Common Considerations

The University of Louisville Research Foundation, Inc. (ULRF) is the legal entity which executes sponsored agreements for the University of Louisville. ULRF is a limited agent for the university for the purpose of receiving grants and research agreements from external funding sources.

Kentucky law does not permit the university to indemnify or hold harmless another party. Negligence claims against the university are subject to the Kentucky Board of Claims (KRS 44.070 et. seq.).

Claims against the university must be brought under the Kentucky Board of Claims Act so we cannot be bound by another state’s laws or agree to the jurisdiction of another state’s courts. However, we can agree to leave the contract silent on governing law/choice of law.

The university cannot agree to binding arbitration, but we can agree to other alternative dispute resolution processes.

The university generally does not provide warranties. Alternatively, the university can “represent” or “certify” to its reasonable knowledge or “agree.”

University intellectual property (IP) rights are governed by the university’s intellectual property policy and, because the University receives a great deal of federal funding, often by the Bayh-Dole Act. Rarely can the university assign or exclusively license intellectual property in advance of its creation. The university can assign ownership in specific work products (e.g., technical reports) generated in performance of a sponsored project, but not the underlying ideas, technology or tools. If development of IP was supported, even in part, by any federal funding, the United States has certain nonexclusive rights by law. The internal Revenue Service (IRS) has ruled advance licensing may violate a university’s nonprofit status. Because of these considerations, the university’s preference is to grant exclusive first options for licenses on terms customary in the applicable industry.

University researchers and their students need the ability to use data and other research work products for noncommercial educational and research purposes and the right to independently publish. This right can be provided under license, can be limited by a sponsor’s right of review, or can be delayed for a short period to permit the protection of IP rights.

Under IRS regulations, nonprofit status can be jeopardized if royalty rates are set in advance. Instead, the university grants to its corporate sponsors an exclusive first option to license IP which results from the company-funded project, on terms reasonable for the industry, including a good-faith negotiation of fair royalties.

The university is subject to the Kentucky prompt payment statute which allows for recovery of interest on late payments.

In most cases, the sponsor is expected to indemnify the university, ULRF and the PI for conducting the sponsored project. Exclusions should only apply to the extent those actions or inactions by the university or PI contributed to the liability/claim.