Need help with Innovate UK Collaboration Agreements?

As part of its measures to assist companies affected by the COVID-19 outbreak, the UK Government has recently announced several funding schemes.  In addition to a “Future Fund” of £250 million for investment in start-up businesses, the Government is pledging £750 million of support for small and medium sized businesses focused on research and development. This support is being provided via the existing Innovate UK grant and loan scheme.

Innovate UK is the UK’s innovation agency - it uses public funds to stimulate research and development through grants and loans. They have recently announced that there will be some accelerated funding to businesses who are already working with them, but no further details seem to be available on this as yet.

We are aware from our clients who are already working with Innovate UK that they are being pushed to get contracts completed, so that monies can be forwarded to the companies. The normal approach for securing funding is to apply for one of the competitions detailed on their website, and many of the competitions result in multiple winners.  This means companies have to enter into collaboration agreements - we regularly advise on these collaboration agreements and have included below some issues to be aware of when negotiating such contracts. The key point is to know that they can be negotiated, and there are various options to choose from.

Entering into Collaborations

Companies engaged in research and development, and particularly those applying for grant funding, will often work in collaboration with one or more other institutions, which may be commercial and/or non-commercial (e.g. universities or government agencies).

It is important, when doing so, to have a written agreement in place governing the terms of the collaboration. This enables the parties to clearly set out, in writing, the expectations they have for the project and for each party’s responsibilities within that project. In addition, a written collaboration agreement will typically:

• Set out how costs are split, and how any grant/commercial funding is paid, how often, and how it is allocated between the parties;
• Deal with the ownership and licensing of intellectual property rights in any existing know-how and materials, as well as any newly created materials or outputs arising from the project; and
• Reduce the risk of misunderstanding or ambiguity in the scope of the project and provide a clear mechanism for dealing with any project issues or disputes which do arise.

Retaining ownership of intellectual property (IP) is extremely important to innovative companies - it is therefore essential that the negotiation of these clauses is done with a great deal of care and attention.

The Lambert Toolkit

Commonly, and particularly where there is collaboration between a commercial entity and an educational institution such as a university, collaboration agreements from the “Lambert Toolkit” are used. These can be found at https://www.gov.uk/guidance/university-and-business-collaboration-agreements-lambert-toolkit.

There are 7 template agreements for one-to-one relationships and 4 consortium agreements, for use if there are more than 2 parties collaborating. These agreements have broadly the same structure but the key differentiator is the ownership and licensing of intellectual property.

Each template contains different intellectual property provisions, enabling parties to choose the most appropriate for the type of collaboration they’re entering into. For example, the first of the one-to-one agreements provides that the institution keeps the IP, with a non-exclusive licence to the commercial entity; whilst the fourth provides that the commercial entity owns the IP, with the institution having a right to use it for non-commercial purposes only.

If you’re entering into a collaboration based on one of the agreements in the Lambert Toolkit, it is vital to ensure the correct version is used for your scenario. There is a guide available to assist with this decision - https://www.ipo.gov.uk/lambert-decguide-sect1.htm.

Collaboration Agreement Tips

As well as the Lambert Toolkit, there are other types of agreement which may be used. Some funding bodies and government agencies will have their own templates; likewise, one of the parties you’re planning to collaborate with may serve up their own agreement, drafted by their lawyer or used by them in the past.

Whatever form of agreement you end up using, it is worth keeping in mind the following tips when agreeing the terms of a collaboration:

• Consider drawing up heads of terms, which are a non-binding statement of intent and the headline commercial terms the parties have agreed. The UK Government website provides two templates for this - https://www.gov.uk/government/publications/university-and-business-collaboration-agreements-model-heads-of-terms-agreements;
• If you’ve been given a draft agreement by another party, rather than starting from scratch with an online template, check whether it is based on a model agreement (e.g. included within the Lambert Toolkit) or whether it’s a bespoke agreement drawn up by the other party. If it’s based on a model agreement, you can do a side-by-side comparison to see what has been changed, making it easier to review.
• The intellectual property provisions are key as research and development inevitably means the creation and development of IP (e.g. copyright in software or written materials, patentable discoveries, new designs) and it is important that the ownership and licensing of that intellectual property accurately reflects what the parties have agreed commercially.

Even the government provided templates normally require some amendments in relation to IP.

Contact Us

This guide is provided for general information only and should not be relied upon as legal advice.

If you would like to discuss any of the contents of this guide in further detail, or would like assistance with drawing up a collaboration agreement, please contact us at commercial@roxburghmilkins.com and we will get in touch as soon as possible.