The Contract Red Flags Kit: 54 clauses to check before you sign a university-industry research agreement

The Contract Red Flags Kit is a free Excel workbook that lists 41 commonly disputed clauses in university-industry research agreements, plus eight consortium clauses, and five material transfer clauses. For each one, it gives the clause pattern that raises the flag, the balanced position where both sides can usually accept, the sponsor's legitimate concern, and a severity rating. Conflicts on these clauses can add months to negotiation because each one sends the draft back to counsel on one side or the other, and a team that hasn't settled its own position in advance renegotiates it from scratch on every agreement.

What's in the kit

The Checklist holds 41 clauses in 11 categories: intellectual property (7), publication (5), indemnification (5), termination (6), export control (2), data (2), governance (2), funding and flow-down (4), multi-party agreements (2), in-kind contributions (3), and materials and prototypes (3). A Consortium supplement adds eight clauses for agreements among three or more organizations, and a Materials transfer checklist adds five for material transfer agreements.

Each row carries the clause, the pattern that raises the flag, the balanced position, the sponsor's legitimate concern, a severity (red, amber, or green), when it applies, the reference behind it, a status dropdown, and a notes column. Four Agreement-profile questions (how many organizations are party, whether public or grant funding supports the work, whether any party contributes equipment, staff, or materials instead of cash, and whether materials or prototypes move between the parties for testing) decide which rows count, so a two-party, industry-funded agreement is not asked about consortium voting rules.

Positions are written to be balanced to both sides, noting the statutory constraints for universities, and every row names the sponsor's legitimate concern, so either side can use the same sheet as the agenda for a negotiation. A Summary sheet counts your statuses by severity, lists the Red clauses still open and recommends a next step, and a Methodology sheet lists every source cited in the workbook.

The 41 Checklist clauses, by category

Intellectual property (seven clauses)

• Background IP scope (amber). Sponsor background IP defined narrowly, the university's broadly. Balanced position: each party owns its pre-existing IP, with a background IP inventory exchanged before drafting.
• Foreground IP ownership (red). Sponsor claims joint or sole ownership of every invention. Balanced position: the university owns foreground IP and the sponsor gets a time-limited option to negotiate a license. It costs months because a university cannot concede ownership without breaking its own policy and, for federally funded work, the Bayh-Dole Act, so counsel will not sign. Push back with a license option inside a defined window after disclosure.
• License field of use (amber). Worldwide exclusive in all fields. Balanced position: field-of-use limits, with research and teaching rights retained.
• Royalty rate (amber). A royalty or fee from the sponsor's template with no benchmark, diligence milestones or minimum payments. Balanced position: either an earned royalty benchmarked to comparable licenses with diligence and minimum payments, or a pre-priced option the university has published in advance; the red flag is a price with no model behind it.
• March-in and step-in rights (amber). Automatic step-in if the university does not commercialize quickly. Balanced position: Bayh-Dole march-in for federally funded inventions; private step-in only on a demonstrated failure to make reasonable efforts.
• AI-assisted invention attribution (amber). Sponsor claims any AI-generated output. Balanced position: under the USPTO guidance of November 26, 2025 only natural persons can be inventors; data and training-data ownership are settled separately.
• Background IP non-assert (red). An open-ended non-assert on the university's background IP that works as an unnegotiated license. Balanced position: non-asserts scoped to named background IP, no implied licenses. It costs months because an open-ended non-assert reaches every patent the university holds, including ones licensed to other partners, so it goes to the technology transfer office and often to outside counsel. Push back with a list of the specific background IP and a grant-back limited to research and education.

Publication (five clauses)

• Sponsor manuscript review window (red). Indefinite or 180-plus day review with a right to revise. Balanced position: 30 to 60 days, up to 90 only to file a patent, with the university keeping final authority over content. It costs months because an open-ended review reads to a faculty senate as a restriction on academic freedom, and the agreement will not clear faculty governance until it changes. Push back with 30 to 60 days and a one-time extension to 90 for a provisional filing.
• Sponsor approval to publish (red). Sponsor must approve, and may block, any publication. Balanced position: notice and review only. It costs months because more than 85 percent of academic medical centers refuse sponsors the authority to revise manuscripts or to decide whether results are published (Mello, Clarridge and Studdert, 2005), so this clause routinely decides whether there is a deal at all. Push back with review for confidential information and patentable subject matter, nothing more.
• Graduate student dissertation carve-out (red). Restrictions apply to every output, dissertations included. Balanced position: dissertations and thesis defenses carved out of any review or delay. It costs months because a degree timeline cannot wait on a sponsor's review cycle, and graduate deans will not approve an agreement that makes it. Push back with an explicit carve-out, handling sponsor confidential information by redaction rather than delay.
• Confidential information designation (amber). Sponsor can designate anything confidential after the fact. Balanced position: marked at disclosure, or within 30 days of an oral disclosure, with the standard exclusions.
• Conference presentation review (amber). The journal window applied to every talk. Balanced position: 14 to 30 days for abstracts and slides, no clearance for routine seminars.

Indemnification (five clauses)

• University indemnifies sponsor (red). University indemnifies for any third-party claim, including claims from the sponsor's own use of deliverables. Balanced position: each party indemnifies for its own negligence, capped at insurance, with sovereign immunity preserved. It costs months because many public universities cannot indemnify at all under state law, and a private one will not carry liability for how a sponsor uses results it does not control. Push back with mutual indemnification for each party's own negligence, capped at insurance.
• Indemnification cap (red). No cap. Balanced position: capped at insurance coverage or the value of the research, whichever is lower. It costs months because an uncapped obligation needs a risk-management review and sometimes a board-level sign-off, which runs on its own calendar. Push back with a cap at the lower of insurance limits and contract value.
• Limitation of liability (amber). Unlimited for the university, capped for the sponsor. Balanced position: mutual, direct damages capped at contract value, consequential damages excluded for both.
• Subject injury in clinical trials (red). University bears subject-injury costs even for a properly administered sponsor product. Balanced position: the sponsor bears costs when injury results from its product used per protocol; the university bears investigator negligence only. It costs months because subject-injury terms are a patient-safety and review-board question as well as a contract one, so a second set of reviewers joins the negotiation. Push back with the allocation in the Accelerated Clinical Trial Agreement template studied by Lawrence et al., 2023.
• Insurance requirements (green). Vague or excessive. Balanced position: each party carries general liability and, where relevant, products and clinical trial coverage, with certificates exchanged.

Termination (six clauses)

• Termination for convenience (amber). Sponsor may terminate at will; the university may not. Balanced position: each party may terminate on 60 to 90 days' notice, the sponsor pays committed costs through wind-down, and where public funding supports the work a funding contingency applies.
• Termination for cause (green). Vague breach standard, short cure. Balanced position: breach defined, a 30-day cure for monetary breach and 60 days for performance.
• Wind-down obligations (red). All work product and IP transfer to the sponsor at no cost on termination. Balanced position: the university keeps foreground IP; the sponsor receives results to date and pays committed and non-cancelable costs. It costs months because a transfer-on-termination clause reopens the ownership question through a side door, so the whole IP section is renegotiated. Push back with results to date, not IP, plus a wind-down budget for commitments already made.
• Survival clauses (amber). Only sponsor rights survive. Balanced position: confidentiality for a set term, IP and license rights, pre-termination indemnification, and the right to publish pre-termination results.
• Right of first refusal after termination (amber). Indefinite right on all university IP in the field. Balanced position: limited to IP from the sponsored work, a six to 12 month window and a defined option fee.
• Asymmetric exit provisions (amber). Different triggers and notice periods for each side. Balanced position: symmetric, unless an asymmetry matches an asymmetric investment and its basis is documented.

Export control (two clauses)

• Foreign-national exclusion (red). Sponsor demands that foreign-national personnel be excluded. Balanced position: the fundamental research exclusion preserved, with any export-controlled work under a separate technology control plan. It costs months because an exclusion clause removes the fundamental research exclusion for the whole project, which turns an open lab into a controlled one and triggers an export-control review before anyone can sign. Push back by keeping the project fundamental research and moving any controlled element into its own plan.
• Sponsor approval before disclosure (red). Sponsor must approve any disclosure to non-employees. Balanced position: restrictions limited to the sponsor's confidential information. It costs months for the same reason: under 15 CFR 734.8, review only to protect sponsor proprietary information or patent rights keeps fundamental research status, and a general approval-before-disclosure clause does not. Push back with confidentiality for sponsor information and nothing broader.

Data (two clauses)

• Data ownership (amber). Sponsor claims sole ownership of all data. Balanced position: each party owns the data it generates, and raw data needed for publication stays accessible to the university. Deliverable datasets named in the statement of work can be the sponsor's, with the university keeping research use and publication of aggregate results.
• Funder data-sharing requirements (red; counts when public funding is switched on). Sponsor restricts sharing that a federal funder requires. Balanced position: federally mandated sharing survives any contractual restriction, with sponsor confidential information excluded under the funder's rules. It costs months because a university cannot sign away an obligation it owes to a federal funder, so the clause has to be rewritten rather than traded. Push back with the NIH Data Management and Sharing Policy language and a carve-out for sponsor confidential information.

Governance (two clauses)

• Steering committee composition (amber). Committee weighted toward the sponsor. Balanced position: equal representation, a rotating or neutral chair, consensus on technical direction, and academic-freedom matters reserved to the university rather than voted on.
• Dispute resolution (amber). Litigation in the sponsor's home jurisdiction as the only mechanism. Balanced position: a stepped escalation first, our default being one week to project leads, by the end of week four to the steering committee, and by the end of week eight to executives, counted from the day the issue is raised in writing, then mediation and arbitration before any litigation, with venue neutral or at the defendant's seat.

Funding and flow-down (four clauses, counted when public or grant funding supports the work)

• Federal funding disclosure and Bayh-Dole precedence (red). The sponsor claims every invention "regardless of any other source of funding", and the agreement never says whether federal money supports the work. Balanced position: the agreement states whether a federal award supports any part of the work, and if it does, every IP term is subject to the government's paid-up license and the preference for United States industry in the standard patent rights clause (37 CFR 401.14). It costs months because a university cannot contract out of a federal statute, so a clause that ignores it has to be rewritten once the funding is discovered. Push back with a funding statement in the recitals and an option that covers only the rights the university can grant.
• Flow-down of prime-award terms and the subaward instrument (red). The university is a subawardee of a small business or a corporate prime and receives a vendor-style purchase order that assigns all inventions to the prime. Balanced position: use the Federal Demonstration Partnership subaward template with the prime terms attached; the patent rights clause flows down, and the prime may not take rights in the university's inventions as the price of the subaward (37 CFR 401.14(g)). It costs months because a work-for-hire assignment of a federally funded invention conflicts with the statute, so both compliance offices have to rebuild the instrument. Push back with the FDP template from the first draft.
• Funder public-access obligations survive sponsor review (red). "No manuscript shall be submitted or deposited without Sponsor's written consent." Balanced position: sponsor review ends before any funder deposit deadline, and the deposit itself is not subject to sponsor consent; under the NIH Public Access Policy effective July 1, 2025 the accepted manuscript is available in PubMed Central on the publication date. It costs months because the university owes the deposit to the funder and cannot trade it away. Push back with review limited to confidential information and patentable matter, ending before acceptance.
• Funding contingency and termination of the prime award (amber). Either silence, or a sponsor right to terminate and claw back everything paid if federal funding is cut. Balanced position: if the award ends, either party may terminate on notice or rescope; the sponsor pays committed costs incurred before notice and rights in work already done survive.

Multi-party agreements (two clauses, counted when three or more organizations are party)

• Ownership of jointly created results among several parties (red). "All Results shall be jointly owned by all Parties in equal shares", or everything vests in the lead firm. Balanced position: each party owns what its own people generate; inseparable joint results are owned by the generating parties only, each able to grant non-exclusive licenses on notice and against fair compensation (DESCA 2.0, section 8.2). It costs months because blanket joint ownership among five parties leaves no one able to grant an exclusive license, so the firm that wants to commercialize forces a renegotiation. Push back with ownership by generation and a first right to negotiate for the exploiting firm.
• Several, not joint, liability and per-party caps (red). "The Parties shall be jointly and severally liable", with one cap shared by all. Balanced position: each party is liable only for its own breach, with its own cap (DESCA's default is once or twice its share of project costs). It costs months because no university will accept liability for a company it does not control, and public universities often cannot. Push back with several liability and a per-party cap in the first draft.

In-kind contributions (three clauses, counted when any party contributes equipment, staff, materials, or data instead of cash)

• Schedule, valuation, and recognition of in-kind contributions (amber). "Sponsor will provide equipment, materials, and staff time as needed", or an in-kind value claimed as the basis for IP or voting rights. Balanced position: a contribution schedule for every party with a valuation basis, stating whether it counts toward cost share (where it does, 2 CFR 200.306 applies) and stating that it earns no IP or voting right by default.
• Seconded, visiting, or embedded personnel (red). A sponsor engineer works in the university lab under the research agreement alone, or every invention by anyone on the project is assigned to the sponsor. Balanced position: a visiting-personnel agreement for each person, with an IP assignment that matches the research agreement and a technology control plan if export-controlled items are involved. It costs months because an unassigned co-inventor from the other organization is a title defect that cannot be cured later without that person's signature. Push back with the visiting-personnel agreement as a condition of lab access.
• Loaned equipment (amber). Title passes to the university on delivery, or the university must insure the equipment and return it in new condition. Balanced position: title stays with the provider, the provider insures its own equipment except loss caused by the university's negligence, and return, purchase, or donation at the end is stated with a date.

Materials and prototypes (three clauses, counted when materials, prototypes, samples, or datasets move between the parties)

• Reach-through claims on inventions made using the material (red). The provider claims every invention, data, and result made with its material, or a reach-through royalty. Balanced position: the provider owns the material, its progeny, and unmodified derivatives; the recipient owns inventions its people make with it, and the provider gets a research license and at most an option to negotiate. It costs months because a reach-through claim on a research university's future inventions is the most common reason a material transfer agreement with a company stalls in the technology transfer office. Push back with the split in the Uniform Biological Material Transfer Agreement.
• Results and test data: testing services versus research (amber). "All test data and reports are Sponsor's sole property" applied to work that is really research. Balanced position: decide which instrument it is first. Defined tests to the sponsor's protocol are a testing-services agreement and the sponsor may own the report (UIDP Contract Accord 13); research keeps the university's data ownership and publication rights, with the device's identity redacted.
• Export classification of the material or prototype (amber, red when the item is controlled). Silence, or a general compliance clause with no classification. Balanced position: the provider states the classification of each item before shipment, and controlled items go under a technology control plan; fundamental research status covers information, not the hardware in the box.

The two supplements

The Consortium supplement covers the rest of a multi-party agreement: the governing body, voting and quorum (DESCA's default is a two-thirds quorum and a two-thirds majority of votes cast); accession, withdrawal and default of a member; the coordinator's authority; access rights to other members' background and results; confidentiality across parties; publication coordination (DESCA's default is 45 days' notice and 30 days to object); antitrust protection for pre-competitive consortia of competing firms under the National Cooperative Research and Production Act; and member funding. If your instrument is an NSF IUCRC membership agreement, the supplement says not to redline it, because the program sets its terms.

The Materials transfer checklist covers a material transfer agreement itself: modifications and derivatives, confidentiality of the material, permitted use and return or destruction, warranties and liability, and which instrument to use (between non-profit signatories, the UBMTA with the AUTM Implementing Letter; for data, a data use agreement rather than an MTA).

How the status workflow works

Set the Agreement profile first, then the statuses. Every clause starts as "Not yet reviewed". As you read your draft against each row, set the dropdown to "Acceptable as drafted", "Needs negotiation", "Unacceptable" or "Not applicable", and note the other side's position and any redline language. The Summary counts only the rows your profile puts in scope, lists the Red clauses still open, and prints one of eleven recommended actions in a fixed order: it first checks your inputs (a profile answer that is blank, a status that is not one of the five values, a row outside your profile that you have flagged), then escalates any open Red clause, then any unacceptable clause, then routes negotiation, and only routes for signature when every reviewed clause in scope is acceptable.

In a survey of 107 academic medical centers, 96% accepted sponsor review of publications and more than 85% refused sponsors the authority to revise manuscripts or to decide whether results are published (Mello, Clarridge and Studdert, 2005), and a master agreement cut industry-sponsored clinical-trial contract time at five health campuses of one state university system from 73 to 39 days (Tran et al., 2017), which is the case for settling your positions once rather than per agreement.

Download the kit

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The kit is free to use and adapt within any organization with attribution to Helikon Labs. Not for resale.

After you download

For teams that want the agreement, the steering committee and the escalation path designed together, our Structuring the Partnership workshop ($2,500) covers all three in one session.

Helikon Labs is not a law firm, and this page and the kit are not legal advice.