The Importance of Being Published

Speak with a PI regarding the terms of a pending contract, and more often than not you’ll be told that “[clause at issue] isn’t really important because there’s no way I’ll be performing [restricted activity].”  Intellectual property, data sharing, you name it. . .the Investigator generally just wants to get the agreement signed so that he/she can get cracking on their anticipated duties.  It’s all well and good for a PI to weigh in, and sometimes their thoughts are even enlisted, but the ultimate decision with respect to term acceptance generally rests with the head of your ORA.

Occasionally, though, there are terms that certain institutions find mandatory, the so-called ‘deal-breakers.’  In these cases, consent from the General Counsel’s office or similar body is generally required to accept such limitations in a given agreement.  For JHU, one of these ‘deal breakers’ is the right to publish the results of a given project.  Publication is one of the most important facets of organized research, both for its facilitation of collaboration and its contribution to the career advancement of the author, and JHU strives to ensure that this right is protected in each of its agreements.

That being said, sponsors are sometimes leery of granting blanket publication rights to research institutions.  First, the sponsor may be concerned that its proprietary information might be disclosed publicly.  Along the same lines, if the research has yielded commercially viable intellectual property, the sponsor may wish to prevent publication until all IP rights have been protected appropriately.  In both of these situations, any sponsor concerns can generally be alleviated by providing them an opportunity to review any proposed article prior to publication and request that its confidential information be removed, or even request a short delay so that patent applications can be filed on any included patentable technologies.

However, every once in a while, universities will encounter sponsors who refuse to budge from their offered terms, and demand that any publications be ‘approved’ by the sponsor prior to dissemination.  Most institutions have their own internal guidelines to help in their decision, but there are generally three main considerations:

1.            Does the sponsor have a legitimate reason for wanting to control publication?  Certain defense-related projects require confidentiality, and thus a publication restriction may be viable.

2.            Do all of the project personnel agree to abide by the restriction?  All parties involved in the research, not just the PI, must be aware of and consent to the restriction and its ramifications.

3.            Are any graduate students involved in the project?  At the very least, the university must protect the ability to publish a final thesis.

If nos. 1 and 2 can be answered with a ‘Yes,’ and no. 3 can be answered with a ‘No,’ the damage from accepting such terms is likely less than it could be.  However, ultimately , your institutional brain trust will weigh the above against its own policies to determine how best to proceed.

The Importance of Those Pesky Liability Clauses

One of the more confusing, and contested, clauses in research contracts is that which contemplates the liability that each party will have in the event that something goes wrong during the project.  Unlike other sections that may hinge on the interpretation of one term, liability provisions are generally consistent in their wording, and simply are dependent on who will ultimately be responsible for a given misdeed or oversight.  However, getting to that point often requires a significant amount of back and forth, and frequently also includes the involvement of higher-ups within a University’s legal food chain.  Two of the more problematic liability issues involve IP indemnification and product liability.

 

Indemnification for Use of Intellectual Property

A standard request in most sponsors’ agreement templates is that Universities should accept responsibility in the event that the University infringes a third-party’s intellectual property during the course of its research.  While it’s somewhat understandable that a sponsor would want to ensure that its funded efforts will not run afoul of any existing proprietary rights, the expectation that the University should take responsibility for such “transgressions” simply isn’t practical.

With so much research being funded and undertaken not just within the U.S. but throughout the world, it’s impossible for a PI, let alone a University, to be aware of all existing research and patents that could potentially have pre-dated his or her projects.  Further, the resources (both financial and otherwise) required to make at least a substantive effort to search patent databases, journals, etc., is considerable, and not something that is realistically within the University’s abilities.  Consequently, most Universities will strike any and all language that makes them liable for any infringement of existing IP.

 

Indemnification for Product Liability

The second hot-button issue arises when contemplating the use of the University’s research results.  Most sponsors want the University to be responsible if the University’s results are used subsequent to the project and grievous bodily harm arises.  Again, it’s understandable that a sponsor would be concerned about it utilizing information produced by a third party, and without any involvement by their personnel.  However, the structural setup of a sponsored research relationship makes assigning liability to a University untenable.

By all measures, a “sponsored research project” is experimental in nature.  An awardee is provided money by the sponsor to test a given hypothesis, and, at the conclusion of the project, produces a summary of the results.  While the results may occasionally be commercially viable in and of themselves, additional research, testing and investigation are generally required before they can actually be brought to market.  These decisions are solely within the purview of the sponsor, and, understandably, the sponsor will ultimately gain the financial benefits from anything that makes it to market.  It simply would not be equitable for the sponsor to reap the benefits in good times, but pawn off liability to the researcher anytime things go awry.  As a result, Universities generally remove language that assigns them responsibility for liability for any products that might result from the use of their results.

How to Write a Statement of Work

Writing a SOW can sometimes be a challenge.  Although we cannot create a template for a SOW because SOWs can be very different depending on the project, what we have been able to do is to create a Form which you can use as a starting point.

The SOW Form below provides the overall framework and format for a SOW and guidance on what should be included.  The hope is that if everyone starts with this, it will increase consistency and help create clearer, more concise and complete SOWs which, in turn, will expedite processing.

Exhibit A

STATEMENT OF WORK

 

[ NOTE:  Be CLEAR, CONCISE and COMPLETE (do not have anything in the budget or payment schedule that is not in the SOW).  The SOW needs to be able to stand alone and should be understandable by a 3rd party not familiar with the subagreement. ]

Background

[ Describes the requirements in general, non-technical terms and explains why the subrecipient was selected to work on the project. ]

Project Objective

[ A succinct statement of the purpose of the subagreement. It should outline results that JHSPH expects and/or identify the benefits to the program that are contemplated.]

Scope of Work

[ An overall, non-technical description of the work to be performed. It expands

on the projected objectives, but does not attempt to detail all of the work required. It must be consistent with the detailed Technical Requirements below. ]

Technical Requirements

[ Spells out precisely what is expected of the subrecipient in the performance of the work. For example:

  • Describes the specific tasks and phases of the work
  • Deliverables to be generated from the described tasks must be clearly defined
  • Specifies the total effort each task or phase is to receive
  • Considerations that may guide the subrecipient in its analysis, design, or experimentation on the designated problems
  • Identifies the requirements and indicates the scope of each

Reporting Schedule (if applicable)

[ Describes any progress reporting requirements including content, format and due date/frequency. ]

Special Considerations (if applicable)

[ For example, any equipment or data JHSPH will be providing to the subrecipient so that they may complete their work. ]

*Deliverables  / *Milestones  (*mandatory as they tie to the payment schedule)

[DeliverablesDefines and describes, in table or numbered list form, the deliverables, the quantity required, and the due date.  The Deliverables list should be part of or, if extensive, attached to the SOW.   OR

[ Milestones:  defines and describes progress points, occurrences, and due dates/schedule of events. ]

Obtaining DUNS (Dun & Bradstreet) and CCR (Central Contractor Registration) Numbers

Under the revised ForeignFunding Accountibility and Transparency Act (FFATA) foreign subrecipients under Federal awards issued after 10/1/10 receiving over $25,000 must now have a DUNS # and CCR registration for federal regulatory compliance and reporting purposes.

 

What are they?

DUNS – Dun & Bradstreet (D&B) provides a free D-U-N-S Number (Data Universal Numbering System), a unique nine digit identification number, for each physical location of a business.

CCR– the Central Contractors Registration is the official, free on-line registrant database for the U.S. Government.  CCR collects, validates, stores and disseminates data in support of agency acquisition and award missions. They require four items for registration.  Once registered, CCR will issue a CAGE #.

 

How do they get them?

**NOTE:  Applications should be done by the sub but JHSPH can assist, if necessary.

In case they need direction on how to obtain a DUNS # and CCR registration, here is the link for international registrants:

https://www.bpn.gov/ccr/international.aspx

All the related links/forms they need are on this site.

Note: An entity must FIRST get its DUNS Number before it can register on CCR.

DUNS numbers should be sent to the listed contacts within two weeks so they need to plan ahead.  If for some reason, there are problems, contact ccrhelp@dnb.com or 866-705-5711.

Why Compliance Matters (Hint: You Don’t Want To Be Exceptional)

The topic of budgetary and performance oversight on a funded research project is generally not high on the list of priorities for many research admin personnel.  So much time and energy is spent in the application phase that, when the Notice of Award finally does come through, the grants or contracts associate, as well as the department analyst, is already focusing on 19 other proposals.

However, post-award activities are vitally important to not only the PI, but also the institution as a whole when it comes to future activities.  There are many stories of universities great and small getting audited and subsequently penalized for myriad issues, from improper use of funds to unreported conflicts of interests.  Besides the financial penalties that are ultimately imposed, there is also the damage done to the school’s reputation, which can affect the availability of funding.

However, in certain circumstances, simply fining an institution isn’t sufficient to ensure that the conduct never happens again.  Once such instance occurred at the University of Minnesota in the 1990s, when investigations revealed that, among other improper actions, researchers were trading funding on NIH awards, which resulted in misplaced funds and generally poor budgeting.  Additionally, there were issues surrounding the implementation of a drug program, including commercialization prior to approval.

 

Following a multi-year examination by multiple parties, the University was placed on NIH’s “exceptional status” list.  This designation removed UM’s expanded authorities, and further required the implementation and management of a compliance program with mandatory participation.  Not surprisingly, complying with the listed penalties required substantial effort by the University, both in terms of award management and overall research oversight, not to mention the additional funds that had to be expended to do so.

Minnesota was eventually removed from “exceptional status” in 2001.  The University indicated that it did not see a substantial impact on its funding opportunities while designated as such, but the ramifications of the episode still resonate with school administrators, and should serve as a warning to research institutions everywhere.

What Stanford v. Roche means for you

The disposition of Intellectual Property under federally-funded research is always one of the more complicated issues to explain to a private sponsor who adamantly believes that they are entitled to own everything that your school creates under a sponsored project.  Thankfully, the rights and obligations of non-profit and educational institutions are largely spelled out in the Bayh-Dole Act, which we discussed last November.  As we noted then, the Supreme Court decision in Stanford v. Roche became a defining case for the research community, and one that had Universities on the edges of their seats with respect to the ramifications on their own daily activities.  Coming up on the year anniversary of that 7-2 decision, we are still now evaluating how this decision fully affects those in the university arena.

The facts of the case are pretty simple — Stanford professor Mark Holodniy executed his employment contract in 1988 that included a clause whereby he “agree[d] to assign” his “right, title and interest” in inventions resulting from his work to the University, which included research under a federally-funded award.  Subsequently, Dr. Holodniy performed a stint as a visiting researcher for a private company (Cetus, which was later bought out by Roche Molecular Systems), and in his agreement with Cetus he directly assigned his rights to any created IP to the company.

While at Cetus, Dr. Holodniy created an HIV testing process, which her further perfected upon his return to Stanford.  Independently and in light of Dr. Holodniy’s work at their respective entities, Stanford applied for and received patents based on the process, and Roche commercialized kits that incorporated the process.  Stanford subsequently filed suit against Roche claiming infringement of their patents under Bayh-Dole.

The main issue became whether rights under Bayh-Dole automatically vest upon creation of the technology, or whether they must be specifically perfected by assignment or similar agreement.  Not surprisingly, everyone had their own opinions, and the case headed to the Supreme Court with a multitude of briefs supporting each side.

Ultimately, the Supreme Court ruled against Stanford, holding that Bayh-Dole does not automatically vest title to federally funded inventions in the inventor’s employer (the federal contractor).  Under Section 202(a) of the Act, the contractor may “elect to retain title,” which the Court found to mean some specific action, or “election,” such as a direct assignment of rights.  Consequently, a University invoking its Bayh-Dole rights must take a substantive step to insure that their rights are retained.

In the Stanford case, the decision largely focused on the language in Dr. Holodniy’s employment agreement with the University.  Because he only “agree[d] to assign” and did not actually assign his rights, some concrete step was necessarily mandated by the wording to allow Stanford to claim ownership.  Consequently, following the execution of the employment agreement but prior to Dr. Holodniy’s execution of Cetus’ Visitor’s Confidentiality Agreement, it was actually Dr. Holodniy himself who held ownership of anything he created.  Once he signed the VCA, which specifically assigned his rights to Cetus (“I hereby assign. . .”), ownership immediately passed to Cetus.

The long-term effect of the Stanford decision is that contractors cannot be passive in their retention of rights that might arise under Bayh-Dole.  Not surprisingly, this has caused non-profit and educational institutions to reevaluate their employee agreements.  While, to some, “agrees to assign” and “hereby assigns” may appear to have the same substantive meaning, schools such as MIT have changed their language in light of the case to make sure that their rights are fully protected

Making Subagreements Easier!

Subrecipients are an integral part of the research process, and here at the Bloomberg ORA we process roughly one thousand subagreements each year alone.  By themselves, the subs would take up a substantial amount of our office’s time, but when you factor in the additional contracts, grants, MOUs and assorted other agreements that come across our desks, it’s easy to see why caffeine and baked goods are the staples of each of our diets.

However, we’ve recently revised our system for processing subagreements that should streamline the efforts of our departments while also making our work efforts more efficient.  As most JHU folks know, subs are requested through an online checklist that takes in relevant information and presents it in a standardized form to our sub team.  While the current checklist did a solid job for several years, our new and improved checklist better addresses the informational needs of our office while also including an notification mechanism that wasn’t previously present.

 

Checklist.v2.0 can be found here, and includes several enhancements, including:

— No special log-in/code needed, just your jhsph.edu ID/password

— Option to apply for a 96 IO# at the same time as completing the checklist

— Auto-generated email sent to ORA, so no need to manually alert us to new sub

— Ability to input Duns Number and other financial information

 

As part of the changes, please do note that you can no longer copy a checklist and control-v it into a new request, as each checklist must be completed on its own.  Additionally, you must save your data every 15 minutes while working within a checklist, or else you may lose whatever you have entered.  However, any minor annoyances caused by these changes should be far outweighed by the new benefits afforded to each department.

The official launch of the new checklist will be on March 26, 2012, and from that point forward no sub requests will be seen that come through the old website.  However, we encourage all of our departments to give the new checklist a test drive prior to the 26th to see if they encounter any issues or problems.  A Quick Guide will be provided on the website to assist users as they navigate the new interface, but if you have any questions, please don’t hesitate to contact the tireless Debra Brodlie at (443) 287-4771.

Understanding Federal “Expanded Authorities” – Part One

While most of the substantive efforts under a federal award are left to the PI and his staff, certain activities are still regulated by the governing sponsor, and the obligations therein vary from agency to agency depending on the issue.  Our next couple of installments will examine these “Expanded Authorities,” as there is often confusion regarding what can and cannot be done without prior approval by the sponsor.

Air Force Office of Scientific Research

No Cost Extensions: All NCE’s require prior approval

Pre-Award Costs:  Awardee can approve costs incurred ninety days prior to the award start date, but at the grantee’s risk.

Equipment: Awardee can approve a purchase of equipment that is not in the approve budget.

Foreign Travel:  No prior approval is required.

 

Army Research Office

No Cost Extensions: All NCE’s require prior approval.

Pre-Award Costs:  Awardee can approve costs incurred ninety days prior to the award start date, but at the grantee’s risk.

Equipment: Prior sponsor approval is required for purchases over $5,000 that were not in the approved budget.

Foreign Travel:  No prior approval is required.

 

National Science Foundation

No Cost Extensions: Awardee can approve a one-time twelve-month NCE, but further extensions require sponsor approval.

Pre-Award Costs:  Awardee can approve costs incurred ninety days prior to the award start date, but at the grantee’s risk.

Equipment: Awardee can approve a purchase of equipment that is not in the approve budget.

Foreign Travel:  No prior approval is required.

 

United States Department of Agriculture

No Cost Extensions: Awardee can approve a one-time twelve-month NCE, but further extensions require sponsor approval.

Pre-Award Costs:  Awardee can approve costs incurred ninety days prior to the award start date, but at the grantee’s risk.

Equipment: Awardee can approve a purchase of equipment that is not in the approve budget.

Foreign Travel:  No prior approval is required.

Copyrights and Federal Funding

Last November, we addressed the issue of ownership of any intellectual property that arises under a Federal contract, and specifically focused on the Bayh-Dole Act and its application to patentable technologies.  Today, we’ll explore who owns copyrightable materials created using Federal funds, as we’ve encountered much confusion with this issue in recent months.  When our office is asked “What is taking so long?” with respect to a pending contract, this particular issue is generally at the top of the list, as it has a substantial impact on the research capabilities of JHU.

As most of you know, Federal contracts are generally governed by the Federal Acquisition Regulations (FAR).  As it relates to copyrightable data, the applicable clause is 52.227-14, which states that the Government shall have unlimited rights in “data first produced in the performance of the contract,” whereas the Contractor will only receive a license to such data subject to certain restrictions.  However, the Contractor may assert copyright ownership of “scientific and technical articles based on or containing data first produced in the performance of this contract and published in academic, technical or professional journals, symposia proceedings or similar works.”  For all other materials, the Contractor must receive permission from the Contracting Officer to obtain copyright.  Consequently, the Contractor would own the publications directed to the research, but not the actual results that produced said publications, and, in most cases, the Contractor’s future use of the research results would be dependent on the consent of the sponsor, which is not always a given.

Needless to say, 52.227-14 as constructed is not necessarily conducive to the efforts of a non-profit research institution like JHU.  Fortunately, there is an avenue available for educational institutions, which is the fourth option of alternate language prescribed.  When “Alt 4” is identified as the governing provision for 52.227-14, the Contractor may, with few exceptions, “establish claim to copyright subsisting in any data first produced in the performance of this contract.”  While the Government receives an automatic license to any such copyrighted material for use for Federal purposes, the Contractor ultimately is the sole owner of the data, and thus is free to use it as it pleases.

In many negotiations, the request to include Alt 4 is eventually accepted.  However, the sponsor will occasionally balk at modifying the original language in 52.227-14, and in a subsequent post we’ll discuss a few of the rare circumstances where JHU might acquiesce.

USAID Forward : Come Gather ‘Round People Wherever You Roam

Mr. Zimmerman was right: The times, they are a-changin’.  Today’s political climate, which includes a lingering economic crisis, a push by some for nationalism with less spending on international efforts, as well as attempts to prioritize spending and improve effectiveness, is forcing federal agencies to step up and get tough.

As a result, USAID has taken stock of its operating methods, and is now looking to adapt its practices and create new improvements to deliver results more effectively.   Announced by USAID Administrator Dr. Rajiv Shah, USAID FORWARD is critical to achieving President Obama’s vision of the United States as the global leader in international development.

After extensive review, USAID has been directed to implement an “Operational and Procurement Improvement Plan” with specific short term results by 2013 and long term results by 2015.

The objectives of the Plan are:

1. Strengthen partner country capacity to improve aid effectiveness and sustainability;

2. Strengthen local civil society and private sector capacity to improve aid effectiveness and sustainability;

3. Increase Competition and Broaden USAID’s partner base;

4. Use U.S. government resources more efficiently and effectively;

5. Strengthen collaboration and partnership with bilateral donors, multilateral and international organizations to increase synergies and avoid duplication; and

6. Rebuild USAID’s internal technical capacity and rebalance the workforce .

If you read the lengthy statement, you will notice the following buzz phrases: “enhance competition,” “robust, transparent evaluations,” “simplifying the procurements processes,” “greater accountability,” and “monitoring performance.”

The rationale?

In a recent face-to-face meeting that JHSPH had with USAID representatives, the majority of our discussion revolved around awards, subrecipient selection, and auditors.  The message we received was clear: We need to document, explain, justify, and defend our decisions – particularly when it involves sole source subrecipients.

Many awardees, including JHSPH, are noticing a much higher level of scrutiny and demand for more detail regarding review and approval of subrecipients.  Furthermore, under Objective 4, USAID will increase the number of fixed price contracts where feasible and appropriate, and decrease the use of certain procurement methods that the OMB considers high risk (e.g. single sourcing, large IQCs and cost reimbursement contracts, etc.)

USAID is significantly reforming the way it does business in order to survive.  As awardees, we, too, must be flexible and adapt to the changing priorities and methods in order to survive.  Consequently, it’s important for you, your department and your PIs to be aware of USAIDs new objectives, and to ensure compliance with any related applicable requirements.