THE SPECTRUM OF UNIVERSITY-CORPORATE COLLABORATIONS:
RECOGNIZING WHAT TERMS ARE APPROPRIATE
November 10-12, 2010
Mark A. Bohnhorst
University of Minnesota
Minneapolis, Minnesota
University of Minnesota Resources Regarding External Sales
Fund Bucket Project Proposed Definitions
1-2
This 2 pa ge doc ument e ncapsulates ove r one year of di scussions a mong of fices
responsible for sponsored projects administration, external sales, gifts, and the Office of
the G eneral C ounsel r egarding ho w t o c lassify funding a mong s ponsored r esearch,
external sales and gifts.
Regents Policy, Direct Sales of Goods and Services
3-4
This i s t he f oundational pol icy ba sis f or University o f M innesota e xternal s ales
activities.
Administrative Policy: Selling Goods and Services to External Customers
5-7
These a re e xcerpts f rom th e a dministrative p olicy th at imp lements th e a bove
Regents Policy. Pages 6-7 identify the roles and responsibilities of numerous offices that
are i nvolved i n t he e xternal s ales a pproval pr ocess, i ncluding R isk M anagement, T ax,
Office of the General C ounsel, and Sponsored Projects Administration (for determining
the proper classification).
Internal/External Sales Approval Form
8-11
This is the University’s internal routing form for sales activities. Item 1 ( page 9)
illustrates t he r ange of potential s ales a ctivities. Items 9 & 10 ( pages 1 0 a nd 11) a re
useful for properly classifying activities as sponsored research vs. external sales. Item 11
(page 11) identifies a range of potential risks that may require further review.
University of Minnesota Services Agreement
12-17
This is th e U niversity’s te mplate a greement f or e xternal s ales a ctivities. If th e
counter-party agrees to t hese terms, review b y the Office of the G eneral Counsel is not
required. Export controls are addressed in Article 9 (page 14).
Addendum to the Services Agreement
18-19
This addendum includes a standard, bi-lateral confidentiality terms (Article 1) and
a University commitment not to publish results of the research (Article 2).
Limited Terms, Exclusive, Royalty-Free License
20-21
This i s a s omewhat no vel c ontract c lause t hat g rants t he s ponsor exclusive
development and commercialization rights for a limited period.
I
contract for the transaction is a sub-award;
The University performs services for the State of
Minnesota (or a department thereof) and the State of
Minnesota desires that the contract be administered
through SPA.
buildings) or personal property (e.g., equipment)
"funds" means money or property, including real property (e.g., land or
"excluded transactions" means the activities listed in I (A)-(L).
rights, and marketing and licensing rights.
"direct economic benefit" includes the transfer of intellectual property, data
obligations that are enforceable at law.
"contract" means a written agreement between two or more parties creating
I
C. The transaction is consistent with the scope, guiding
principles, and criteria set forth in the Board of Regents
Policy on Direct Sales of Goods and Services
B. The transaction is not a Sponsored Project, Gift, or an
excluded transaction; and
A. The funds are in exchange for (i) services performed by
the University and any tangible goods produced as a
result of such services; (ii) use of laboratory equipment;
or (iii) a license to use information on University
maintained databases.
"External Sale" means a transaction involving a transfer of
funds from a third party to the University which meets all of
the criteria set forth below.
External Sale
"training grant" means a grant of funds to the University to develop or enhance research
training opportunities for individuals, selected by the University, who are training for careers in
specified areas of research or scholarly inquiry. Under the terms of such grant, the University
must account to the third party for use of the funds, must return unused funds, and/or must
report the results of research or other scholarly inquiry undertaken by the trainee.
"sub-award" means a contract with a sub-recipient performing a portion of the scope of
substantive programmatic work (i.e., beyond mere analytical work-for-hire) covered by a
prime award.
"services" as used in the definition of Sponsored Projects may include research, training,
and public service/outreach activities.
"research" means (i) a systematic study intended to increase generalizable scientific
knowledge or scholarly understanding; or (ii) a systematic study intended to determine or
exploit the potential of new knowledge for improvements in technology, materials, processes,
methods, devices (including design and development of prototypes), or techniques.
J. The contract provides federal funds to the University for
a building or capital equipment project.
I.
H. The contract for services requires the University to
provide cost sharing or matching funds.
G. The contract provides funds for a training grant; or
F. The University performs services that require prior
approval or monitoring by a University institutional review
board or committee, unless the services are funded by a
gift or by departmental funds;
E. The contract is for services and requires the University
to account for and return unspent funds;
D. The
B. The contract is for the performance of a clinical trial;
C. The University performs services for the federal
government or a department thereof (e.g., Department of
Health and Human Services);
A. The University performs research for a third party under
a fixed price or cost-reimbursement contract;
excluded transactions, involving the transfer of funds by a
third party, other than an individual, to the University which
meets any of the criteria set forth in (A) - (J):
"Sponsored Project" means a transaction, other than
Sponsored Project
"academic affiliation" means a documented affiliation with another entity a
purpose of which is the sharing of resources, facilities, educators in
furtherance of an educational program.
Glossary
Indicator: If a transaction that otherwise meets the
definition of a Gift contains extensive financial
reporting or programmatic requirements (e.g.,
milestones), the Foundations will consult with
Sponsored Projects Administration to determine
whether the Gift would be administered more
appropriately by SPA.
"Gift" means a transaction involving the transfer of
funds by a third party to the University without any
requirement on the University’s part to provide the
third party (i) any direct economic benefit, or (ii) a
return of any unused funds.
Gift
Gifts, Sponsored Projects, & External Sales
Fund Bucket Project Proposed Definitions (Continued)
Instruction offered in the University’s regular, extension, evening, or
continuing education programs, including non-credit instruction
(Indicator: A program conducted by Extension Services that contains one or
more of the criteria for a Sponsored Project (e.g., cost sharing, matching funds,
return of unused funds) may be more appropriately administered by SPA. In such
instances, Extension Services (including 4-H) should consult with SPA regarding
how best to proceedi;
Services provided in the practicum aspects of the University’s
instructional programs, including academic affiliations;
Retail food and beverage services, including catering;
Admission to University sporting or entertainment events;
License for rights under a University patent, trademark, or copyright, including
software support and maintenance;
Use, sale, or transfer of University real property;
Naming rights or athletic promotions and signage;
Sale of University equipment, fixtures, or supplies;
Delivery of health care services to individuals;
Delivery of veterinary care services to individual animals; and
Delivery of services by University to either Fairview or University of
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(I)
(J)
(K)
(L)
Minnesota Physicians.
Room and board;
(A)
The following activities are referred to as excluded transactions:
Version 6
A transaction classification group with representatives from SPA, External Sales, and both University Foundations has been established to provide rapid input to faculty and
administrators who are uncertain how to classify a given transaction. This group also has ready access to University counsel when needed. To obtain input from this group, send a
copy of the proposed statement of work, budget and performance dates, contact information for the person most knowledgeable about the proposed transaction, and any other
background information the requestor feels is pertinent to:
A classification decision or a request to obtain clarifying information will be provided to the
requestor within 3 working days.
While the excluded transactions referenced above and the definitions on the next page attempt to create bright lines, grey areas may still remain. A gift, for example, that requires
extensive financial reporting beyond that normally required to fulfill an obligation of good stewardship, may fit the definition of a Gift, but it might be administered more appropriately
by SPA. To highlight these grey areas, an excluded transaction or a definition may contain indicators that are intended to provide guidance and factors to be considered by
appropriate administrative units for resolving "grey area" transactions.
Grey Areas and Questions about Definitions
Words in bold italics throughout this document have the meaning provided in the Glossary
The definitions in this document are intended to clarify the types of
transactions which result in funds administered by the University’s
Foundations (i.e., University of Minnesota Foundation and Minnesota
Medical Foundation), Sponsored Projects Administration (’SPA"), and the
University’s External Sales Office. As clarification, the payments received
by the University in (A) through (L) (displayed on the right) do not fall
within the definition of a Gift, Sponsored Project, or External Sale. As
indicated previously, these payments and the activities generating them
are administered by other units at the University.
Transactions Excluded from the Definitions
The University administers funds it receives from third parties through
various administrative units. For example: The Office of Student Finance
administers tuition, the Budget Office administers legislative
appropriations, the Department of Intercollegiate Athletics administers
ticket sales to sporting events, and the Office of Technology
Commercialization administers funds received in exchange for licenses to
University technology.
Gifts, Sponsored Projects, & External Sales
Fund Bucket Project Proposed Definitions
2
UNIVERSITY OF MINNESOTA
BOARD OF REGENTS POLICY
Page 1 of 2
DIRECT SALES OF GOODS AND SERVICES
The central mission of the University of Minnesota (University) is teaching, research,
and outreach. In support of this mission, University academic and support units (units) have
opportunities and are encouraged to generate revenues through the direct sale of certain
goods and services. In so doing, the University must be mindful of the potential for competition
with the private sector.
Scope. This policy identifies and defines the circumstances in which the
Subd. 1.
University may engage in the direct sale of goods and services. This policy shall not apply to:
(a) fees for instruction offered in the University’s regular, extension,
evening, or continuing education programs, including non-credit
instruction;
(b) fees for services provided in the practicum aspects of its
instructional and research programs;
(c) outside consulting, service activities, and other work separately
regulated by Board of Regents policy; or
(d) student organization programs and fundraising activities.
Guiding Principle. Units may engage in the direct sale of goods and
Subd. 2.
services to individuals, groups, or external entities when the production of those goods or
services substantially supports the teaching, research, or outreach mission of the University.
Criteria for Permissible Sales. Direct sales of goods and services means
Subd. 3.
an exchange by the University of tangible or intangible property or service with external
customers for monetary consideration. The following factors shall be considered and weighed
in determining whether a direct sale of goods or services shall be authorized:
The goods or services represent the transfer of knowledge and expertise
from the University to the public.
The goods or services support and extend the University’s teaching,
research, or outreach mission.
The charge for the goods or services takes into account all direct and
indirect costs of providing the goods or services as well as the
competitive price of such items in the public market.
3
I
UNIVERSITY OF MINNESOTA
BOARD OF REGENTS POLICY
The goods or services are not commonly available or otherwise easily
accessible in the public market.
The provision of goods or services represents an opportunity to utilize
existing capacity or under-performing assets in order to reduce the
University’s internal costs of providing the goods or services.
SUPERSEDES: BUSINESS ENTERPRISES AT THE UNIVERSITY DATED OCTOBER 17, 1980.
4
http://www.poIicy.umn.edLlPOIicies/Finance/Accounting/EXTERN...
Selling Goods and Services to External Customers
UNlvRslTY OF
D
MINNESOTA
AI)MINISTRA’I’IVE POLICY
] Selling Goods and Services to External
Customers
Policy Contents
Policy Statement
Reason for Policy
Procedures
Forms/Instruction s
Additional Contacts
Definitions
.Rsspensibililies
Appendices
fAQ
Related Information
HibtOr
Effective Date: October 1996
Last Update: February 2010
Responsible University Officer:
University Controller
Policy Owner:
Director of Treasury Accounting and
Internal/External Sales
Policy Contact:
Keith Jansen
Printed on: October 4, 2010. Please go to http://policy.umn.edu
Policy or related document.
POLICY STATEMENT
for the most current version of the
RETURN TO TOP
Units may generate additional revenue through the direct sale of goods or services to non-University
(external) customers, provided the sales activity substantially supports the University’s mission and is
consistent with the normal activities of the unit. Any unit desiring to conduct external sales activity must
obtain appropriate approval. The prices charged (rates) for the goods or services should fully cover all
direct and indirect costs associated with the sale and must not unfairly compete with the public market.
Any subsidies must be documented in the rate development and approved by the dean, director, or
department head.
University departments are required to have a written agreement in place to govern external sales
transactions with non-University entities. . Units should use the University of Minnesota standard
Services Agreement OGC-SCIO2 or any other agreement identified as an External Sales Contract
located on the Office of the General Counsel (OGC) website. Any changes to the standard Services
Agreement (or other agreement as deemed appropriate) must be approved by the OGC prior to the
contract being signed.
Units conducting external sales have a legal obligation to collect Minnesota sales tax on taxable sales
Units are permitted to engage in activities that generate unrelated business income and are
responsible for complying with the tax procedures.
Units must ensure revenue and costs of external sales activity are separated from internal sales
activity when establishing sales activity operating accounts in the financial system. When generating
any sales of goods or services from a sponsored project, units should also refer to Administrative
Policy: Managing Program Income Earned on Sponsored Projects. When planning or approving
business activities, deans, department heads, and other administrators should ensure that these
activities are consistent with this policy. Units that do not follow the guidelines set forth in this policy
will be held responsible for any taxes, fines or penalties incurred.
Special Situations
External sales activities generally should be self-sustaining. However, in situations where University
facilities would otherwise sit idle, incremental revenue may be desirable even if allowable indirect
expenses are not fully recovered. Many University facilities carry fixed overhead costs that will be
incurred regardless of how a facility might be used with an external customer base. In these situations,
units are allowed to conduct external sales to help partially cover indirect costs that would otherwise
be paid by the University.
Exceptions
The Vice President and Chief Financial Officer may grant exceptions to the policy based on written
justification.
Gifts and sales related to sponsored projects are handled through different policies and procedures
(see Related Information).
License for rights under the University patent, trademark, or copyright, including software support and
maintenance are handled through different policies and procedures (see Related Information.)
REASON FOR POLICY
RETURN TO TOP
To implement Board of Regents Policy: Direct Sales of Goods and Services and to ensure that
external sales activity complies with federal and state regulations. The intent of the policy is to help
units identify and mitigate legal, insurance, and tax financial risks; to streamline the process for
establishing external sales activity; to accurately accumulate all costs within an identified, segregated
set of accounts; to recognize subsidies to the operation; to establish rates based on total costs, and to
5
10/4/2010 2:26 PM
Selling Goods and Services to External Customers
http://www.policy.umn.edu/Policies/Finance/Accounting/EXTERN...
Examples of units conducting internal sales activity: Graphics Services, Fleet services,
Telecommunication Services, Physics Shop and University Stores
Public, Public Customers, or External Customers
Al individuals (including faculty, students and staff), private businesses, foundations, and government
agencies that acquire goods /services from University departments or units and do NOT use the
University internal billing system. Purchases are made by individuals or Non-University organizations.
Research
(i) A systematic study intended to increase generalizable scientific knowledge or scholarly
understanding; or (U) a systematic study intended to determine or exploit the potential of new
knowledge for improvements in technology, materials, processes, methods, devices (including design
and development of prototypes), or techniques.
Service Unit
Each distinct good or service provided must have a unit of product or service (Service Unit) that
becomes the basis for charging customers. A service unit: 1) is identifiable and measurable; 2)
accurately captures the resources necessary to produce it, 3) is related to, or is a reasonable proxy
for, the benefit received by the user.
Single Purchase Tax Exemption
Customers whose exemption is for a single purchase. These are customers who are not typically tax
exempt but are purchasing items that are intended for resale. The customer must provide a completed
Minnesota form ST3.
Sponsored Project
A transaction, other than excluded transactions, involving the transfer of funds by a third party, other
than an individual, to the University which meets any of the criteria set forth in (A) - (J) in Appendix Gifts, Sponsored Projects, & External Sales.
Taxable
Items that may or may not be taxed, depending on the tax status of the customer.
Useful Life
The length of time that a depreciable asset is expected to be useable as defined by the Controllers
Office following Generally Accepted Accounting Principals.
RESPONSIBILITIES
RETURN TO TOP
Internal/External Sales Office
Review and approve Inlemal/External Sales Approval Form and initial rates for all new external sales
activity. Develop and update content in external sales training materials.
Controller’s Office
Review and approve new external sales activity.
Chancellor! Dean! Vice President
Approve or deny external sales activity. Responsible for compliance with all University policy and
federal regulations. Review external sales revenues and expenses throughout the year to evaluate
financial solvency. Cover any deficits created by external sales activity under their direction. Review
the sales business plan annually. Records of these reviews should be maintained at the RRC level.
External Sales Business Manager
Prepare business plans and rate analysis. Comply with established University policies and procedures.
Provide competitive rates and services. Units are responsible for maintaining copies of all external
sales agreements and managing record retention. Units are responsible for communication between
the University and the customer.
Environmental Health and Safety
Provide environmental health and safety expertise to units conducting external sales activity on an as
needed basis.
Foundations
Handle gift activity and forward other activity to SPA, central administration or departments.
General Counsel
Review and approve contract terms and conditions for external sales activity that does not use an
External Sales contract template located in the Office of the General Counsel forms library. Review
and approve any changes to a University form or any non-University of Minnesota agreement.
Inventory Services
Inventory Services is responsible for updating the accounting system for all capital equipment.
Inventory Services will assist departments in determining depreciable life of capital equipment,
appropriate method for disposal of capital equipment, and appropriate accounting for all capital
equipment.
Risk Management
Provide risk management expertise to units conducting external sales activity on an as needed basis
RRC Manager
Setup accounting structure for external sales activity. Designate a guarantee account for use in the
event of a deficit resulting from sales activity within the REC. Active participant in management of the
sales activity processes and procedures. Active participant in review process.
Sponsored Projects Administration (SPA)
6
10/4/2010 2:26 PM
Selling Goods and Services to External Customers
http://www.policy.umn.edulPolicies/Finance/AccountinglEXTERN..
Work with Foundations and Internal/External Sales Office in determining classification of revenue
sources [i.e. gifts, sponsored projects, or external sales]
Tax Management Office
Provide tax expertise to the departments as needed.
University Services / System Academic Administration
Maintain space programming and management database.
Vice President and CFO
Determine the types of businesses the University will engage in.
RETURN TO TOP
APPENDICES
Gifts, Sponsored Projects, and External Sales (PDF)
FREQUENTLY ASKED QUESTIONS
RETURN TO TOP
1. Will separate 501(c)3 Corporations be created to handle business activity?
No. Al businesses will be run within the University accounting system.
2. When Can I Use a Standard University Contract to Execute an External Sales
Transaction?
o
The Office of the General Counsel has approved the contracts listed below. These
contracts can be used for any approved external sales activity.
o
Department professional service for fee =Services Agreement
o
Testing of equipment or medical devices =Ser v icesgteeiIient
Laboratory testing services =jceggeemenI
Lease of facilities =Procedure Use & Lease b y Non-U Groups
Lease of equipment =Equipment Lea s e
o
Sale of product developed by department =Bill of Sale
o
Workshops or presentations for fee = Workshop/Presentation Agreement
Use of Lab Equipment or Use of Supervised Lab =Lab Use Agreement
Company
Individual
Volunteers and Visitors
3. Does This Policy Apply to Auxiliaries?
No. The primary customers for auxiliaries are students, faculty, and staff. Auxiliaries directly
support the mission of the University.
RELATED INFORMATION
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Related Policies
Board of Regents Policy: Individual Business or Financial Conflict of Interest
Administrative Policy:
Accepting and Managing Gifts
Administrative Policy:
General Accounting
Administrative Policy:
Managing Program Income Earned on Sponsored Projects
Administrative Policy
Selling Goods and Services to University Departments
Other Related Information
Federal Office of Management & Budget Circulars:
o
A-21 Cost Principles for Educational Institutions
o
A-t 33 Audits of Institutions of Higher Education and Other Non-Profits.
Internal Revenue Code Section 512: Unrelated Business Taxable Income
Minnesota Statue 297A: General Sales and Use Tax
HISTORY
RETURN TO TOP
Amended:
February 2010- Updated forms section. External Sales Action form replaced by Internal/External Sales
Approval form. Added Business Proposal Template. Updated procedures to address use of these
forms.
Amended:
October 2009 - Captures a more complete picture of the product’s/service’s viability by requiring
approval of any subsidies by the dean director, or department head; Directs departments to the
appropriate central unit for subject matter expertise and advice (tax, insurance, legal, etc.); Aligns
M
[0/4/2010 2:26 PM
Internal/External Sales Approval Form
1295 WBOB
11300 So. 2nd St.
IMinneapolis, MN 55454
’xtsales'umn.edu
Request to Conduct Internal and/or External Sales
Administrative Policies:
Customers.
U Wide Form:
outs this form to:
UNIVERSITY OF MINNESOTA
Rev: 09/09
Selling Goods and Services to Other University Departments and Selling to External
See Policies:
http://policy.umn.edu/Policies/Finance/Accountincj/EXTERNALSALES.html
http://rolicy.umn.edu/Policies/Finance/Accountinq/INTERNALSALES.html
Purpose: This form must be completed and approved before engaging in any internal or external sales activity. The
purpose of this form is to capture the essential information related to the pending business activity with internal and/or
external customers, streamline the process, be consistent with internal policies and procedures, mitigate potential risks,
and secure necessary approvals before the activity begins.
Department:
Applicant:
Phone
RRC Manager:
Phone
Contact Person:
Phone
Chartfield String (Internal)
Fund
DeptID
Program
ChartField
DeptiD
Program
Chartfield
-
Chartfield String (External)
Fund
Approvals:
RRC Manager
Date
Dean / Director! Department Head
Date
VP! Sr. VP / Provost! Chancellor
Date
(ii specialized service center)
University Controller (or Designee)
Date
The University of Minnesota is an equal opportunity educator employer.
(c) 2007 by the Regents of the University of Minnesota
8
1. Activity type. Check category(s) that most closely characterizes the activity described in the request.
(Please left click on box and note correct point of contact when comment occurs.)
Dept professional/consulting services fee
I
Services provided in the practicum aspects of the University’s
Instructional programs, including academic affiliations
Sale of support/administrative services
I
Testing of equipment/product
= Admissions to University sporting events
Laboratory testing services
I
I
Sale of biological materials
[Retail food and beverages services, including catering
[sale, (ease, or license for rights under University patent, trademark
or copyright, including software support and maintenance.
Sale, lease, License or transfer of tangible property.
Naming rights or athletic promotion and signage
Advertising
VY of veterinary care services to
I
[Sale or lease of University equipment, fixtures, supplies or facilities
individual animals
Delivery of health care services to individuals
Room and board
I
Instruction offered in the University’s regular,
extension, evening, or continuing education
programs, including non-credit instruction (Indicator:
A program conducted by Extension services that
constrains one or more of the criteria
for Sponsored Project (e.g., cost sharing, matching
funds, return of unused funds) may be more appropriately
administered by SPA. In such instances, Extensions
Services (including 4-I-I) should consult with SPA
regarding how to proceed)
I
[Delivery of services by University to either Fairview or University
of Minnesota Physicians
Other (describe):
2. Describe the activity in detail:
3. What customer(s) will you be selling to?
The University of Minnesota is an equal opportunity educator employer.
(c) 2007 by the Regents of the university of Minnesota
9
4. What customer type will you be selling to? (check all that apply)
=Students
Private Businesses
=Staff
=Faculty
=university Colleges or Departments
Government Agencies
Foundation
Other: Please explain.
5. List the customers who will pay more than $10,000 ann
6. Estimate the number of individual activities or contracts, or series of transactions, to be processed annually for this
activity:
7. When (month and year) will this activity begin? Will the activity be conducted on a regular’ basis (i.e. year round,
seasonal each year) versus a one-time, infrequent, casual, or sporadic basis?
8. Estimate the annual gross receipts and/or other consideration to be generated from this activity by fiscal year (for the
first three fiscal years if applicable):
9. Is it anticipated that any intellectual property (e.g., discoveries, inventions, patentable improvements to existing
technology) exists or will be created or conceived as a result of performing the services contemplated by this external
sales activity?
j ves
INo
It yes, please describe below:
The University of Minnesota is an equal opportunity educator employer.
(c) 2007 by the Regents of the University of Minnesota
10
10. Is the activity related to or derived from part of a currently active Sponsored Project?
F--]Yes I
INo
If yes, will the sponsor consider the proceeds program income?
Also, provide the account string(s):
DeptiD
Fund
Program
ChartFleld
11. Activity risk characteristics
Indicate yes or no for each risk characteristic. (Left click on the box below and note point of contact when comment
occurs) If you answer ’YES" to any question, please include an explanation in the space provided.
No
Yes
[_IActivity involves testing or creating a product that could be a subject to product liability claims.
F-1 An exclusive contractual relationship with a vendor or third party will be required.
will involve intellectual property such as trademarks, copyrights, patents, trade secrets or
P1I otheractivity
proprietary information and materials.
1-1 The activity will require a non-compete agreement.
IThe activity will require confidentiality commitment.
F-1
conflict of interest issues have been identified and managed (include details in the business
F1
proposal for this activity).
II
This activity will involve human subjects, laboratory animals, radiological hazards, human,
plant, or animal pathogens or biological toxins, recombinant DNA, or the use of human biological material.
I
F7 Federal equipment or state appropriations will be used in this activity.
F7I IPotentially subject to federal Unrelated Business Income Tax (UBIT) and/or MN state sales or use tax.
]Students will participate in the activity as part of an academic requirement.
II
IF 1 revenues from this activity are expected to exceed $50,000 annually.
will involve the transport of biological material including human, animal, or plant
IF7 Theactivity
pathogens or arthropods between states or internationally.
-
(The activity will involve the transfer of biological materials.
F7
IF] The activity will involve the use of heavy equipment and/or high energy sources.
12. Attach the business plan, proposal and/or memo providing any other information significant to the activity along with a
rate development to this form. (See Business Plan Template)
13. List professors that have outside consulting contracts (Company, Date, Term)
The University of Minnesota is an equal opportunity educator employer.
(c) 2007 by the Regents of the University of Minnesota
11
For Internal Use Only
I)cpts must provide:
ESAF’#
flC hart/Field Account No.
For Internal Use Only
OES ismat provide:
OES Contract #
Analyst
-
UNIVERSITY OF MINNESOTA
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement") is between the Regents of the
University of Minnesota (the "University"), a Minnesota constitutional corporation, and
(the "Company"). This Agreement is entered into by University through its
The parties agree as follows:
1.
Description of Services. University shall perform the following services for Company:
("Services"). Reference to Services in this Agreement shall be deemed to include any
deliverables provided to Company in connection with the Services, including without limitation,
reports, results, materials, products, and information.
Compensation. For the Services performed under section 1, Company shall pay
2.
), plus any sales or use tax if applicable.
University
and /100 ($
2.1
The compensation shall be paid (check one of the two boxes):
in full upon the signing of this Agreement; or
in installments, payable on the following dates:
2.2
Invoices shall be sent to:
Attn:
Phone No.:
Facsimile No.:
Email:
Term. The term of this Agreement shall commence on
3.
unless terminated earlier as provided in section 4.
shall expire on
("Effective Date") and
Termination. Either party may terminate this Agreement if the other party (i) fails to
4.
perform any material obligation under this Agreement and (ii) does not correct such failure
within seven (7) days after having received written notice of such failure. Additionally, either
FORM: OOC-SC102
Form Date: 01.2962
Revision Date: 0720.10
1
12
party may terminate this Agreement for its convenience upon thirty (30) days’ prior written
notice to the other party. Upon any termination under this Section 4, Company shall promptly
pay University for all Services rendered and costs incurred up to and including the effective date
of termination.
5. DISCLAIMER OF WARRANTIES. UNIVERSITY MAKES NO WARRANTIES,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING WITHOUT
LIMITATION, THE CONDITION, ORIGINALITY OR ACCURACY OF THE SERVICES
PERFORMED OR DELIVERABLES PROVIDED UNDER THIS AGREEMENT. UNIVERSITY
EXPRESSLY DISCLAIMS WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE.
6. LIMITATION OF LIABILITY FOR BREACH OF CONTRACT. IN NO EVENT
SHALL EITHER’S PARTY’S LIABILITY FOR BREACH OF THIS AGREEMENT INCLUDE
DAMAGES FOR WORK STOPPAGE, LOST DATA, OR INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFIT), OF ANY KIND. EXCEPT FOR
EACH PARTY’S OBLIGATIONS UNDER SECTIONS 8.1 AND 8.2, EACH PARTY’S
LIABILITY TO THE OTHER FOR BREACH OF THIS AGREEMENT SHALL NOT EXCEED
AN AMOUNT EQUAL TO THE MONETARY CONSIDERATION PAID TO UNIVERSITY
UNDER THIS AGREEMENT.
Use of University Name or Logo. Company agrees not to use the name, logo, or any
7.
other marks (including, but not limited to, colors and music) owned by or associated with
University or the name of any representative of University in any sales promotion work or
advertising, or in any form of publicity, without the prior written permission of University in
each instance. However, Company may use the name of University in a document required to be
filed with, or provided to, any governmental authority or regulatory agency to comply with
applicable legal or regulatory requirements. Company agrees to provide University with a copy
of any such document.
8.
Indemnification.
Except as provided in Section 8.2, each party shall be responsible for its own acts
8.1
and omissions and the results thereof and shall not be responsible for the acts of the other party and
the results thereof. Liability of University is subject to the terms and limitations of the Minnesota
Tort Claims Act, Minnesota Statutes Section 3.736, as amended.
8.2 Company shall indemnify, defend, and hold harmless University, its regents, faculty
members, students, employees, agents, contractors, and authorized volunteer workers against any
and all claims, costs, or liabilities, including attorneys’ fees and court costs at both trial and
appellate levels, for any loss, damage, injury, or loss of life (other than that attributable to willful,
wanton or intentional acts or omissions of University) arising out of (i) use by Company (or any
third party acting on behalf of or under authorization from Company) of the Services or any
information, reports, deliverables, materials, products or other results of University’s work under
this Agreement or (ii) Company’s infringement of a third party’s intellectual property rights or
FORM: 0CC-SC 102
Form Date: 01.29.02
Revision Date: 07.20. 10
2
13
Company’s violation of any law, rule, or regulation in the provision of any materials to
University.
Each party represents that it has and will continue to have at least the following
8.3
levels of insurance during the term of this Agreement: (i) as to University, Workers’
Compensation in statutory compliance with Minnesota law and General Liability insurance in an
amount not less than $1,000,000 each claim/$3,000,000 each occurrence; and (ii) as to Company,
General Liability insurance in an amount not less than $1,000,000 each occurrence/$2,000,000
annual aggregate. Certificates of all insurance detailed above shall be furnished to the other party
upon request.
Export Controls. Company shall notify University in writing if any technological
9.
information or data to be provided to University is subject to export controls under U.S. law or if
technological information or data that Company is requesting University to produce during the
course of work under this Agreement is expected to be subject to such controls. Company shall
notify University of the applicable export controls (for example, Commerce Control List
designations, reasons for control, and countries for which an export license is required).
University shall have the right to deline export controlled information or tasks requiring
production of such information. if the Services cannot reasonably be performed without University
access to export controlled information or data, the Agreement may be terminated by either party
for convenience in accordance with Section 4, except that such termination shall occur immediately
upon written notice to the other instead of at the end of the 30-day period set forth in Section 4.
Company shall not release export controlled information or data to University until Company has
been notified in writing by University that University has implemented a technology control plan
for such information.
10.
General Provisions.
10.1 Amendment. This Agreement shall be amended only in writing duly executed by
all the parties to this Agreement.
10.2 Assignment. The parties may not assign any rights or obligations of this
Agreement without the prior written consent of the other party. Any assignment attempted to be
made in violation of this Agreement shall be void.
10.3 Entire Agreement. This Agreement (including all documents attached or
referenced) is intended by the parties as the final and binding expression of their agreement and
as the complete and exclusive statement of its terms. This Agreement cancels, supersedes and
revokes all prior negotiations, representations and agreements between the parties, whether oral
or written, relating to the subject matter of this Agreement, including without limitation, any
non-disclosure agreements. The terms and conditions of any purchase order or similar document
submitted by Company in connection with the services provided under this Agreement shall not
be binding upon University.
10.4 Force Majeure. No party to this Agreement shall be responsible for any delays or
failure to perform any obligation under this Agreement due to acts of God, strikes or other
FORM: OGC-SCIO2
Form Date: 01.29.02
Revision Date: 07.20. 10
14
disturbances, including, without limitation, war, insurrection, embargoes, governmental
restrictions, acts of governments or governmental authorities, and any other cause beyond the
control of such party. During an event of force majeure the parties’ duty to perform obligations
shall be suspended.
10.5 Governing Law and Jurisdiction. The internal laws of the state of Minnesota shall
govern the validity, construction and enforceability of this Agreement, without giving effect to
its conflict of laws principles. All suits, actions, claims and causes of action relating to the
construction, validity, performance and enforcement of this Agreement shall be in the courts of
Hennepin County, Minnesota.
10.6 Independent Contractor. In the performance of their obligations under this
Agreement, the parties shall be independent contractors, and shall have no other legal
relationship, including, without limitation, partners, joint ventures, or employees. Each party’s
employees (i) shall be regarded as the employees of such party and shall not be regarded as the
employees of the other party; (ii) shall be subject to the employment policies and procedures of
such party and shall not be subject to the employment practices and procedures of the other
party; and (iii) shall not be entitled to any employment benefits of the other party. Neither party
shall have the right or power to bind the other party and any attempt to enter into an agreement in
violation of this section 10.6 shall be void. Neither party shall take any actions to bind the other
party to an agreement.
10.7. Notices. All notices and other communications that a party is required or elects to
deliver shall be in writing and shall be delivered personally or by facsimile or by a recognized
courier service or by United States Mail (first-class, postage prepaid, certified return receipt
requested) to the other party at the following addresses. Such notices and other communications
shall be deemed made when delivered; faxed; submitted to the courier service; or, with respect to
U.S. mail, three days after mailing.
If to University:
University of Minnesota
Attn:
Phone No.:
Facsimile No.:
E-mail:
FORM: OGC-SCIO2
Form Date: 01.29.02
Revision Date: 07.20. 10
4
15
With a copy to:
University of Minnesota
Office of the General Counsel
Attn: Transactional Law Services Group
360 McNamara Alumni Center
200 Oak Street S.E.
Minneapolis, MN 554552006
Facsimile No.: (612) 626-9624
E-mail: [email protected]
With a copy to:
University of Minnesota
Office of External Sales
295 West Bank Office Building
1300 South 2nd Street
Minneapolis, MN 55454
Facsimile No.: (612) 624-4149
Email: [email protected]
If to Company:
Attn:
Phone No.:
Facsimile No.:
E-mail:
10.8 Taxes and similar fees. In addition to the payment obligation in section 2,
Company is responsible for the payment of any and all income, sales, use, consumption, value
added, excise, custom duties or other taxes and similar fees in connection with this Agreement,
levied or required to be withheld from payment(s) to University by any taxing authority or any
other body having jurisdiction under any present or future laws. To the extent that Company is
required to withhold or deduct taxes or similar fees on any payment to be made to University,
then the amount payable shall be increased by the amount that will, result in University receiving
a net payment in the amount it would have received absent such withholding or deduction. If
University is required to pay any of such fees and/or taxes or any related penalties or interest,
then any such payments shall be reimbursed to University by Company.
10.9. Breach; Attorneys’ Fees. In the event it fails to perform any of its obligations
under this Agreement, Company shall reimburse University for all University’s costs and
expenses (including reasonable attorneys’ fees, court costs, and costs of investigation) to enforce
this Agreement, regardless of whether a suit or action had been commenced or concluded.
10.10. Survival. Upon termination or expiration of this Agreement, Sections 2, 5, 6, 7, 8,
9, and 10 shall survive.
FORM: OGC-SC 102
Form Date: 0 1.29.02
Revision Date: 07.20.10
16
IN WITNESS WHEREOF, the parties have entered into the Agreement as of the dates
indicated below. Each individual signing below represents that they have the authority to bind
the party on whose behalf they are signing.
Regents of the University of Minnesota
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
FORM: 0CC-SC 102
Form Date: 01.29.02
Revision Date: 07.20. 10
6
17
For Internal Use Only
l)epts must provide:
ESAF #
Chart/Field Account No.
For Internal U s e Only
OES must provide:
OES Contract #
Analyst
-
UNIVERSITY OF MINNESOTA
ADDENDUM
TO THE SERVICES AGREEMENT
DATED
BETWEEN
REGENTS OF THE UNIVERSITY OF MINNESOTA ("UNIVERSITY")
AND
("COMPANY")
The parties set forth above hereby agree that the terms of this Addendum shall be
incorporated in and be a part of that certain Services Agreement, as referenced above (the
"Agreement").
1.
The following is hereby added as a new Section It:
11.
Confidentiality.
11.1 For purposes of this Agreement, "Confidential Information" means
written or tangible information disclosed by either party to the other, which at the
time of disclosure, is clearly and conspicuously labeled "Confidential" or
"Proprietary". Confidential Information shall also mean oral and visual disclosures
which are identified as confidential at the time of such disclosures and which are
confirmed and summarized within fifteen (15) days of the disclosure by the
disclosing party in a written document that sets forth the substance of the
Confidential Information disclosed. The parties agree to maintain confidentiality of
the Confidential Information during the term of this Agreement, including any
renewal periods, and for a period of three (3) years from the effective termination
or expiration date of this Agreement. Furthermore, neither party shall use said
Confidential Information for any purpose other than those purposes specified in
this Agreement. The parties may disclose Confidential Information to employees
requiring access thereto for the purposes of this Agreement. Neither party shall be
held financially liable for any inadvertent disclosure, but each will agree to use its
reasonable efforts not to disclose any agreed to Confidential Information.
11.2 Nothing contained herein will in any way restrict or impair either
party’s right to use, disclose, or otherwise deal with any Confidential Information
that at the time of its receipt:
11.2.1 Is generally available in the public domain, or thereafter
becomes available to the public through no act of the receiving party;
FORM: OGC-SCI07
Form Date: 0701.02
Revision Date: 05.02.08
1
18
11.2.2 Was independently known prior to receipt thereof, or made
available to such receiving party as a matter of lawful right by a third
party;
11.2.3 Is received without obligation of confidentiality from a
third party who was free to disclose the information; or
11.2.4 Is required by law (including disclosures under the
Minnesota Government Data Practices Act, Minnesota Statutes, Chapter
13), regulation or court order to be disclosed, in which case party required
to make disclosure shall notify the other to allow that party to assert
whatever exclusions or exemptions may be available to it under such law.
2.
The following language is added as a new Section 12:
Results of Analysis and Intellectual Property Rights. The parties acknowledge
12.
that the Services provided hereunder are governed by University’s Openness in Research
Policy, a copy of which may be found at http://wwwl.urnn.edu/regents/policiesacademic/Openness in Research.pdf, and that University shall not publish the results of
the Services. Any materials or information provided to University under this Agreement
shall remain the property of Company and Company grants University no express or
implied intellectual property rights in such information or materials.
Except as expressly provided herein, all other provisions of the Services Agreement shall
3.
remain the same.
IN WITNESS WHEREOF, the parties have entered into this Addendum as of the dates
indicated below. Each individual signing below represents that they have the authority to bind
the party on whose behalf they are signing.
Regents of the University of Minnesota
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
FORM: OGC-SCIO7
Form Date: 07.0102
Revision Date: 05.02.08
2
19
LTERF—Limited Term, Exclusive, Royalty-free License
Article 9, below, grants the sponsor a limited term, exclusive development license. The
University of Minnesota has proposed this to some sponsors in discussions regarding
master agreements. A few companies have expressed interest; one liked it very much.
We have signed a master agreement with that company for these terms. This approach
was suggested by, and championed by, the University’s technology transfer office.
Article 9 - Grant of Rights
9.1
University g rants S ponsor t wo e xclusive opt ions t o l icenses U niversity’s r ights i n
each P roject I nvention. T he f irst e xclusive op tion t o a P roject I nvention m ust b e
exercised within o ne-hundred e ighty ( 180) da ys of disclosure of t he Project
Invention by either party (or such longer time as the parties may agree). The license
under the first option is a limited time, exclusive, royalty-free, world-wide license
(“Limited T ime, E xclusive, R oyalty-Free License” o r “ LTERF l icense”) t o t he
Project Invention both for developmental purposes and for commercialization. The
LTERF license shall extend for a period of two calendar years from the date Sponsor
notifies University that it has exercised the first option. The second exclusive option
to a Project Invention must be exercised either prior to expiration of the first option
period or , if S ponsor ha s e lected t he L TERF l icense, pr ior to e xpiration of t he
LTERF l icense. At Sponsor’s election, the s econd l icense s hall be either (a) nonexclusive and royalty bearing and for specified field(s) of us e, and with a right t o
sublicense, or ( b) e xclusive a nd r oyalty-bearing, w ith mutually a greeable
commercialization obligations f or s pecified f ield(s) of use, a nd w ith a r ight t o
sublicense.
9.2
A c ondition of e ach of t he l icenses available t o Sponsor un der A rticle 9. 1 i s t hat
Sponsor ha s paid U niversity t he f ull C ontract Price f or t he P roject a nd has pa id
directly o r ma de time ly r eimbursement to the U niversity o f a ll p atent c osts. T he
additional terms and conditions will be mutually agreed upon, with licenses executed
within one hundred twenty (120) days of exercise of options or such longer time as
the parties may agree. If no option is exercised by Sponsor, or if Sponsor exercises
the f irst op tion but no t t he s econd opt ion t he University i s f ree t o i ndependently
pursue s uch pr otection a nd l icense a rrangements w ithout f urther ob ligation t o
Sponsor, pr ovided that n othing i n this A rticle 9. 2 s hall a ffect or impair Sponsor’s
rights, title and interest in Joint Project Inventions or agreements made by the parties
under Article 8.4.1.
9.3
University also grants Sponsor an option to any University Background IP (a) that
the U niversity i s l egally f ree t o l icense t o S ponsor a s of t he da te t hat S ponsor
exercises the option and (b) that is necessary or useful for the practice of a P roject
Invention for which Sponsor has exercised an option. This Article 9.3 o ption must
be e xercised w ithin one -hundred e ighty ( 180) da ys of di sclosure of t he Project
Invention b y e ither pa rty ( or s uch l onger t ime a s th e p arties ma y a gree). Prior to
notice of S ponsor’s e xercise of t his A rticle 9.3 option, t he U niversity i s f ree t o
license background t echnology t o t hird parties o n a non -exclusive basis w ithout
20
regard to Sponsor’s potential interest in the background technology. The license to
background t echnology granted t hrough this A greement s hall be e ither: ( a) non exclusive and royalty bearing and l imited t o the extent necessary or us eful for t he
practice o f a P roject I nvention l icensed b y S ponsor w ithin t he licensed f ield(s) o f
use; or (b) exclusive and royalty bearing and limited to the extent necessary or useful
for t he pr actice of a Project I nvention licensed by S ponsor w ithin t he l icensed
field(s) of us e. In e ach c ase, S ponsor w ould be pe rmitted t o s ublicense. T he
additional t erms a nd c onditions s hall be m utually a greed upon. N othing i n t his
Agreement ba rs Sponsor f rom ne gotiating f or a dditional r ights t o t he U niversity’s
background technology.
21
THE SPECTRUM OF UNIVERSITY-CORPORATE COLLABORATIONS:
RECOGNIZING WHAT TERMS ARE APPROPRIATE
November 10 – 12, 2010
Allis M Oswell
Assistant General Counsel
Carnegie Mellon University
ATTACHMENTS:
1. Carnegie Mellon University – Fundamental Concepts in Sponsored Research
Agreements
2. Carnegie Mellon University – Draft Term Sheet: Master Research Agreement
Carnegie Mellon University
Fundamental Concepts in Sponsored Research Agreements
Funding:
Research is generally performed under cost-reimbursable terms, where the University invoices the Sponsor as costs are
incurred (although it is possible to agree to fixed-price terms with a specified payment schedule). Labor costs are
always based on percentage of effort, rather than on an hourly basis, and all costs associated with sponsored research
shall be accounted for in accordance with the US OMB Circular A-21, entitled “Cost Principles for Educational
Institutions”. See ://www.whitehouse.gov/omb/circulars/a021/a021. for details. All research is conducted according
to a specific scope of work with a well-defined period of performance.
Ownership of Work Product:
For the reasons discussed below, Carnegie Mellon retains ownership of intellectual property and other materials
created by it in the performance of the research.
Tax-exempt organizations like Carnegie Mellon are supposed to use their resources to perform activities related to
their exempt purposes (essentially, in consideration for not having to pay taxes on income, tax-exempt organizations
are not expected to behave like private companies or use their resources to benefit private companies). As a result,
Carnegie Mellon is not supposed to use its resources (meaning money, personnel, intellectual property, facilities,
etc) to provide “private benefit” to individuals or entities. In addition, Carnegie Mellon may only do a small amount
of work that is unrelated to its tax-exempt mission. Such unrelated work creates taxable income to the University
(commonly referred to as unrelated business taxable income, or “UBTI”). To the extent the IRS believes Carnegie
Mellon is spending more than an insignificant portion of its time performing unrelated activities that generate UBTI,
it could lead to large fines or ultimately a loss of the University’s tax-exempt status.
In addition parameters relating Carnegie Mellon’s tax-exempt status, Carnegie Mellon must also comply with
relevant rules relating to its use of tax-exempt bond financing. Carnegie Mellon’s tax-exempt status allows it to
benefit from issuing tax-exempt bonds, and Carnegie Mellon has used such financing in the majority of its buildings.
There are very specific rules concerning an exempt organization’s use of tax-exempt bond financed facilities.
Corporate sponsored research is permitted, but the University must own the work product it develops and may only
offer licenses to the corporate sponsor under certain parameters (as discussed in the “Use of Project Deliverables”
section below).
To avoid jeopardizing its exempt status and to comply with the tax-exempt bond rules, Carnegie Mellon does not
engage in “work for hire” type of agreements that are typical for for-profit companies and consultants, nor does
Carnegie Mellon offer automatic joint ownership to the work product that Carnegie Mellon produces. In addition to
the fact that such arrangements would raise issues with respect to Carnegie Mellon’s tax-exempt status and use of
tax-exempt bonds, there are several other important reasons Carnegie Mellon retains ownership of the work product
created by its personnel under research agreements:
•
•
•
To fulfill obligations the University has under federal regulations (e.g., the Bayh-Dole Act)
To fulfill obligations under the Carnegie Mellon Intellectual Property Policy and federal
regulations for the sharing of royalties with inventors
To ensure that faculty are not blocked or otherwise prevented from continuing to perform
research in their research area
Regarding intellectual property that results from true joint development by Carnegie Mellon and Sponsor (for
example, where the parties would be considered joint inventors or joint copyright holders under relevant law), title
to such intellectual property would be held jointly and either party could make use of it without accounting to the
other. However, because of issues of private benefit and private use of tax-exempt bond financed facilities, any
development by Sponsor under a research project should not occur in any Carnegie Mellon building that is financed
by tax-exempt bonds.
Page 1 of 3
This document is for informational purposes only.
Confidentiality; Publication of Research Results:
Carnegie Mellon can agree to keep confidential certain information that sponsor would like to pass to Carnegie
Mellon for use in the research project, provided that the sponsor is willing to mark or identify the information as
confidential or proprietary. However, for the reasons discussed below, Carnegie Mellon must have the freedom to
publish and disseminate the research work product, subject to a limited review and comment by Sponsor.
Carnegie Mellon’s goal is to allow faculty to explore their research interests and disseminate their research results as
a part of a free and open academic environment, as emphasized in Carnegie Mellon’s Policy on Restricted Research
(http://www.cmu.edu/policies/documents/RestrictResearch.html). C onsistent with t his p olicy, e xcept for c ertain
restricted p rojects co nducted in semi-autonomous units at Carnegie Me llon, t he U niversity accep ts o nly a 3 0-day
period of l imited pr epublication r eview a nd c omment t o a llow s ponsors: ( i) t o f lag a ny s ponsor c onfidential
information i t may h ave p assed t o C arnegie M ellon for t he p roject t hat h as b een i nadvertently i ncluded i n t he
proposed publication; and/or (ii) to request a limited delay in publication so that the sponsor may file patents or
other intellectual property protection regarding any intellectual property in which sponsor has an ownership interest
(such as materials t hat sponsor p assed t o C arnegie M ellon f or t he p roject o r joint i ntellectual pr operty de veloped
under the project).
Aside from the basic academic concerns raised above, accepting publication restrictions beyond the limited review
mentioned ab ove cau ses C arnegie M ellon t o l ose t he b enefit o f cer tain i mportant ex emptions u nder U .S. e xport
control laws and regulations—to the extent certain information or materials are found to be controlled under relevant
export control laws, then non-US persons at Carnegie Mellon may not be able to access them unless they are granted
an e xport lic ense ( which would s ignificantly r estrict t he in volvement o f a nd d issemination o f i nformation to
Carnegie Mellon’s many foreign personnel and students).
Warranties and Indemnification:
Carnegie Mellon performs its work on an as-is basis without offering warranties or indemnification related to its
work.
Unlike private, for-profit companies that often provide contractual warranties that their work product does not
infringe on third party rights, meets certain specifications, etc., Carnegie Mellon (like other universities) offers its
services and materials on an "as-is" basis with no warranties of any kind. In addition, the University does not
contractually agree to defend and pay for any claims that may result from a sponsor’s use of the University’s work
product. Because Carnegie Mellon is a non-profit organization and does not have a pool of profits to support any
such warranties and indemnities, it simply is not in the position to offer these kinds of clauses that are generally
offered by for-profit contractors. Although Carnegie Mellon does not offer the contractual protections of a typical
for-profit consulting firm, it does have a unique collection of expertise not often found in a single firm and may also
be able to perform the project for a lower cost due to its nonprofit status.
Use of the Project Deliverables:
Sponsors receive a non-exclusive license to review and evaluate any deliverables provided to the Sponsor under the
Agreement. Sponsors may also request to negotiate commercial license rights to the work created by Carnegie
Mellon under the Agreement.
Because of its non-profit status and use of tax-exempt-bond financing, Carnegie Mellon needs to receive fair value
for its work and any resulting use of Carnegie Mellon’s research results. The amount charged for research work is
intended to cover Carnegie Mellon’s costs in performing the research and does not include license fees for any
resulting intellectual property. Under the tax-exempt bond rules, the sponsor is required to pay a competitive price
for a license or any other use of the resulting technology, and this competitive price must be determined at the time
of the license (so it cannot be pre-set at the time the parties enter into the research agreement). In addition, there can
be no credit toward the licensing fee for any amounts paid by sponsor to sponsor the research. Because Carnegie
Mellon often grants limited internal evaluation licenses at no charge, the standard Carnegie Mellon research
agreement allows the sponsor the non-exclusive, royalty-free right to review and evaluate the research deliverables
internally within its company. However, except for the occasional circumstance described below, commercial
licenses must include a competitive, fair market license fee/royalty determined at the time of the license.
Page 2 of 3
This document is for informational purposes only.
The only instance in which a licensee fee or royalty can be determined during the research phase is if University
(and all the researchers on the project) have determined and agreed upfront that the results of the research will be
offered on a non-exclusive basis to anyone and everyone at a particular set price (which forecloses any exclusive
licensing opportunities the sponsor otherwise may have had). This particular situation is not generally reflected in
the University’s standard research template, since it depends on the facts of the particular project and whether the
individuals on that project have determined to take such an approach.
Indemnification by the Sponsor for Use of the Work:
In its agreements, the University requires the sponsor to indemnify the University for claims arising out of the
sponsor’s use of intellectual property received from the University.
Because Carnegie Mellon is a non-profit organization, it does not have the resources to bear the risk of lawsuits or
other claims resulting from a sponsor’s use of Carnegie Mellon’s intellectual property. Because Carnegie Mellon
retains ownership of its intellectual property, it is likely that Carnegie Mellon would be named in any lawsuit
relating directly or indirectly to the use of such intellectual property even where the claim is based on some activity
of the sponsor. While Carnegie Mellon is happy to have sponsors evaluate and use its work product, our research
agreements provide that the sponsor must be responsible for any claims against Carnegie Mellon that result from the
sponsor’s use of the deliverables provided to it or otherwise from sponsor’s exercise of rights granted to it under the
agreement.
Export Control:
Carnegie Mellon asks that its sponsors not provide Carnegie Mellon with any export-controlled materials to use in
connection with the research project unless the sponsor has notified Carnegie Mellon that it would like to do so and
makes prior arrangements with Carnegie Mellon.
Carnegie Mellon is an open campus and has many faculty, staff and students who are not U.S. citizens or permanent
legal residents. Carnegie Mellon does not perform export-controlled work on campus or restrict its research projects
to only U.S. citizens. Therefore, Carnegie Mellon would not generally take receipt or access to export-controlled
information, particularly if it was intended to be somehow incorporated into the work product. However, there may
be occasions where it could be helpful for Carnegie Mellon’s researchers to review certain export-controlled
information in connection with a project. In those instances, because Carnegie Mellon has an open campus with
many foreign nationals, Carnegie Mellon may elect to arrange for certain of its researchers to access the information
elsewhere. Since our sponsors are in the best position to know the nature of the materials they elect to provide to the
University, we ask that they please notify and coordinate with us in advance on these issues.
Agreement Execution and Modifications:
Any agreements with the University must be signed by an individual who is authorized to legally bind the
University. Individual researchers, principal investigators, and even department heads are not authorized to sign
documents on behalf of the University. Only a limited number of individuals (or their specific written designees)
are authorized to sign agreements on behalf of Carnegie Mellon. Therefore, any research agreement will not be
binding upon the University unless it is executed by someone authorized under Carnegie Mellon’s policy entitled
“Authorized Signatures for Agreements, Contracts, Licenses” (currently posted at
http://www.cmu.edu/policies/documents/AuthSig.html) or who the sponsor knows possesses a valid, written
signature delegation issued pursuant to such policy.
In addition, any changes to the agreement (including any changes in scope or cost) must be documented through a
written amendment to the agreement. Any such amendments will also need to be signed by an authorized University
signatory in order to be binding.
Page 3 of 3
This document is for informational purposes only.
For discussion purposes only. All provisions are subject to addition, elimination, or revision by
either party. All communications and discussions are tentative until execution of a written agreement
by both parties.
Draft Term Sheet
Company – CMU
Master Research Agreement
SUBJECT
CARNEGIE MELLON
PROPOSED TERMS
Agreement Type
Master Research Agreement requiring
executed statements of work (SOW) for each
project
Term
3-yr. term for main agreement. Each project
term set forth in SOW.
Compensation
Stated in each SOW. Cost-reimbursable terms
with consent required from Company before
exceeding certain budget cap.
Ownership of IP developed
solely by CMU under
agreement (“CMU
Foreground”)
CMU owns (the University cannot do workfor-hire). CMU immediately grants to
Company a non-exclusive, non-commercial,
internal evaluation license. Company will have
commercial licensing options (see licensing
section below)
Ownership of IP developed
solely by Company under
agreement (“Company
Foreground”)
Company owns. Company immediately grants
to CMU a non-exclusive, non-commercial,
internal license to use for
academic/research/administrative purposes.
Ownership of IP jointly
developed by Company
and CMU (“Joint
Foreground”)
Jointly owned—either party can use without
consent of the other and without accounting to
the other. Assumes Company is not making use
of any CMU facilities financed using taxexempt bonds (we’re not permitted to allow
private parties to create and own IP in our taxexempt-bond financed facilities).
Ownership/use of IP
developed prior to or
outside scope of agreement
(“Background IP”)
Each party retains ownership to its Background
IP. If Company would like to license any CMUowned Background IP, it can request to
negotiate a license. If available for licensing, the
IP would be licensed out at fair market value
(FMV) under a separate license agreement.
Confidentiality
Confidential info. that is marked/designated
would be protected for period of 2 yrs
following end of applicable SOW.
COMPANY
COMMENTS
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For discussion purposes only. All provisions are subject to addition, elimination, or revision by
either party. All communications and discussions are tentative until execution of a written agreement
by both parties.
Licensing options
Within 180 days after CMU notifies Company
of any disclosures of CMU Foreground or Joint
Foreground, Company can let CMU know if
Company would like to negotiate an exclusive
or a non-exclusive license to the IP (of course,
no non-exclusive license needed for Joint
Foreground). CMU would not negotiate with
others during this 180-day period.
Unless otherwise negotiated per the guidelines
below, any licenses would be granted under a
separate license agreement, with license
fees/royalties set at FMV at the time of the
licenses.
Because of CMU’s use of tax-exempt bond
financing, the only mechanisms for
determining license fees in advance are
described in the alternates listed below
(provided that the personnel working on a
particular SOW would agree to accept the
SOW with these terms—CMU could not force
certain faculty to work under these terms, as
they would limit their opportunity to share in
licensing proceeds as contemplated under
CMU’s policies. These alternatives are listed
for discussion purposes because they are
legally feasible for CMU. As stated above,
once we discuss and understand what
Company would like, we would need to touch
base with our faculty):
Alternate #1: Company agrees that all IP
coming out of a project belongs to CMU (even
any Company Foreground or Joint
Foreground). CMU could then agree to grant
Company a non-exclusive license at $X, with
the value of “X” pre-set by the parties. Any
other parties wanting a non-exclusive license
would need to pay FMV at the time of the
license. Company could also negotiate an
exclusive instead, but that would need to be
FMV at the time of the license and the cost
could not be pre-determined.
Alternate #2: CMU could agree to grant
Company a non-exclusive license at $X, with
the value of “X” pre-set by the parties. Any
other parties wanting a non-exclusive would
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For discussion purposes only. All provisions are subject to addition, elimination, or revision by
either party. All communications and discussions are tentative until execution of a written agreement
by both parties.
then also pay $X. Company could let CMU
within the 180 day period that Company would
like an exclusive license instead (FMV at the
time of the license). If Company decides to
take a non-exclusive at $X, Company could
always come back later, and if there have not
been any other non-exclusive licenses granted
by CMU by that time, Company could ask to
“upgrade” its non-exclusive to an exclusive by
paying FMV at that time.
IP protections
Under any commercial license obtained by
Company, it would be required to pay money
for patent or other IP protections (50% for a
non-exclusive, and 100% for an exclusive).
Independent of a license, Company could ask
CMU to file IP protections on any CMU
Foreground in any country at Company’s
expense. Either party could file IP protections
on Joint Foreground, provided that title to the
patents, etc. remain in both parties' names.
Contemplated that the parties split IP
protection costs on joint filings, BUT a party
could elect not to contribute initially and then
reimburse the paying party for half the costs at
the time the non-paying party decided to
license out/use the Joint Foreground for
commercial gain.
Fundamental
research/export control
CMU expects its work product to be
fundamental research. CMU would not restrict
participation by nationality. Company would
not pass any export controlled materials to
CMU without letting CMU know and
discussing arrangements.
No warranty
Like other universities, CMU does its research
on an AS-IS basis and does not offer
warranties.
Indemnity
Because CMU is a private, non-profit and
cannot afford to handle claims arising out of its
sponsors’ use of IP created at CMU, CMU
requires indemnification from its sponsors.
Company would indemnify CMU for any
claims arising out of Company’s exercise of
licenses granted to it by CMU under the
agreement.
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For discussion purposes only. All provisions are subject to addition, elimination, or revision by
either party. All communications and discussions are tentative until execution of a written agreement
by both parties.
Publication
For a period of 2 yrs following the end of the
applicable SOW, CMU will provide Company
30 day pre-publication review to flag any
Company confidential info or IP to be
patented. If patent issue, CMU delays
publication for up to another 60 days to get
patent applications filed. Publication provision
would not include pre-review or delays on
student theses/dissertations.
Termination
Either party could terminate the agreement or a
particular SOW on 60 days’ advance notice.
CMU would be paid for work performed &
non-cancellable commitments made through
termination. Provided CMU is paid for its
work, CMU would pass along any work
completed to that point and Company would
have the licenses/options to them as described
in the agreement.
Use of names
Except for CMU acknowledging Company’s
funding in publications, etc., neither party
would use the name or trademarks of the other
party or any member of its staff in sales
promotion work, advertising or other publicity
without consent.
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