R&D Agreement (Drafting)

What is an R&D agreement? A Research & Development ("R&D") agreement can be compared to a cooperation agreement. R&D stands for research and development. In an (international) R&D agreement (whether or not on the basis of subsidies or projects) you lay down the most important agreements between your company and cooperation partners. Elements of an R&D agreement usually include: a division of tasks, the distribution of costs and revenues, intellectual property (distribution of results), liability, exclusivity, termination and dispute resolution. In the event of international cooperation, you must pay special attention to the choice of law and forum in an R&D agreement. After all, the obligations arising from an R&D agreement must be enforceable abroad. 

The joint R&D agreement may be subject to the competition rules. The European Commission and other EU/EEA institutions are encouraging R&D by making exceptions to the strict competition rules in a Regulation on a block exemption. The Regulation contains the information what should be avoided and provides a blacklist of provisions. The Regulation may not necessarily cover the entire agreement (e.g. price fixing, market sharing and limitation of production and others), due to the some restrictions on competition.However, the prohibition of the competition restrictions does not apply to the SMEs or to the firms having a low market share. It is easier for them to draft the R&D agreements, since the turnover and market share of these companies can be so low that their agreements often are not capable of having an appreciable effect on the trade between Member States.


Features of R&D Agreement


The following restrictions of competition are considered as strict ones when R&D agreement has an appreciable effect on the trade between Member States:

1.Restriction of freedom to carry out R&D in other fields during and after the period of the agreement

2.Restriction of freedom to carry out R&D in the same field after expiration of the agreements

3.Prohibition from challenging the validity of intellectual property right

4.Limitation of production or sales

5.Price fixing related to sales to third parties

6.Market sharing (geographical are of group of customers), with some exceptions

There must be in addition an appreciable restriction of competition for the rules to be applied. Otherwise, certain restrictions of competition may be permitted in accordance with the “de minimis“ Notice, subject to the fulfillment of the conditions in the Notice. The European Commission and the ESA give a definition of what is an appreciable restriction of competition in the Notice. The R&D agreements are horizontal agreements of minor importance. Due to this reason, they are not considered to appreciably restrict the competition when the parties' market share on the relevant market affected by the R&D agreement is under 15%. When the parties are actual or potential competitors, this rate is reduced to 10%. Nevertheless, there might be more strict national competition rules applied. In the situation when manufacturer orders the R&D from another party in the exchange for payment, the ownership of the result is not covered by the Regulation on horizontal agreements, but instead by the Regulation on vertical Agreements.

Documents Required

Passport Photo

Passport Photo of all parties

PAN Card

PAN card of all parties.

Aadhar Card

Aadhar card of all parties.

Utility Bill

Utility bill of Electricity or Telephone.

Address Proof

Valid Address Proof of all the parties.


Valid Driving Licence of all the parties.

Terms and Conditions

Terms and Conditions between the parties.

Other Documents

Other documents will be intimated through e-mail.