Legal Considerations when reviewing and negotiating an award
Indemnification. Indemnification obligations require the indemnifying party to compensate the other party for a harm or loss resulting from the indemnifying party’s actions. However, the University cannot control every element in a project and some projects may have unanticipated risks. Therefore, we try to limit our indemnification of funders (or “sponsors”) to damages, claims, or liabilities that may arise from the University’s negligence, breach of the contract, or actual infringement of a third party’s intellectual property. Additionally, since we cannot control how a sponsor uses the data we generate for them, we want sponsors to indemnify us for damages claims, or liabilities that may arise from their use of the project data.
Publication. Academic freedom is a crucial principle for any university. One of the forms this principle takes is the right of the University and its faculty to broadly disseminate the results of its work. Agreements infringe on this principle when they limit the University’s ability to publish these results. There are also export control implications, as the University cannot claim the fundamental research exemption when it is subject to publication restrictions. We can agree to give the sponsor a limited amount of time to review a manuscript prior to publication to allow them to (i) request the redaction of its confidential information and/or (ii) delay publication to allow them to take necessary steps to protect their intellectual property.
Participation of foreign nationals. The University is committed to the principle of openness in research and does not limit the participation of foreign nationals in any of its projects. As a result, the University generally does not accept awards that limit the participation of foreign nationals based on their citizenship.
Confidentiality.The University understands the need to preserve certain sponsor information as “confidential.” We can agree to define “confidential information” as information (i) that is disclosed by the sponsor in writing as “confidential,” (ii) if disclosed orally, that is reduced to writing and labeled as “confidential” shortly after disclosure, or (iii) that is reasonably understood to be confidential at the time of disclosure. It is important to limit the definition of “confidential information” this way, otherwise the University may have the unmanageable obligation of keeping every communication with a sponsor confidential. Confidentiality obligations should last no longer than five (5) years beyond the end of the agreement. In addition, OTC prefers that confidentiality obligations be mutual, and protect any confidential information of the University in addition to that of the sponsor. In some (e.g., clinical research, agreements with proprietary IP) cases 7 years may be agreeable, but never more than 10.
Applicable Law and Venue. We prefer contracts be governed by DC law, but regularly accept NY, MD, VA, and DE, CA law as well. However, we are more concerned with an agreement being governed by the laws of an international jurisdiction than we are another US state. If possible, we would prefer to go silent on choice of venue.
Termination. Ideally, the University should have the right to terminate the agreement for convenience. Many of the University’s faculty are experts in their field and cannot be replaced. If these key personnel become unavailable, the University should be able to terminate the agreement without being considered in default. If this is not possible, we should have the flexibility to mutually agree on a successor if key personnel leave the University before continuing any work under the contract. However, the FAR does not allow the contractor to terminate, so we will typically not be able to obtain termination rights on Federal contracts (and some sponsors insist that our termination rights be limited to cases of breach by the sponsor). In the event of any termination, the University should be compensated for all work performed prior to the effectiveness of that termination.
Publicity. Neither party should have the right to use the other’s name or symbols without prior written permission.
Payment and Reporting Schedule. Most federal awards are paid by wire transfer on the basis of costs reported by the Sponsored Projects Financial Operations (SPFO). Foundations, private voluntary agencies and corporations generally pay on the basis of fixed schedules. It is difficult, if not impossible, for the University’s financial system to produce accurate invoices or financial reports earlier than forty-five (45) days after the expenses have been incurred. Sixty (60) days is ideal.
Intellectual Property. Normally, the University will own any inventions made by its personnel. The Office of Technology Commercialization should be consulted if the faculty member believes the award could result in licensable technology. Please go to Inventors page and see Georgetown University’s Intellectual Property Policy to review the revised policy. The University does not perform works-for-hire. We will need to own copyright or patent rights to any developments made by our personnel. This ensures that the material can be widely disseminated, and ensures that the work can be used by the personnel in other, related work. The University has also funded the construction and/or renovation of physical space on campus with tax-exempt bonds and, in order to maintain the tax-exempt treatment of those bonds, is limited in the amount of “private benefit” that can be derived from work performed in those spaces. While the “public benefit use” analysis can hinge on multiple factors, it is highly preferable that that sponsors get no more than a non-exclusive, royalty-free license to data, deliverables, or the intellectual property that result from the project. We can give a sponsor an option to negotiate an exclusive license, but an exclusive license cannot be granted outright upon completion of the research. In some circumstances, joint ownership with sponsors may be appropriate, but there are bond and IP implications to joint ownership so OTC and OGC should be consulted. In no case will the University transfer title to materials or other IP that we owned prior to a particular research project be transferred to a sponsor. Please consult with OTC if you have any questions about the intellectual property terms for a particular project.
Our standard language regarding new IP is, “Ownership follows Inventorship. In other words, what ours is ours and yours is yours and what was created jointly is owned jointly. In all the cases, sponsor receives an exclusive option to negotiate commercial license to any new IP or improved/modified IP and the sponsor gets a non-exclusive license to use the new IP for non-commercial research use. Joint ownership with Sponsors may allow Sponsor to use resulting new or improved/modified intellectual property (not deliverables, per se, because a deliverable is proved under a service agreement) on a non-exclusive basis; however, the parties need to enter into IP management and Revenue sharing agreement such that each party is informed of the patent management process and revenues are shared between the parties . If they do not agree on non-commercial research purposes, in some cases Sponsor may negotiate for a non-exclusive commercial use.
Data Ownership: Data may be owned by University and shared with Sponsor, or jointly owned by University and Sponsor.
Billing. As is customary with U.S. universities, Georgetown’s accounting system does not track hours worked for faculty and professional staff. Hourly rates are not auditable in the university payroll system, and we cannot bill on an hourly rate basis. Budgets should be based on percentages of annual salaries. Documentation for salaries will show annual salary certifications. Documentation for space rental will show overall building leases that will not be broken out by project.
Reports. Any required technical or financial reports must be due on a clear, regular schedule. ORS will negotiate favorable reporting schedules.
Acceptance of Deliverables. Sponsors will sometimes want the right to determine when work has been completed successfully. We do not want their approval of GU’s work to be arbitrary: it should be tied to the statement of work. Ideal language will define “acceptable” as “performed in accordance with the statement of work.” Avoid language requiring “best efforts” or “commercially reasonable efforts.”
Rights to Information. The University must have use of all of the underlying data and information resulting from the study, except as limited by the agreement’s non-disclosure or confidentiality terms.
Warranties. Generally speaking, the University can make warranties to sponsors, but they must be warranties that we can actually make (i.e., factually correct, not unduly burdensome, etc.). They should also be limited to the particular work we are performing under the contract (i.e., “Georgetown will comply with all applicable laws [in its performance of this Agreement/in connection with the Study].”). University would disclaim several warranties. For example, University should not warrant (express or implied) merchantability or fitness for a particular purpose, nor that any material, confidential information or intellectual property provided or methods in making or using are free from liability for patent infringement.
Data Security. Certain FAR clauses require that we meet particular security standards, which may require special treatment of data under the agreement or which the University may not be able to meet. We will provide a list of such clauses. If you see data security or data privacy requirements in other non-federal contracts, please route those provisions for review to UIS Security, OGC, and OTC. Data use agreements should be reviewed and signed by OTC.
Independent Contractors/International Work. Contracts that involve independent contracts and/or international work to be performed by Georgetown employees or independent contractors (i.e., not by subawardees) should be flagged early for review by the Tax Office and other campus offices as appropriate (ORO, OGC, Risk Management, etc.).