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Collaboration Agreements: The Challenge of Reconciling the Interests and Rights of all the Parties Concerned

June 5, 2020

Author: Gunther Meyer.


In the context of innovation, businesses increasingly cooperate with third parties. This article will highlight some aspects and concerns related to collaboration agreements between businesses and knowledge-based institutions (in particular universities).

Innovation has become increasingly complex. As a result, the need to collaborate and exchange knowledge in the context of R&D activities has become all the more important. However, this is not only a matter between companies, but also – and above all – between companies and knowledge institutions (such as universities). In addition, in some cases, external funding is used to bridge the early stage of the costs associated with innovation.

The complexity of this type of collaboration makes good contractual arrangements imperative so that the parties involved understand and respect each other’s rights and interests.

For example, companies collaborating with Belgian universities must take into account the specific legal framework within which universities have to act when providing research or other services to companies.

One aspect of collaboration between companies and universities that is not widely understood is that universities are required to act in line with market conditions. This principle is not only enshrined in higher education legislation, but is also a result of (European) competition law and the European state aid rules.

In addition, there is sometimes a misunderstanding among companies that research commissioned by universities in return for payment automatically involves the transfer to the company of the rights (including intellectual property rights) to the research results. In principle, the ownership rights to the research results are vested in the researchers, and the transfer of those rights always has to be negotiated. 

Furthermore, companies are not always aware of the universities’ right to publish research results and to further use them for research and teaching purposes. This publication right often conflicts with the expectations and wishes of companies that pay a university for specific research. In such cases, companies usually want the ownership of the rights to the research results to be fully vested in them and they do not want the university to be able to further use them without consent. This arrangement is certainly possible, but within certain limits. Balanced clauses that precisely define the conditions of further academic use and the publication are therefore crucial.

Another point for consideration regarding this type of collaboration concerns the definition and description of the background knowledge that each party brings to the collaboration. After all, it is the background knowledge of each of the parties that will form the basis of the research project and ultimately of the research results that will emerge from the project. A party may improve its own background knowledge through collaboration with another party or on the basis of that other party’s background knowledge. Similarly, that same party may improve the other party’s background knowledge within the framework of the collaboration. These aspects should also be agreed upon in the collaboration agreement. Finally, during the negotiation of the collaboration agreement the parties will have to consider whether the company should obtain rights to the background knowledge of the university, for the later exploitation of the research results. If this is required, a framework for this should already be laid down in the collaboration agreement.

The aspects described above are not only important for the parties involved in the collaboration, they will also be evaluated by any potential financiers in the context of a request to invest in a company at an early stage of the research.

This article was written on the occasion of the joint IBJ/IJE – Crowell & Moring Brussels webinar on Collaboration Agreements

Gunther Meyer
Senior Counsel – Brussels
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