This article is written by Nihar Ranjan Das pursuing Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.

Introduction

Collaborative Research and Development Agreements are actually involved in the research and development of mutual interest in the same field. In which the researcher and the sponsor share every report and outcome with each other. The main focus is towards the invention of new Intellectual Property within the research project and all the involved parties bring their background Intellectual Property to the same table for effective research.

The author’s aim for writing this article is to define the establishment of a working relationship between the researcher and the sponsor, which generally means the researcher shall provide his knowledge, supervision, and guidance, whereas the sponsor shall provide all necessary support for timely completion of the project. Let’s discuss this in detail.

What is a Collaborative Partnership Agreement?

It is an agreement between at least two parties working together for a specific project, it may be a research and development project or anything on a collaboration basis. It usually consists of some specific terms and conditions regarding the collaboration project and also includes the obligation of each party and sharing of revenues collected by exploiting the work. 

But why do we need this! Is it really necessary? Yes, a collaboration agreement helps to minimize the disputes with each collaborator and at the same time, it clarifies the nature and scope of the project and a proper clarity on the obligation of each party. Without any specific collaborative agreement, it shall be difficult to control the ownership of the end results, which is actually jointly invented. The agreement also promptly clarifies the consequence of any breach done by any involving party and also further determines the process if in between the research, one of the collaborators decided to leave the project. So, in short, it clarifies each and every expected scenario that might happen during the project.

How and why companies enter into a Collaborative R&D Deal?

A report published on Globe Newswire, Dublin on 8th April, 2020 regarding the Global Collaborative R&D Partnership Agreement in the pharmaceutical industry. It provides all the specific forms of collaborative R&D deals and a detailed understanding of how and why companies actually prefer to enter into a collaborative R&D deal.

Earlier, a traditional collaborative R&D arrangement mostly preferred, where the owner of IP rights (licensor) provided the license of its work to another company (also known as licensee), and the licensor in return charged royalties from the licensee on basis of the sales of the product, which actually derived from his licensed work. 

But, in recent times, licensing is actually the end result of a successful collaborative R&D project and the outcome product shall be commercialized in accordance with the terms and conditions mentioned in the Collaborative R&D Partnership Agreement. It clearly describes who shall be responsible to commercialize the product and the distribution of payment once the commercialization proceeds.

The report published on Globe Newswire, Dublin on 8th April, 2020 reveals that big pharmaceutical industries such as Abbott, AstraZeneca, BMS, Eli Lilly, Mitsubishi, Novartis, Pfizer, Sanofi, and many others are already announced such projects focusing on Collaborative Research and Development Partnership.

Important part of the Collaborative Research and Development Agreement

Most of these agreements usually have five parts as follows. Let’s discuss each part with exhaustive examples to get a clear picture of this engagement:

• Objectives

It explains the overall purpose of the agreement and also clarifies that what parties want to accomplish during their collaboration and why such collaboration is important for this specific project.

We can take a real example of an ongoing pandemic situation where Dr. Reddy’s Laboratories Ltd. announced its partnership with BIRAC (Biotechnology Industry Research Assistance Council) and the Department of Biotechnology (DBT) for assistance and advisory support on clinical trials of Sputnik V vaccine in India.

• Plan and procedure

It explains the details about the research and development process the parties are intending to do, which also includes the approaches and methodologies that are going to be taken during the project. Most importantly it describes which party is responsible for what procedure and need to comply the mentioned set of rules and regulation while doing the same. It further specifies the due date for completion of the research and the consequences if any party failed to comply with the same.

If we will take the above situation of Dr. Reddy’s Laboratories Ltd., as per the news report this partnership shall allow Dr. Reddy’s to identify and use some BIRAC’s clinical trial centers for the vaccine (to provide the infrastructure) and the same shall be funded under the National Biopharma Mission (NBM) (to provide funding for research and trials), which shall be implemented by Project Management Unit- NBM at BIRAC.

It is also further clarified that Dr. Reddy’s Lab will also have access to GCLP (Good Clinical Laboratory Practice) Labs to conduct immunogenicity assay testing of those vaccines (Infrastructure).

• Legal compliances

It describes all the required approvals from the statutory authority and legal procedure that need to be done during the project and after completion of the project without any failure.

• Budget

It explains the resources each party needs to arrange and the details contribution required to make the collaborative research in a smooth manner.

Collaborative R&D Agreement checklist

1. Parties to the agreement,
2. Recitals,
3. Definition,
4. Scope of the project,
5. Relationship and responsibilities of the parties (management),
6. Funding (financial contribution),
7. Intellectual Property (use and exploitation),
8. Liability,
9. Dispute resolution,
10. Term and Termination, and
11. Oher general clauses (Confidentiality, Notices, Termination, Amendments, etc.).

Important clauses of Collaborative R&D Agreement

1. Scope of the Project

1. The parties agree to collaborate on the project named “Global Partnership for Covid Vaccine Research and Development” (“Partnership”). The aim of the project is to develop vaccines, promoting responsible use of those vaccines, and ensuring their access for all. 
2. The partnership is a joint AstraZeneca/Johnson & Johnson project, incubated within Johnson & Johnson and contributing to achieving some of the objectives set in the AstraZeneca Global Action Plan for the vaccination dose against the COVID-19 (hereinafter referred to as the “Project”).
3. The objective of the collaboration is to ultimately create the conditions to fulfil the purpose of this Project and that shall be independent of AstraZeneca and Johnson & Johnson.
4. The arrangements under this agreement shall at no point of time intending to set-up a new legal entity or to use its objectives, activities, and its governance structure for any other purpose other than the Project in this agreement.
5. The parties shall collaborate on the Project in the manner described in this agreement. The individual obligation of the parties shall be carried out individually under this project as mentioned in the annexure of this agreement.
6. The implementation of Project activities undertaken by a party is subject to that party’s regulations, rules, and administrative practices.

2. Funding

1. Each party herewith agreed that it shall be fully responsible for the funding of its activities under this agreement, except as otherwise expressly agreed in this agreement or in any sub-agreement or any amendment thereto. The implementation of each Project performance is subject to the availability of sufficient human and financial resources.
2. Any fund-raising from commercial entities or their foundations, or organizations funded mainly from commercial sources, shall be made in accordance with the rules of both parties in order to avoid any perceived conflict of interest.
3. Each party shall administer the funds handled by it in accordance with its financial regulations, rules, and administrative practices. The accounts shall be subject to audit in accordance with the party’s rules and procedures and upon special request of the other party, a copy of the audit report of the external auditor (to be appointed) shall be sent, as soon as it becomes available.
4. Any transfer of funds between the parties shall be made under an appropriate separate agreement, to be negotiated in good faith between the parties.

3. Intellectual Property

1. The parties shall mutually decide for allocation of works are to be exactly to be done under the Project and which Party shall be responsible for the preparation of such works.
2. For collaboration works, AstraZeneca and Johnson & Johnson both shall hold all the IP rights and AstraZeneca shall grant Johnson & Johnson a license to use, publish, copy, circulate, modify, translate any contribution. 
3. By using the IP rights of any work prepared by one of the parties on its own under this Project shall be vested to such party, who may publish the work in the manner it wants. It is also herewith provided that the other party shall also have the opportunity to comment on the work to modify or alter and any references to that other party before publication. 
4. Both parties shall be duly acknowledged in any work resulting from the Project and the wording of such acknowledgement shall be agreed upon between the parties. In general, the project should be referred to as a ”joint AstraZeneca and Johnson & Johnson initiative, in line with the Global Action Plan for COVID-19 Vaccine.”

4. Relationship and responsibilities of the parties

1. Nothing in this agreement shall be construed as creating a relationship of joint ventures, partners, employer/employee, or agent. It is herewith clarified that no party shall create any obligation for the other party of its own without the consent and approval of the other party. 
2. Without the prior written consent of the other party, neither party shall, in any statement or material of an advertising or promotional nature, refer to the relationship of the parties under this agreement or use the other party’s name in any manner.
3. Notwithstanding the foregoing, each party may refer to the relationship of the parties and the Project in any material directly related to the Project, or in the framework of reporting on the activities of AstraZeneca and Johnson & Johnson respectively, e.g. on the respective AstraZeneca and Johnson & Johnson websites, annual reports, reports to governing bodies. 
4. Each party shall be solely responsible for the activities they have carried out on its part under the collaboration and as well as in this agreement. It is also herewith clarified that no party shall be responsible for any loss, accident, damage, or injury suffered or caused by the other party, or the representative of the other party or any subcontractors, in connection with the collaboration under this Project.

Conclusion

Collaborative R&D Partnership Agreements are actually extremely beneficial for each party. Where, the need of funding, resources, and intellectual capacity which is very much required in such projects shall be shared equally by the Parties. Hence, performing these types of research projects by way of forming partnership shall be more effective and also economical rather than the traditional way of researching, which usually takes a decade to reach a conclusion. Collaborative research agreements are moreover to establish a longer-term relationship. The benefits from such engagement are much more than the monetary profit. So, any project for research and development through collaboration usually helps to build strong communication between the partners, which ultimately sets the path for success. 

Lastly, during initiation of these type of agreements, writing and negotiation part is a very difficult phase and the same amount of difficulties one is going to face while putting all these clauses in a manner which shall satisfy each of the parties without any further delay in negotiation.

References

• file:///D:/Articles(LS)/R&D%20patrnership%20agreements%20in%20pharamceutical%20industry/who-dndi-antimicrobial projectcollaborationagreement.pdf 
• http://www.iphandbook.org/handbook/ch07/p04/ 
• https://www.sec.gov/Archives/edgar/data/867773/000086777311000015/ex998.html

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