The Promise of Biomarkers and Antibodies

Biomarkers, an abbreviation of “biological markers,” serve as medical indicators for the disease state observed from outside the patient. This measure is both precise and replicable, and accounts for a chemical, physical, or biological response. [1]

Biomarkers have been around for quite some time, and we see examples of them in our everyday lives. Blood pressure, for example, can serve as a biomarker for the physiological state of a patient or a patient population. Similarly, body temperature, or presence of a fever, can indicate to us a change in a person’s state of being, from diseased to healthy or vice versa.

Biomarkers are often used as clinical endpoints while measuring biological processes, especially as a function of disease. Biomarkers are often surrogate endpoints in clinical trials; that is, they serve as substitutes when a clinically relevant endpoint cannot be identified. The advantage to this is that many clinical endpoints, such as survival (a measure of death), are not reliable predictors due to infrequency of occurrence or unethical practices, such as manipulating the survival of individuals. By using a biomarker, researchers can reduce harm and risk to a subject while still producing clinically relevant conclusions. [1]

Biomarkers play a large role in the drug development process; they bridge the gap between the measurable biological outcomes and clinical outcomes. However, biomarkers are limited in how well they can reproduce physiological consequences of disease.[1]

On the other hand, antibodies are abundant, stable-in-serum biomarkers that can predict a variety of pathologies. Many comparable biomarkers have a tendency to run dilute, and detection can prove difficult, particularly over extended periods of time. [2]

Natural antibodies are the body’s biomarkers, and help the immune system monitor the body. Antibodies in the body can serve as biomarkers that indicate the functional changes of the body system that they are functioning in. [3] Antibodies are the body’s way of detecting a change in the expression of a protein, which in turn can indicate the progression of a disease or infection. Harnessing the natural properties of antibodies as biomarkers, or clinical indicators, could prove to be successful on a larger scale in the future. The ability for antibodies to remain stable in blood serum over extended periods of time could change the way clinical trials are conducted.

[1] Strimbu, K., & Tavel, J. A. (2010). What are Biomarkers? Current Opinion in HIV and AIDS 5(6), 463–466.

[2] Sabatino, A. D., Biagi, F., Lenzi, M., Frulloni, L., Lenti, M. V., Giuffrida, P., & Corazza, G. R. (2017). Clinical usefulness of serum antibodies as biomarkers of gastrointestinal and liver diseases. Digestive and Liver Disease,49(9), 947-956. doi:10.1016/j.dld.2017.06.010

[3] Xu, X., Ng, S. M., Hassouna, E., Warrington, A., Oh, S. H., & Rodriguez, M. (2015). Human-derived natural antibodies: biomarkers and potential therapeutics. Future Neurol, 10(1), 25-39. doi:10.2217/fnl.14.62

The Benefit of Master Agreements

Master agreements help set standard terms between two parties of a contractual, reciprocal agreement. The process of two parties having to repeatedly enter into a separate agreement of the same type can be tedious, time consuming and potentially detrimental to a business relationship, especially if the parties find themselves constantly revising and renegotiating agreement terms. Doing so can significantly slow down the time it takes to initiate sponsored research projects or productization of licensed inventions.

The master agreement specifically covers standard terms that apply to a particular type of transaction between two parties. These agreements set out the basic framework of the working relationship between the two parties. Emory University, specifically, negotiates master agreements that cover the terms of clinical trials, sponsored research, research tools, and confidentiality. By agreeing to standard terms upfront, the parties save a significant amount of time when a new project or engagement is initiated. With the umbrella agreement in place, a relatively short addendum, work order, or similar is executed for a specific item/project. There are some terms that need to be agreed upon for each project under a master agreement such as project scope of work, finances, and IP rights.

Master agreements themselves can cover a broad spectrum of terms; for example, indemnification, which is a part of an agreement that stipulates that one party in the agreement will absorb monetary costs for losses that a second party may incur. Other terms can be items such as termination, confidentiality, data ownership, publication and reporting.

Creating a large, comprehensive agreement is not without its pitfalls. Parties involved must be incredibly thorough and make sure that they can live with the terms, as once a master agreement has been signed off on, making changes can be difficult.

Master agreements are generally a benefit to both parties. Investigators are extremely supportive of master agreements, given they can significantly shorten the waiting time before a research project can begin. The university and company save on personnel time and resources by engaging in one extensive negotiation rather than multiple negotiations, which is a much more inefficient process. Putting several agreements under one master agreement saves time and effort while simultaneously establishing a working business relationship. Streamlining the process makes companies and institutions more willing to work with one another.

While the investment it takes to negotiate the initial agreement can be significant, once the master agreement is in place, individual agreements covering a research study or commercial license can be finalized within a matter of a few days. The time it takes to develop the initial master agreement can vary greatly and depends on the level of priority a company assigns to such an agreement, but one thing remains for sure: master agreements are almost universally appreciated and preferred in the industry.

What are Orphan and Rare Diseases?

Rare diseases affect very small populations of individuals. According to the United States Food and Drug Administration (FDA), orphan diseases are those that specifically affect less than 200,000 people within the nation; many of these rare diseases are also genetic. Some of these rare diseases include cystic fibrosis, Huntingon’s disease, Aarskog syndrome, Waardenburg syndrome, and Fabry disease.

During the summer of 2014, more than one hundred million dollars were raised in the fight against a rare disease called amyotrophic lateral sclerosis—or ALS—through a movement called the ALS Ice Bucket Challenge. Participants would dump a bucket of ice water over their friends’ heads, capture the moment on video, educate viewers about ALS, and even urge others to participate in the challenge or donate to the cause. ALS, also commonly referred to as Lou Gehrig’s disease, is a neurodegenerative disease characterized by an eventual loss of muscle control and movement; an estimated 20,000 Americans have ALS at a given time.

According to the Genetic and Rare Diseases (GARD) Information Center in the National Institutes of Health (NIH), approximately twenty-five to thirty million Americans live with rare diseases; they further estimate that there may be up to 7,000 rare diseases in existence. Therefore, while rare diseases individually affect a small portion of the population, all rare diseases cumulatively impact a significant number of Americans.

However, since each rare disease individually affects very few individuals, companies initially had very little incentive to develop drugs to treat these diseases; such drugs would not necessarily provide profits with such small patient populations. In fact, according to GARD, rare diseases were coined “orphan” diseases because drug companies did not want to “adopt” them and provide treatments for them.

In 1983, Congress passed the Orphan Drug Act (ODA) to create financial incentives to facilitate necessary orphan drug development. Some of these incentives included tax credits for research, grant funding, and marketing opportunities. For example, grants such as the Orphan Products Clinical Trials Grants Program help provide funding towards clinical research “that tests the safety and efficacy of drugs, biologics, medical devices, and medical foods in rare diseases or conditions.” The FDA even currently has an entire office dedicated to overseeing products related to rare diseases; the mission of the FDA’s Office of Orphan Products Development is to “advance the evaluation and development of products that demonstrate promise for the diagnosis and/or treatment of rare diseases or conditions.”

According to the FDA, in the decade preceding the ODA, less than ten treatments for orphan diseases were approved; in the years since it passed, however, hundreds of orphan drugs have since been developed. Approved orphan drugs to treat ALS, for instance, include Edaravone and Riluzole. While research into treatments for orphan and rare diseases is ongoing, the advancements performed over the years are encouraging for future progress.

Orphan Drugs & Priority Review Vouchers

Rare illnesses and medical problems are often neglected in the pharmaceutical industry. This is because drug developers opt to focus on illnesses that are prevalent and their treatments more lucrative. The Federal Drug Administration (FDA) is addressing this problem with Priority Voucher Review Programs, whose recipients are awarded expedited FDA review for their future product. These vouchers have specific requirements in place making them applicable only to drugs being developed for overlooked afflictions, also known as “orphan drugs.” The main drug ingredient must not yet be approved by the FDA, which supports innovation while potentially decreasing overuse of antibiotics and subsequent resistance. Voucher programs are in place for treatments or preventatives in three areas: rare pediatric diseases, rare tropical diseases, and medical countermeasures for possible terroristic threats. Tropical diseases include Zika, malaria, filovirus, cholera, and leprosy and more; the list of accepted ailments is open to being added to. Medical countermeasures include treatments and preventatives for nuclear, chemical, biological, and radiological threats that the Department of Homeland Security finds significant.

These vouchers are attractive to drug developers for a variety of reasons. The development process often takes many years from conception to market placement, so early approval can provide a significant advantage over competitors, and shorter review time means money can be saved and directed toward other priorities. These vouchers are also able to be sold or traded to other companies, heightening their general value. These benefits are intended to be incentives to encourage companies to develop drugs in these underserved areas.

The program began a little more than 10 years ago, in September of 2007. The concept was designed by economic professors at Duke University and was intended to help with the long- standing problem of recognizing medical needs in developing countries. The first PRV was awarded to the antimalarial drug Coartem®, developed by Novartis Pharmaceuticals. Coartem was already a successful and popular drug in other countries, making it an easy first choice for expedited U.S. FDA review and approval. Since then, 14 vouchers have been awarded: six of which have been used for rare pediatric diseases, five for tropical diseases. Many vouchers remain unused, however, with companies waiting to put them toward a promising drug innovation or a lucrative trade.

There are specific conditions to the use of these vouchers. The voucher only benefits review time, not the approval itself, and the FDA has set a user fee that ranges from 2 million to 5 million dollars. This could be a worthless investment if the drug fails, so companies must be sure of their product’s effectiveness if they are to use a voucher. In addition, excluding pediatric priority review, vouchers can only be traded once.

These vouchers exist as a counterbalance to market forces. As with anything within the economic field, supply is consistent with demand. This works in most cases; however, sometimes this causes serious problems to be overlooked due to relative lack of profitability. Tools like that of Priority Review Vouchers aim to discourage stagnation of drug exploration in underserved areas and support finding life-saving or life-improving treatments for those in need.

The Ins and Outs of Creative Commons Manuscript Submissions

It’s fairly easy to prove ownership of a newly-purchased jacket: simply pull out your receipt. But what about a story you wrote, or an invention you designed? What if someone takes your original plan and modifies it? What if a rival claims you stole their idea?

The question of ownership only amplifies in importance as technology and progress gains more speed than ever before. In the field of research, this question is critical: what is the point in investing in and developing a technology that the competition can copy as soon as you share it?

Copyrights, trademarks, patents, and licenses help to regulate this increasingly-sticky area. While the first three of these methods are designed to protect intellectual property, a license sets the terms of how that property can be used by others. The Creative Commons license is one such tool, and has helped protect over 1.1 billion works to date. Creative Commons is a nonprofit organization that provides platforms in which creators can license and share their work. Having this form of protection allows scientists to claim their authorship, and is often a requirement for submission to scientific journals hoping for the publishers to avoid legal troubles. These licenses “facilitate the dissemination of knowledge while maintaining control of intellectual property,” according to Hyeon (Sean) Kim, MS, MBA, a Licensing Associate at Emory University. By reducing the risk of plagiarism and data-theft, scientific findings can be more freely shared discussed, producing a wider breadth of scholarship available to the public without compromising the rights of the creators.

Creative Commons is affiliated with sharing platforms such as flickr, Wikipedia, and Youtube in order to make works more accessible online. Meanwhile, Creative Commons provides licensing that affirms the creator’s ownership and intellectual property right such ascopyright. Kim explained that “the Creative Commons license is a backbone” that protects the ownership and integrity of the work. In addition to the core protection provided by the license, the owner must choose one of six possible attributes. Attributes “further expand restrictions or permissions,” such as whether or not the work can be used for commercial use or whether it can be modified. Commercial use is defined as any activity that results in profit. If a work is used non-commercially, it still requires a citation. By choosing a more conservative attribution, Kim said, any patent applications filed for or issued patent directed to the work can still be licensed for commercial use and receive royalty payments down the road.

Creative Commons is rapidly growing, and it’s easy to see why: it gives authors the ability to license (and later publish) their work through an affordable and user-friendly interface. According to Kim, submitting to Creative Commons is as easy as “uploading a picture to Facebook. Since everything is processed online, owners don’t have to write complex license agreement on their own. “The caveat is that they have to be really careful,” said Kim, as it is up to the owner to choose the licensing agreement that is best for him or her. While Creative Commons provides a Commons Deed which explains each license in laymen’s terms, it is not always easy for the owner to distinguish which version best fits his or her legal needs. Kim’s job is to help Emory scientists navigate this sometimes-confusing process.

The protections of Creative Commons and other licenses have fostered a scientific environment of creation and exploration. Assured that their work cannot be stolen or modified without their permission, researchers are able to publish and share their manuscripts easier than ever before. The increased communication between scientists and the public has helped to encourage the explosion of research and technology in the United States and around the world. As innovation and demand for copyright licensing grows, the role of Creative Commons will only become more prominent in today’s globalized world.

The Bayh-Dole Act: Giving the Power of Innovation Back to Universities and Small Businesses

Universities, hospitals, small businesses, and research centers have long been hotbeds of scientific innovation and discovery. However, in the past many of the scientific advances being made at these institutions failed to be developed into products and medicines that could benefit society. In large part, they remained ideas and visions because the existing policies and legislation did not incentivize researchers or their institutions to further develop and commercialize their work. This all changed in 1980 with the passage of the Bayh-Dole Act, which reimagined patent and copyright policies applied to federally funded research and facilitated the development of numerous products and medications.

The federal government has been a large, if not the largest funder, of basic research carried out in the United States since the end of World War II. This longstanding investment in scientific and technological research can arguably be traced back to the 1945 report by Vannevar Bush, then head of the U.S. Office of Scientific Research and Development, entitled “Science, The Endless Frontier.” In this report, Bush argued that “Scientific progress is one essential key to our security as a nation, to our better health, to more jobs, to a higher standard of living, and to our cultural progress.”

Bush’s argument encouraged President Harry S. Truman to boost government spending on research and development, increasing the research capacities of the nation’s labs and universities. However, despite significant in the amount of federal funds designated for scientific research, the full potential of these discoveries was not being reached. Innovations developed with federal funding were typically early stage developments and not fully formed marketable products. Nevertheless, the title (ownership) of any invention created from federally funded research were retained by the government; cutting-edge research being funded by American tax dollars was was languishing. In fact, in certain instances companies from other countries like Japan were taking research done by American scientists and funded by the American people and developing it into marketable products that were being sold back to American consumers.

The government’s legal ownership over any potential inventions created using federal grants complicated the public and private sector research efforts. Often researchers never fully developed their ideas into finalized, marketable products because they did not possess legal rights to the fruits of their research. Joe Allen, a former staffer for Senator Birch Bayh and champion of the Bayh-Dole Act, said “We basically had a segregated wall between the best and the brightest in our public and private sectors. It was a barrier for the private and public sectors doing joint research.” This barrier was evidenced by a study done in the 1970s that found that approximately 28,000 patents from federally funded research had been accumulated by the government, yet less than 5 percent of those innovations had been commercially developed and additionally, no drugs had been developed from drug related research. Allen and others, he worked with realized that they “must structure the incentives of the patent system so that when someone made an invention with government funding they had the incentive to develop it. If a researcher did not own their invention, they would not have the incentive to remain involved with it and it would never be commercialized.”

With the onset of the 1970’s economic recession the issues surrounding the potential missed opportunities of public benefit from federal research funding reached a critical new juncture. Allen reflects, “We could no longer afford to give away the fruits of billions and billions of hard earned tax payer research and get nothing out of it.” During this time Joe Allen, as a representative for Democratic Senator Birch Bayh of Indiana, began meeting with staff from Purdue University and the University of Wisconsin, who complained that the ownership of innovations created through federally funded research were not being retained by their institutions.

Birch Bayh, partnered with Republican Senator Bob Dole of Kansas, to co-sponsor the Bayh-Dole Act or the Patent and Trademark Law Amendments Act. This act transferred the ownership of innovations created through federally funded research from the federal government to those universities, small business, and non-profits, thereby incentivizing them. The act stipulated that the federal government retain a non-exclusive license; that they must give a preference for United States based manufacturers and small businesses, thereby incentivizing the creation of American Jobs; that any royalties from the inventions must go back into education and research; and that the institutions reward the inventors, consequently increasing those individual’s stake in the product’s development. “Basically,” says Allen, “the main concept was to have the government fund the research and oversee a few basic rules, but then to get out of the way and not try to predict what was going to happen with any given invention.”

The Bayh-Dole Act was officially enacted in December 12, 1980 and has been largely seen as a success over the past few decades. Between 1996 and 2013 it added $1.18 trillion dollars to the economy, created over 3.8 million jobs[1] and an average 2.5 companies a day[2]. Furthermore, it currently accounts for almost a third of the value of NASDAQ[3]. The Economist Technology Quarterly said it is, “Probably the most inspired piece of legislation to be enacted in America over the past century[4].”

The Bayh-Dole Act also enabled the development of the profession of technology transfer with offices at most universities and research based non-profits across the United States, including Emory’s own Office of Technology Transfer (OTT). Thanks to Bayh-Dole, Emory OTT has had many success stories over the years, including the widely-used HIV antiretrovirals (emtricitabine & lamivudine), Factor VIII (rpfVIII, tradename Obizur®), or FACBC (tradename Axumin™)  Without the Bayh-Dole Act, the world today would look very different and the visionary research being done at universities like Emory would never be translated into products, medicines, and therapies that shape the world we live in today.






What is eCTS? And Why Is It Taking So Long Anyway?

Emory’s Electronic Contract Tracking System (eCTS) is the online portal for all research contracts/agreements and general information related to the contract negotiation and award set-up of specific studies and clinical trials. The online portal is accessible to everyone who has an Emory netid. This system creates a streamlined source for updates and general information throughout the course of contract negotiations and award set-up. Each study or trial entry has the following information listed: proposal ID number, investigator, title, sponsor, school/department, status, assigned contract analyst, important dates, and details. A study can be searched and tracked within eCTS by the Emory Proposal Express (EPEX) ID (e.g. 0000012345) or a uniquely generated number for contracts that do not route through EPEX (e.g. CDA.12345.678910).

According to Daniella Carter, JD, a Senior Sponsored Research Analyst in Industry Contracting at Emory, the details section is one of the most useful aspects of the site; it provides a mechanism to keep all involved parties at Emory up to date on the status of an agreement. This is particularly important given all of the moving parts involved in the contract process. The process is not linear and includes many contingent steps. For example, a study needs IRB/regulatory approval and budget approval, and only then can the agreement be signed. At this point, eCTS might show “negotiations completed,” but there is still a waiting period before they can formally move forward.

The completion of a contract is delayed in two main ways: delays finalizing language and delays with contract execution. The language within an agreement is critical and every edit has a reason, namely to protect an individual’s ideas and to protect Emory. Carter goes over every agreement numerous times, carefully evaluating the wording to make sure the language is accurate and terms are correct. She then marks the document with tracked changes and returns the document to the industry sponsor contact for their review and approval. This document typically goes back and forth between parties at least a few times until both reach a consensus on the contract language.

Delays can also come from fine-tuning details, for example if one party wants the other to maintain confidential information for fifteen years, the other party might suggest five years, and they then agree on ten. Alternatively, if the sponsor is using a Contract Research Organization (CRO), then it often takes more time to reach an agreement on the contract language given that there is an added middle-man within the negotiation process.

Some agreements are simply more complicated than others; certain PI-initiated studies might require more back and forth to ensure that intellectual property rights are maintained for a particular idea being tested. Delays in contract execution are common; if one party is busy and does not sign in a timely manner, the whole process is extended.

The second delay can be with contract execution. While negotiations on contract language may be complete with the sponsor there can still be outstanding items. The two most common of these are review and approval by the IRB or the completion of budget negotiations. While these reviews can be initiated at the same time and happen in paralleled they don’t typically complete at the same time. The “details” section in eCTS for a particular agreement is a wealth of information and often includes dates when contract analysts have followed up with departments or other involved parties.

An Introduction to Medical Care Coding

Richard Duszak, Jr., MD is nationally recognized for his work in imaging health policy, Duszak came to Emory after serving as founding CEO of the Neiman Health Policy Institute and president of a regional health system based radiology practice. A recent member of the CPT Editorial Panel, he has held numerous national professional society leadership positions and currently serves as Associate Editor for Health Services Research and Policy for the Journal of the American College of Radiology. Rich recently came to OTT for a lunch and learn and shared with us some of his experience with healthcare coding. Healthcare Insurance graphic

At a high level what are CPT and ICD codes and who oversees them?

  • CPT stands for Current Procedural Terminology and are the codes used by healthcare providers to describe the services provided. The code set is maintained by CPT Editorial Panel, which is appointed by the American Medical Association. CPT codes have three categories. Category I is the most broadly used and are most likely recognized by insurers in their coverage determinations. Category II are primarily for performance management. Category III are temporary codes for emerging and experimental items. These codes may become Category I codes at a later time should they meet rigorous literature and utilization criteria.
  • There are around 50,000-60,000 CPT codes, with around 1,500 new or changed code requests per year.
  • Category I CPT codes are divided into six groups: evaluation & management, anesthesiology, surgery, radiology, pathology & laboratory, and medicine.
  • ICD codes are the International Classification of Diseases which is a set of codes to describe diagnoses, symptoms and procedures in conjunction with hospital care. These codes are maintained by the World Health Organization, and are thus separate and distinct from CPT codes. These codes are also used to classify mortality data from death certificates.
  • CPT and ICD codes are used together to fully describe medical events.
  • Additionally, there one other sets of codes. The HCPCS codes which stands for Healthcare Common Procedure Coding System overseen by the Centers for Medicare and Medicaid Services (CMS). CPT codes are designated as Level I HCPCS codes. For services for which CPT codes may not exists, CMS creates its own (Level II) HCPCS codes.

At a high level how are CPT codes added or removed?

  • There is a CPT Editorial Panel comprised of 17 mostly physician members which meets three times a year. A coding change request form is submitted to the CPT Advisory Committee for review which provides clinical expertise and other comments to facilitate the Editorial Panel’s deliberations. If the Editorial panel approves the code change proposal, it is referred then for valuation and ultimate inclusion in the official code set released each year. If the Editorial Panel rejects the request, there is an available appeals process.

At a high level what are the minimum criteria necessary for a CPT code?

Category I

  • Has received Food and Drug Administration (FDA) approval.
  • Is a distinct service performed by medical practitioners.
  • Has a well-established clinical efficacy in the U.S. and is documented.
  • Is not a fragmentation of an existing code or can be reported by more than one existing code.
  • Is not a means to report extraordinary circumstances related to existing codes.

Category III

  • A protocol for studying procedures.
  • Support from relevant specialties.
  • Availability of U.S. peer reviewed literature.
  • Description of current U.S. trials.

When evaluating innovation, how do CPT codes and reimbursement factor in?

  • Understanding how both the company and physician would get paid can clarify the business model for commercializing the innovation.
  • If reimbursement is possible under an existing code, the path to market may be more straightforward.
  • Not every product requires its own code. In fact, the CPT Editorial Panel strives to make services vendor agnostic whenever possible.

What are some examples of potential innovations that wouldn’t require a CPT code?

  • Something that a provider (doctor) pays for rather than an insurer (e.g., an enhanced computer system).
  • An improved service rather than a new service (e.g., a stent made out of a different alloy).
  • An existing CPT code already covers it (most CPT codes are vendor agnostic).

The Ever-Confusing World of Contract Lingo – Part 2

While much of OTT’s work deals with the review, protection, and management of the inventions made by our faculty, there is a whole other side that is of equal importance: negotiating contracts with industry, be it for licenses, clinical trials, collaborations, sponsored work, or confidential discussions. Just as the world of patents has its own set of jargon and terms, contracts do too. Below we’ve compiled a helpful list of some common terms you may encounter in contracts. You can find part 1 of this blog here.

Common Contract Terms & Concepts Continued
Representation: A fact that one party states with the knowledge that the other party is relying on that fact to make an agreement. If one makes a false representation, it can allow the other party to have the contract be voided or seen as a fraud in the inducement, meaning that an intentionally untrue fact was construed in the contract. For example we often represent that we have the ability to enter into the contract, or that to the best of our knowledge we are owner of a certain technology.

Warranty: A promise of the reliability of a given product or service. If a warranty is incorrect, the other party can deem it as fraudulent and claim breach of warranty and contract claim.

Disclaimer of Warranty: A provision that denies warranties that would otherwise be applicable to a given product or service. For example, in license agreements, Emory will often disclaim any warranty of merchantability.

Material Breach: A breach of a term or terms of the contract by one party substantial enough that it relieves the other party of their obligations to perform under that contract and provides grounds for termination of the agreement.

Waiver: Failure to exercise a right under an agreement that results in the loss of that right. Agreements will often have a waiver provision that says failure to exercise a right under the contract won’t preclude that party from exercising that right or any other right under the agreement.

Injunctive Relief: Remedies provided by a court of law that are not compensatory or punitive, for an example an injunction which is when a judge orders a party to do or not do something.

Other Jargon
“Including but not limited to or without limitation”: A phrase which signals to the court that a party is not trying to create a limited list of options, but that the list is meant to be expansive, and the list is only providing some common examples.

“Indemnify and hold harmless”: The terms indemnify and hold harmless are synonyms, however they are often both stated in contracts. These terms mean that one will have to pay any damages owed to or provide legal support for the other party if they are sued by a 3rd party.

“Good Faith”: Meaning both parties in a contract agree not to lie, give complete honesty, and act with no deception in contract discussion and formation. This is considered to be breached when a party uses clever word games, denies facts that are clearly understood between the two negotiating parties, or use other means to avoid delivering on their obligations under the terms of a contract.

“Incorporated by reference herein”: When a document and its terms are made a part of a contract without having to physically attach that document to the contract. With clinical trial agreements, the protocol is a part of the agreement but are typically lengthy at approximately 60 pages long, so they are incorporated in the agreement simply by reference rather than by including all 60 pages into the contract.

The Ever-Confusing World of Contract Lingo – Part 1

While much of OTT’s work deals with the review, protection, and management of the inventions made by our faculty, there is a whole other side that is of equal importance: negotiating contracts with industry, be it for licenses, clinical trials, collaborations, sponsored work, or confidential discussions. Just as the world of patents has its own set of jargon and terms, contracts do too. Below we’ve compiled a helpful list of some common terms you may encounter in contracts.

What is a Contract?
At its most basic, a contract is a binding legal agreement voluntarily entered into by two or more parties. Those parties can be individuals, companies, organizations, or as is the case with most contracts OTT handles, the university and an industry partner. Contract law is governed by state law. Courts review contracts based on the law of the contractually specified state or the state in which the contract was formed.

Common Contract Terms & Concepts
Recitals: Preliminary statements at the beginning of a contract that presents the background and purpose for the contract. Recitals are not part of the actual contract and are merely considered statements that set the stage for the relationship contemplated in the contract and provide explanations to a reader as to why the contract exists.

Definition: Words can have multiple meanings, so in most contracts, important words and terms are specifically defined, either in their own section of the contract or noted to have the specific meaning in another fashion. Once defined, the word is generally capitalized throughout the remainder of the contract and interpreted to have the specific meaning. If a term is defined, these given definitions take precedent over given word’s typical definition.

Consideration: Money, articles, services, or promises to do or not do something that are outlined in a contract. Both parties must receive consideration in a contract (for example, one party receives money in exchange for the services of the other party). If the only consideration is unidirectional, it is actually considered a gift.

Severability: If a term in a contract is unlawful or ineffective then the entire contract may be voidable by the other party. To avoid a contract being voided in its entirety most contracts include a severability clause that states that if there is a provision in the contract that is defective then only that term will be void and the parties can negotiate to arrive at a replacement term.

Force Majeure: If something occurs outside a party’s control that cannot be rectified by exercise of due care by that party and it hinders the party’s ability to fulfill the contract, then the party is excused from its failure to perform. Examples of this are “acts of God” like natural disasters which cause one party to be unable to fulfill its obligations under a contract.

Survival: A clause in a contract that maintains that certain terms of a contract, for example confidentiality, survive or continue for a period of time after the contract is terminated. When a contract expires or is terminated, a court would consider only these specific terms to exist and be in effect.

Notice Provisions: Clauses stating how two parties in a contract communicate with one another in a written form, for example each party must notify each other in writing delivered by courier or email. Usually it will also include to whom notifications should be sent.

Stay tuned for part two of our contract jargon blog.