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Post Award: Award Negotiation, and Receipt MUHAS, Dartmouth, UCSF

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1 Post Award: Award Negotiation, and Receipt MUHAS, Dartmouth, UCSF
Tuesday October 21, 2014

2 Common Agreement Terms
During this training we will provide: Definitions Purpose and Importance Examples of Acceptable Clauses Examples of Unacceptable Clauses For the following Common Agreement Terms: - Publication Rights - Indemnification - Governing Law (Sovereign Rights) - Insurance - Payment Terms & Invoicing - Intellectual Property - Confidentiality - Citizenship Restriction - Use of Name - Terrorism - Termination - Export Control

3 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. In order to qualify as Fundamental Research, the research must be conducted free of any publication restrictions. Research that qualifies as FR is NOT subject to export controls.

4 Publication Rights What are Standard Positions on Publication Rights?
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 Institution. What are some instances why we allow sponsor to review? To identify if any confidential information is included; to identify intellectual property requiring protection;

5 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 Sponsor.

6 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. Regnier

7 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 Attachments Number of copies Signatures Regnier

8 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. Regnier

9 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.

10 Payment Terms & Invoicing
Example of unacceptable payment terms and invoicing language: 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.

11 Confidentiality 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. Deb

12 Confidentiality 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 years. 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. Prefer limiting to 5 years or less. CI provision typically is included in the list of clauses which survive the expiration or early termination of the Agreement, thus it is imperative to place a time limit on the period of non‐disclosure

13 Confidentiality 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”

14 Confidentiality 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 information; 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.”

15 Confidentiality 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.

16 Confidentiality 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 care.”

17 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. Deb

18 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 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.

19 Termination 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 agreement. Why is Termination Important? It is the right of a party to completely or partially end performance under the provisions of the contract termination clause. Regnier

20 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 Regnier

21 Termination 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.

22 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.

23 Indemnification 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 omissions. Deb: Indemnification is a clause that requires one party to be responsible for the liabilities imposed on the other party. We want to make sure that the clause does not make us liable for someone else’s actions. We also can’t agree to allow another party to be “held harmless” for actions where they are at fault. We generally don’t have a problem accepting liability for the negligence of the University or it’s employees.

24 Indemnification 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.

25 Indemnification 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 indemnification. The US Federal Government will not indemnify Contractors.

26 Indemnification 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.

27 Insurance 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.

28 Indemnification/Insurance
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.

29 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 agreement. 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. There are various forms of statutory protection for Intellectual Property, but the two that are most likely to be relevant in the University environment are copyright and patents.

30 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 Faculty, staff and visitors assign patent rights to Institution UC Copyright Policy (reference) uc.html Sponsored Agreement vs. Scholarly Works Bayh-Dole Act 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.

31 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 assignment.   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.

32 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.

33 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.

34 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.

35 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 Award.

36 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.

37 Citizenship Restriction
What is a Citizenship Restriction? A restriction placed on a person or group of people rights and duties. 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.

38 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 approval. 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.

39 Terrorism 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 terrorists.

40 Terrorism 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 Should any change in circumstances occur during the year, the Foundation will be notified as soon as possible.

41 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.

42 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.

43 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.

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