Material transfer agreements are essential when sharing proprietary materials, such as biological samples or technical data, as they help unlock collaboration opportunities while protecting your interests.
Without a well-drafted material transfer agreement (MTA), you could face risks like misuse, intellectual property disputes, or unauthorised commercial exploitation. Our commercial law solicitors specialise in crafting MTAs that clearly define each party’s rights and obligations, giving you the legal security you need to enter collaborations with confidence.
Contents:
- What are material transfer agreements?
- When is a material transfer agreement necessary?
- Key clauses to consider in a material transfer agreements
- Entering into a material transfer agreement
- What should we consider when the transfer involves human tissue?
- Benefits of a material transfer agreement and the importance of legal and regulatory advice
- Conclusion
What are material transfer agreements?
A material transfer agreement generally governs how parties will share and use specific materials for defined purposes. Its primary goal is to manage the transfer of materials from a provider to a recipient, safeguarding the materials and the project outputs.
Typically, the recipient party seeks to use the materials for research purposes, such as academic or scientific research. However, material transfer agreements serve various purposes and may also involve commercial organisations. For instance, commercial organisations using materials for the purposes of creating new inventions.
A material transfer agreement establishes rules and parameters for the relevant material’s use, ensuring the protection of the owner's materials.
Biological materials, often including human tissue, antibodies, bacteria, cultures, and plasmids, are commonly the focus of material transfer agreements. However, there are a range of different other materials which could be shared under a material transfer agreement.
Universities generally have detailed policies regarding material transfer agreements and their requisite compliance obligations. For instance, several internal reviews and procedures may need to be actioned and completed prior to entering into a new material transfer agreement.
When is a material transfer agreement necessary?
Researchers, often in university settings, often use material transfer agreements to govern the transfer of biological materials, including human tissue. However, material transfer agreements can extend to cover various material types, from chemical compounds to software.
Scientific and research purposes, such as medical research or the commercialisation of materials through new inventions, frequently drive the use of material transfer agreements.
Material transfer agreements may be used for different purposes, such as joint research, intellectual property creation, or material testing. When parties collaborate for joint research and collaboration, sharing materials requires careful risk mitigation. Using a material transfer agreement can help mitigate against various risks which the parties could face.
Key clauses to consider in a material transfer agreements
There are several scenarios which could involve organisations sharing materials for different purposes, such as companies sharing biological materials for scientific research. As such, there is no one-size-fits-all approach to material transfer agreements. Each agreement must be carefully drafted, considering the project's purposes, the relevant materials, and associated legal and regulatory issues.
When drafting a material transfer agreement, you should consider the nature of the materials, their intended use, any necessary control levels, and how to handle intellectual property rights created from the project. Additional regulatory obligations and contractual may also need addressing as part of the agreement.
Material transfer agreements hold significant importance and often require niche legal considerations. For instance, research conducted under a material transfer agreement may lead to breakthrough medical findings or inventions.
Some common provisions in a material transfer agreement include:
- Definition of materials – Correctly defining the relevant materials is vital. It requires a detailed description.
- Project details – The agreement should provide a clear, detailed description of the research project, stating the permitted use of the materials.
- Intellectual property rights – Careful consideration is necessary to protect each party's rights and determine ownership of new rights created during the project. It’s important to address how intellectual property protection in commercial contracts applies in this context, including the consideration of royalties payable for the use of any newly created rights, which may be a significant commercial issue.
- Ownership of materials and rules on their use – Clear provisions are necessary regarding material ownership, usage permissions, and storage rules. For instance, specifying that materials must be stored in a designated lab and accessed only by authorised individuals.
- Risk and costs – The agreement should allocate responsibility for materials during transit and who will cover any transportation costs. Insurance is also a key consideration.
- Research and data results – Provisions in the agreement should address the use or publication of the project results.
- Confidentiality – Safeguarding confidential data and materials from wider disclosure requires appropriate provisions within the agreement.
- Warranties – Negotiating contractual warranties or assurances is another key consideration. For instance, warranties regarding the provider's attainment of any necessary consents or specific warranties about the condition of transferred materials.
- Regulatory considerations – Depending on the project, various regulatory obligations may need addressing. For instance, considerations under data protection laws if the materials are not anonymous, leading to possible application of rules under the UK General Data Protection Regulations and other relevant laws.
- Limitation of liability – Defining how a party's liability to the other will be limited is crucial, especially in high-risk contracts. The material provider may also seek an indemnity from the recipient for any losses they suffer resulting from use of the materials.
- End of contract provisions – These should cover what happens to the materials upon termination of the project.
- Governing law and jurisdiction – Specifying the governing laws is vital, especially if one party is based outside of the United Kingdom.
In addition to the above, the agreement should include various other standard boilerplate clauses.
Entering into a material transfer agreement
Many institutions, including universities, have their own material transfer agreement templates.
Consideration must be given to whether an organisation uses its own agreement or a third party's agreement. This will depend on various factors, including bargaining positions of the parties.
If a third party's agreement is used, its terms should be carefully reviewed before signature. The other party must assess whether the agreement raises any risk issues or whether the contract requires further negotiation. When presented with a material transfer agreement for signing, consider if you should take legal advice to understand its terms and their implications on your organisation. Materials transfer agreements, once executed, are legally binding contracts. This means the other party could have various remedies if your organisation breaches any of its obligations under the agreement.
Also note that often, it is necessary to check whether entering into a material transfer agreement complies with the internal policies and procedures at the institution. Universities usually have guidelines around entering into a material transfer agreement when the university is the provider or recipient of materials. As such, material transfer agreements should be carefully discussed internally with any relevant teams prior to signature.
If the material transfer agreement involves human tissue falling under the Human Tissue Act 2004, understanding the relevant regulatory obligations is crucial. This is explored further below.
What should we consider when the transfer involves human tissue?
Various legal rules, particularly around the transport and use of specific materials, need consideration when drafting a material transfer agreement.
When transferring 'human tissue,' strict legal requirements must be followed. This includes, without limitation, the need for a material transfer agreement.
The Human Tissue Act 2006 governs the transfer of human tissue, providing a framework for the storage and use of human organs and tissue. This law, regulated by the Human Tissue Authority, defines human tissue as material from a human body consisting of or including human cells. The key purpose of this law is to provide a legal structure around various issues including the use of human organs and tissue.
Materials covered by this legislation generally include those consisting of human cells, such as teeth, urine, or saliva.
If the materials being transferred fall under the scope of Human Tissue Act 2006, the agreement should include clauses stipulating the parties' obligations to comply with it. For example, warranties ensuring that the materials were obtained with appropriate consent as required by the Human Tissue Act 2006.
In agreement involving the transfer human tissue, additional considerations may include:
- Whether patient consent has been obtained, where required.
- Inclusion of provisions to comply with regulatory requirements around human tissue transfer.
- Adherence to any applicable data protection law rules, including conducting a data protection impact assessment where necessary.
Projects involving the transfer of human tissue require careful attention and sensitivity. Material transfer agreements must be bespoke, addressing the unique circumstances of the human tissue being transferred.
Understanding the regulatory framework around human tissue use is vital, to ensure the agreement complies with the Human Tissue Act 2006. As such, legal advice is recommended before proceeding with a material transfer agreement involving human tissue.
Benefits of a material transfer agreement and the importance of legal and regulatory advice
Material transfer agreements provide various benefits for both material providers and recipients. Significantly, these agreements protect the provider's rights to their materials, allowing control over their use and rules around the exploitation of the research results of the relevant project.
Using a material transfer agreement allows you to:
- Define the rights and obligations of all parties, to avoid potential misunderstandings and disputes.
- Protect the original materials and assets created under the project, by determining ownership of output materials and any rights over their usage by the other party.
- Ensure good governance and compliance standards, by ensuring that any legal, regulatory, and ethical obligations are prescribed and followed.
Overall, material transfer agreements serve as valuable tools, helping parties to protect the relevant materials, establishing clear usage restrictions, and complying with relevant rules and regulations.
Material transfer agreements should be carefully drafted, taking into account the specific project and its requirements.
Drafting material transfer agreements can be complicated. To draft them correctly, the consideration of several legal rules and regulations (including intellectual property laws and data protection laws) is essential.
Parties entering into a material transfer agreement must ensure that the agreed-upon terms do not conflict with other contractual commitments, such as agreements with external third-party sponsors.
While the drafting and negotiation of material transfer agreements may require time and resources, their importance should not be overlooked. Organisations or institutions seeking support with a material transfer agreement should seek legal advice. Seeking legal advice on material transfer agreements can add significant value, particularly as material transfer agreements are bespoke and must be tailored to the project.
For instance, an experienced law firm can support your organisation with:
- understanding your project and guiding you on whether you require a material transfer agreement;
- advising you on any legal and regulatory obligations you need to comply with;
- drafting and negotiating a material transfer agreement on your behalf; and
- helping you address any problem issues that arise under the agreement after it has been signed.
Conclusion
A robust material transfer agreement is crucial for mitigating the risks associated with sharing proprietary materials and ensuring that all parties' rights are protected. These agreements are especially vital in research and academic settings, where biological materials or human tissue are frequently exchanged.
By clearly defining usage parameters, ownership rights, and compliance obligations, material transfer agreements help foster ethical, legally sound collaborations. Given the complexity and regulatory requirements, particularly where human tissue is involved, specialist legal advice is highly recommended.
If your organisation is entering into a material transfer arrangement, our experienced commercial law solicitors can support you in drafting and negotiating agreements tailored to your project’s specific needs.
