Negotiation term sheet for contract research

Updated on October 2015

Note: Terms 1-6 are negotiated on a case-by-case basis, depending upon the nature of the project and the desires of the sponsor and the principal investigator. The terms shown are “typical” but there can be significant variation, especially in respect of intellectual property (IP). Terms 7-15 are requirements of the university and there is limited flexibility to negotiate.

Item Proposed Terms
1. Total Project Costs (direct costs + 30% overhead) N/A
2. Payment Schedule Annually in advance
3. Reports Progress reports every six months and at end of project
4. IP Ownership Creator-owned
5. IP Commercialization Rights (e.g., licensing rights, etc.)

Typical terms could include:

  • Sponsor will receive an exclusive six-month option to negotiate a license to any foreground IP following the project
  • License may be royalty-bearing, limited by field of use
6. Background IP
  • Both sides grant research-only license for duration of project
  • Commercial option to background IP could be granted depending on circumstances
  • The university will not make any warranty of non-infringement with respect to any use of project results under any circumstance
7. Equipment University retains ownership of any purchased equipment
8. Confidentiality
  • Applies to business or technical information provided by the company
  • Does not apply to research project results
9. Retained Rights The university retains perpetual rights to all foreground IP for use in research and teaching
10. Publication
  • Proposed publications will be submitted to the company for review 30 days before submission
  • Upon request, publication can be delayed by up to 60 days to allow for patent filings
  • Company confidential information may also be removed
11. Student Theses
  • Student thesis submission cannot be delayed
  • If required, thesis defences can be conducted in camera and maintained confidential for up to six months
12. Termination
  • Termination upon 60 days’ notice by either party
  • The university shall be reimbursed for any non-cancellable commitments
13. Controlled Good and Export Control
  • Company is responsible for informing university of any specific requirements on provided materials and project results
  • The university will not accept responsibility for compliance unless the company has detailed the specific controls required to be in place
14. Participant Agreement Students and post-docs will be required to sign a form indicating that they understand and agree to abide by the terms of the contract
15. Publicity The university may publish the name of the company, the title of the research project, the name of the project leader, and the funding received in publicly-available research activity reports