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3 Each party represents and warrants to the other that:(a) it has the power to enter into and perform its obligations under this agreement; (b) it has taken all steps necessary to properly execute this agreement; (c) it is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation; (d) neither the execution of this agreement nor its performance hereunder conflicts with any applicable law, rule or regulation or any other agreement to which it is a party; [and (e) during the Term, it will not enter into any agreement, arrangement or understanding that conflicts with its obligations under this agreement. 17.2. The Licensor represents and warrants to the Licensee that: (a) it is the exclusive owner of all right, title and interest in the Patent Rights, free and clear of any license, lien, security interest or other encumbrance other than as listed in Schedule 6; (b) it has the full right, power and authority to grant the rights and licenses granted to the Licensee under this agreement; (c) to the best of its knowledge, as of the Effective Date, Licensee's exercise of the Patent Rights pursuant to this agreement do not infringe the rights of any third party; (d) it has not granted and will not during the Term grant any other party rights to any of the Patent Rights that conflict with the rights granted to the Licensee under this agreement; (e) to the best of its knowledge, as of the Effective Date, the Patent Rights are valid and subsisting and are not unenforceable, in whole or in part; and (f) as of the Effective Date, there are no suits, proceedings or claims pending, or to the best of its knowledge, threatened against Licensor relating to the Patent Rights (including the ownership, validity or enforceability thereof), or that call into question its right to license the Patent Rights to Licensee or Licensee's right to exercise the Patent Rights, and Licensor is not as of the Effective Date aware of any facts which indicate a likelihood of any of the foregoing. 17.3. The Licensee represents and warrants to the Licensor that: (a) it will use its reasonable efforts to exploit the Patent Rights; (b) except as expressly warranted by the Licensor under this agreement, it has relied on its own investigations with respect to the rights granted to it under this agreement; (c) it has not entered into, and during the Term will not enter into, any agreement, arrangement or understanding that would restrict or prevent it from fully exploiting the rights granted to it under this agreement; and (d) to the best of its knowledge, as of the Effective Date, its use of the Patent Rights/the manufacture, use, sale, offer for sale and import of the Licensed Products will not infringe the rights of any third party.

4 KNOWLEDGE TRANSFER CONTRACTSMyriam Ayass Legal Advisor, KT Group

5 Content Why a contract? What is special about a CERN contract?What is a KT contract? What makes it special? Anatomy of a collaboration agreement Contract drafting

6 Why a contract?

7  Legal framework for disseminationKT group aims at disseminating CERN’s Knowledge and Technology for the benefit of Society. Such dissemination always requires legal frameworks. One of the services provided by KT office is the negotiation and the drafting of such TT contracts.

8 A contract: what for?!? Agreement attempts to define clearly, and without ambiguity: WHO WHAT WHEN HOW FOR HOW MUCH

9 What is special about CERN (contracts)?

10 The unique legal environment of CERNTreaty-based scientific IGO Operational rather than political Cross-border territory Biggest and most diverse scientific collaborations Governing body: CERN Council Treaty-based scientific IGO Founding Convention (no military endeavour) Privileges and Immunities IGO = organisation set up by agreement between several states (≠NGO), with international legal personality  can own property, enter into contracts... Specific purpose, limited powers (qualifies ‘legal personality’) Operational rather than political Pushing the boundaries of scientific and technical exploration Established in a cross-border territory: two Host States Host of the world’s biggest and most diverse scientific collaborations and community Governing body: CERN Council = highest authority of the Organization, has responsibility for all important decisions. It 1- controls CERN’s activities in scientific, technical and administrative matters, 2- approves programmes of activity, adopts the budgets and reviews expenditure. Council is assisted by the Scientific Policy Committee and the Finance Committee. The DG, appointed by the council, manages the laboratory.  Each of 22 member states has two official delegates to the CERN council. One represents his or her government’s administration; the other represents national scientific interests. Each member state has a single vote and most decisions require a simple majority, although in practice the council aims for a consensus as close as possible to unanimity.

11 Sui generis OrganizationDistinct from corporate world, but also from Academia and PROs & RTOs Non-profit Lives through contributions of Member States Research infrastructure Distinct from corporate world, but also from Academia and PROs & RTOs Fundamental research – CERN budget covers its scientific program -> No need to fight for funds! A non-profit organization:  The simplest explanation of a non-profit organisation is that any profit it makes goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members. The basic premise of a non-profit organisation is that it is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organisation is operating and when it winds up. Research infrastructure Need to develop accelerators, detectors and ICT infrastructure required to host the research program

12 Purposes (Convention)Collaboration among European States in nuclear research of a pure scientific and fundamental character, and in research essentially related thereto Shall have no concern with work for military requirements Results of its experimental and theoretical work to be published or otherwise made generally available Activities: Construction of one or more international laboratories for research on high-energy particles Organisation and sponsoring of international cooperation in nuclear research (dissemination of information; exchange of relevant scientific and technical information)

13 Consequences Fairness towards and between Member StatesEqual opportunities No competition with industry Warranties/liability Focus on dissemination, not profit Ensure access to necessary technologies Partners’ technologies Reservation of rights No military use By CERN By partners/licensees Applicable law Arbitration

14 What is a KT contract?

15 Types of agreements handled by the Knowledge Transfer GroupNon-disclosure Agreement Collaborative R&D Agreement Contract Research Agreement Joint Ownership Agreement Consultancy and/or service agreement Consortium agreement (IP part) License Agreement (including software license)

16 Numerous legal aspects involvedContract law Rights and obligations of the partners Intellectual property law Legal protection of IP Exploitation Company law Bankruptcy Merger… Employment law (HR aspects) Status of collaborators Insurance Public international law Special status of the organization Competition law Distortion of competition Block exemption for tech transfer Hardcore restrictions vs. permitted clauses What makes it special?

17 Contracts 101 Key-principle: 'Freedom of Contract'but: restrictions by other areas of law (e.g. competition law)! Contracts are legally binding Contracts are incomplete (room for opportunism; yet: detailing can be a straitjacket or lead to distrust!) Dispute resolution (national court? arbitration? friendly settlement?) Which national legislation is applicable to the contract? Negotiation phase (‘Letters of Intent’; break off negotiations; NDA)

18 KT contracts 101 1. The Crystal Ball.a) ongoing long-term relationship b) licensor and licensee will be bound together into the future c) tension -- need for flexible contractual language versus need for precision 2. Highly Technical Subject Matter 3. Amorphous Subject Matter 4. Specialized Legal Concepts 5. Many Purposes 6. The Usual Range of Commercial Issues

19 'Embodiment' of technical/commercial know howInventions (products / processes) Software / chips; IT-products; documentation (Industrial) Designs & Models Trademarks Trade secrets, 'non-disclosed' know how Specific legal protection Patent legislation Copyright legislation; 'Chips' Act Legislation on industrial designs & models; trademarks Some main points of IPR exclusive rights principle of 'territorialism' period of protection licensing

20 Typical progression Licence Joint ownership Collaborative R&D NDAUse and commercialization of technology Joint ownership Regulating joint IP if applicable Collaborative R&D Technology / product development NDA Exchange of information

21 Non Disclosure AgreementWhen and why? Each time confidential information is exchanged between CERN’s employee and a third party, To protect information which are not covered by a patent yet or which are not patentable but that you want to keep secret (ex: Know-How). What information should be included? Procedure Drawing up non-disclosure agreements is accessible in the Admin e-guide. Templates are available (names, technology concerned and the purpose of the NDA) What should NOT be included? No license or transfer of IP When an NDA is needed and very recommended ? Each time confidential information is exchanged between CERN’s employees and a third party. Why ? The essence of an NDA is to protect Know-How which is not covered by a patent yet or which is not patentable yet. If you have some technology that you don’t’ want to patent but that you want to keep secret. What ? The parties and who’s is going to disclose what ? The confidential information shall be clearly identified. What kind of information will be exchanged ? Our NDA stipulates that the term information includes materials, experimental techniques, results, design, drawings, reports, computer programmes, samples, prototypes, expertise in connection with or arising from the information. the purpose of this specific NDA. In my example of a Collaborative R&D Project it will be “to discuss a possible collaboration”. Then, it will contain the 2 types of restrictions which are usually covered by an NDA : regarding the use of confidential information and regarding the divulgation of such information. Basically, you’re not allowed to disclose the information received from the other party to third party (and the disclosing party shall limit the disclosure to a limited circle of persons on a need-to-know basis) And you’re not allowed to use the confidential information for other purpose than the purpose of discussing a collaboration. Not to produce a prototype for instance. What should not be ? An NDA only contains the way to treat confidential information. The rules that will apply to the possible future collaboration will be negotiated in a separate agreement. No license or transfer of intellectual property shall be mentioned in an NDA. It should be mentioned that the confidential information remains the property of the parties. Joint Ownership Agreement

22 Collaborative R&D Project With a public external funding(Ex : EU Project) NDA The Partners have less autonomy for the negotiation of the consortium agreement Agreement between the partners and the project coordinator Work organization IP specific provisions Liability Future exploitation and dissemination of the Results Consortium Agreement Joint Ownership Agreement Agreement between the Commission and the Consortium Statement of work General Conditions IP rules non-negotiable Grant Agreement

23 Anatomy of a Collaboration Agreement

24 Section Subject « Between» The Parties «Considering that » The preamble «The Parties have agreed as follows» Definition Scope of the agreement Rights and obligations of the parties Intellectual Property Confidentiality Publications Warranty/Liability Entry into force/Duration/Termination Applicable law/Jurisdiction

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26 1. Definition of the project (the “Project”)What are the Project objectives ? How do you want the Project to be managed? Do you need a committee ?

27 2. Responsibilities and Resources of the PartiesDefine the exact role of each party Define the resources of each party (human, material, financial)

28 3. Establishment of the IP rulesClarification of the pre-existing technology “Background IP” Identification of the Background IP Ownership of the Background IP remains unaffected Ownership of the technical results generated in the course of the agreement and related to the project “Foreground IP” Ownership vested in the party having generated it Possibility of joint ownership

29 4. Confidentiality When an NDA covers the discussion before entering into a collaboration, the confidentiality clause will cover all the confidential information exchanged during the Project.

30 5. Publications Very important in order to acknowledge the role of each party in the project but also to disseminate the results of the Project. Conflict of interest between research institutions and industrial partner. Standard clause : Right to publish scientific results obtained in the execution of the Project but with prior written approval of the other parties.

31 6. Warranty/ Liability Different type of warranties: timely performance, results, infringement of third party rights. Liability of each party for actions or omissions under the R&D Collaborative Agreement. CERN’s status as Intergovernmental Organization leaves no space for negotiation with regard to warranty and liability clause.

32 7. General clauses Duration and termination of the Project Applicable law and Jurisdiction clauses As an Intergovernmental organization, CERN enjoys immunity from jurisdiction. Obligation for the parties to resort to arbitration procedure in case of dispute.

33 Remember… All of this is decided and negotiated taking into account what is foreseen to happen AFTER the project ends!

34 Contract drafting

35 Boilerplate clauses - What is boilerplate???General belief... In fact... Standard, usually non-operative clauses in a contract Sets out procedures, compliance with law and remedies Vital clauses that through their effect permeate the contract No common law definition Examples: Notice Interpretation Waiver Force majeure

36 !!! Be very careful They may be presented as standard termsUsing them as precedent may be inappropriate Nothing should appear in a contract that you don’t understand

37 Waiver “The failure of either party to enforce or to exercise at any time or for any period of time any term of or any right pursuant to this Agreement does not constitute, and shall not be construed as, a waiver of such term or right and shall in no way affect that party’s right later to enforce or to exercise it.” ‘no waiver’ clause

38 Waiver Purpose Effect To prevent one party excusing another party’s breach of contract To prevent the excusing party’s conduct from being a variation of the contract (in legal sense) Be able to enforce terms of contract irrespective of earlier conduct Formally reserve rights in the contract

39 Force majeure The term “force majeure” shall mean any circumstance beyond the reasonable control of the party invoking force majeure, including acts of nature, fire and war, which prevent it, wholly or partially, from performing its obligations under the contract. Strikes and other labour conflicts which do not form part of an industry-wide conflict shall not constitute force majeure. Examples Acts of God Acts of nature War Terrorism Changes in law Strikes? In CERN definition, only if nation-wide

40 Force majeure Risk Defines Sets out procedure to followPurpose Effect of ‘force majeure’ Risk Depends on type of contract Payers vs. providers Defines Unforeseen events Events outside control of parties Sets out procedure to follow Short term Long term Liability: removed, shared...? Time for performance: extended? Costs increases? Termination: timescale and procedure? Mitigation

41 Entire agreement Purpose Effect Stop a party from bringing an action for misrepresentation (as opposed to breach of contract) Ensure that all obligations are clearly and definitively set out (avoid dispute) Ensure that any claim is Only for terms actually in contract itself Only for breach of contract

42 Drafting CERN hereby grants the license to XCERN does hereby grant the license to X CERN grants the license to X The license is hereby granted to X CERN shall grant the license to X as of the date of this agreement

43 Drafting - Ambiguity A shall hire (1) X and Y or (2) Z;A shall hire X and either Y or Z

44 Drafting - vagueness Reasonable efforts“Best efforts” Why be vague? Reasonable efforts Commercially reasonable efforts Reasonable best efforts Good faith efforts Commercially reasonable best efforts Too many variables Precision requires too much negotiation Being precise in all provisions may not be possible BUT may give rise to disputes Obligation fulfilled? Condition satisfied? ...

45 Thank you