Appendix A

Basic Guidelines for the Transfer of Research Tools
to and from Recipients of NIH Funds

As a biomedical research institution and research sponsor with a mission to promote the public health, NIH has a strong interest in facilitating the progress of biomedical research and product development. These goals are generally best served by promoting cooperation and collaboration between institutions in the public and private sectors. Such interactions allow the public to realize practical benefits from the investment of taxpayer dollars in biomedical research by accelerating the development of new products for the improvement of human health. Paradoxically, however, negotiating the terms of these interactions can slow the pace of research.

Progress in research depends upon prompt access to state-of-the-art research tools. But the transfer of research tools is increasingly impeded by protracted negotiations between institutions over proprietary rights and restrictions. Reasonable restrictions on the use and dissemination of research tools are sometimes necessary to protect the legitimate proprietary interests of institutions in the tools that they have developed and to preserve incentives for commercial development. At the same time, however, these restrictions can stifle the broad dissemination of new discoveries and limit future avenues of research and product development, to the immediate detriment of science and the long-term detriment of product development and public health. In some situations, it may be necessary to choose between accepting such restrictions or foregoing the use of certain proprietary research tools.

The purpose of these guidelines is to assist recipients of NIH funds in (1) deciding what sorts of restrictions to accept as a condition of receiving access to research tools for use in NIH-funded research, and (2) determining reasonable terms and conditions to impose in making NIH-funded research tools available to scientists in other institutions in the public and private sectors.

Basic Guidelines

  1. Publication. Scrutiny of research findings within the scientific community is an important mechanism for ensuring the quality and veracity of research claims. Recipients of NIH funds have an obligation to make timely disclosure of their research findings through publications and presentations at scientific meetings, and should avoid signing agreements that unduly limit the freedom of investigators to do so.

    Reasonable delays in publication for a brief period (generally no more than thirty to sixty days) may be appropriate to permit the filing of patent applications and to ensure that confidential information obtained from the provider of a research tool is not inadvertently disclosed. Excessive delays, requirements for approval of publications from an outside institution, and withholding of data by an outside institution undermine the credibility of research results and should be avoided.

  2. Dissemination of Research Tools. Ordinarily the social value of research tools as a means of making future discoveries is greatest when they are widely distributed on a nonexclusive basis. When research tools are used only within one or a small number of institutions, there is a great risk that fruitful avenues of research will be neglected. Recipients of NIH funds that elect to retain title to research tools created in funded research have an obligation under the Bayh-Dole Act to promote the utilization and public availability of these inventions.

    Exclusive licenses for research tools should generally be avoided except in cases where the licensee undertakes to make the research tool widely available to researchers through sale or sublicense. When an exclusive license is necessary to promote investment in commercial applications of a subject invention that is also a research tool, the recipient should ordinarily limit the exclusive license to the commercial field of use and retain the right to distribute the invention broadly for use as a research tool. Recipients of NIH funds should avoid signing agreements to gain access to proprietary research tools that are likely to restrict their ability to promote broad dissemination of research tools discovered in the course of NIH-funded research.

  3. Ownership and Licensing of Inventions Made with NIH Funds. The right of recipients of NIH funds to retain title to inventions made in the course of NIH-funded research comes with corresponding obligations to promote utilization, commercialization, and public availability of these inventions and is qualified by certain retained rights of NIH. The Bayh-Dole Act and the terms of NIH grants generally prohibit recipients of NIH funds from assigning ownership of NIH-funded inventions, but encourage them to license these inventions in order to promote utilization, commercialization, and public availability.

    Recipients of NIH funds may not sign agreements to gain access to proprietary research tools that purport to assign to the provider ownership of future discoveries made in the course of NIH-funded research. When an agreement instead obligates the recipient to license future discoveries back to the provider, the recipient should consider whether such a precommitted license is likely to promote utilization, commercialization, and public availability of the invention.

    The recipient should examine the scope of the promised license rights and consider the type of inventions likely to result from the research and the motivation and ability of the provider to develop such inventions for public use. If the promised license rights are closely related to a commercial product in which the provider is already making substantial investments (e.g., a grant-back of a license to any new use or improvement of a product that is in commercial development), the goals of the Bayh-Dole Act may be well served by agreeing to the license. Indeed, if the provider already has a patent on the product, it is difficult to see how the recipient could promote utilization, commercialization and public availability by witholding from the provider a license to any new use or improvement that is covered by the dominant patent.

    Some providers may not be satisfied with such narrowly circumscribed license rights as adequate compensation for providing a valuable research tool free of charge to an academic institution, particularly if the primary value of the tool is in facilitating research across a broad spectrum of scientific problems. If the provider is seeking license rights to a broad range of future inventions that are outside the scope of any patent on the research tool and well beyond the scope of the provider's research programs and capabilities, the promised license rights might interfere with full utilization of these inventions. In such a situation the recipient might sometimes minimize the risk of underutilization by limiting future license rights to discoveries and fields of use that the provider is likely to develop commercially, by offering to share royalties in lieu of a grant-back of license rights for discoveries and fields of use that the provider is unlikely to develop commercially, or by requiring that the provider grant reasonable sublicenses for discoveries and fields of use that it is not interested in developing commercially.

    Recipients should be wary of signing inconsistent obligations to grant licenses or options on future discoveries to multiple providers of research tools.

  4. Preservation of Incentives for Commercial Development. Recipients of NIH funds have an obligation to deploy their intellectual property rights in subject inventions so as to promote commercial development of new products for the improvement of human health. When the subject invention is a potential therapeutic product, the goal of promoting commercial development is generally best served by securing a patent to ensure the availability of exclusive rights. On the other hand, product development becomes less attractive as the number of proprietary rights holders laying claim to potential revenues increases. Proprietary rights on research tools often function primarily as a tax on commercial development rather than as a source of exclusive rights to preserve the viability of end products and to motivate further investment. When recipients of NIH funds provide NIH-funded research tools for the use of scientists in other institutions, they should generally avoid imposing reach-through royalty obligations that can only dampen incentives for commercial development.

    When recipients enter into agreements to acquire proprietary research tools that they will use in carrying out NIH-funded research, they should avoid incurring royalty obligations that will make future discoveries less attractive candidates for commercial development when they pass them along to product developers, although this may not always be possible. Recipients should also be wary of granting broad nonexclusive licenses that prevent them from conveying commercially viable exclusive licenses in the event that their NIH-funded research yields potential products.

Minimizing Administrative Impediments to Research

Recipients of NIH funds are expected to pursue funded research projects expeditiously and to minimize administrative impediments to the use and dissemination of research tools that they create in NIH funded research. Each iteration in negotiations over the terms of a license agreement or materials transfer agreement delays the moment when a research tool may be put to use in the laboratory. Sometimes such delays are inevitable, but not always.

Recipients of NIH funds might streamline the process of transferring their own research tools in a number of ways.

  1. Free dissemination. Recipients should encourage free exchange without formal agreements for use in research that is far removed from any commercial product. Many research tools might be broadly and effectively disseminated by making them freely available without patents and without imposing any restrictions on access and use. When that is the case, the goals of the Bayh-Dole Act are better served by free availability than by proprietary restrictions. Technology transfer need not be profitable to be successful.

  2. Use of UBMTA. Recipients should use the Uniform Biological Materials Transfer Agreement (UBMTA) or its companion "Simple Letter Agreement" whenever possible, thereby avoiding the need for case-by-case review of each agreement.

  3. Clear drafting. When the provisions of the UBMTA are unacceptable, recipients should draft agreements that are clear and comprehensible to scientists and business people.

  4. Reasonable terms in the first draft. In drafting license agreements and MTAs, recipients should seek to begin with reasonable terms in their first draft and refrain from imposing restrictive terms that they know from experience are likely to raise objections and have to be renegotiated.

Recipients of NIH funds have less control over the terms of agreements presented to them by other institutions for access to proprietary research tools, but there are nonetheless a number of ways that they might streamline negotiations over inlicensing research tools.

  1. Identify responsible personnel with authority to negotiate. Recipients should identify personnel within their institutions who are responsible for approving such agreements and who have authority to negotiate their terms and see to it that incoming agreements are directed to these people.

  2. Provide adequate personnel and resources. Recipients should allocate sufficient resources and personnel to this task and develop productivity measures that acknowledge and reward the value to the institution of expeditious handling of incoming license agreements and MTAs.

  3. Track agreements. Recipients should maintain up-to-date databases of agreements that they can check to avoid incurring conflicting obligations.

  4. Emphasize research and dissemination over profits. It might sometimes be possible to resolve conflicts with providers of research tools by foregoing the remote possibility of profiting from future research results through proprietary rights and simply agreeing to grant the provider access to such discoveries on a nonexclusive basis. Recipients should recognize that technology transfer is important and worthwhile even when it does not yield revenue to the institution.