INTELLECTUAL PROPERTY RIGHTS ISSUES

WITHIN THE RTD MODEL CONTRACT (COST

REIMBURSEMENT)

This brochure is aimed at helping anyone preparing proposals for RTD

projects or anyone already subject to a contract to understand the rules,
and their rights and obligations related to IPR and the dissemination and
FIFTH FRAMEWORK PROGRAMME use of research results , as set out in the model contract.

The philosophy of European Research and Technological Development

(RTD) projects is simple: each partner might contribute to pre-
existing know-how, financial resources, and other resources. The
Community contributes financial help, in this type of contract generally up
to 50% of the eligible project costs. Contract partners have the right to own
the research results they generate, and the obligation to protect and use
or disseminate these results.

The Fifth Framework Programme*, together with the

corresponding rules covering project participation and the
dissemination of research results, makes it necessary to outline the
principles and main contractual obligations of participants or prospective
participants in EU supported RTD projects.

This leaflet only offers an overview. It is not intended to be exhaustive,

nor is it to be considered as legally binding, or in any way to replace
the regulatory documents and the model contract itself.

The information provided does not necessarily reflect the official

position of the European Commission.

Intellectual Property Rights Issues within

the Community Research and Technological
Development Model Contract
(Cost Reimbursement)

* Fifth Framework Programme: OJ L 26 of 1.2.1999 p.1. and Specific Programmes:

Understanding the Rules on OJ L 64 of 12.3.1999 p.1.
Contractors’ Rights and Obligations
IN ORDER TO UNDERLINE THE RIGHTS AND OBLIGATIONS RESULTING FROM AN RTD MODEL CONTRACT AND TO PROMOTE A
CLEAR UNDERSTANDING OF THE SUBJECT, IT IS ESSENTIAL TO IDENTIFY SOME KEY TERMS
PRE-EXISTING KNOW-HOW, KNOWLEDGE
AND ACCESS RIGHTS
Pre-existing know-how (ex “Background”) is the information necessary to carry
out a project (excluding knowledge generated in the project), which is held by
principal or assistant contractors before the project starts. It is also information
acquired in parallel to the project, as well as copyright, patents, utility models,
designs and models, plant variety rights, additional certificates, or other similar
forms of protection, and any applications relating to such rights.
In short, pre-existing know-how covers both information and the rights deemed
necessary for the project, which are owned or acquired by the contractors
before the project has begun, or in parallel with it.
Knowledge (ex “Foreground”) is the results, including information, obtained
under any project within the Fifth Framework Programme, as well as
copyright, patents, designs and models, plant variety rights, additional
certificates or other similar forms of protection, and any applications for
such rights.
In other words, it is the new information and rights which contractors acquire from
any project under the Fifth Framework Programme.
Access rights are licences (non-exclusive but exceptionally also exclusive) as
well as user rights with regard to knowledge and pre-existing know-how.
Financial conditions for granting access rights can be on:
-Royalty-free basis : there are no costs (free of
charge).
-Favourable conditions: conditions that have a
value lower than commercial (market) conditions.
-Market conditions: open market conditions.
TYPES OF AGREEMENTS
An RTD contract is an agreement concluded between principal contractors,
assistant contractors, and the European Community to carry out an RTD
project.
A subcontract is an agreement for the provision of goods or services
concluded between a participant in the RTD contract and a subcontractor for the
specific needs of the project.
A complementary contract is an agreement concluded with the European
Community, for work technically related to the RTD project and recognised as
such by the participants in each contract.
A consortium agreement is one or more agreements concluded between
participants, which aims to specify or supplement the provisions of the RTD
contract, without conflicting with it.
TYPES OF PARTNERS
P r i n c i p a l c o n t r a c t o r s are participants (legal entities, international
organisations, or the Joint Research Centre - “JRC”), other than an assistant
contractor, taking part in a project by virtue of the conclusion of a RTD contract
and have the rights and obligations provided for in the contract.
The project coordinator must come from among principal contractors and is
subject to supplementary rights and obligations towards the Commission. It is in
charge of the scientific, financial and administrative coordination of the project.
Assistant contractors are participants (legal entities, international
organisations or the JRC) taking part in a project by virtue of the conclusion of a
RTD contract and act under the technical supervision of one or more
principal contractors and have the same rights and obligations as them, except
with regard to the scope of their responsablility for the execution of the project
(they are responsible solely for the sections of research work they are carrying
out), and access rights (they only benefit from limited access rights).
Subcontractors are third parties (legal entities, international organisations or
the JRC) providing services or goods, who have entered into a subcontract.
Complementary contractors are third parties (legal entities, international
organisations or the JRC) who have entered into a complementary contract.
USE, EXPLOITATION, DISSEMINATION, AND
THE TECHNOLOGICAL IMPLEMENTATION
PLAN
U s e is the direct or indirect use of knowledge in research activities or for
e x p l o i t a tion purposes.
E x p l o i t a t i o n is the direct or indirect use of knowledge for creating and
marketing a product or process, or for creating and providing a service.
D i s s e m i n a t i o n is the disclosure of knowledge for the promotion of scientific
and technical progress, with the exception of publication resulting from
formalities related to knowledge protection.
The Technological Implementation Plan (TIP) is a report produced by the
contractors containing a summary of the project, a description of their
achievements, and a forecast of their intentions regarding the use of knowledge.
THE EC TREATY
Article 130J of the EC Treaty (now article 167 EC) implemented by:

The Council Decision 1999/65/EC of 22 December 1998

concerning the rules for the participation of undertakings, research
c e n t r e s a n d u n i v e r s i t i e s a n d f o r t h e d i s s e m i n a t i o n of
research results for the implementation of the Fifth Framework
P r o g r a m m e of the European Community (1998-2002) (OJ L
2 6 o f 1.2.1999 p.46);

The Commission Regulation (EC) No 996/1999 of 11 May 1999 on

the implementation of the Council Decision 1999/65/EC
concerning the rules for the participation of undertakings, research
centres and universities and for the dissemination of research results
for the implementation of the Fifth Framework Programme of the
European Community (1998-2002) (OJ L 122 of 12.5.1999 p. 9);

The model contract, including the general rules relating to

intellectual and industrial property, publicity, and confidentiality
contained in Annex II Part B of this contract.

THE EURATOM TREATY

Articles 12-29 of the Euratom Treaty implemented by:

The Council Decision 1999/66/Euratom of 22 December 1998

concerning the rules for the participation of undertakings, research
centres and universities in the implementation of the Fifth Framework
Programme of the European Atomic Energy Community (Euratom)
(1998-2002) (OJ L 26 of 1.2.1999 p. 56);

The Commission Regulation (Euratom) No 1605/1999 of 22 July 1999

on the implementation of Council Decision 1999/66/Euratom
concerning the rules for the participation of undertakings, research
centres and universities for the implementation of the Fifth Framework
Programme of the European Atomic Energy Community (Euratom)
(1998-2002) (OJ L 190 of 23.7.1999 p. 3).
OWNERSHIP OF PRE-EXISTING
KNOW-HOW
Each partner may bring in know-how which was
previously or concurrently acquired outside the project
a n d i s d e e m e d n e c e s s a r y f o r c a r r y i n g i t o u t . This pre-
existing know-how will always remain the property of the
partner in question.
OWNERSHIP OF KNOWLEDGE
Knowledge resulting from a RTD project i s t h e p r o p e r t y o f
the principal contractors and assistant contractors who
have generated that knowledge.
In the case where knowledge is generated by several contractors, an
agreement shall be made concerning ownership of these results and
the use of these property rights (for example in a consortium
agreement).
The ownership of knowledge can be transferred, subject to
agreements transferring all related obligations resulting from a RTD
model contract, and complying with i nternational agreements
concluded by the Community. A transfer notification, specifying the
terms and conditions must be made to the rest of the contracting
parties prior to concluding the agreement.
ACCESS RIGHTS TO PRE-EXISTING
KNOW-HOW AND KNOWLEDGE
Access rights to pre-existing know-how and knowledge w i l l
be given to RTD contractors.
Such rights can be granted free of charge, under preferential
conditions, or under market conditions (see table of access rights below),
according to the type of partner (principal contractors or
assistant contractors) and the use to which this knowledge will be
put (to carry out the project, or for its use or dissemination).
As a general principle, access rights are granted on a
non-exclusive basis but the holder may, as an exception, grant
exclusive access rights to their knowledge for exploitation
purposes at market conditions. This exception should apply when
economically essential, in particular taking into account the market,
the risks involved, and the investment required to exploit the
knowledge. It should also comply with competition rules.
In such cases, the holder must inform the other contractors in due time
about the requesting party and of the proposed arrangements for
granting such rights.
Principal contractors may object to the concession of such exclusive
rights, indicating their commitment to exploit the knowledge on the basis
of non-exclusive access rights within 30 days of receipt of such
notification.
The holder of the rights is entitled to refuse access rights for the
exploitation of knowledge if it intends to exploit the knowledge
itself, but only if it is economically essential to do so, taking into
account the market, the risks involved, and the investments required.
The act of granting exclusive access rights or the refusal to do so does
not affect the obligation to grant access rights to the requesting party for
the use of its own knowledge.
The holder of these rights is entitled to grant them under more
favourable financial conditions . Within a consortium agreement it will
always be possible to grant additional access rights or to complement the
access right conditions.
A C C E S S R I G H T S
PRE-EXISTING KNOW-HOW
FOR CARRYING OUT THE
PROJECT
Access rights under favourable
conditions to the pre-existing
know-how necessary to carry
out their work in the project.
Access rights under favourable
conditions to the pre-existing
know-how of their principal
contractor(s) or other assistant
contractors of their principal
contractor(s) necessary to
carry out their work in the
project.
Access rights under market
conditions to the pre-existing
know-how of other principal
contractors or other assistant
contractors.
Subject to arrangements between parties
(granting of access rights, duration, financial conditions).
AS A GENERAL PRINCIPLE, ACCESS RIGHTS ARE GRANTED ON A NON-EXCLUSIVE BASIS
- R T D
FOR USE
Access rights under
favourable conditions
to the pre-existing know-how
necessary to use the
knowledge of the project.
P R O J E C T S ( C O S T R E I M B U R S E M E N T )
KNOWLEDGE
BENEFICIARIES FOR CARRYING OUT THE
PROJECT
Access rights on a
royalty-free basis to
knowledge necessary to
carry out their work in
PRINCIPAL CONTRACTORS
the project.
Access rights on a royalty-free
basis to the knowledge of the
principal contractor(s) or other
assistant contractors of their
principal contractor(s), necessary
ASSISTANT CONTRACTORS to carry out their work
in the project.
Access rights under favourable
conditions to the knowledge of
other principal contractors or
other assistant contractors.
Access rights under favourable
conditions and subject to the
owner’s legitimate interests, to
the knowledge necessary
ANY PRINCIPAL to carry out their work
CONTRACTORS IN THE SAME in their own project.
SPECIFIC PROGRAMME
(Not applicable to
participants from third countries.)
COMPLEMENTARY Subject to arrangements between parties
CONTRACTORS (granting of access rights, duration, financial conditions).
(EXCEPT CASE ABOVE)
FOR USE
Access rights on a royalty-free
basis to all knowledge resulting
from the project.
Access rights under favourable
conditions to knowledge
generated outside the project,
if necessary to use knowledge
resulting from the project.
Access rights under favourable
conditions to the knowledge of
their principal contractor(s) or
other assistant contractors of
their principal contractor(s)
necessary to use the knowledge
they have generated.
Access rights under market
conditions to the knowledge of
other principal contractors or
other assistant contractors.
Access rights under market
conditions and subject to the
owner’s legitimate interests, t o
the knowledge generated by the
project to use the knowledge
generated by them.
(Not applicable to
participants from third countries.)
 FOR HOW LONG WILL I BE ENTITLED TO ACCESS RIGHTS?
? IF I AM UNABLE TO EXPLOIT THE KNOWLEDGE

? WHICH I GENERATED WITHIN A PROJECT, WHAT CAN I DO?

?
The length of time during which access rights can be requested
will depend on the status of the principal contractor or assistant
contractor engaged in the same project, or the principal contractor
of another project within the same specific programme.
In this case, you may decide to grant access rights to this
knowledge to the principal contractors for their exploitation,
not free of charge but under financial conditions corresponding
to your contribution to the project, and to the potential of this

?
knowledge.

Principal contractors Principal contractors

and
assistant contractors
of the same
specific programme
?
For carrying
out the
project
For the duration
of the project
For the duration
of their project ?
For use
5 years after
the end of the project*
2 years after
the end of their project
?
* A longer term can be agreed upon in the technological implementation plan
?
ARE ACCESS RIGHTS GRANTED AUTOMATICALLY? ?
No,
No they are only granted on request .
? ARE THERE ANY LIMITATIONS TO
THE GRANTING OF ACCESS RIGHTS?

? Yes,
Yes there are limitations.

The concession of these rights can be made subject to the conclusion

? of agreements about the intended purpose of using these rights and to

confidentiality.

Furthermore, the concession of access rights for pre-existing know-how

? will only be possible if the holder of these rights is free to do so.

?
 OBLIGATION TO PROTECT
The contractors have to protect knowledge capable of industrial or
commercial application in an adequate and effective manner and for an
appropriate period of time . The details of how the knowledge is or has been
protected* must be defined in the technological implementation plan.
If the contractors do not intend to protect knowledge capable of
protection in a particular country, the Commission may, after
agreement with the contractors, take over their contractual obligations.
A contractor may publish or allow the publication of data concerning the
knowledge they have acquired in the course of the contract, only if the
disclosure does not affect the protection of the knowledge , and always
subject to prior consultation and with the agreement of the other
contractors.
DOES COMMUNITY FUNDING COVER THE PROTECTION COSTS OF
KNOWLEDGE GENERATED BY THE PROJECT?
PROJECT
Yes,
Yes under the Fifth Framework Programme, the protection costs of
knowledge generated by the project can be eligible for Community
funding under certain conditions.
conditions These include the prior
written approval of the Commission, and conformity with
competition rules.
These costs will cover:
- costs of documentary research preliminary to the
filing of an application for the granting of an
industrial property right;
- fees paid to relevant author ities, which are
necessary with a view to the granting of
an industrial property right, for its territorial
extension (provided that a preliminary documentary
research has been carried out), or for the extension of
the duration of an industrial property right;
- fees paid to advisers (internal or external) with a limit of
4,000 EUR in respect of each industrial property right, provided
that an application for the granting of an industrial property right has
been subsequently filed.
Costs excluded are:
- translation costs,
- costs to obtain access rights.
* Details of the precise form the protection of research results will take is left to the contractors.
The various existing legal protection instruments may be used. It should be borne in mind that depending on the
nature of the results, the use of a protection system or the combination of several different types of
protection systems for property rights could be chosen. These can be patents or utility models, industrial
designs, trade marks and other distinctive signs, copyright, and other types of protection such as plant
varieties rights, additional certificates, or other similar forms of protection.
OBLIGATION TO USE OR DISSEMINATE
The aim of the rules on use and dissemination of research results is to ensure
that the benefits of EU-supported RTD are used as widely as possible for the
economic and social benefit of Europe's industry and society.
T h e c o n t r a c t o r s a r e r e q u i r e d , within a reasonable period of time and
in accordance with the interests of the Community:
to use results which they own either in further research activities or for
exploitation purposes or alternatively to ensure that effective use is
made of any knowledge according to the principles and timetable
set out in the TIP; or
otherwise to disseminate the knowledge if it is not to be used either
by exploitation or research. The contractors, when disseminating, must
always respect:
- the need to safeguard intellectual and industrial property rights;
- confidentiality;
- the legitimate interests of the other contractors.
If the contractors fail to use or disseminate the knowledge, the Community may
disseminate it by any appropriate means.
PRODUCTION OF A TECHNOLOGICAL
IMPLEMENTATION PLAN (TIP)
The contractors must produce a technological implementation plan as a tool for
ensuring adequate IPR management and for monitoring the obligation to use or
disseminate their knowledge. This plan:
must be submitted to the Commission no later than two
months after the end of the duration of the project;
must reflect the broad outlines of the plan for dissemination
and use submitted and evaluated as part of the original
proposal;
must include a summary of the project, a description of the
achievements, and a forecast of the intentions of the
contractors, as to how the knowledge is to be used or
disseminated;
must justify any subsequent changes in the initial
dissemination and use plan that significantly alters
the conditions of dissemination and use;
requires approval from the Commission.
DO I HAVE ANY OTHER OBLIGATIONS?
Yes, as in previous Framework Programmes, the contracting parties commit themselves to
carrying out the work listed in the work programme annexed to the contract, and to
providing the Commission with detailed activity reports and cost statements.