Think Before You Sign: Protecting IP Rights with MTAs

October 23, 2019

Introduction

Material transfer agreements (MTAs) are contracts that allow one party to perform research using the materials of another party. These agreements provide a mechanism to protect the interests of the owners of discoveries and inventions, while promoting data and material sharing in the research community. Although these are admirable goals in principle, MTAs have a bad reputation with some researchers and institutions for being overly complex and, in fact, hindering research. Nonetheless, MTAs are important for defining the rights, responsibilities, and obligations of the parties with respect to research collaborations and need to be carefully considered, particularly with respect to ownership of IP rights implicated by the transferred materials.

Basic Elements of an MTA

Biological materials transferred using MTAs can include reagents, cell lines, antibodies, animal models, research tools, mutations, sequence databases, novel vectors, and various genetic resources. 

Regardless of its length and complexity, most MTAs incorporate many (if not all) of the following provisions:

-          Preamble;

-          Definitions

-          Description of the use of the materials;

-          Confidential information (though may be handled by a separate agreement);

-          Warranties;

-          IP Rights;

-          Liability and/or indemnification;

-          Publication;

-          Governing law

-          Termination;

-          Signatures; and

-          Exhibits/appendices.

Some of these clauses are relatively standard among MTAs, whereas others will change significantly depending on the specific situation. 

Notably, MTAs are not subject to the geographic or temporal limitations of patent law, and thus can be much farther reaching that the scope of patent rights. Regardless, IP provisions must be carefully considered, as detailed in the next section. 

IP Provisions to Consider – Existing Rights and Future Rights

IP provisions in MTAs may cover patent rights, trademarks, trade secrets and/or know-how. There are competing considerations for IP provisions in an MTA: while thorough protection is desired, an MTA should not contain such overarching IP language that it can reach through to a researcher’s or institute’s past and future inventions, which may have little or nothing to do with the materials actually provided by the MTA and could impact future research.  

Existing IP Rights: In addition to tangible property rights, the transferred materials may also be the subject of one or more patents and/or patent applications. In that case, the MTA may need to address transferring the associated existing patent rights as well as transferring the tangible material. Generally, transferring IP rights is in the form of a license. For example, the provision would give the transferee a limited license to carry out activities that would otherwise violate the patent holder’s rights.

Future IP Rights: MTAs may also stipulate how future IP rights arising from the use of the transferred materials will be allocated.   

There are several general approaches with respect to IP ownership in an MTA. For example, ownership rights can broadly revert back to the material provider, ownership can go with the transferee, a joint ownership structure can be adopted, or ownership can be determined by following inventorship as defined under the relevant patent law principles.

Other specific issues that should be considered, and may need to be memorialized specifically, include disclosing inventions, responsibility for prosecuting any resulting patent applications, granting licenses, and addressing any obligations under the Bayh-Dole Act.

Conclusion

Once materials have been widely disseminated without a proper MTA, it is usually too late. Thus, companies and institutions may need to assist researchers and employees in navigating their relationships with collaborators via MTAs, or they may risk losing valuable intellectual property rights. Drafting and reviewing IP provisions in MTAs requires carefully considering the implications and walking the line between promoting research while protecting potential commercial interests.