In any competitive business environment, one of the most important investments you can make is your Research & Development. If you want to stay relevant and maintain a competitive edge, it’s worth looking into new ways to improve on existing products and build new ones. 

One of the most common ways businesses go about this development and exciting stage of growth is through collaboration with other people. This is always a good idea so you can benefit from the range of ideas and areas of expertise in your relevant industry. 

However, this kind of arrangement also calls for an Agreement that ensures everything is clear from the outset. For example, you might want to consider the following:

  • What is our overall goal?
  • How can I ensure these goals are met?
  • How can I protect my IP?
  • How can I make sure that the outcome is of high quality?

These are all matters that should be covered in a Research And Development Agreement. 

What Is It?

If your business is working with collaborators to develop new ideas and technologies, you may want a formal Research & Development Agreement in place.

This should outline the relationship you have with your cooperation partners, and should generally cover some of the following matters:

Put simply, the Agreement should cover the roles and responsibilities of you and your collaborators. It should set out relevant deadlines, standards and ownership rights. For example, if you’re creating a new product, who will officially own it? 

Intellectual Property

If you’re working with another business or party and they are creating a form of IP as part of your project, it’s important that you consider how you will ensure that property officially belongs to you. 

Generally, there are 2 ways to do this:

  1. IP Assignment Deed
  2. IP clause in a contract

An IP Assignment Deed is a separate agreement that transfers full ownership of the IP to you. However, if you already have a Research & Development Agreement in place, it makes more sense to simply insert an IP Clause in that contract. 

This clause should require the party you’re collaborating with to agree to transfer all ownership of the IP they create to your business, so you’ll own it. If you don’t have this kind of clause or agreement in place, the IP that comes out of your project won’t be yours and the parties that you collaborated with might be able to distribute and share that as they wish, which is the last thing you want. 

We’ve written more about assigning IP here. 

How Is It Enforced?

If you think of other agreements like employment contracts or a service agreement, you’ll know that these types of contracts are regulated. For example, the Australian Consumer Law is regulated by the ACCC. 

However, a Research And Development Agreement is not regulated. This means you have some wriggle room when it comes to negotiating the terms of the agreement, such as dispute resolution and what happens if there is some issue or disagreement with the arrangement you have in place. 

When Would I Need A Research And Development Agreement?

Usually, when a business engages in a project for research and development, they would opt for a Research And Development Agreement so the arrangement is in writing and all parties understand what their role is. 

Since it’s not regulated, it’s a good idea to speak to a lawyer about the kinds of terms you want to include, so that the dispute resolution process is as simple and stress-free as possible. 

How Do I Terminate A Research & Development Agreement?

There are a number of ways you can end a Research And Development Agreement, and this also depends on what you choose to include in your contract. Some of the following are options:

  • Expiration set out in the agreement itself
  • Dissolution
  • Nullification
  • Mutual consent 

As we mentioned before, these agreements aren’t regulated, so you can be quite flexible in determining what can and can’t be done. 

Example
Let’s say you’re a business that provides an online payment service. You want to innovate by creating an app that allows you to pay for items in instalments online. To do this, you partner up with a business called TechNGo to improve your existing service and benefit from their expertise in software development. 

So, the Agreement should cover some of the following things – What tasks will they be required to do? How will these tasks be distributed between TechNGo and your business? What process will be followed if the tasks aren’t completed? Who will own the IP? If there’s an issue with the service or app, who is liable? What process will be followed if one of the parties breaches a term of the Agreement (dispute resolution)? Will TechNGo be reimbursed for any relevant costs during the project?

Need Help?

If you’re ready to get a Research & Development Agreement drafted for your business, Sprintlaw has friendly and experienced lawyers that can help you through the legal processes involved!

If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

Mason Kemeny
Mason is a legal consultant at Sprintlaw. Having founded his own media production company, Mason has experience in both film and music industries. He is also currently working towards his law degree at Macquarie University.
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