Tech Transfer News: A Reintroduction to the UBMTA

Twenty years ago, the National Institutes of Health (NIH) published a document that would become well known in the Technology Transfer community. After much consideration and feedback from various universities, law firms and other public entities, the National Institutes of Health (NIH) finalized the Uniform Biological Material Transfer Agreement (UBMTA). ¹ The UBMTA was originally authored with the intention of becoming the standard document for all academic to academic transfers of research materials. ² Before the UBMTA, sharing research materials between academic organizations with non-standardized material transfer agreements (MTAs) became increasingly burdensome and unnecessarily time consuming for academic Technology Transfer Offices (TTOs). With these delays, academic research was sometimes stalled or even permanently put on hold due to MTA negotiations. The NIH took these concerns into consideration when they finalized the UBMTA. They hoped that with the use of one standard agreement, these important transfers would become much easier and would take less time to execute so that scientific research could continue.

There are a few common issues where delays arise in academic to academic material transfers. These issues include the rights to data, results and inventions, restrictions on publication and lab funding, confidentiality of a Recipient’s research results, indemnification and liability, and jurisdiction and choice of law. A recent survey conducted by the Association of University Technology Managers (AUTM) polled TTOs about the terms and conditions that were frequent issues in negotiations. Below is not a comprehensive list of issues but includes some of the most important ones that the NIH took into consideration when writing the UBMTA.

Rights to Data and Results

One of the biggest issues that the UBMTA attempted to resolve between nonprofit institutions are those dealing with a material provider’s rights to subsequent data and results. ³ Many times, providing organizations ask recipient institutions for ownership rights in any data or results that come out of using their materials. This can be particularly troubling to researchers because they may not only feel slighted by someone who was not directly involved in their research, but researchers may also be unable to pursue further or alternative lines of research in the future. According to a recent survey ⁴ , 28% of TTOs agreed that a providing nonprofit institution had, at some time through a MTA, attempted to own data and results generated by a Recipient’s use of the provided material. ⁵ For many recipient organizations, resolving these attempts is crucial. Nearly all TTO respondents (95%), rated that satisfactorily resolving this issue was important to their institution. ⁶ In line with academic principles, the UBMTA does not address terms regarding ownership rights in data and results.

Intellectual Property and Inventions

Sometimes providers seek rights to new intellectual property (IP) that is created as a result of sharing materials under the terms of a MTA. ⁷ IP can include any patentable inventions made by a Recipient Scientist while using the Provider’s material. Providers can also try to restrict the transfer of modifications made by the Recipient, which are materials created by the Recipient that contain or incorporate the original material. Both Recipient researchers and TTOs (on behalf of their institution) may feel that it is unfair that the outcome of their research and the use of their institution’s resources results in a Provider ownership interest in any IP that may be produced. Furthermore, universities, as part of their academic mission and for the public good, have a duty to ensure that research they sponsor is available to the greatest number of researchers. ⁸ 30% of TTOs agreed that providers attempt to assert these “reach-through” rights in MTAs sometimes, frequently or always. More than half of TTOs agreed that resolving IP rights for internal research purposes only is either important or very important, while more than 90% agreed that resolving these IP issues when it comes to commercial purposes is important. ⁹ The UBMTA says that the Provider owns the original material while the Recipient owns what it creates. The UBMTA also accounts for new IP that is created. If the material created by the Recipient contains/incorporates part of the original material, the Recipient may have to relay any information in regards to new IP to the Provider in some instances, such as patent filings. ¹⁰ By using a standard agreement like the UBMTA, institutions are better equipped to resolve important issues involving IP that frequently come up in negotiations.

Publication

Recipient scientists can be asked by a Provider to delay publication of research results or to submit their manuscript to the Provider for pre-publication review when using Provider material. Publications may be delayed so that the Provider can review and possibly remove any information that they deem inappropriate. Recipients have also been asked to co-list the providing scientist as an author on research publications when using the the provider’s material. ¹¹ Delaying publication can unfairly impact the Recipient and can stall future research even further. More than half of TTOs agreed that the Provider required a delay in publication or prepublication review either sometimes, frequently or always and 86% said that these issues were either very important or important to resolve. ¹² The UMBTA directly addresses this issue by providing that “[t]his agreement shall not be interpreted to prevent or delay publication of research findings resulting from the use of the MATERIAL or the MODIFICATIONS.” ¹³ These attempts by providers to place restrictions on publication can negatively impact the validity of that publication as well as hamper scientific research throughout the community.

Funding Restrictions

For academic transfers, many organizations do not allow for any subsequent materials made by the Recipient to be distributed to industry or for-profit companies. However, placing restrictions on who can use the material may be a reasonable request, but the way in which a lab obtains funding for using that material is a separate issue. Some providers would like to restrict how academic or nonprofit labs receive their funding and may attempt to restrict funding from commercial companies. ¹⁴ Scientific funding is already scarce and to place additional barriers for labs to do research places an unnecessary burden on them. The UBMTA does not specifically restrict lab funding from industrial organizations as it recognizes the potential for this need. However, the definition of COMMERCIAL PURPOSES ¹⁵ calls out when funding by industry would not be appropriate. By allowing for some forms of funding from commercial companies, the UBMTA’s authors attempted to resolve the issue of Providers placing restrictions on how labs receive funding by addressing their concerns.

Confidentiality

Another issue arises when providing institutions try to restrict research results by making them confidential. Since many universities encourage their researchers to make results public information, MTAs that include language that restricts the sharing of results can be particularly problematic. These restrictions directly conflict with most institutions missions and policies. TTOs agree that sometimes the Provider has tried to keep the Recipient’s research results confidential and nearly 90% percent of them agree that it is very important or important to satisfactorily resolve this. ¹⁶ The UBMTA does not include any terms regarding the confidentiality of results and by doing so, it allows institutions to agree to sharing terms that are in line with their mission and policies.

Indemnification and Liability

When sharing materials for research purposes, an institution overstepping on terms like indemnification and liability can be problematic. ¹⁷ It is most beneficial to both parties if the Recipient accepts liability for their own use, while the Provider should not be held liable for actions made by the Recipient. In other words, each party should be responsible for its own actions. However, many MTAs include language that is not consistent with this sentiment and therefore it becomes problematic. Many state and federal institutions, for example, may not legally be able to agree to indemnification clauses because of explicit laws that forbid it. ¹⁸ More than half of TTOs agree that a Provider has required the Recipient to indemnify the Provider either sometimes, frequently or always and over 80% of TTOs agree that it is important to resolve these issues. ¹⁹ The UBMTA does not include an indemnification term but simply states that, outside willful misconduct or gross negligence, the Recipient is responsible for its actions and not the Provider. This allows TTOs to avoid incurring liability for most actions beyond their responsibility and at the same time, makes TTOs understand that other institutions should also not be liable for actions that are out of their hands.

Jurisdiction and Choice of Law

Many times, organizations will ask that the MTA specify which courts, either in a specific country or state, or which law will apply to the agreement. Organizations like to specify where and which laws should be used if a conflict were to arise because it simply makes sense practically to apply the laws that are most familiar. However, these terms can be problematic when sharing research materials, because the goal of these transfers is to share research materials with the researcher’s colleagues, while still protecting each party’s rights. Requests to specify jurisdiction or choice of law are not generally successful. While it may benefit one party, it is possible the other party may find it unfair as it requires additional administrative and legal costs if something were to go wrong. Only 9% of Recipients, either always or routinely accepted MTAs with foreign jurisdiction and/or courts of a country or state other than their own and only 10% stated that they either always or routinely accept MTAs that included a choice of law term other than the Recipient’s. ²⁰ To avoid these issues, the UBMTA does not specify either jurisdiction or choice of law. Even though these terms may ease the concerns of one party, by remaining silent on these terms, parties can avoid extensive negotiations. This allows parties to come to an agreement that is satisfactory to all parties more quickly, which, is most beneficial for researchers who are otherwise left waiting for their materials.

The UBMTA attempted to resolve all of these issues addressed here and others that frequently occur during inter-academic transfers. Some of these issues include the Provider gaining rights to data, results and inventions created by the Recipient, rights to restrict how the Recipient could publish new data and on lab funding, the Provider seeking to maintain Recipient’s results confidential, indemnification and liability, and jurisdiction and choice of law. By addressing these issues, the NIH hoped to resolve these administrative issues so that more academic to academic transfers could occur more quickly. Even though every nonprofit institution may not be able to agree to every term within (or intentionally left out of) the UBMTA when sharing research materials, the ideas and overall collaborative spirit the UBMTA conveys is certainly a good place to start.

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The material contained in this newsletter is for informational purposes only and is not intended to be legal advice. It is understood that each case is fact-specific and that the appropriate solution in any case will vary. Transmission of this material is not intended to create and receipt does not establish an attorney-client relationship. While the material is intended to be accurate, errors or omissions may be contained herein, for which any liability is disclaimed. Legal advice of any nature should be sought from your legal counsel.

Endnotes

1. The UBMTA was published in the Federal Register March 8, 1995.
2. The NIH initially intended for organizations to become part of the “Master Signatory” list. Then, for any future transfers where both parties were Master Signatories, the transfer would only require an “Implementing Letter”. More and more institutions are beginning to adopt and endorse the terms of the UBMTA.
3. AUTM MTA Guiding Principles,http://www.autm.net/MTA_Guiding_Principles/12666.htm
4. http://www.autm.net/AM/Template.cfm?Section=Documents&Template=/CM/ContentDisplay.cfm&ContentID=5761, page 35-36
5. TTO respondents were given the following options when asked how frequently a certain issue arises: Always, Frequently, Sometimes, Rarely or Never.
6. TTO respondents were given the following options when asked how important it was for the issue to be resolved: Very Important, Important, Moderately Important, Of Little Importance, or Unimportant.
7. AUTM MTA Guiding Principles, http://www.autm.net/MTA_Guiding_Principles/12666.htm
8. http://www.cogr.edu/viewDoc.cfm?DocID=151740
9. http://www.autm.net/AM/Template.cfm?Section=Documents&Template=/CM/ContentDisplay.cfm&ContentID=5761, page 36-37
10. http://grants.nih.gov/grants/guide/notice-files/not95-116.html, UBMTA Terms 1, 2 and 8
11. http://www.autm.net/AM/Template.cfm?Section=Documents&Template=/CM/ContentDisplay.cfm&ContentID=5761, page 30
12. http://www.autm.net/AM/Template.cfm?Section=Documents&Template=/CM/ContentDisplay.cfm&ContentID=5761, page 31-32
13. http://grants.nih.gov/grants/guide/notice-files/not95-116.html, UBMTA Term 11
14. AUTM MTA Guiding Principles, http://www.autm.net/MTA_Guiding_Principles/12666.htm
15. http://grants.nih.gov/grants/guide/notice-files/not95-116.html
16. http://www.autm.net/AM/Template.cfm?Section=Documents&Template=/CM/ContentDisplay.cfm&ContentID=5761, page 33
17. AUTM MTA Guiding Principles, http://www.autm.net/MTA_Guiding_Principles/12666.htm
18. http://www.ucop.edu/ott/faculty/overacad.html#requirements
19. http://www.autm.net/AM/Template.cfm?Section=Documents&Template=/CM/ContentDisplay.cfm&ContentID=5761, page 40
20. http://www.autm.net/AM/Template.cfm?Section=Documents&Template=/CM/ContentDisplay.cfm&ContentID=5761, page 41