language:
 University hereby agrees to defend, indemnify and hold
harmless Sponsor, and Sponsor’s officers, agents and
employees from any liability, claim, loss or damage that they
may suffer as a result of claims, demands, costs, or judgments
against them but only in proportion to and to the extent such
claims, demands, costs or judgments are caused by
University’s negligent acts or omissions.”
For non-profit Sponsors, it is acceptable to remain silent on
The US Federal Government will not indemnify Contractors.
Examples of Unacceptable Indemnification Language:
UNIVERSITY shall defend, indemnify and hold [OTHER PARTY]
harmless from and against any and all liabilities, losses,
damages, claims, or causes of action, and any connected
expenses (including reasonable attorneys' fees) that are
caused, directly or indirectly, by or as a result of the negligent
performance by [OTHER PARTY] or UNIVERSITY (or by their
agents, employees and students) of this AGREEMENT.
Insurance and UCSF’s Standard Position
Often agreements contain clauses that require
procurement of liability insurance by the University. The
University is self-insured under state law. Requiring the
purchase of insurance because of a single contract is not
practical. Insurance clauses often require production of a
certificate of insurance. The Office of Risk
Management does provide a certificate of self insurance
that satisfies the concerns of most contractors. The
Certificate of Self-Insurance Coverage document (COC)
illustrates the self-funded retention levels maintained for
each liability program.
How do you review agreements for indemnification & insurance?
The review process should include the following steps in order to
protect the University from potential liability:
 Read the entire agreement. It is not unusual for indemnification
issues to be located in several places.
 Are the limits required of the University reasonable and
appropriate for the type of activity covered by the agreement?
 Does the agreement need to be modified to show that the
University is self-insured?
 Most importantly, does the agreement limit the University's
liability to the negligent acts or omissions of University officers,
agents, employees, invitees, and guests as defined by your
Institutions Policies or Mandate.
Intellectual Property
What is Intellectual Property?
Intellectual property (IP) defines the rights and obligations of creations
of the mind, such as inventions; literary and artistic works; designs; and
symbols, names and images used in commerce. (From WIPO)
In University grants and contracts, IP section usually involves rights and
disposition to patents, copyrights, data rights created in a sponsored
Why is the Intellectual Property Section Important?
Making intellectual property available for the public benefit is part of
the University’s core mission.
University may have multiple, overlapping obligations to Sponsors, the
US Government and other Universities.
University may have obligations to researchers under its patent policy.
Intellectual Property
By policy, at the University of California retains intellectual property
developed by its faculty and staff when the work is a result of
sponsored funding, is created for university administrative purposes or
the work involves the use of substantial university resources.
UC Copyright Policy (reference)
Sponsored Agreement vs. Scholarly Works
Bayh-Dole Act
UC Faculty, staff and visitors assign patent rights to Institution
Permits a university, small business, or non-profit institution to elect to pursue
ownership of an invention in preference to the government.
U.S. Patent Law says that if we invent it, we own it, if they invent it, they
own it, and if we jointly invent it--that is if both an employee of the
University and an employee of the Sponsor would be inventors under US
Patent Law--then we would own in jointly.
Intellectual Property - Patent Rights
Examples of Acceptable Language:
UCSF agrees to communicate in writing and in confidence to Sponsor all
patentable inventions which are conceived and reduced to practice by UCSF, in
the performance of the Research Program (“Inventions”). Inventorship of
Inventions will be determined in accordance to U.S. patent law. Ownership of
such Inventions shall vest in the party to whom the inventor has an obligation of
Title to all inventions and discoveries made by Institution resulting from the
research performed hereunder shall reside in Institution; title to all
inventions and discoveries made by Sponsor resulting from the research
performed hereunder shall reside in Sponsor; title to all inventions and
discoveries made jointly by Institution and Sponsor resulting from the
research performed hereunder shall reside jointly in Institution and Sponsor.
Inventorship shall be determined in accordance with U.S. Patent law.
Intellectual Property
Example of Problematic IP Language:
 Institution
agrees to assign all right, title, and interest to
any intellectual property, including but not limited
inventions (whether patentable or not), copyrights,
know-how, data, plans, processes, drawings developed
in connection with the grant.
 Any language that outright grants a license to a
sponsor is not appropriate for a research agreement.
Intellectual Property
What we can do is offer the sponsor a non-exclusive,
royalty free license for internal research purposes only or
an option to negotiate a license.
Example acceptable language:
 To the extent UCSF is legally able to do so and subject to
UCSF’s obligation to the U.S. government, UCSF shall grant
Sponsor a non-exclusive royalty free license for internal
research purposes to practice Inventions that are claimed in
a patent application filed to cover such Inventions.
Intellectual Property - Copyrights
Copyrights: According to UC’s policy, ownership of copyrights to scholarly and
aesthetic works generally reside with the faculty creator, with certain exceptions.
If the work is sponsored or contracted, or is part of a project that has special
provisions on copyright ownership, then copyright ownership is generally
retained by the university.
Acceptable language (FDP): Subrecipient ___ grants / ___ shall grant (check
one) to Prime Recipient an irrevocable, royalty-free, non-transferable,
non-exclusive right and license to use, reproduce, make derivative works, display,
and perform publicly any copyrights or copyrighted material (including any
computer software and its documentation and/or databases) first developed
and delivered under this Subaward Agreement solely for the purpose of and
only to the extent required to meet Prime Recipient’s obligations to the Federal
Government under its Prime Award.
Intellectual Property - Data rights
Data Rights: “Data means” recorded information,
including technical data and computer software.
Title to data and software belongs to the university
Government receives unlimited rights
Acceptable language (FDP): Subrecipient grants to Prime
Recipient the right to use data created in the performance
of this Subaward Agreement solely for the purpose of and
only to the extent required to meet Prime Recipient’s
obligations to the Federal Government under its Prime
Intellectual Property Summary
Takeaway Messages
 Patents
are assigned to UCSF, we can‘t give away
ownership of inventions. (Industry Sponsored clinical
trials are the only exception)
 Don’t provide rights to IP created outside the scope of
the grant.
 We don’t provide ownership or assign title to the
research results.
 We can provide title to a deliverable report made
pursuant to a sponsored grant or contract.
Citizenship Restriction
What is a Citizenship Restriction?
 A restriction placed on a person or group of people rights and
What is UCSF’s Standard Position on Citizenship?
 The University’s Nondiscrimination and Affirmative Action Policy
states that the university does not discriminate on the basis of
citizenship. UC, therefore, generally does not accept public
and private sponsors’ restrictions of research based on
Citizenship Restriction
In select cases, narrow exceptions to this policy may be made:
 Where there are compelling circumstances in support of
legitimate public interests bearing on individual job
requirements, e.g. for classified research. The chancellor may
recommend such an exception to the president for her
 Where the restriction to U.S. citizens is placed on fellowship
support for graduate and undergraduate students (so-called
training grants) because such fellowship restrictions from
governmental sponsors are considered to be consistent with
legitimate government interests in promoting the training of
domestic students and because there is no specific policy
precluding this practice.
What is a Terrorism Clause?
 Foundations and federal agencies are increasingly
incorporating clauses in their award documents which require
recipients to agree or certify that they do not engage in,
support, or promote terrorism or support terrorist organizations
or activities. Federal agency certifications may remind
recipients of requirements to comply with United States
executive order(s) and law prohibiting transactions with
Example of preferred terrorism language:
 Anti-Terrorism. You confirm that you are familiar with the U.S. Executive Orders
and laws prohibiting the provision of resources and support to individuals and
organizations associated with terrorism and the terrorist related lists promulgated
by the U.S. Government. You will use reasonable efforts to ensure that you do not
support or promote terrorist activity or related training, or money laundering.
Example of problematic terrorism language:
 You certify that as of the date of this document indicated below, your organization
does not knowingly employ individuals or contribute funds to organizations found on
any terrorist- related list promulgated by the United States Government, the United
Nations or the European Union, including the Department of Treasury’s Office of
Foreign Assets Control Specially Designated Nationals List, the Department of
Justice’s Terrorist Exclusion List and the list annexed to Executive Order 13224.
Should any change in circumstances occur during the year, the Foundation will be
notified as soon as possible.
Export Control
What is an Export?
In addition to an actual shipment of a commodity out of the country,
export regulations also control the transfer, release or disclosure to
foreign persons in the United States of technical data about
controlled commodities.
The "deemed export" regulation states that a transfer
of "technology" (Export Administration Regulations/EAR term) or
"technical data" (International Traffic in Arms/ITAR term) to a
foreign person is "deemed" to be an export to the home country of
the foreign person.
Accordingly, for all controlled commodities, a license or license
exception is required prior to the transfer of "technology" or
"technical data" about the controlled commodity to foreign persons
inside the U.S.
Export Control
Export control regulations cover shipment of controlled physical
items, such as scientific equipment that require export licenses
from the United States to a foreign country and transfers of
controlled information, including technical data.
The university must also comply with federal regulations when
faculty and students travel to certain sanctioned or embargoed
countries for purposes of teaching or performing research.
Export Control
Example of preferred export control language:
Export Controls: It is understood that University is subject to United States laws and
regulations controlling the export of technical data, computer software, laboratory
prototypes and other commodities, and that its obligations hereunder are
contingent on compliance with applicable U.S. export laws and regulations
(including the Arms Export Control Act, as amended, and the Export Administration
Act of 1979). The transfer of any such Technology and Items and the entering into
and provision of such Transactions and Services that are subject to Restrictions may
require a license or authorization from the cognizant agency of the United States
Government, and/or may require written assurances by the receiving party that it
shall not re-export such Technology and Items to certain foreign destinations
and/or to certain recipients without prior approval of the cognizant government
agency, and/or may require that the involved individuals and entities will comply
with conditions on Transactions and Services. While University agrees to
cooperate in securing any license which the cognizant agency deems necessary in
connection with this Agreement, University cannot guarantee that such licenses will
be granted.

similar documents