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Background IP vs foreground IP: what each side brings, keeps, and shares

Andrew T. Flowers ·

Every research agreement sorts intellectual property into two categories. Background IP is what each party brings to the project from outside it. Foreground IP, which some agreements call project IP or results, is what the project creates. The sorting sounds simple, but the first dispute in a university-industry collaboration is usually about which category something belongs in, because the background IP wasn't defined before the project work started. This article explains how the main model agreements define the two, where they differ, and why a background-IP inventory, filled in by each party before the term sheet, is the first thing to settle. The inventory is a free download at the end.

We're not a law firm, and this isn't legal advice. It's our practitioner's guidance using the published frameworks.

What the model agreements say

Three public frameworks are the most common for the English-speaking world, and the US federal rules add a layer on top. They agree on the principle and differ on the details, so we'll lay out the differences between the models to reduce potential surprises.

The Lambert Toolkit (UK). The model collaboration agreements define background as "information, data, techniques, Know-how, inventions, discoveries, software and materials" that one party provides to the other "for use in the Project," whether before or after the agreement is signed, "except any Result." Results are everything "identified or first reduced to practice or writing or developed in the course of the Project." The ownership clause is blunt: the agreement "does not affect the ownership of any Intellectual Property Rights in any Background," which stays with the party that contributed it, and "no licence to use any Intellectual Property Rights is granted or implied by this Agreement except the rights expressly set out" (Model Collaboration Agreement 1, clause 4.1). Two things follow. Background isn't only what you owned on day one, it's anything you bring in during the project too. And the other side gets exactly the license the agreement spells out, nothing more, so an unlisted background item is an item nobody has permission to use.

DESCA (EU). The Horizon Europe model consortium agreement, now at version 2.1 (February 2026), takes the inventory a step further by making it part of the contract. Background takes the grant agreement's definition: data, know-how, or information a partner held before it joined the grant agreement and that's needed to implement the action or exploit the results. Each partner lists its background in Attachment 1, with any restrictions or conditions on each item, and anything not listed carries no obligation to grant access (section 9.1.1). Access to listed background for a partner's own project work is royalty-free unless the annex says otherwise (section 9.3), and access a partner needs to exploit its own results is on fair and reasonable conditions (section 9.4.2). The model's logic is that a partner should never discover, after signature, that another partner's lab notebook was off limits.

The Australian IP Toolkit. IP Australia's model contract defines background IP as any IP "existing prior to the execution of this Contract" or "obtained or created after the execution of this Contract by a Party other than as a result of the performance of this Contract," and project IP as any IP "created by or on behalf of a Party for the purposes of the Project" (Model Full Research Collaboration Contract). That second limb matters: work a party does on its own, during the project but outside it, stays background. The toolkit's term sheet asks the parties to name their background before drafting, which is the same inventory idea in a government template. IP Australia now points university and industry collaborations to the voluntary HERC IP Framework and offers the toolkit for small businesses.

Canada. NSERC's guidelines don't impose a model agreement. They say ownership of project IP "can be owned by any one, or combination, of the parties," depending on institutional policy, contributions, "background IP and conventions within the field," and they tell researchers to weigh "the significance of the industrial partner's background IP and the extent of their contribution" when the terms are set. In other words, the company's background is part of what it brings to the table, and it's expected to count.

The US federal overlay. When federal funding is involved in a project, an invention of the organization that holds the award "conceived or first actually reduced to practice in the performance of work under" it is a subject invention under the standard patent rights clause, with the disclosure, election, and government-license obligations that follow (37 CFR 401.14). The agreement can call it whatever it likes. A university can't assign US rights in a subject invention without the agency's approval, except to an organization that manages inventions (37 CFR 401.14(k)(1)), and background the sponsor brought in stays the sponsor's. The UIDP Contract Accords carry the US sponsored-research version of these positions.

Translation Box: "background"

On the academic side: the lab's prior work, most of it published, some of it patented by the university, and generally assumed to be free to use because it's the reason the sponsor came.

On the industry side: trade secrets, internal data, product specifications, and know-how that must never reach a publication. The worry isn't losing ownership, but that the company's background becomes part of the university's foreground, or leaks through a thesis.

Both are right, and the inventory is how they stop talking past each other.

Where the frameworks differ, and what it costs you

Improvements to background. Lambert leaves improvements as results unless the parties say otherwise, so an improvement the university makes to the company's own compound is a result the university may own, with the company getting whatever license the agreement grants. Sponsors who assume "improvements to my stuff are my stuff" are assuming a clause that isn't there by default. If you need it, write it. In our experience, the university will limit it to improvements that can't be used without your background.

Sideground. Work a party does during the project but outside it is background under the Australian definition. Lambert's definition is silent on timing, because it defines background by what's provided to the other party rather than when it was made. DESCA's, which takes the grant agreement's definition, covers only what a partner held before it joined, so later outside work isn't background at all. If your lab is running a parallel internal program, say so, and say that its output stays out of the project.

Know-how. Patents are easy to list. Know-how is where inventories fail, because nobody writes down "the way our process engineer tunes the reactor." Hertzfeld, Link, and Vonortas studied US-based companies and how they protect what they bring to research partnerships and found that patents are the most frequently used mechanism for both background and foreground, that other mechanisms are used to protect know-how "especially in the early, forming stages of a partnership," and that "IPR negotiations are reported to be more complex in horizontal partnerships and when universities are involved" (Research Policy, 2006). The inventory is where the know-how gets a line, a confidentiality marking, and a named owner.

Joint ownership. It sounds fair, but the frameworks steer away from it. Hagedoorn's study of joint patenting among companies describes co-ownership as something "generally seen by patent lawyers and firms alike as a second-best option that, if possible, should be avoided," even though firms keep doing it (Industrial and Corporate Change, 2003). The reason is practical: each co-owner's rights to license and enforce turn every later decision into a negotiation. The model agreements instead assign foreground to one party and give the other defined rights.

The cost of getting this wrong is in the research on why partnerships don't form at all. In Hall, Link, and Scott's study of Advanced Technology Program projects, 12 of the 25 projects without a university partner said IP had been an insurmountable barrier to having one, and none of the 13 with a partner said so (Journal of Technology Transfer, 2001). A sponsor that can see, on one document, what it's protecting and what it's getting is a sponsor that signs.

What goes in a background-IP inventory?

Fill it in before the term sheet, one copy per party, and once the terms are agreed, attach every party's copy to the agreement as the background schedule. The columns:

  1. Item. The patent number, the software name and version, the dataset, the material, or the piece of know-how, described well enough that a stranger could tell whether a result came from it.
  2. Type and status. Granted patent, patent application, software, other copyright, data, material, prototype, know-how, trade secret, or other. Confidential, not confidential, published or public, or not yet decided.
  3. Owner and encumbrances. Who owns it, and whether anyone else has rights in it: a licensor, a prior sponsor, a federal agency, a co-author's institution, an open-source license, or the MTA it came under.
  4. Use during the project. What the other party may do with it: project use only, use and modify, test and evaluate only, no access, or not yet decided, with any conditions in words.
  5. What survives. Whether the other party needs it to use the results, then what it gets after the project: nothing (return or destroy), a research-use license, a license limited to using the results, a broad commercial license, or not yet decided. Improvements go in their own section.
  6. Notes. Where it's kept, who to ask, and the NDA, MTA, or data use agreement it was disclosed under. Anything a party is holding back on purpose goes in a separate exclusions section, so the other side doesn't assume it's available.

A university will usually list the lab's relevant patents, its software, and any materials, and limit its confidential know-how to project use. A company will list the compound, the data, the specifications, and the process know-how it's disclosing under the NDA, mark most of it confidential, and say that improvements are what it wants rights in. Once every party's inventory exists, the agreement's IP clause is a matter of drafting rather than discovery.

Download the background-IP inventory (Word and PDF, free).

What this looks like on the Helikon platform

The inventory and the agreement it feeds belong beside the project. A project on Helikon keeps its files in folders, including one for IP and prior art, so every party's inventory, the NDA it was disclosed under, and the signed agreement sit where the project team can find them. The project can require a signed agreement before it goes active, records when the agreement was signed and when it expires with the signed copy linked, and emails the project owner before it expires. You can set one up on a free account.

The sponsor's guide to university research agreements covers who owns the foreground and why. Our next article in this series answers the question sponsors ask after the inventory is done: who owns the IP when a company funds university research.

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Background IP vs foreground IP: what each side brings, keeps, and shares · Helikon Labs