Saturday, legal issues according DESCA model contract Lecturers:

                                                  Saturday, 13January 2018                                                                                                                                                      Take home assignment for course “LegalAspects for European Projects”    Relevant legal issuesaccording DESCA model contract    Lecturers: Prof. (FH) Dr. Doris Kiendl-Wendner, LL.M.

     Student: Karlo Ku?an        Table of Contents   1.     Introduction. 2 2.     The differentiations between DESCA consortium agreement model and Erasmus+ contract: 3 3.

     DESCA – Overview of the consortium agreement 5 4.     Intelectual properties. 5 Conclusion.

10                     1.   Introduction The consortium agreement is a private agreementbetween the beneficiaries, to set out the rights and obligations amongstthemselves1. Although the first consortium model agreements in EUresearch area was introduced within 6th EU Framework Programme for Research andTechnological Development (FP6)2 andduring following years was developing,  it wasn’t till 2009. that European Commission introducedDESCA model agreement – an newer and improved version of consortium agreementthat in its focus has intellectual property and confidentiality of details ,rather than freedom of technology/IP transfer as it was the case in previousversions of research related agreements. The aim of this of assignment is to compare DESCA Horizon2020(version 1.2., February 2016)3and Erasmus consortia agreement and to provide description on DESCA contract specifically on clarity of language, due todifferences in partners’ abilities to understand agreement in English language.

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  2.     Thedifferentiations between DESCA consortium agreement model and Erasmus+ contract:  Criteria DESCA Horizon2020 Erasmus+ Clarity The language is simple and understandable for users, even for “non-lawyers”. Plain-style drafting is used, the language is simple and understandable for users, even easier then DESCA contract Scope of the funding programme Research and development Mobility and education Regulations of contract The REGULATION (EU) No 1290/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 December 2013. Not defined Definitions Very detailed list in Section 1. Definitions Basic definition list in Section 1. Purpose of agreement Basic information, very simple definitions, rest of principles are defined in MGA Basic information and simple definition Duration and termination of th contract Explained in Section 3.

– includes also rules for new entry and automatic termination, linked to General Grant Agreement. Explained in Section 3. New entry and automatic termination are not included. Procedures in case of termination explained briefly.       Responsibilities of parties/third parties/ Structure and internal organisation Covered in Section 4: Responsibilities of Parties, Section 6: Governance structure Governance structure is foreseen for small projects and large or medium projects. Acting in good faith in accordance to Belgian law. Breach of Contract covered in Section 4. – DESCA defines procedures in the case of breach.

Involvement of third parties explained in Section 4.3.). In Governance structure DESCA gives procedures for consortium meetings, which is is not defined in MGA, Consortium plan or in the Grant Agreement. Provisions for third parties entering the consortium are set in Grant Agreement. Termination is not automatic, but defined. Also, it is acting in accordance with recognized standards (scientific and professional) and with no procedures for consortium meetings. The agreement is not strict regarding entrance of third parties, so the Lability declaration with third parties is not defined as in DESCA model.

Responsibilities of partners     Linked to MGA (MGA provides detailed explanation on partners’ roles and responsibilities) and Consortium plan. General principles for Section 4. Responsibilities are set in Section 4, and it includes general principles, breach provisions, involvement of third parties. . Distribution of funding General funding distribution is defined by Section 7, and specific details are covered by Consortium plan and/or Grant Agreement. The payments are linked to the approval of reports by the Funding Authority.

Cooperation obligations with regards to results dissemination are set in 8.4.4. section.

Funding distribution covered in Section7: financial provisions. Financial distribution and dynamic of payment is well explained, not linked to Consortium plan or similar documents. Advance payment is foreseen       Intellectual property Intellectual property is covered by Section 8. Results.

  Results are owned by the Party that generates them.  Linked to the Grant Agreement and MGA.  In a case of Joint ownership, DESCA suggests setting up Joint ownership agreement. In dissemination (8.4.

) an open access should be ensured for all publications and results. Linked to MGA 29.3. This part sets precise procedures for dissemination of results (including the time frame) and also procedures for the case of breach.   The CA suggest IPR agreement to be signed among consortium members. Third party’s involvement is forseen and explained in section 4.3.

. Each party is solely liable for any loss, damage or injury to third parties resulting from the performance of the Party’s obligations or from its use of Results or Backgound.   Partner’s liability Mentoned liabilities are defined within Section 5: Liability towards each other 5.2 Limitations of contractual liability, 5.

3 Damage caused to third parties. In DESCA procedures are defined and instructions are given in order to adjust the limitations of contractual liability (5.2.) Includes provisions for delayed delivery of outputs (4.1), and procedures in a case of breach of contract (4.2.) Liability in case of damages is defined in section 5 and  in the Grant Agreement.

  Confidentiality obligations and access rights Explained in detailed in section 9. Access rights and section 10. Non-disclosure of Information. In addition to project results, DESCA suggests setting up an agreement on Background within the consortium. Background information should list confidential and non confidential work. Access rights for implementation are granted on a royalty free basis to and by all Parties, and terminates upon competition of the Action. Confidentiality and non-disclosure is not defined in this contract but it is covered by Grant Agreement.

 3.     DESCA– Overview of the consortium agreement DESCA (Development of a Simplified Consortium Agreement) is a comprehensive research basedconsortium agreement, created and developed by European Commission (EC) forbeneficiaries of Horizon 2020 programme. The purpose and aim of DESCA is tospecify the project relationship among Parties, in particular concerning theorganization of the work between the Parties, the management of the project andthe rights and obligations of the Parties concerning inter alia liability,access rights and dispute resolution. Research and development projectsexperience numerous challenges, the idea was that intellectual propertyprovisions must became more limited in access rights, and/or dissemination andexploitation of project results.

DESCA experienced changes from Fp7 – it has simplifiedand facilitate the negotiation process, demonstrate best practices orguidelines and serve as frame of reference and save time and cost..Following legal main areas are included within theDESCA model contract:-        Purpose,terms and internal organization of the consortium-        Distributionof the European Union funding-        Ruleson result transfer and dissemination-        Arrangementsfor settling international disputesSpecific attention is given to the rules governing intellectualproperties (ownership regimes, and to the exploitation of research resultsthrough contractual means) therefore, this assignment addresses DESCA’s mainparts of its purpose.  4.   Intelectualproperties   1.1. Background(or Result) AgreementThe consortium agreement sets out flexibleand efficient rules to encourage and support cooperation between thebeneficiaries as regards intellectual property, defines their rights in relationto results, joint ownership, access rights and non disclosure.

The contract sets well explained procedures to ensureefficient and accurate project implementation. One of phases of Intellectualproperty protection (access rights, confidentiality) is setting project Resultsor Background agreement within consortium (attachment to the Consortiumcontract, as set in H2020 MGA). The agreement may take any form; it may be aseparate agreement or may be part of the consortium agreement4.The project “background” “means any data, know how or information whatever itsform or nature, tangible or intangible, including any rights such asintellectual property rights.The instructions for using the Backgrounds or Resultsis set in DESCA section 9.1.1. „theParties have identified and agreed on the Background for the Project and havealso, where relevant, informed each other that Access to specific Background issubject to legal restrictions or limits.

Anything not identified in Attachment1 shall not be the objectof Access Right obligations regarding Background” and 9.1.2 „Any Party may add further own Background toAttachment 1 during the Project by written notice to the other Parties.However, approval of the General Assembly is needed should a Party wish tomodify or withdraw its Background in Attachment”.  The section if followed by detailed opinionthat suggests that Background or Results agreement/document in addtiton topositive list5and negative list6or project results (listing the project results without having written ageementwithin consortium members was recommendation of FP7 CA).  Law experts agree „the background has to be considered with reference to the entireuniversity or company and should not be limited to the specific departmentinvolved in the research”7The provision is in line with Commission Recommendation for universitiesand other public research organizations, on the management of intelectualproperty in knowledge transfer activities8.

 1.2. Ownership and transfer of resultsOwnershipof results is briefly explained in section no.8 of DESCA, while moreinformation could be found in H2020 MGA 26.2. The general rule is that “Resultsshall be owned by the participant generating them”.DESCArecommends development of joint ownership agreement for IP that aims to bepatented, written agreement on the allocation and terms of exercise of jointownership of results9.

In other hand H2020 MGA indicates that the agreement must be developed betweenconsortium members no matter of the following procedures concerning IP. Furthermore,if there is no written agreement (or unless otherwise agreed) DESCA suggests 2options:1)  „each ofthe joint owners shall be entitled to Exploit their jointly owned Results on aroyalty-free basis, and without requiring the prior consent of the other jointowner(s), and each of the joint owners may grant non-exclusive licenses tothird parties to exploit jointly-owned Results (without any right tosub-license), if the other joint owners are given: (a) at least 45 calendardays advance notice; and (b)Fair and Reasonable compensation”10.2) „in case of joint ownership, each of the jointowners shall be entitled to Exploit the joint Results as it sees fit, and togrant non-exclusive licences, without obtaining any consent from, payingcompensation to, or otherwise accounting to any other joint owner, unlessotherwise agreed between the joint owners. The joint owners shall agree on allprotection measures and the division of related cost in advance.

“Sinceinnovation/research transfer from universtities to public and private sector ishighly advisable by European Commision (triple helix and other sciencecomercialization models11)it is clear that the procedures are supported also by the legal framework.DESCA’s article 8.3. explains procedures for ownership transfer indicating thatall Parties should be informed about the trasfer to third parties and each Partyshould have possibility to object to a transfer listed in the prior notice.   1.

3. Protection of outputs/results, exploitation andlicensingThebenificiaries must, for any results that can reasonably be expected to becommercially or industrially exploited examine the possibility of protectingthem and, if possible, reasonable and justified, protect them even if thisrequires further research and development or private investment. If the Partythat is obliged by the Project to protect its work decides not to undertakeprotection procedures, the right of protection should be offered to otherconsortium members/Parties.

Background or Results agreement (and the GrantAgreement when rights protection is forseen by the project) lists work thatshould be protected during the project and after the project closure, while theusage of results is defined in Joint ownership agreement. In most cases the workis protected from Third parities and their comercial usage of the projectresults. DESCA advises that, under certain circumstances it may be appropriateto interpret certain research activities on behalf of a third Party ascommercial and therefore to predict and implement appropriate measures to avoidexpoitation of results by third parties (whether they are public or private).Protection of results is partly covered by MODULE IPR SC Specific Softwareprovisions (DESCA, Article 9.8.

pg 51.) which provides more detailed provisionsregarding software (sublicensing rights, open source code software etc.).1.

4. DisseminationDESCAindicates that „main new features ofH2020 is the obligation to make all publications of results available underopen access, Article 29.2 MGA, and that open access to data may be foreseen,optional clause 29.3 MGA. The Open access is sugested by the EuropeanCommission in order to encourage collaboration, speed up innovation and involvecitizents and society.

” Open accessfor Horizon 2020 projects „refers to thepractice of providing online access to scientific information that is free ofcharge to the end-user and reusable. ‘Scientific’ refers to all academicdisciplines. In the context of research and innovation, ‘scientific information’can mean: 1. peer-reviewed scientific research articles (published in scholarlyjournals) or 2. research data (data underlying publications, curated dataand/or raw data).” 12However, open access does not mean that all the results should be published,but it concerns only those results that are chosen by consortium/Parties.

Thereforethis provision addresses only those results that are marked as „free for use”in Backgroung and Results agreement. The dissemination measures should beconsistent with the ‘plan for the exploitation and dissemination of theresults’ and proportionate to the impact expected from the action. Ifthe project results are confidential (linked to Joint ownership agreement andproject Background) DESCA advises to limit the time of the restriction (1-4years). Consultation among consortium members/Parties before publishing thework is mandatory. The Parties receive the work at least 45 days (optionalnumber of days) before the publication, and if no objection is made, the publicationi permitted.  If objection has beenraised the involved Parties should discuss how to overcome the justifiedgrounds for the objection.

The time of publication should be limited to thecertain number of days (Article Article8.

4.5. use of names, logos and trademarks should be improved by insertingproject/programme visibility elements and other visibility statements13,in line with Grant Agreement. Since Grant ageement does not include opinion onprocedures, it would be appropriate if those were inserted in the ConsortiumAgreement.1.5. Access rights Section9.

Access rights sets legal provisions on project results usage. The rules andprocedures concerns only those project resutls listed in Background or Resultsagreement/Attachment 1, however, since Attachment 1 is a vital document,another project result can be added anytime within the project implementation(adding another result/work should be confirmed by the project consortium). DESCAsuggests provision of oppen access rights for the project implementationpurposes „Access Rights to Results and BackgroundNeeded for the performance of the own work of a Party under the Project shallbe granted on a royalty-free basis, unless otherwise agreed for Background inAttachment 1″. As for IP exploitation of the third parties, DESCA advisesincluding granting the access on Fair and Reasonable conditions14„unless the beneficiary that holds the background has — before acceding to theAgreement — informed the other beneficiaries that access to its background issubject to legal restrictions or limits, including those imposed by the rightsof third parties”15.On other words – Open access rights are limited to non-commercial and non-competitive use, while other forms of usage can berestricted and/or limited.Section9.5. Acess Rights must be given to Affiliated Entities established in an EUMember State or ‘associated country,16in accordanceto the Grant Agreement (25.

4) and Consortium Agreement. AccessRights to Affiliated Entities shall be granted on Fair and Reasonableconditions and upon written bilateral agreement. Inthe further articles DESCA defines a) additional access rights – 2 options areprovided, b) access rights for parties enetering consortium (any new Partyshould be included in Background or Results agreement), c) access rights forparties leaving consortium (defaulting and non-defaulting Party). Access rightsfor Software is precisely defined in Article 9.8. and Module IPR SC.1.6.

Confidentiality Section10. of DESCA defines “ConfidentialInformation” as any type of information which is disclosed by a Party (the”Disclosing Party”) to any other Party (the “Recipient”) in connection with theProject during its implementation and which has been explicitly marked as”confidential” at the time of disclosure, or when disclosed orally has beenidentified as confidential at the time of disclosure and has been confirmed anddesignated in writing within 15 calendar days from oral disclosure at thelatest as confidential information by the Disclosing Party. The obligation isnot to disclose confidential information to anybody (whether inside theconsortium or not). Commitment of non-disclosure under the Grant Agreement isset for a period of 4 years after the end of the Project.17Article 10. Defines what does not apply for disclosure under this agreement (ifthere is different explanation in the Grant Agreement, if confidentialinformation becomes publicly available etc.

)Conclusion Thelegal framework introduced by Horizon 2020, which had the aim of simplifyingthe regulatory framework proposed by FP7, is still too complex and does notfully clarify the problematic issues that the past experience of Europeanfunding had shown: it is still quite common to those who deal with this kind ofissues to manage critical situations arising from practical scenarios18. Asidefrom the very few critics, DESCA is a positive mechanism for simplifying andformalizing project implementation procedures. It saves time and cost,facilitate the negotiation process, demonstrate best practices or guidelinesand serve as frame of reference.  1Guidance How to draw up your consortium agreement, European Commission; 2 The 6thFramework Programme in brief,https://ec.europa.

eu/research/fp6/pdf/fp6-in-brief_en.pdf3 DESCA - 4 H2020 AGA — Annotated Model Grant Agreement:V2.1.1 – 1 July 2016 – http://ec.europa.

eu/research/participants/data/ref/h2020/grants_manual/amga/h2020-amga_en.pdf 5 “Positive list” involvedlisting any data (perscribed by FP7 CA), know how or information that isintended to share  – Guarda P. (2015) ConsortiumAgreement and Intellectual Property Rights within theEuropean Union Research and Innovation Programme,University of Trento/Faculty of Law, Trento, Italy6″Negative list” provided the listing of only such information as you intend toexclude from the project (perscribed by FP7 CA); Guarda P. (2015) ConsortiumAgreement and Intellectual Property Rights within the European Union Researchand Innovation Programme, University of Trento/Faculty of Law, Trento,Italy7 Guarda P.

(2015) ConsortiumAgreement and Intellectual Property Rights within the European Union Researchand Innovation Programme, University of Trento/Faculty of Law, Trento,Italy8Commission Recommendation C(2008) 1329 of 10.4.2008 on the management ofintellectual property in knowledge transfer activities and the Code of Practicefor universities and other public research institutions attached to thisrecommendation9’Results’ means any (tangible or intangible) output of the action such as data,knowledge or information — whatever its form or nature, whether it can beprotected or not — that is generated in the action, as well as any rightsattached to it, including intellectual property rights (H2020 MGA)10 DESCAagreement11 Cervantes M., Meisner D. (2014); Commercialising Public Research under the Open Innovation Model: NewTrends; 2014, and C. Godt (2015), TechnologyTransfer: The hange of European governance of research from private lawperspective, University of Oldemurg, Germany , Springer InternationalPublishing Switzerland 12 European Commission ( 2016) -Guidelines on Open Access to ScientificPublications and Research Data in Horizon 2020 -https://ec.europa.

eu/research/participants/data/ref/h2020/grants_manual/hi/oa_pilot/h2020-hi-oa-pilot-guide_en.pdf13 „All patent applications, standards,publications or any other dissemination, including those in electronic form,relating to results shall, if possible,include a statement, which may include visual means, that the action receivedfinancial support from the Union. The terms of that statement shall beestablished in the grant agreement” – H2020 AGA — Annotated ModelGrant Agreement: V2.1.1 – 1 July 2016 14 ‘Fair and reasonableconditions’ means appropriate conditions, including possible financial terms orroyalty-free conditions, taking into account the specific circumstances of therequest for access, for example the actual or potential value of the results orbackground to which access is requested and/or the scope, duration or othercharacteristics of the exploitation envisaged.15 http://ec. 16 a non EU-country (thirdcountry) which is Party to an international agreement with the Union17 The source of this 4-year duration lies inthe MGA, Article 36.18 GuardaP. (2015) Consortium Agreement andIntellectual Property Rights within the European Union Research and InnovationProgramme, University of Trento/Faculty of Law, Trento, Italy