EU Funding through the European Commission and its Impact on R&D Consortium Agreements - Richard Nugent -- 19 April 2013 final

EU Funding through the European Commission and its Impact on R&D Consortium Agreements

Richard NugentHead of Contracts and Intellectual Property

Rothamsted [email protected]

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Introduction to the European FP7/Horizon 2020 Agreements


Agreement Types

Agreement Issues

Outlook Horizon 2020

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Agreements- when in the process?


Call opens Submission Evaluation GA signed

CA signedConfidentiality agreement

Memorandum of Understanding

Draft CA

Image c/o Maria Habicht, Estonian Research Councilhttp://cpi.asm.md/wp-content/.../Day3_Consortium-agreement.ppt

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Main Agreement Types

• Grant (EC-GA)• Consortium• DESCA (a commonly used consortium agreement)• Other Agreements


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Grant Agreement (GA)

• Between Commission and the beneficiaries (initially just the coordinator, with others acceding to GA later).

• Mandatory to sign/accede• Once signed the project can begin


Full image from IPR Helpdesk Fact Sheet June 2011 – IP rules in FP7 Projects: http://www.iprhelpdesk.eu/sites/default/files/newsdocuments/Factsheet IP rules FP7 June 2011.pdf

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Consortium Agreement

• Key Project document• Draws on terms in Annex 2 (General Conditions) of GA• Cannot contradict the GA• Governs relationships between project beneficiaries• Ensures processes in place to cover main eventualities • Facilitates the delivery of the project


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Consortium Agreement –Required by the GA• Beneficiaries to make appropriate internal arrangements consistent

with the provisions of this grant agreement to ensure the efficient implementation of the project. When provided for in Article 1.4 these internal arrangements shall take the form of a written consortium agreement (the "consortium agreement"). The consortium agreement governs inter alia the following:

• i. the internal organisation of the consortium including the decision making procedures;

• ii. rules on dissemination and use, and access rights; • iii. the distribution of the financial contribution …• iv. the settlement of internal disputes, including cases of abuse of

power; • v. liability, indemnification and confidentiality arrangements between

the beneficiaries.


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DESCA

• DEvelopment of a Simplified Consortium Agreement• Widely used• Now at version 3 – specifically designed for FP7• Supplementary to Grant Agreement• It is preferable to sign DESCA in advance of the Grant Agreement


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DESCA

• Core text plus optional texts• Also includes optional Governance Structure modules for

– Small Projects– Medium and Large Projects

• Special Clauses for Software Projects• Optional attachments for Background


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Other Consortium Agreements I

• IMG4– Industrial Management Group representing aerospace companies– Based on DESCA– Additional IP clauses for Aeronautics projects– Includes an agreement for loans of material and equipment


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Other Consortium Agreements II

• EUCAR– European Council for Automotive R&D

• EICTA-IPCA (designed for ICT community)– Integrated Project Consortium Agreement


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Agreement Issues

Intellectual Property /

Access Rights Confidentiality Dissemination/

Publications

Liability Sub-contracting Personal data


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Intellectual Property/Access Rights-what is meant

• Patents• Utility models• Designs• Copyright• Trademarks• Plant variety rights• Unregistered intellectual property e.g. know-how, proprietary

materials


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Intellectual Property/Access Rights

• The Background/Foreground distinction


Full image from IPR Helpdesk Fact Sheet June 2011 – IP rules in FP7 Projects: http://www.iprhelpdesk.eu/sites/default/files/newsdocuments/Factsheet IP rules FP7 June 2011.pdf

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Intellectual Property/Access Rights-Background

• Information or rights held by the beneficiaries• Information or rights to which the beneficiaries have access


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Intellectual Property/Access Rights-Foreground Ownership

• Foreground is the results generated under the project, regardless of whether they can be protect by IPRs

• Ownership – owned by generating beneficiary or beneficiaries• Joint owners to agree a joint ownership agreement (JOA)• Where no JOA there is a default entitlement for each owner to give

non-exclusive licences to third parties (without ability to sub-licence) and on 45 days notice to the other owner(s)

• Under DESCA parties may agree to forego notice and compensation to other joint owners for licensing incomes regarding join foreground

• Individuals working for beneficiaries entitled to claim any rights they may have in relation to Foreground


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Intellectual Property/Access Rights-Foreground Protection

• Beneficiaries shall protect the Foreground (taking into consideration their interests and those of the other beneficiaries)

• If filing a patent in relation to the Foreground a declaration required that the Foreground was generated with the assistance of financial support from the Union/Euratom– “The work leading to this invention has received funding from the

[European Union] [European Atomic Energy Community] Seventh Framework Programme ([FP7/2007-2013] [FP7/2007-2011]) under grant agreement n° [xxxxxx]”

• GA does not specify similar requirement for other rights such as trademark, registered design right or plant variety right.

• Commission must be informed prior to dissemination, if registrable IP is not going to be protected


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Intellectual Property/Access Rights-Foreground Transfers

• Transferring foreground is permitted• Other owners may object to the transfer• Commission may object to foreground transfers to third countries

(non-EU).• Transfer – transferor has duty to pass on obligations associated

with the Foreground to the transferee


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Intellectual Property/Access Rights-Access Rights

• Access rights are licences and user rights to Foreground or Background

• Owner(s) of Foreground shall ensure that it used either by itself or others

• Owner(s) of Foreground to report on the expected use of it


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Intellectual Property/Access RightsSummary

Use means use of Foreground for non-project activities


Access Rights within Project

Access Right for Use

Access to Background

Royalty-free, unless otherwise

agreed

Royalty-free or on fair and reasonable

terms

Access to Foreground

Royalty-free

Royalty-free or on fair and reasonable

terms

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Intellectual Property/Access Rights

• Access Rights may be needed by a participant for the project• Requests for Access Rights to be made in writing• Access Rights :

– may be conditional e.g. if confidentiality is respected– (unless otherwise agreed )- do not confer right to sub-licence– may be exclusive if other beneficiaries waive their access rights and

(where to a third country licensee) Commission does not object – but normally granted non-exclusively– must be needed (DESCA) by requesting Party

• Access Rights extend to affiliated entities• Access Rights cease either:

• 1 year after project finishes• 1 year after owner of foreground or background is terminated,


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Confidentiality- key considerations

• Consider a Confidentiality Agreement during the proposal stage• Disclosure of confidential info may be necessary to develop a

winning proposal• Mutual CA is prudent at proposal stage• Impact of dissemination duties on confidentiality• Grant Agreement position• Consortium agreement position


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Confidentiality-Grant Agreement

• Confidential Information is that which is identified as such• Confidential information to be kept confidendial for term of project

plus 5 years.• Orally disclosed information to be stated as Confidential Information

within 15 days of disclosure if confidential• Standard exclusions to confidentiality obligations• Confidential information only to be used in relation to the project• HOWEVER• Consider application of national and European legislation relating to

sharing of information which is restricted for security reasons or to which export controls apply – not all information can or should be shared with all project participants


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ConfidentialityAdditional points

• Keep minutes of what is discussed in meetings in the event of any future dispute

• Consider marking information as confidential – how practical is this?

• How long does information need to be confidential?• To whom are you disclosing – what laws apply to the recipient e.g.

Freedom of Information laws.


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ConfidentialityAdditional points

• Commission may make a request for Confidential Information to be provided to Member State or an Associated Country

• Audits – beneficiaries may object to expert auditors on grounds of commercial confidentiality

• Mergers and Acquisitions – beneficiary being acquired or merging which is passing on its obligations regarding access rights – has a duty to give 45 days notice to other beneficiaries


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Dissemination/PublicationsBasics

• Relates to foreground• Beneficiaries responsible for disseminating their foreground• Consider protecting rights in foreground before dissemination• Develop and deploy the Plan for Use and Dissemination of

Foreground (PUDF) (part of proposal)• Beneficiaries must disseminate foreground as quickly as possible• Commission may disseminate if beneficiary fails to do so


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Dissemination/PublicationsPracticalities #2

• To whom? Audience = general public, as well as specialists• How? Website, scientific publication, newsletters, local media• Concentrate on communicating results rather than process• Focus: Tailor communications to different audiences• Don’t forget to accredit the EU funding• Dissemination of information to be compatible with:

– Intellectual property rights– Confidentiality obligations– Legitimate interests of the foreground owners

• Registrations of rights e.g. patent applications, are not considered to be dissemination


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Dissemination/PublicationsPracticalities #2

• Final report must include dissemination plans• Report should state the

– expected use of foreground– Any dissemination which has occurred during project

• 45 days notice to be given to other beneficiaries of: – proposed dissemination– what is to be disseminated


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Liability

• What it is• To the Commission• To the Project Participants• To third parties


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Liability - definition

• The state of having financial or legal responsibility for something• E.g. the legal obligation to pay compensation for damage


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Liability – to the Commission

• Beneficiaries are jointly and severally liable to carry out the project according to the EC-GA (collective responsibility)

• Beneficiaries indemnify the Commission against 3rd party claims• Also - the Commission itself cannot be held liable for acts and

omissions of the beneficiaries.• Certificates by auditors do not affect the liability of beneficiaries

under the EC-GA• Beneficiaries liable to pay back any over-claimed amounts


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Liability –to the Project ParticipantsDESCA

• Beneficiaries commit to deliver their part of the project, fully and on time

• No warranties to each other• Each beneficiary liable for how it uses information it receives• No liability for third party IPR claims when information provided to

another beneficiary• Beneficiary liable (to other beneficiaries) for acts of their own

subcontractors, • Liability limited to value of what beneficiary receives (or more if

otherwise agreed)• Statutory liabilities unaffected


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Liability –to the Project ParticipantsDESCA

• Indirect and consequential losses excluded• Liability provisions survive expiration or termination of CA• No beneficiary liable for costs of others in respect of justifying their

costs under the Project to the Commission


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Liability – to third partiesDESCA

• Each party liable for losses to third parties which may arise from:– performing their own obligations– using Background– using Foreground


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Sub-contracting

• A subcontractor is a third party which has entered into an agreement on business conditions with one or more beneficiaries (Annex 2 II.7.1)


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Sub-contracting

• Co-ordination cannot be subcontracted• Beneficiaries can use subcontractors for minor tasks• Beneficiary is bound to deliver tasks allocated to subcontractor• Beneficiaries can claim costs for subcontractors – these costs are

excluded from limitations regarding indirect costs which apply to beneficiaries own costs

the European Commission and its Impact on R&D Consortium Agreements

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Sub-contracting

• Subcontracts may:– Only cover limited part of project– Subcontract must be justified in Annex I– Subcontract not to affect beneficiary background or foreground rights

• Award of contracts to be according to principle of:– Best value for money (best price/quality ratio)– Transparency– Equal treatment


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Personal data

• Processing of personal data to be in line with Regulation (EC) No. 45/2001

• ‘personal data’ (PD) shall mean any information relating to an identified or identifiable natural person


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Personal data

• PD to be processed solely for: – implementation of EC-GA– follow up of EC-GA– evaluation and impact of activities– use and dissemination activities

• Beneficiaries to have access to their PD and allowed to correct it• Data Controller for Project is coordinator contact from Article 8.1 of

main EC-GA agreement


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Outlook: Horizon 2020

• Legal TFEU origins:– Industry (Article 172)– Research and technological development and space (Article 182)

• Key priorities, making Union’s R&D more globally competitive, via:– Excellent Science– Industrial Leadership– Societal Challenges


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Outlook: Horizon 2020Excellent Science

• European Research Council - flexible funding• Future and Emerging Technologies stream - supporting paradigm-

changing innovation• Marie Curie actions – cross-border research training and

knowledge-exchange opportunities• Research infrastructure – develop research infrastructure


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Outlook: Horizon 2020Industrial Leadership

• Leadership in enabling and industrial technologies• Access to risk finance• Innovation in SMEs


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Outlook: Horizon 2020Societal Challenges

• Health, demographic change and well-being;• Food security, sustainable agriculture, marine and maritime

research, and the bioeconomy;• Secure, clean and efficient energy;• Smart, green and integrated transport;• Climate action, resource efficiency and raw materials;• Inclusive, innovative and secure societies.


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Thanks

• This work is licenced under:– Creative Commons Attribution-ShareAlike 3.0 Unported licence– http://creativecommons.org/licenses/by-sa/3.0/

• Contact details:[email protected]@totalinfo.net +44 7875 359510Skype: ringrichard

• Happy World IP Day!


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EU Funding through the European Commission and its Impact on R&D Consortium Agreements - Richard Nugent -- 19 April 2013 final