EUREKA
THE TOOLBOX
Legal Forms of Collaboration
TABLE OF CONTENTS
FOREWORD
INTRODUCTION
Legal Forms of Collaboration
A word of warning
LIST OF GENERAL DEFINITIONS
Cooperation agreement
Legal forms of collaboration
R&D agreement
Consortium agreement
Joint venture agreement
Results ('foreground information')
Background information
Intellectual property rights (IPRs)
Know-how
TYPOLOGY OF EUREKA PROJECTS AND LEGAL FORMS
FIRST STEP:
Situate your project within the proposed typology of projects
Joint research and development
Concerted research and development
Joint exploitation of results
Combined exploitation
Contract research
SECOND STEP:
Verify whether your proposed project falls within the EUREKA context or not and if certain legal forms of cooperation are eligible for public funding
THIRD STEP:
Identify the relevant legal aspects for your particular case
FOURTH STEP:
Go through the following checkpoints to ascertain which main types of legal forms are available in your case
CASE I:
Concerted research and separate exploitation
CASE II:
Joint research and separate exploitation
CASE Ill:
Concerted research and joint exploitation
CASE IV:
Joint research and joint exploitation
CASE V:
Concerted research and combined exploitation
CASE VI:
Contract research and separate or combined exploitation
Definitions
QUESTIONS AND ANSWERS
A. EUREKA and legal forms of cooperation
B. The choice between a purely contractual form of cooperation, an informal grouping or an institutional solution.
C. Legal forms of cooperation and IPRs
D. Legal forms of cooperation and concerted research: strategic alliance
E. Legal forms of cooperation and concerted research: the case for a consortium
F. Legal forms of cooperation: the case for the EEIG
G. Legal forms of cooperation and combined exploitation
H. Legal forms of cooperation and joint exploitation
I. Visibility of all partners
J. Financial squeeze
COMPARATIVE TABLE OF LEGAL FOMS OF COOPERATION
A- Purely contractual
B. Grouping or consortium
C. Institutional cooperation
FOREWORD
This booklet is intended as a guide to a number of elements concerning the legal aspects of a cooperation in the framework of a EUREKA project.
Experience has shown that the absence of a legal guarantee concerning the cooperation is one of the major causes of project failure. The quality of a project is inevitably determined by appropriate cooperation management where due attention has been given to legal issues.
This booklet does not claim to set out line of conduct in order to obtain quality projects, but it tries to warn potential project partners of possible risks of the legal aspect if the cooperation is not sufficiently taken into consideration, or if the form of cooperation that has been set up is not the appropriate one in this specific situation.
The booklet for legal forms of collaboration covers the different legal forms of structured collaboration applied by most members of EUREKA. It inter alia sets out, for the potential partners, several possibilities to set up an appropriate legal structure taking into account the share
each partner will have in the exploitation of the results. A variety of legal forms of collaboration is presented and systematically analysed so that project partners can decide for themselves how to be covered by the most secure and appropriate contract.
An appropriate legal form is a guarantee for a quality project. In this view this booklet tries to play a role in the improvement of project quality.
We hope that the reader will find appropriate information in this booklet and we wish potential partners great success in the drawing up of their legal form of collaboration.
Guillaume DEDEURWAERDER Chairman of the National Project Coordinators' Group
Belgian EUREKA Office
INTRODUCTION
The objectives of EUREKA are to raise, through closer cooperation among enterprises and research institutes in the field of advanced technologies, the productivity and competitiveness of European enterprises and national economies on the world market.
In order to achieve this objective, EUREKA has to encourage and facilitate increased industrial, technological and scientific cooperation on projects directed at developing products, processes and services which are based on advanced technologies and which have worldwide market potential.
These objectives show that EUREKA has a genuine economic mission, this being to improve the competitiveness of European enterprises. EUREKA helps Europe to play a major role on the global economic scene.
In order to achieve a proper level of competitiveness, it is essential to set up projects with a high technological value that, at the same time, are appropriately covered from the legal and financial point of view. Without projects there would be no EUREKA and without high quality projects EUREKA would not be able to play the role it was assigned. This is why it is vital to set up high quality projects, free of technological, legal or financial risks.
Legal Forms of Collaboration
It would be impossible to analyse in a single document the technological, legal and financial aspects. This is why the scope of this booklet is limited to only one of the important and sensitive issues for the successful implementation of a project.
The object of this booklet is to provide a number of elements on the legal aspects of a cooperation in the framework of a EUREKA project. Experience has shown that the absence of an adequate legal framework for the cooperation is one of the major causes of project failure. The quality of a project is inevitably determined by appropriate cooperation management where due attention has been given to legal issues.
This booklet does not claim to set out a line of conduct in order to obtain quality projects, but it shows the opportunities for collaboration offered by different legal forms of collaboration and it tries to warn potential project partners of possible risks if the legal aspect of the cooperation is not sufficiently taken into consideration, or if the form of cooperation that has been set up is not the most appropriate one in their specific situation.
By definition, a EUREKA project is an R&D project with a commercial, hence economic objective. As such, two phases can be distinguished in a EUREKA project: the research and development phase and the exploitation phase (commercialisation).
If a EUREKA project has to be looked at from every angle (preparation, development, implementation), both phases have to be considered separately, as well as in parallel.
The legal information concerning the research and development phase is mostly covered in the booklet 'Checklist for the Preparation and the Execution of a EUREKA Project'. The Checklist provides information on the general framework concerning the cooperation between the partners in a EUREKA project but only partially covers the appropriate legal structures that have to be added to the general framework. This booklet on Legal Forms of Collaboration covers essentially these legal structures which cover the second phase, the exploitation phase.
EUREKA projects can only play a role in the productivity and the competitiveness of enterprises if these projects extend into the exploitation phase. If the R&D phase is the way to enter the EUREKA framework, the exploitation phase justifies cooperation in a EUREKA project. The exploitation phase can be analysed as the most important phase in a EUREKA project in the perspective of the role of EUREKA in the worldwide market thecompetitiveness and the productivity of EUREKA. As stated above, a EUREKA project has a commercial objective. In order to play its economic role, EUREKA projects should result in successful exploitation. In order to plan and manage this phase effectively, it is obviously necessary to pay due attention to the legal aspects when setting up the project.
As such, this informative booklet covers the different legal forms of structured cross-border collaboration. It inter alia sets out, for the potential partners, several possibilities to set up an appropriate legal structure as regards the share each partner will have in the exploitation of the results.
The methodology used consists in the drawing up of a typology of EUREKA projects and a certain number of questions encountered in typical cases. The booklet tries to answer these questions in a didactic manner, in order to encourage participants to find and use the most appropriate legal structure for a given situation.
To allow potential partners to have access to the most comprehensive information, the booklet describes the various legal forms of collaboration applied in most EUREKA member countries.
Enterprises from EUREKA member countries will therefore find in this booklet the basic information necessary to determine which legal form of collaboration is the most suitable in their situation from the perspective of legal security.
A word of warning
This guide tries to conform to the bottom-up principle enshrined in the Hanover Declaration. The participants in a EUREKA project will themselves decide wharf form the collaboration will take, taking into account the characteristics of the project. It will be up to the partners to determine ways of managing the project and ensuring administrative support. The partners have complete freedom to define, finance and manage their project. The booklet is written with this perspective in mind. It merely suggests the partners implement a legal form of collaboration that matches their situation and offers guidance to the partners who are free to accept or ignore it. It can only add to the quality of the decision making process.
It is not the aim of this booklet to act as a substitute the assistance of a legal advisor to whom EUREKA partners should have resort when negotiating a legal form of collaboration. The information contained in this booklet is necessarily only indicative and intends to offer a synoptic overview rather than a detailed analysis of the laws in each EUREKA country.
The booklet has deliberately omitted public funding and tax issues that may be an important factor in choosing a particular form of cooperation.
LIST OF GENERAL DEFINITIONS
Cooperation agreement
is the formal and binding legal document signed by the participants specifying their respective rights and duties in the framework of the project. For a detailed checklist of points to discuss during the negotiation of a cooperation agreement, reference is made to the booklet 'Checklist for the Preparation and Execution of a EUREKA Project'.
Legal forms of collaboration
are the different types of collaborative structures between the participants as defined in the cooperation agreement from the legal perspective, being purely contractual, informal grouping or institutionalised. This booklet also provides more information on the available legal forms in different EUREKA countries.
(See also R&D agreement, consortium agreement, joint venture agreement.)
R&D agreement
is the most straightforward specific form of arrangement for carrying out research and development collaboration. The parties will be associated as independent contractors under the terms of the contract and capable of governing both their ongoing relationship and its contractual termination.
Consortium agreement
is the contractual document which governs the relationship between two or more participants who agree to work together to achieve specified objectives, where their cooperation is based on an informal grouping or undertaking having no separate legal character.
Joint venture agreement
is the contractual document establishing the cooperation agreement where the co-operation is going to be structured as a joint enterprise with a separate legal entity during and/or after the EUREKA R&D phase.
Results ('foreground information')
means any kind of technological information whether protected as know-how or subject to intellectual property rights generated by the participants and sub-contractors within the framework of the project results sometimes referred to as foreground as is the case in the EUREKA booklet 'Guidelines for the Protection of Technological Information' as well as in the model contract used for projects within the ESPRIT-programme. Foreground is to be distinguished from background information.
Background information
means any kind of information whether protected as know-how or subject to intellectual property rights other than foreground and that is owned or controlled by a participant in the project and is vital for either the R&D project or the exploitation of the results.
Intellectual property rights (IPRs)
also called industrial property rights, are any exclusive title granted under any applicable legal provision to the maker, owner or author of an invention, distinctive sign or creation such as patents, utility models, trade marks, industrial designs, copyright. See the EUREKA booklet 'Guidelines for the Protection of Technological Information' for further information on the different types of IPRs. For practical reasons the abbreviation IPR is used throughout this booklet.
Know-how
Means technological information, data, or knowledge resulting from experience and skills which are applicable in practice as defined in the EUREKA booklet ‘Guidelines for the Protection of Technological Information’. Know-how may be protected under the law as trade secrets or other forms of confidential information depending on its nature, the applicable legislation and contractual arrangements (e.g. secrecy agreements) between participants or with third parties. In order to be protectable, know-how must be valuable and not freely obtainable from other sources in a laxful way.
TYPOLOGY OF EUREKA PROJECTS AND LEGAL FORMS
CASE I:
Concerted research and separate exploitation
CASE II:
Joint research and separate exploitation
CASE III:
Concerted research and joint exploitation
CASE IV:
Joint research and joint exploitation
CASE V:
Concerted research and combined exploitation
CASE VI:
Contract research and separate exploitation
FIRST STEP:
Situate your project within the proposed typology of projects
Before reading further about legal forms of cooperation an assessment should first be made to ascertain into which type of EUREKA project your situation fails.
Joint research and development
is defined as work (i) carried out by a joint research team, (ii) jointly entrusted to a third party or (iii) allocated between the participants by way of specialisation and achieved within the framework of a programme defining the field and objectives of the work.
Joint research is to be distinguished from concerted research.
Concerted research and development
is defined as the situation where the cooperation between participants in the R&D project mainlyconsists of an exchange of complementary information andresults in order to avoid duplication from parallel/double research activities while participants have and maintain their independent R&D capacities.
Concerted research is to be distinguished from joint research and development.
Joint exploitation of results
is defined as any kind of further use of the results of an R&D project (i) through joint licensing to third parties or (ii) direct commercial exploitation in common by the participants (iii) with or without joint selling of end-products in the market. In cases where participants wish to continue their joint efforts into the exploitation phase in one way or another i.e. beyond the EUREKA phase, they will probably have to structure their cooperation agreement as a real joint venture agreement.
Joint exploitation is to be distinguished from separate or combined exploitation.
Combined exploitation
is a situation where the results obtained by a participant cannot be exploited independently by such a participant or exploited without integrating products or processes from one or more other participants. This situation differs from Joint exploitation as there is generally no need to establish common structures for the production or commercialisation of the results. The relationship between the parties can be based on a particular contractual arrangement based on sub-contracting or a silent grouping.
Combined exploitation is to be distinguished from joint or separate exploitation.
Contract research
is an unilateral arrangement whereby the (sub-) contractor performs research work for the account of the principal who normally becomes the sole owner of the results in exchange for a financial consideration.
SECOND STEP:
Verify whether your proposed project falls within the EUREKA context or not and if certain legal forms of cooperation are eligible for public funding
CASES I to V
When an informal or formal grouping is established between the participants check whether you stilt qualify for public funding.
CASE VI
When the project is limited to a purely subcontracting arrangement, your project will probably not qualify for EUREKA status. EUREKA criteria require not only that all the participants benefit from the project and need to have sufficient technical financial and managerial resources and competence to run the project, but that there must also be a real market potential of the project results for all the participants to exploit. This is rather exceptional in acontract research situation where one party subcontracts the research work to another party not in a position to independently exploit the results.
However, the sub-contracting of research work within a real collaborative setting is not excluded as long as the project is not limited to contract research – check with your NPC.
THIRD STEP:
Identify the relevant legal aspects for your particular case
Type of Research / Form of Cooperation / Ownership of Results / ExploitationContract Research / Purely Contractual / Transfer / Separate Exploitation
Concerted Research / Informal Grouping / Partition / Combined Exploitation
Joint Research / Institutional / Common Ownership / Joint Exploitation
Youare now in a position to examine what kind of legal form of collaboration is the most suitable for your project. Refer to the case you have identified as being the closest to your situation and go trough the different checkpoints.
Summary:
1. Normally EUREKA is about concerted research.
2. If your projects involves contract research or joint research you should verify in advance if this complies with national funding requirements.
3. The exploitation of projects results is only indirectly a matter of EUREKA as one of the EUREKA requirements is the need of a market potential for the exploitation of the results by the participants.
FOURTH STEP:
Go through the following checkpoints to ascertain which main types of legal forms are available in your case
CASE I:
Concerted research and separateexploitation
CHECKPOINT I.1: Are or will the participants be fully capable of exploiting the results in an independent way?
□ yes - see next CHECKPOINT □ no – CASES III, IV or V
CHECKPOINT I.2: Are the participants willing to join forces to exploit the results?