Managing the negotiation of multi-party research agreements

herding catsIP Draughts was recently instructed to assist a university client with the drafting and negotiation of a research collaboration agreement between 33 parties. He offers the following suggestions for managing a process of this kind, based on this and earlier experiences. The suggestions assume that you or your client are responsible for leading and managing the negotiations.

These suggestions could be relevant to many kinds of multi-party agreement. It so happens that, in the present case, the research is funded by the European Commission under the Horizon 2020 funding programme. Under the funding rules, the parties are required to enter into a consortium agreement (another name for a research collaboration agreement) before the funding agreement is signed. IP Draughts’ client, as Coordinator of the project, has the responsibility to ensure that this happens.

horizon 2020None of the suggestions is revolutionary. What is important, in IP Draughts’ view, is following a negotiation process that is adapted for negotiating with large numbers of parties, communicating well with the parties, having a clear timetable for the different stages of the negotiations, and allocating sufficient time and resources to ensure that the process is followed through to a conclusion.

  1. Establish a timetable and process. Work backward from the date when the agreement must be signed. Split the available time into blocks that give a sufficient period for each round of negotiations. Make sure enough time is allowed to prepare the first draft and to prepare comments on that first draft. It may be possible to reduce the time allowed for later rounds. Produce a written timetable and try to get it agreed by the parties.This will have two desirable effects: (1) it will inspire confidence that you are managing the process properly; and (2) it will enable you to keep the negotiations “on track”, and make it easier for you to disregard comments that are not made on time.
  2. Use a well-regarded template agreement. If possible, and if the client agrees that it is appropriate, base your draft agreement on a template that is commonly-used in the industry sector. Doing this, and telling the parties that you are doing this, should help to reassure them that they don’t need to “reinvent the wheel” by makingdesca lots of comments on the draft. You are trying to minimise a negotiation process that has the potential to be very unwieldy with large numbers of parties. In the present case, the parties have agreed to base the consortium agreement on an industry template known as the DESCA agreement. It is not perfect (and IP Draughts spent time cleaning up some of its style and content) but using it is likely to be more productive, in the present case, than producing a better but unfamiliar document.
  3. Spend time on the first draft. Don’t be rushed by colleagues who have no idea what goes into an agreement of this kind, into sending out a first draft that has not been carefully thought through (eg a template agreement that has not been adapted to the circumstances of the project). Be willing to use some of the precious negotiation timetable to get the first draft right. You are trying to manage a negotiation process that could easily get out of hand with numerous parties from different countries. Sending out a good first draft should reduce the volume of comments. Developing a good draft depends on taking detailed instructions from the client, eg on issues such as project content, governance, and IP issues.
  4. Communicate. Explain the drafting and negotiation process to the parties, and keep explaining as you go along. Make it seem reasonable (which of course it will be). Tell them what to expect, and deliver against those expectations. Try to make sure that you are communicating with the right people – ask each party to provide the name and contact details of the person who will be leading the contractual negotiations, eg a lawyer or contracts manager.
  5. Establish a workable review process. In the present case, getting back 32 marked-up drafts of the agreement would be a logistical nightmare. Consider sending out a comments table, on which you summarise each clause of the draft agreement (perhaps identifying any deviations from the template on which it is based) and have a blank column of the table on which you invite parties to insert their comments, instead of producing a new draft. Confirm that you will do your best to address comments, as long as they are consistent with the objectives of the consortium. This approach should have two desirable effects: (1) limiting the number of comments, eg on drafting points (it is very tempting to make drafting comments when you are marking up a draft), and (2) giving you greater flexibility to draft wording to reflect the principles, rather than feeling obliged to accept specific drafting, which will sometimes be sub-optimal or inconsistent with the drafting style of the rest of the document.
  6. Try to set expectations for later rounds of comments. After the first set of comments has been received and assessed, and second draft of the agreement is issued, ask people to limit their further comments to essential points, with a view to reducing the volume of comments at each round. This won’t always work, as some parties may just keep plugging away for all of their points to be accepted, but at least you can try. It may help to set this expectation by explaining it to the parties at the outset of the negotiation process.
  7. Build in time at the end. No matter how strictly you try to enforce a timetable, there will always be someone who doesn’t follow it, or who insists on points even if you think they are not workable or consistent with the larger picture (eg if other parties have made comments that contradicts those points). You may need a few days leeway before the hard deadline, to resolve any last minute issues. On a different point, you need to build in time for getting the agreement signed. Some parties may say things like “our only authorised signatory is on holiday and won’t be back for a week”.
  8. sign hereAgree the signing process in advance. It is good to explain to people what they must do to sign and return the agreement, so that there are no misunderstandings or disagreements over whether a party has formally entered into the agreement. A common method is to get each party to apply an ink signature to a copy of the final agreement (which has probably been circulated by the lead party in an uneditable pdf version), scan the signature page into the computer, and email an electronic copy of that signature page to the lead party. It might be intended, for example, that an organision makes an unconditional offer to enter into the agreement when it sends that electronic copy to the coordinating party’s representative by email, and that the agreement as a whole comes into effect when the coordinator’s representative sends out an email to all parties, confirming that he has received signed copies from all of them. At least under English law, the key point is to agree (expressly or by implication) what the process will be. See this Law Society practice note on signing agreements by virtual means. English law is usually flexible (at least in the case of agreements under hand) as to how the parties formally enter into a contract. In some cases it may also be desirable to agree with the other parties, at the start of the negotiations, what will happen if some but not all of them sign. Can the agreement go ahead if a few people don’t sign? Should a  mechanism for this be written into the collaboration agreement? That won’t work in the present case, as all parties must enter into the consortium agreement before the funding agreement is signed.

1 Comment

Filed under Commercial negotiation, Contract drafting

One response to “Managing the negotiation of multi-party research agreements

  1. Reblogged this on IP Draughts and commented:

    This week’s oldie is both golden and evergreen. Managing the negotiation of multi-party agreements involves an extra layer of professional activity, compared with negotiating two-party agreements.

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s