Research and development agreement

What is an R&D agreement? A Research & Development ("R&D") agreement can be compared to a cooperation agreement. R&D stands for research and development. In an (international) R&D agreement (whether or not on the basis of subsidies or projects) you lay down the most important agreements between your company and cooperation partners. Elements of an R&D agreement usually include: a division of tasks, the distribution of costs and revenues, intellectual property (distribution of results), liability, exclusivity, termination and dispute resolution. In the event of international cooperation, you must pay special attention to the choice of law and forum in an R&D agreement. After all, the obligations arising from an R&D agreement must be enforceable abroad. 

Legal arrangement

A (pure) R&D agreement is not a special agreement in the sense of Book 7 of the Dutch Civil Code and Book 7A of the Dutch Civil Code. Contrary to special agreements such as an agency contract, an employment contract, a settlement agreement, a contracting agreement, a rental agreement, etc., there is no legal regulation for an R&D agreement. A Research & development agreement is therefore in principle free of form (no specific rules apply), unless it can be qualified as a special agreement. This leaves a lot of room for contracting parties to record their mutual agreements, but also entails risks because matters that are not regulated in a Research & Development agreement are not covered by a statutory regulation.

Research & Development agreement for (grant) projects

An R&D agreement is also often linked to a subsidy or project plan and then the content of such a research and development agreement must be geared to the relevant subsidy conditions and the R&D agreement in question must also be submitted to the subsidising body. When drawing up R&D contracts, the requirements set by the subsidising authority must therefore be taken into account beforehand. If you conclude an R&D agreement with a knowledge institute, you must also take into account possible unlawful state aid when making agreements in an R&D agreement on the use of background and foreground knowledge of the knowledge institute.

What do you arrange in an R&D agreement?

In research & development agreements, you arrange, amongst other things, which activities are carried out by which party, usually linked to a planning and milestones. You also lay down which basic knowledge (also known as background information or background) is contributed by each of the parties under the joint R&D agreements and how this may be used by the other party within, but possibly also outside, the R&D project in question. In addition, it is important to determine which of the parties becomes the owner of the knowledge (also referred to as foreground knowledge or foreground) developed in the R&D project (whether or not jointly). This can be arranged in different ways in an R&D agreement (for example, each of the parties may become the owner of foreground developed by it, the parties may jointly become the owner of foreground, or ownership may be allocated to certain territories/markets in which the different parties are active). Appropriate agreements on the ownership and use of background and foreground are often at the heart of a sound R&D agreement. In practice, this is often the subject of discussion between the cooperation partners. This should therefore be taken into account when drawing up and terminating an R&D agreement.

Termination of a Research & Development agreement?

Depending on the form, content and circumstances, an R&D agreement can be terminated in a number of ways: by expiry of the term of an R&D agreement, termination, dissolution, nullification, reliance on nullity and by mutual consent. Some of these termination options can be contractually excluded in R&D agreements. On the other hand, an R&D agreement can, based on jurisprudence, usually still be terminated, even if nothing has been arranged about termination in terms of content (otherwise it would remain in force indefinitely).

Termination of an R&D agreement?

In principle, an R&D agreement can be terminated by giving notice. However, if the other party has a special interest in the continuation of the R&D agreement or could expect a permanent cooperation in this respect, the termination must be based on a serious interest or unforeseen circumstances within the meaning of Section 6:258(1) of the Dutch Civil Code. The requirements of reasonableness and fairness under circumstances may mean that a reasonable notice period must be observed. A distinction must also be made between a fixed-term R&D agreement and an indefinite R&D agreement and, under circumstances based on reasonableness and fairness, compensation may also be payable if an R&D agreement is terminated. When both drawing up and terminating an R&D agreement, you should therefore take this into account and preferably seek advice from a legal expert.

Need help with a Research & Development agreement?

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