{"id":210,"date":"2020-03-26T09:38:25","date_gmt":"2020-03-26T13:38:25","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/lifescienceslaw\/?p=210"},"modified":"2020-03-26T09:38:25","modified_gmt":"2020-03-26T13:38:25","slug":"protecting-the-companys-crown-jewels-best-practices-for-growth-stage-biotechnology-companies-using-contract-vendors-in-support-of-basic-research-activities","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/2020\/03\/26\/protecting-the-companys-crown-jewels-best-practices-for-growth-stage-biotechnology-companies-using-contract-vendors-in-support-of-basic-research-activities\/","title":{"rendered":"Protecting the Company\u2019s Crown Jewels: Best Practices for Growth Stage Biotechnology Companies Using Contract Vendors in Support of Basic Research Activities"},"content":{"rendered":"<p><em><strong>By <a href=\"https:\/\/www.duanemorris.com\/attorneys\/patrickcgallagher.html\" target=\"_blank\" rel=\"noopener noreferrer\">Patrick C. Gallagher, Ph.D.<\/a> and <a href=\"https:\/\/www.duanemorris.com\/attorneys\/sandragstoneman.html\" target=\"_blank\" rel=\"noopener noreferrer\">Sandra G. Stoneman<\/a><\/strong><\/em><\/p>\n<p id=\"E849\" class=\"qowt-stl-DMBdyTxt\"><span id=\"E850\">Emerging growth biotechnology companies often need to rely on third-party vendors and collaborators to fuel their research and development efforts.\u00a0 These vendors and collaborators may perform crucial aspects of the R&amp;D process, such as candidate screening, assay development and validation, and lead generation. To enable this work, biotechnology companies may be required to share their \u201csecret sauce\u201d (or the building blocks to an eventual secret sauce), like antibodies and their targets.\u00a0 The following recommendations should be taken to account when working with third parties to balance the need to advance R&amp;D with limited internal capacity and the need to maintain confidentiality of trade secrets and other proprietary information:<\/span><\/p>\n<ul>\n<li id=\"E851\" class=\"qowt-li-1_0 qowt-list qowt-stl-DMBdyTxt\"><span id=\"E852\"><strong>Strong work-product language<\/strong>\u2014Ensure the contract has strong invention assignment and \u201cwork-for-hire\u201d language. \u00a0Consider calling out specific antibodies and their targets as your \u201cbackground intellectual property\u201d or your materials.\u00a0 <\/span><\/li>\n<li id=\"E853\" class=\"qowt-li-1_0 qowt-list qowt-stl-DMBdyTxt\"><span id=\"E854\"><strong>Confidentiality<\/strong>\u2014Confidentiality obligations in the contract for trade secrets should survive for so long as the information qualifies as a trade secret under applicable law.<\/span><\/li>\n<li id=\"E855\" class=\"qowt-li-1_0 qowt-list qowt-stl-DMBdyTxt\"><span id=\"E856\"><strong>Subcontracting<\/strong>\u2014Limit the ability of the vendor or collaborator to use subcontractors.\u00a0 Understand the full supply chain and work flow, and the companies involved in each step.\u00a0 For example, often vendors and collaborators want the ability to assign\/subcontract to affiliates.\u00a0 If that affiliate not qualified, this could present regulatory and IP protection issues.\u00a0 Make sure you know who will actually have access to your confidential information and proprietary biological material.<\/span><\/li>\n<li id=\"E857\" class=\"qowt-li-1_0 qowt-list qowt-stl-DMBdyTxt\"><span id=\"E858\"><strong>Material transfer<\/strong>\u2014If biological material is being transferred, consider entering into a separate \u201cmaterial transfer agreement\u201d because most contract service agreements may not adequately address protections around sharing of material, and each time biological material is shared there likely will be specific limitations that will be appropriate to specify for the vendor.\u00a0 At a minimum, ensure the contract limits the scope and nature of what the vendor is allowed to do with the biological material.\u00a0 Also ensure that the contract requires return of all physical materials (often, the return obligations only apply to confidential information), and prohibits copying or replication except to the extent necessary for the contracted work.<\/span><\/li>\n<li id=\"E859\" class=\"qowt-li-1_0 qowt-list qowt-stl-DMBdyTxt\"><span id=\"E860\"><strong>Diligence your vendor or collaborator<\/strong>\u2014ask for references, visit their location, periodically exercise audit and inspection rights under the contract.<\/span><\/li>\n<\/ul>\n<p id=\"E861\" class=\"qowt-stl-DMBdyTxt\"><span id=\"E862\">It almost goes without saying that if a company is going to outsource R&amp;D functions, there is some inherent risk that cannot be eliminated, but a good deal of the risk can be mitigated. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Patrick C. Gallagher, Ph.D. and Sandra G. Stoneman Emerging growth biotechnology companies often need to rely on third-party vendors and collaborators to fuel their research and development efforts.\u00a0 These vendors and collaborators may perform crucial aspects of the R&amp;D process, such as candidate screening, assay development and validation, and lead generation. To enable this &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/2020\/03\/26\/protecting-the-companys-crown-jewels-best-practices-for-growth-stage-biotechnology-companies-using-contract-vendors-in-support-of-basic-research-activities\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Protecting the Company\u2019s Crown Jewels: Best Practices for Growth Stage Biotechnology Companies Using Contract Vendors in Support of Basic Research Activities&#8221;<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[51,438,439,441,298,445,443,442,402,444,440],"ppma_author":[521],"class_list":["post-210","post","type-post","status-publish","format-standard","hentry","category-general","tag-biotech","tag-biotechnology","tag-biotechnology-companies","tag-conrractors","tag-patrick-gallagher","tag-proprietary-information","tag-rd","tag-research-and-development","tag-sandra-stoneman","tag-trade-serets","tag-vendors"],"authors":[{"term_id":521,"user_id":6,"is_guest":0,"slug":"duanemorris3","display_name":"Duane Morris","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/843ff6e7a8fe5fc92109b47a45f34b6cf0ea499e6e788db23456c838b0ae6747?s=96&d=blank&r=g","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/posts\/210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/comments?post=210"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/posts\/210\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/media?parent=210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/categories?post=210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/tags?post=210"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/lifescienceslaw\/wp-json\/wp\/v2\/ppma_author?post=210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}