University Researchers Suffering from Unfair R&D Contract Terms from Companies

Sep 03, 2019

“There are many difficulties carrying out R&D projects from companies. From a company’s perspective, it is only increasing its sales without any operating profit. However, researchers are also faced with unfair contract terms. Although it is natural to improve such unreasonable practice, such practice will only continue if companies and universities do not come together.” said a professor from a South Korean university regarding performing a R&D project for a company. This researcher condemned the fact that there has yet to be any improvement for several years even though many complaints and a need for improvement were brought up regarding unfair contract terms by companies.
South Korea’s research industry believes that both companies and researchers bear responsibilities. It emphasized that there needs to be a climate where fair treatment and value of IPs (Intellectual Property) are recognized and that universities need to refrain from contracts that only hurt themselves.
◊Unfair contract terms becoming a norm
There have been many criticisms on how contract terms of R&D between universities and companies are clearly unfair for researchers for many years. Although South Korea’s research industry centered on researchers from universities looked to have discussions with companies in 2010 regarding improving unfair contract terms, they could not come to an agreement.
Such unfairness has not improved at all since. Prototypes, reports, and patents that come from research basically become possessions of companies. Companies possess inventions, designs, new varieties of plants, industrial designs, trademarks, works, computer software, and knowhow. Even if researchers obtain IPs that are not directly related to research, researchers are given rights to these IPs only after agreeing with corresponding companies that they are working with. It is normal for researchers to bear responsibilities for compensation for damages from trade secret, patent right, and copyright.
Contract terms with South Korean Government and contract terms with companies are completely different. Government department needs to prepare rules for research projects and sign a contract with universities according to the style of a standard research agreement contract. It is normal for an affiliated agency to possess technologies and IPs that come from R&D by researchers. When an affiliated agency transfers technologies or earns profits through a patent fee, corresponding researchers are partially compensated.
Based on contract terms by companies, situation is the same even if a company and a research agency have joint ownership of an IP. Because a research agency needs to receive an approval from a company if it wants to sell or allow a third party to use their intellectual property, it is difficult to say that a company and a research agency have joint ownership.
Issue is that such contract terms have become a norm. Because a subcontracting contract, which is made more favorable for a company by a company’s legal team, is basically applied as it is to a joint industrial-educational R&D, companies do not allow their contract terms to be changed.
“Unfair contract terms by companies are basically becoming a standard.” said a university professor. “Companies prepare contracts that are more favorable for them and adjust terms while negotiating with researchers or universities’ industrial-educational cooperative group.”

University Researchers Suffering from Unfair R&D Contract Terms from Companies

◊Companies and universities must work together to fix current issue
It is difficult for professors to voice their opinions when they sign contracts with companies unless they are successful professors. There are many cases where researchers become subordinates of companies by obtaining many R&D contracts for a long period of time. Although contracts are somewhat unfair, university researchers sign contracts to maintain their relationship with corresponding companies.
Young researchers are even in a deeper hole. Many of them obtain R&D contracts even if the terms are bad in order to secure personnel expense for other researchers in their laboratories and research results.
“Although there are many companies that propose contracts to young researchers who recently finished their postdocs overseas, many of these contracts state that researchers will not have the rights to their discoveries.” said a representative for a university’s industrial-educational cooperative group. Despite unfair terms, young researchers sign contracts anyways to secure early success in their research.
If this situation continues, only researchers will suffer down the line because they cannot exercise their rights to their discoveries even if the value of their discoveries goes up in the future.
Polarization is also deepening within universities and the research industry. “Contracts depend on the reputation of a university and there is also clear difference between researchers with many success and researchers without much success.” said a professor from a university in Seoul.
First, there needs to be a way to protect the results from research such as increasing manpower specializing in IP within an industrial-educational cooperative group of a university. “It is difficult to immediately understand the value of an IP and to predict its effect.” said a patent attorney of a university’s industrial-educational cooperative group. “Researchers need to sign contracts that consider the possible effect of the results from their research.”
Discussing with a legal team every time when a contract is signed cannot solve the fundamental issue. Companies need to recognize the results that researchers come up with while researchers need to sign contracts from a long-term perspective rather than hastily obtaining a contract.
“Although it is difficult to compare South Korea to the U.S that strongly supports researchers, the U.S. transfers the results from research that comes from industrial-education cooperation to a corresponding agency.” said a researcher. “South Korean companies also need to improve how they perceive researchers rather than looking at them as ‘subcontractors’.”
“Researchers also need to sign contracts that will provide fair compensation and recognize the value of the results from research and fix current practice on their own.”
Staff Reporter Choi, Ho | & Staff Reporter Jeon, Jiyeon |

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