Cooperative Research and Development Agreements (CRADAs) are arrangements between a federal agency, in the form of a government-owned laboratory (either government or contractor-operated) and another party, often referred to as a "collaborator." CRADAs facilitate the transfer of technology from the federal government to the private sector by making available government facilities, intellectual property, and expertise in collaboration with industry and other types of entities. These agreements are intended to lead to the development of commercial products. The chief benefit of a CRADA to a collaborator is that it may obtain rights to the intellectual property that is produced by the joint research and development effort. In return, the federal laboratory receives resources that advance its research and development mission. To successfully negotiate a CRADA, prospective collaborators must understand what a CRADA is, how it is structured, and the issues that need to be resolved before the agreement can be executed.

Authorizing Legislation

CRADAs are authorized by the Stevenson-Wydler Act. These instruments are defined by the Act as any agreement between one or more federal laboratories and one or more non-federal parties under which the federal government, through its laboratories, provides personnel, services, facilities, equipment, intellectual property, or other resources with or without reimbursement. The nonfederal party provides funds, personnel, services, facilities, equipment, intellectual property, or other resources toward the conduct of specified research or development efforts which are consistent with the missions of the laboratory. Sharing of resources is not completely reciprocal however, as the laboratory is prohibited from providing funds to the collaborator. 15 USC Section 3710a(d)(1).

Pursuant to a CRADA, a laboratory may grant to a collaborator patent licenses or assignments, or options thereto, in any invention made in whole or in part by a laboratory employee under the agreement or may grant a license to an invention which is federally owned, for which a patent application was filed before the signing of the agreement, and is directly within the scope of work under the agreement, for reasonable compensation when appropriate. 15 U.S.C. Section 3710a(b)(1).

Under a CRADA, the laboratory shall ensure that the collaborator may retain title to any invention made solely by its employee in exchange for normally granting the government a nonexclusive, nontransferable, irrevocable, paid-up license to practice the invention or have the invention practiced throughout the world by or on behalf of the government for research or other government purposes. 15 USC Section 3710a(b)(2). In the case of a laboratory that is part of the National Nuclear Security Administration (such as Sandia National Laboratories or Los Alamos National Laboratory), the NNSA may waive any license retained by the government if such a license would substantially inhibit the commercialization of an invention that would otherwise serve an important national security mission. 15 USC Section 3710a(b)(6)(A).

Issues for Negotiation

There is no government-wide model form of CRADA. Each federal agency that enters into CRADAs has its own templates. A CRADA typically consists of two major parts. First, a "boilerplate" section that recites the basic terms and conditions. Second, a research plan that outlines the specific work that will be performed and the contributions of each of the parties to that work.

The scope of the issues to negotiate before entering into a CRADA varies depending on whether the parties are addressing the boilerplate provisions or the research plan. Basic terms and conditions are drawn from the general authority for federal agencies to enter into CRADAs and reflect policies and rules of the agency. The model agreements issued by the agencies provide limited guidance as to which boilerplate provisions in the template are subject to negotiation and, if so, to what extent. While the following list is not exclusive, it appears from various model CRADAs that agencies may negotiate at least the following boilerplate provisions:

  • Payment schedule
  • Disposition of tangible property or equipment produced or acquired in conducting the work
  • Publishing of research results
  • Warranty disclaimers
  • Intellectual property indemnity
  • Product liability indemnity
  • Patent rights
  • Rights in technical data
  • Insurance coverage
  • Access to classified information
  • Dispute resolution procedure

The research plan section of the CRADA is where the particulars of the project are defined. Parties need to agree on the components of the plan, which primarily consist of the following:

  • Objectives of the project, including the nature of the collaboration, the technology transfer to occur, the benefits to the agency and to the collaborator, and the value of each party's contributions.
  • Parties and other participants, including a description as to how the relationship between the agency and the collaborator developed, an explanation of why the parties are partnering with each other, and identification of any other contributors to the research and development effort.
  • Technical tasks, including a description of the work to be performed by each party.
  • Intellectual property, including a designation of the relevant background technology each party brings to the agreement, the handling of privileged or proprietary information, and the future use of information.
  • Deliverables, including a description of all property and equipment to be furnished under the agreement and reporting requirements.
  • Milestones, including dates on which each of the parties is expected to complete its tasks.

Successfully Negotiating a CRADA

To successfully negotiate a CRADA with a federal agency, a prospective collaborator needs to be clear on what it intends to accomplish. A CRADA revolves around the research plan. Prospective collaborators should acquaint themselves with the elements of a research plan. This includes deciding the objectives of the research and development project and the contributions each party is expected to make to that effort.

The collaborator must next consider the boilerplate terms and conditions in the agency's applicable CRADA template. This review should focus on provisions that the collaborator believes are inconsistent with the objectives of its proposed CRADA. Of primary importance are the intellectual property rights the collaborator will take away from the CRADA. In negotiating the boilerplate provisions, the collaborator needs to be prepared for pushback from the agency contending that its flexibility in addressing these terms and conditions is limited by law. Ultimately, because agency templates do not shed much light on the boilerplate provisions agencies are willing to modify, the terms and conditions will have to be decided through bargaining.

Originally published by PACA Pulse

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