Contracts For Non Lawyers Life Sciences August 5, 2008

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This presentation provides a brief review of select contract principles and provisions. It is geared towards non-lawyers at Life Sciences companies.

Transcript of Contracts For Non Lawyers Life Sciences August 5, 2008

  • 1. VLP Virtual Law SchoolContracts for Non-Lawyers 101a:Contracts for Life Sciences CompaniesAugust 5, 2008Ellen LeznikFounding Partner, Virtual Law Partners LLP eleznik@virtuallawpartners.com (650) 321-1393

2. Why Do We Need Contracts? Contracts are more than promises they are agreements between the parties that the law will enforce. Well-drafted contracts clearly show the intent and responsibilities of the parties and provide a business plan, or a road map, for a specific transaction or business relationship. 2August 5, 2008Virtual Law Partners LLP 3. Basic Contract Provisions Defined terms Parties Purpose Parties responsibilities Description of the product or service (including quality and quantity) Rights to the resulting product Standards of performance Price and payment terms3August 5, 2008 Virtual Law Partners LLP 4. Basic Contract Provisions (contd) Risk allocation Indemnification and insurance Limitation on liability Confidentiality Representations and warranties Term and termination Applicable law Dispute resolution Contract construction4August 5, 2008Virtual Law Partners LLP 5. Contract Templates Contain necessary contract provisions for a specific type of transaction Tailored for your companys specific needs Can significantly reduce drafting and negotiation effort Should be reviewed and updated regularly5 August 5, 2008Virtual Law Partners LLP 6. Proper Use of Templates Use each template only for the specific type of transaction for which it was designed:CDA vs. MTAMCDA vs. CDAMSA vs. Services AgreementMSA vs. CRO AgreementCTA vs. CRO AgreementCTA for Phase I vs. CTA for Phase III6August 5, 2008 Virtual Law Partners LLP 7. Proper Use of Templates (contd) Customize the template before sending it to the other party: - Party name and address - Contract term - Signature block - Exhibits 7 August 5, 2008Virtual Law Partners LLP 8. Proper Use of Templates (contd) Whenever possible, start the contracting process with your own companys template:- Negotiation advantage- Potentially lower legal cost- Exceptions: government contracts (e.g., CRADAs)8August 5, 2008 Virtual Law Partners LLP 9. Frequently Negotiated Contract Provisions IP ownership rights Indemnification Limitation on liability Representations and warranties Dispute resolution 9August 5, 2008 Virtual Law Partners LLP 10. IP Ownership Rights:Sample Provision; Alternative Language4.Ownership4.1 Definition of Invention. Invention means any discovery, invention, technology, result, data (including without limitation Study Data), specimen, material, information, concept or idea, whether or not patentable, resulting from, conceived or reduced to practice as a result of conducting the Study, or conceived or made using the Study Drug or Sponsor Confidential Information, together with all intellectual property rights therein. Inventions shall include, but not be limited to, processes, compositions, methods, software, tangible research products, formulas and techniques, patents, copyrights and know-how, and any improvements related thereto.4.2 Disclosure of Inventions. Site, the Principal Investigator and Sub- Investigator (if applicable) shall promptly disclose in writing to Sponsor all Inventions made including, without limitation, those Inventions made by Site and/or the Principal Investigator and Sub-Investigators. 10 August 5, 2008 Virtual Law Partners LLP 11. IP Ownership Rights (contd)4.3 Sponsor Inventions. (a)Site and Principal Investigator agree and acknowledge thatSponsor shall own all right, title, and interest in and to all Inventions. (b)Site and Sites employees (including the Principal Investigatorand any Sub-Investigators), agents, sub-contractors, affiliates, and relatedpersonnel (including, but not limited to postgraduate students, researchfellows, and other students) shall, upon Sponsors request and atSponsors expense, execute such documents and take such other actionsas Sponsor deems necessary for Sponsor to obtain such ownership and toapply for, secure, and maintain patent or other proprietary protection ofsuch Inventions. (c)All Inventions and any information with respect thereto shall beSponsor Confidential Information subject to the confidentiality, non-disclosure, and non-use obligations set forth in Section _ hereto. 11 August 5, 2008 Virtual Law Partners LLP 12. IP Ownership Rights (contd)4.4Assignment Obligations. Site shall ensure that each of itsemployees and any sub-contractors performing any part of the Study,including, without limitation, the Principal Investigator and any Sub-Investigators, shall have a contractual obligation to assign all inventionsand intellectual property rights therein created, discovered, or generated bysuch personnel as a result of performing the Study during the term of thisAgreement to Site so that Site can comply with its obligations underSection 4.3, and Site shall promptly obtain such assignments. 4.5No Transfer of Rights. It is agreed that neither Sponsor, thePrincipal Investigator, the Sub-Investigator (if applicable) nor Site transfersto the other by operation of this Agreement any patent right, copyright,trademark right, or other proprietary right of any party, except as expresslyset forth herein or as necessary to perform its obligations under thisAgreement.12 August 5, 2008Virtual Law Partners LLP 13. Indemnification:Sample Provision; Alternative Language 6.Indemnification6.1 By Sponsor. (a)Sponsor agrees to indemnify, defend, and hold harmless the Principal Investigator, any Sub-Investigator, Site, and Sites trustees, directors, officers, and employees, and those of Sites sub-contractors whose services were pre-approved by Sponsor under Section __ (collectively, the Site Indemnitees) from any and all liability, loss, damage, cost, and expense, including reasonable attorneys fees and costs (collectively, Losses) in connection with any claim, demand or lawsuit for bodily injury or property damage brought by a third party arising from (i) any Study Drug or placebo supplied by Sponsor that is dispensed or administered in the course of the Study in strict accordance with the Protocol and Sponsors instructions, (ii) the negligence, recklessness, or willful misconduct of Sponsor or its officers, employees, agents, and representatives, (ii) a breach of the Sponsors obligations under this Agreement, or (iv) a breach of any of Sponsors representations and warranties made in Section __.13 August 5, 2008Virtual Law Partners LLP 14. Indemnification (contd)(b)Notwithstanding the foregoing, Sponsor shall not beobligated to indemnify the Site Indemnitees to the extent thatLosses arise from (i) negligence, recklessness, or willfulmisconduct on the part of any of the Site Indemnitees, (ii) a breach ofthe Sites obligations under this Agreement, (iii) a breach of any ofSites representations and warranties made inSection __, (iv) anyinjuries occurring at the Study Location (other than injuries causedby or attributable to any Study Drugor placebo supplied bySponsor that is dispensed or administered in the course of theStudy in accordance with the Protocol), or (v) a failure of any of theSite Indemnitees to comply with any applicable FDA regulation orother federal, state, or local law or regulation.14August 5, 2008Virtual Law Partners LLP 15. Indemnification (contd)6.2 By Site.(a) Site agrees to indemnify, defend, and hold harmlessSponsor and its officers, directors, employees, agents, sub-contractors andrepresentatives (the Sponsor Indemnitees) from any and all Losses they maysuffer in connection with any claim, demand or lawsuit for bodily injury or propertydamage brought by a third party arising from (i) the negligence, recklessness, orwillful misconduct on the part of the Site or its trustees, directors, officers, agents,employees, sub-contractors, or related personnel (including, without limitation, thePrincipal Investigator, Sub-Investigator (if applicable), postgraduate students,research fellows, and other students), (ii) a breach of the Sites obligations under thisAgreement, (iii) a breach of any of Sites representations and warranties made inSection 9, (iv) any injuries occurring at the Study Location (other than injuries causedby or attributable to any Study Drug or placebo supplied by Sponsor that is dispensedor administered in the course of the Study in strict accordance with the Protocol andSponsors instructions), or (v) a failure of any of the Site Indemnitees to comply withany applicable FDA regulation or other federal, state, or local law or regulation. 15August 5, 2008Virtual Law Partners LLP 16. Indemnification (contd)(b) Notwithstanding the foregoing, Site shall not beobligated to indemnify the Sponsor Indemnitees to theextent that such Losses arise from (i) any Study Drug orplacebo supplied by Sponsor that is dispensed oradministered in the course of the Study in strict accordancewith the Protocol and Sponsors instructions, (ii) negligence,recklessness, or willful misconduct on the part of any of theSponsor Indemnitees, (iii) breach of Sponsors obligationsunder this Agreement, or (iv) a breach of any of Sponsorsrepresentations and warranties made in Section __.16 August 5, 2008Virtual Law Partners LLP 17. Indemnification (contd)6.3 General Conditions of Indemnification. (a) Each party's agreement to indemnify, defend, and hold the other partyand its respective indemnitees harmless is conditioned upon the indemnified party:(i) providing written notice to the indemnifying party of the relevant claim, demand, orlawsuit within twenty (20) days after the indemnified party has knowledge of suchclaim, demand, or lawsuit, provided that a delay in providing such notice will notrelieve the indemnifying party of its obligations under this Section 6 unless theindemnifying party is materially prejudiced by such delay; (ii) permitting theindemnifying party to assume full responsibility and authority to inves