Contract Terms

Sometimes third parties expect rights to inventions, data or even control over publication in return for providing funding or materials to University researchers. UChicagoTech and University Research Administration collaborate closely in negotiating these provisions in order to protect researcher’s and the University’s interests. This page offers a brief summary of the issues.

CONTRACT TERMS	ANSWER	REASON

RIGHTS TO INVENTIONS
Sponsor/Provider Claims Ownership of any invention made with sponsor support or provider material	Not Acceptable	For materials, such rights are termed "reach through rights". Such rights directly conflict with the NIH Principles and Guidelines for research tools. In addition, such rights could block the recipient from collaborating with other researchers.
Provider claims ownership of improvements	Depends	If a material is provided by a company, it may be reasonable for them to want ownership or control over improvements, to the extent that the ownership is restricted to use with their material only.
Sponsor/Provider wishes to share ownership	Depends	Sharing ownership lets the sponsor/provider block commercialization efforts with other parties.
Sponsor/Provider claims "work for hire"	Not Acceptable	"work for hire" means sponsor owns the results. Such provisions can jeopardize the University’s nonprofit tax exempt status.
Sponsor wants assignment of copyright interests to sponsor	Depends	This is another way for the Sponsor/Provider to gain ownership or control.
Sponsor/Provider wants right to determine "disposition of rights"	Less Acceptable	This is another way of saying that the sponsor/provider owns the rights.

PUBLICATION and DATA
Sponsor/Provider controls right to publish	Not Acceptable	This provision is prohibited by University policy.
Sponsor/Provider can delay publication for invention review	More Acceptable	Short delays of 30-60 days for purposes of patenting only are OK.
Sponsor/Provider can delay publication for any reason	Not Acceptable	A short delay to review a manuscript for company confidential information may be acceptable only if there is separate provision for the Sponsor/Provider to provide such confidential information.
Sponsor/Provider owns data or research results in a clinical trial	Less Acceptable	If the Sponsor/Provider allows the researcher unimpeded use of the results and data, with full right to publish, such a provision may be OK.
Sponsor/Provider owns data or research results under a Sponsored Research Agreement	Not Acceptable	There is no need for a sponsor to own data or results if the sponsor has access. The University does not do work for hire.
Sponsor/Provider controls use of data or research results	Not Acceptable	If the Sponsor/Provider permits the researcher to retain a copy of the results and data, and allows unimpeded use of the results and data, with full right to publish, such a provision may be OK.
Sponsor/Provider has access to data or research results	More Acceptable	This provision is generally OK, especially if the provision protects researcher priority for publication.

LICENSING REQUIREMENTS
Income Sharing	Depends	This issue usually arises when foundations provide funding. Issues to consider: - Any revenue share given to a sponsor must reflect the fact that sponsor’s financial support is often intermingled with support from other sources, such as NIH, as well as the broader indirect support from the university as a whole. - An example of such broader support is the part of University infrastructure paid by indirect costs included in most grants. Foundations rarely pay full (if any) indirect costs, so this circumstance (an indirect subsidy toward the project from the University) should be accounted for in the revenue sharing formula. - Another example of the University’s support of a foundation funded project is the expense of patenting. Foundations rarely support such efforts.
Review by sponsor	Depends	The impact of this issue depends on the specific circumstances. A right to review and comment only is usually acceptable.
Approval by sponsor	Less Acceptable	This provision is rarely acceptable, as it allows the sponsor/provider to block licensing efforts. If such a provision is restricted, limiting the sponsor/provider’s ability to block licensing, it may be OK.
Terms set by sponsor	Not Acceptable	This provision would allow the sponsor to control licensing efforts, and is almost always unacceptable. It can be particularly troublesome for joint inventions with other labs.
Sponsor/Provider allowed non-exclusive royalty free license for open use	Depends	The acceptability of this provision depends on the nature of the research and surrounding circumstances.
Require invention to be commercialized within certain time	Less Acceptable	Since most commercialization efforts are the result of further research by a licensee, commercialization is unpredictable, so such a provision is rarely acceptable. UChicagoTech uses different approaches to ensure licensees are properly diligent in their commercialization efforts.
Assignment to Sponsor/Provider if not commercialized in certain time	Less Acceptable	Since most commercialization efforts are the result of further research by a licensee, commercialization is unpredictable, so such a provision is rarely acceptable. UChicagoTech uses different approaches to ensure licensees are properly diligent in their commercialization efforts.
Termination of license if not commercialized in a certain time	Less Acceptable	Since most commercialization efforts are the result of further research by a licensee, commercialization is unpredictable, so such a provision is rarely acceptable. UChicagoTech uses different approaches to ensure licensees are properly diligent in their commercialization efforts.
Timely notification and reporting	More Acceptable	This provision is reasonable.

DISPOSITION OF RIGHTS
No release without prior written approval of sponsor	Not Acceptable	This provision could force the University to take actions not in its best interests, so is unacceptable.
No abandonment without consultation with sponsor	More Acceptable	This is usually acceptable.
No abandonment without offering rights to sponsor	Depends	This is usually acceptable if the sponsor is willing to assume expenses.
Patent must be dedicated to public	Less Acceptable	While some foundations require all inventions made with their support to be dedicated to the public, such terms need to be approached carefully. - If dedication to the public means no patent can be sought or commercialized, the inventor may find that further commercial development of an invention is impossible. This could happen if, for example, a company needs patent protection in order to justify investment in drug development. - A requirement to dedicate inventions to the public in specific parts of the world, such as third world countries, is usually more acceptable. For instance, some foundations, supporting diseases most prevalent in poorer countries, require that inventions to treat those diseases in those countries be licensed at no cost. This is reasonable.