Frame Agreements

A frame agreement is a form of collaboration agreement that involves the establishment of a common protocol and set of standard terms on which a succession of task agreements may be based. Each task agreement reasons from the standard terms, in light of local circumstances, to reach an agreement specific to the purposes of the task. Other task agreements may reason to a different configuration. In this way, the frame agreement provides a common, express basis for negotiation rather than a set of provisions absolutely acceptable to both parties from the outset, which tends to favor conservative requirements and narrow the range of possible agreement without a detailed knowledge of all future tasks). Thus, a frame is not a “master” agreement in the conventional sense, but rather a “basic” agreement of the form set out in FAR Subpart 16.7.

The term “frame” comes from the analogy with interframe video compression techniques. The general idea is that an image is established as a base, and subsequent frames of the image are stored only as changes from the base. In this way, one focuses only on changes. In a similar manner, a frame agreement permits tasks to represent only changes from the base, thereby focusing negotiation and review on those elements that require change. The aim therefore of the base agreement is not to secure all terms entirely acceptable to either party (that may happen anyway) but rather that the terms as a whole constitute the most favorable foundation for negotiating any particular task. Thus, in a frame, there can be provisions that are, as they stand, in general not acceptable to either party to the Agreement. This violates expectations of what an agreement is for many folks. They think of agreement as mutual capitulation. Or compromise not desired by either party but better than nothing. In a frame agreement, the agreement is over protocols and a base, without reference to whether that base is acceptable other than as a foundation for negotiation. One might think then of a frame agreement as 80% or so complete. Each task agreement completes the frame for a specific purpose. Another task agreement might complete the frame in an entirely different way.

This approach is particularly suited to research collaborations that may take various forms over time. While master agreements tend to draw their terms from procurement situations, such a purchasing standard goods and services, a frame focuses on collaborations that intend to follow exploration and discovery activities, which are necessarily opportunistic and cannot be fully specified in advance. Thus, in using a frame, one adapts contracting to the conditions of basic or exploratory collaborative research, rather than seeking to restrict the conduct of that research to contractual terms designed originally for other sorts of transaction.

In any given task situation, each party has four fundamental options. The task may be accepted as drafted. The task may be rejected. The task may be accepted, but only after internally various exceptions to policy are approved and management apparatus put in place. Or the task may be accepted only after negotiations that modify its terms or add additional terms that modify the frame defaults. In this way, the frame does not dictate anything, but can be seen to facilitate a great deal.

One advantage of a frame is that it suspends completion of a formal agreement until the purpose and local conditions of a given task are available. It may be that while such a task might be in general unacceptable, in specific instances it is acceptable. For instance, a university generally does not allow a company sponsor to own IP developed in sponsored research. But universities routinely allow such ownership when the research is a clinical trial with protocol supplied by the sponsor. Thus, a master agreement that contemplated both clinical trials and other research would be challenged to find general language on IP. In a frame, it doesn’t much matter, because it is the task circumstances that determines acceptablity.

In advanced frames, we define interfaces, so that tasks take take advantage of a standard set of terms in a particular interface. Thus, if one sequence or cluster of tasks looks most like sponsored research, a sponsored research interface can be developed within the frame. If another sequence involves subcontracting STTR funding from various university initiatives to a company, then an STTR interface can be developed to record a useful set of basic provisions.

There are other advantages. Once a frame and various interfaces are in place, review focuses on the particular situation and applicability of default conditions. Legal and business review alike benefit from focused attention on the changes to the base. While the agreement formally consists of the base and the task, as the base is already known, it need not receive the same level of scrutiny each time. Further, because tasks slice up a relationship into contained modules, a company may have different tasks with different university labs under the same frame. Where one lab may have pre-existing IP being made available in an open innovation manner, another may have no such IP and may be working instead on testing company-supplied technology. With a frame, both company and university limit the issues between the laboratories without having to negotiate entirely separate agreements.

Universities often underestimate the cost to companies, especially small companies, of legal services for contract negotiation and review. Holding substantial parts of a contract steady once reviewed allows subsequent review to be primarily focused on business and logistics. Both companies and universities may underestimate the delays that come about with legal review of complex documents. Without the modularity of tasks, parties may be tempted to edit past agreements throughout, requiring careful reading for changes and analysis of how those changes might affect other agreements using the base language. Putting changes in a task protects the base language and isolates the changes for ready review.

Another benefit of a frame approach is that it moves management of tasks much closer to the technical points of contact. Since the bulk of the legal review is already done by the organizations, the particular relationship may focus on those things mostly in control of the technical points of contact–exactly as one might want for exploratory research.

In research settings, some of the best research is skunk research. This runs against the sensibilities of contract attorneys and other management wanting to be in control. This is understandable. Organizational attorneys don’t get a lot of thank you cards. They expect to take the blame for any bad outcome. One can expect they will draft to avoid as much badness as they can. That means control. That means, working against exploratory research norms, against academic and educational norms, against the liberties and opportunities afforded by dipping into the resources of an organization that has different values, assets, and practices than one’s own organization. Rather than making a collaboration negotiation a fight over form of instrument and which organization will come to dominate the other so it conforms to one’s own “principles”, with a frame organizations can navigate the relationship by working with local conditions, modularly constructed, and mutually independent.

Here is a sample frame agreement, without an interface provision, to illustrate the approach. This particular frame agreement has a pretty cool IP approach that navigates some of the tax issues that universities often interpose. Rather than saying–that’s totally unacceptable!–a university might rather say, how would we typically negotiate away from that position? This, just as an instance. Readers should also study the FAR subpart 16.7 development of basic agreements. Then consider how much waste there is in starting each negotiation with a company from scratch when only a very few conditions generally vary from transaction to transaction.

Finally, a frame agreement starts with the idea of repeat business. If you have a frame, your gain is in multiple transactions, all coordinated but flexible. If you have a frame, you rise to the top of a first call list. Why start up a new negotiation from scratch with that university, when you are a one-pager in 2 hours away from doing the work with the university with a frame?

There are other advantages, but I will leave these to the reader to discover.

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