AI Review for Clinical Trial Agreements (CTAs)

What is a Clinical Trial Agreement?

Clinical Trial Agreements (CTAs) are contracts for the performance of clinical research on human subjects. There are multiple types of CTAs.

Our CTA is between an industry Sponsor (e.g., a pharmaceutical, biotech, medical device company) and the Site (e.g., a university, medical institution, hospital, etc.) performing the research on the Sponsor's drug, biologic, or medical device (the "Trial Product") according to the research protocol provided by the Sponsor.

This type of work is extremely expensive and involves substantial risks to all involved. Thankfully, it is also heavily regulated in order to protect the privacy, safety, and well-being of the subjects undergoing the trial. However, as a result of the foregoing, CTAs are highly complex agreements that require careful negotiation.

In addition to identifying the parties, a CTA should identify the Trial Product being studied, the protocol (which should be attached to the CTA or incorporated by reference), and the lead scientist ("Principal Investigator") that will be overseeing the conduct of the clinical trial at the Site. The parties should also address some key areas in respect to how the trial will be conducted such as subject safety, legal compliance, changes to or deviations from the protocol, progress payments for performing the trial, who can work on the trial, data protection, monitoring the trial, etc.

Key Considerations in Clinical Trial Agreements

It is perhaps easiest to understand the CTA and our potential customers who review them by explaining how the parties differ in terms of their nature and priorities going into the negotiation of a CTA:

1. Sponsors: Industry Sponsors work in an extremely competitive business and are looking to limit their costs and financial risk while gaining high-quality, timely, and sound data regarding their product. They want to pay the minimal amount necessary for the trial, shift as much potential liability as possible onto the Site performing the trial, and protect their intellectual property and confidential information from misuse or unauthorized disclosure. They also want to ensure that the records generated from the trial meet all requirements necessary for them to submit their product to the FDA for approval and that the Site's conduct of the trial won't attract unwanted attention or action from a regulatory authority. Finally, Sponsors want to ensure that they protect their freedom to operate and acquire, at minimum, all rights in inventions and discoveries generated from the Trial they feel are necessary to do so.
2. Sites: Sites are often academic institutions, many of which are public entities, with missions to conduct medical research, provide education, and give their patients excellent clinical care. They often barely make enough money on clinical trials to cover their costs. Instead, they are focused on (a) advancing medical science so their patients or future patients have more treatment options and (b) contributing to publicly available scientific knowledge through publication. In fact, a guiding tenet of any academic entity is to ensure academic freedom which mandates the ability for the Site to independently publish its results from its conduct of a clinical trial. Failure to do so may jeopardize that institution's tax-exempt status and accreditation. In negotiating CTAs, Sites are primarily concerned with ensuring that subject safety is paramount and not negatively impacted by the Sponsor's inherent conflict of interest. They also want to protect their rights to any intellectual property generated by their own scientists and staff during the Trial that is severable from or unrelated to the Trial Product or Sponsor's Confidential Information, for example an invention to rotate hospital beds conceived by the Principal Investigator during a drug trial.
   

Additionally, the parties should specify their rights and obligations regarding the outcomes of conducting the trial. For example, the CTA should discuss reimbursement if a subject is injured as a result of the trial, indemnification from third party claims, confidentiality and use of both the information shared and generated during the trial, and the rights of the parties with respect to the results of the trial and any inventions created during the performance of the trial. Such topics generally include the obligation to retain the trial records in a certain manner for a certain amount of time, obligations of confidentiality and non-use, rights of publication, use of name, and licenses to use the data for limited purposes, etc.

Finally, the sponsor will likely want the CTA to include specific language pertaining to regulatory requirements so that it is clear to any regulatory authorities that may review the CTA that the Sponsor and Site are aware of their obligations under anti-corruption and transparency laws and will not engage in improper conduct, billing, or payments. The Sponsor may also ask the Site to agree to assist the Sponsor in protecting its intellectual property generated by the trial, in preparing regulatory applications for the Trial Product, and in reporting certain information to the government. A Site should be careful in assessing to what extent, if at all, it will agree to assist the Sponsor in such matters as these are the Sponsor's responsibilities.

Additional Considerations in Clinical Trial Agreements

1. Bargaining Power: The biopharma and medical device industry is significantly more concentrated and well-funded than research institutions, so they tend to have the most bargaining power on average because they have a wide range of sites to choose from. That said, large or prominent research institutions invest a lot in attracting the best medical scientists in their fields, so certain institutions that are extremely well respected in a popular area of research, such as oncology, can be selective in the trials they undertake and unyielding in the language they will agree to in a CTA. They know industry Sponsors would prefer to have the most well respected scientists that are working in the area of medicine to which their product relates publishing the trial results (and potentially developing more IP for the Sponsor along the way).
   
   
2. Limitations: There are several legal factors that potentially constrain or limit a university's/non-profit's ability to negotiate regarding insurance, liability limitation, subject injury reimbursement, and indemnification. These limitations form the basis for institutional policies and negotiation approaches, and cannot generally be waived by contract. These can include Good Samaritan laws, volunteer protection and volunteer immunity laws, liability limitation laws, shield laws, charitable immunity laws, and specifically with respect to State entities can include State Constitutional limitations, vestiges of sovereign immunity, case law following Dillon's Rule of construction of delegated State authority, etc. As a result, broad promises of contingent liability in a contract, including indemnity provisions, run the risk of violating the law as well as being unenforceable. Particularly in the case of State universities, in many instances they can only be held liable and/or indemnify to the extent positively and explicitly authorized by law. Nearly universal examples of such specific authorizations are the various State Tort Claims Acts, which lay out the degree and extent to which a State entity can be sued for its own negligence. Because of the foregoing, and because of IRS rules and regulations relating to a non-profit's tax status, universities are often strictly limited in the legal scope of financial exposure that they can undertake with respect to industry-sponsored clinical trials.

Checklist for a Good Clinical Trial Agreement

To ensure that your Clinical Trial Agreement is effective, comprehensive, and legally sound, use this checklist:

•  Clearly identify the parties, Trial Product, protocol, and Principal Investigator
•  Address subject safety, legal compliance, protocol changes, and monitoring
•  Specify progress payments and who can work on the trial
•  Include provisions for data protection and confidentiality
•  Outline reimbursement for subject injury and indemnification from third party claims
•  Define rights to trial results and inventions created during the trial
•  Specify record retention, confidentiality, publication rights, and limited data use
•  Include language pertaining to regulatory requirements and anti-corruption
•  Carefully assess the Site's responsibilities in assisting the Sponsor
•  Consider the relative bargaining power of the parties
•  Be aware of legal limitations on the Site's ability to negotiate certain terms
•  Ensure the agreement complies with applicable laws and regulations
•  Have the agreement reviewed by legal counsel experienced in clinical trials
•  Ensure the agreement is signed by authorized representatives of both parties

AI Contract Review for Clinical Trial Agreements

To give you a sense for the benefits of leveraging ai contract analysis trained by lawyers, we’ve selected some sample language our software presents to customers during a review. Keep in mind that these are static in this overview, but dynamic in our software - meaning our AI identifies the key issues and proactively surfaces alerts based on importance level and position (company, 3rd party, or neutral) and provides suggested revisions that mimic the style of the contract and align with party names and defined terms.

These samples represent a small sample of the pre-built, pre-trained Legal AI Contract Review solution for Clinical Trial Agreements. If you’d like to see more, we invite you to book a demo.

INSTITUTIONAL REVIEW BOARD APPROVAL

For: Sponsor

Alert: May be missing an article regarding the acquisition of approval from the institutional review board.

Guidance: It is essential for the party conducting a clinical trial to secure Institutional Review Board (IRB) approval before initiating the trial. This approval ensures that the trial adheres to ethical guidelines and regulatory requirements, protecting the rights and welfare of the trial participants and maintaining the integrity of the research. 

In practice, obtaining IRB approval provides a clear and legally compliant framework for conducting the clinical trial, helping to avoid potential legal issues, delays, and financial losses associated with non-compliance, however it can prove to be an arduous and lengthy process depending on a variety of factors. The value of this suggestion is not only that it ensures that the clinical trial will not proceed unlawfully prior to its IRB approval, but also to ensure that the trial team understands it will need to invest effort in, and cooperate with the Sponsor regarding, submission of the study to the IRB and throughout the approvals process. 

Relevant laws and regulations to consider in this context include the U.S. Code of Federal Regulations Title 45 Part 46 (45 CFR 46), which governs the protection of human subjects in research. Additionally, the FDA regulations for clinical investigations involving drugs, biologics, and medical devices (21 CFR Parts 50, 56, 312, and 812) provide further requirements for the protection of human subjects, informed consent, and IRB review and approval in the context of clinical trials involving investigational products regulated by the FDA. Compliance with both the Common Rule and FDA regulations is essential for obtaining and maintaining IRB approval for a clinical trial in the United States.

Sample Language:

INSTITUTIONAL REVIEW BOARD APPROVAL

Prior to the beginning of the Trial, SITE shall obtain IRB approval for the Trial and provide SPONSOR with documentation verifying approval by the IRB of (i) the Protocol, (ii) the Investigator’s Brochure, if any, (iii) the information and form to be provided to Trial candidates to secure their informed consent and authorize disclosure of their health information to SPONSOR (the “ICF”), (iv) any advertising or recruitment materials used to recruit subjects for the Trial, prior to their publication or use, and (v) amendments to any of the foregoing. SITE shall ensure that the IRB continues to monitor and review the Trial during the term of the applicable Trial in accordance with Applicable Laws, and in any event at least once per year during the term of this Agreement, and shall provide to SPONSOR documentation of the IRB’s continuing review contemporaneously therewith. SITE shall immediately notify SPONSOR if the IRB takes, or gives notice of its intent to take, any action that could reasonably be expected to affect the Trial.

INVENTIONS AND DISCOVERIES

For: Sponsor

Alert: May be missing an article regarding inventions and discoveries.

Guidance: The primary legal principle in the given suggestion highlights the significance of protecting and allocating intellectual property rights, especially concerning inventions and discoveries arising from clinical trials.

To safeguard the parties involved, it is essential to include a provision in the CTA that clearly outlines the ownership, rights, and responsibilities related to inventions and discoveries resulting from the clinical trial. This approach reduces potential disputes or misunderstandings and promotes successful collaborations and partnerships.

For example, when a research institution partners with another party to conduct a clinical trial, a researcher may uncover a groundbreaking method for analyzing trial data that substantially enhances the accuracy of the results. By incorporating a provision in the CTA addressing inventions and discoveries, the parties can unambiguously determine the ownership and rights to this new method, preventing potential disputes and ensuring their interests are protected.

Relevant statutes or laws to consider in this context include the United States Patent Act (Title 35 of the United States Code) and the Bayh-Dole Act (Title 35, Sections 200-212 of the United States Code). The Bayh-Dole Act, in particular, governs the ownership and commercialization of inventions and discoveries resulting from federally funded research. This act may influence the distribution of IP rights between the parties involved in the clinical trial, especially if the trial is funded by a federal agency. As a result, it is crucial to adjust the standard IP provisions in the CTA to ensure compliance with the Bayh-Dole Act and protect the interests of the parties involved.

‍Sample Language:

INVENTIONS AND DISCOVERIES

1. Each Party hereto retains all right, title, and interest in any patent, patent application, trade secret, know-how and other intellectual property that was owned by such Party prior to the Effective Date of this Agreement or arises outside of the research conducted hereunder (“Background IP”). Except as otherwise provided in this Agreement, neither Party shall have any claims to or rights in the Background IP of the other Party and nothing contained in this Agreement shall be deemed to grant directly, by implication, estoppel, or otherwise any license under any Background IP to either Party.

2. As used herein, “Intellectual Property” means all inventions, discoveries, developments, improvements, enhancements, innovations, software, know how, methods, techniques, formulae, compositions of matter, designs, apparatus, processes, or other proprietary ideas (whether or not patentable or registrable under patent, copyright or similar laws) and all intellectual property rights therein. All Intellectual Property made by SITE Personnel during and in the conduct of the Trial that are related to the Trial Product or its uses, the Trial, or the Protocol and that (a) are conceived, discovered, developed or reduced to practice as a result of (1) SITE Personnel’s performance of any services pursuant to this Agreement, including but not limited to as a result of any review or other use of Trial Results as part of the performance or analysis of the Trial; or (2) any deviation from the Trial Protocol, or (b) are derived from or otherwise incorporate Confidential Information provided by SPONSOR to SITE under this Agreement (collectively, “Product Inventions”) shall be promptly disclosed in writing to SPONSOR by SITE. SITE has caused SITE Personnel to irrevocably assign to SITE all of their respective existing and future rights, title, and interest in and to any Product Invention, and SITE hereby irrevocably assigns and transfers all existing and future rights in any Product Invention to SPONSOR.

3. Ownership of any and all inventions, developments, and discoveries that are made during and in the direct conduct of the Trial other than Product Inventions (“Other Inventions”) shall follow inventorship as determined by United States patent law. Each Party shall promptly disclose to the other Party in writing each Other Invention. 

4. SPONSOR is hereby granted, without option fee other than consideration of the Trial sponsored herein and the reimbursement to SITE for patent expenses incurred prior to or during the option period, an option to acquire an exclusive, worldwide, royalty-bearing license to SITE’s rights to any Other Invention, which option shall extend for no more than ninety (90) days after SPONSOR’s receipt of written notice disclosing each such Other Invention (“Option Period”). The Parties shall use their reasonable efforts to negotiate, for a period not to exceed ninety (90) days after SPONSOR’s exercise of such option, a license agreement satisfactory to both Parties (“Negotiation Period”). In the event SPONSOR fails to exercise its option within the Option Period, or the Parties fail to reach agreement on the terms of such license within the Negotiation Period, SITE shall have no further obligation to SPONSOR under this Agreement with regard to the specific Other Invention.

5. Upon request, SITE and the Principal Investigator shall assist SPONSOR in its efforts to secure, maintain, and enforce SPONSOR’s rights in the Product Inventions as well as any Other Inventions in which SPONSOR has a legal interest, including any copyrights, patents or other intellectual property rights therein. Such assistance may include, without limitation, the execution of all reasonable applications, specifications, oaths, assignments and all other reasonable instruments necessary in order to apply for and obtain such rights and in order to assign and convey such rights to SPONSOR or another entity designated by SPONSOR, or their successors and assigns.

6. SITE represents and covenants that its activities under this Agreement are and will be outside the planned and committed activities of any government-funded project undertaken by SITE or the Principal Investigator (“Government-Funded Activities”), and will not diminish or distract from the performance of such Government-Funded Activities. Notwithstanding the foregoing, use of equipment or space that may have been funded with federal funds shall not constitute a violation of this section. In the event that any Product Inventions contemplated hereunder are determined to have been conceived or first reduced to practice in the performance of Government-Funded Activities, SITE shall take all actions necessary under applicable laws to retain, to the maximum extent possible, all rights to such Product Invention. SITE shall assign to SPONSOR, in each case, to the extent permitted under applicable law, the rights contemplated to be SPONSOR’s under this Agreement with respect to such Product Invention. Further, if applicable law prohibits SITE from effecting such assignment, SITE shall grant to SPONSOR (or its designee) an exclusive, worldwide, perpetual, irrevocable, fully-paid, royalty-free license, with the right to sublicense through multiple tiers (or grant the maximum similar rights permitted by applicable law), to exploit such Product Invention for all legal purposes, subject to any retained rights of the U.S. Government, including any rights of consent.

SPONSOR REPRESENTATIONS, CERTIFICATIONS, AND COVENANTS

For: Site

Alert: May be missing an article stipulating the sponsor's representations, certifications, and covenants.

Guidance: The main legal principle in the given suggestion highlights the significance of clearly defining the sponsor's representations, certifications, and covenants in a CTA. This clarity helps establish a mutual understanding of the sponsor's role and responsibilities, preventing disputes and protecting the interests of the parties involved.

In practical terms, this stipulation serves to provide a framework for the sponsor's obligations, ensuring that the clinical trial is conducted according to the agreed-upon terms and conditions. This ultimately contributes to the trial's success and safeguards the interests of the parties.

It is essential to consider relevant statutes or laws in this context, such as the FDA regulations governing clinical trials, as well as any applicable state laws and regulations. Other significant regulations and guidelines include HIPAA, the Federal Policy for the Protection of Human Subjects (the ""Common Rule""), and the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) Good Clinical Practice (GCP) guidelines.

Sample Language:

SPONSOR REPRESENTATIONS, CERTIFICATIONS, AND COVENANTS

SPONSOR further represents, certifies, and covenants to SITE as follows:

(a) SPONSOR and its principals have not been debarred, suspended, excluded, sanctioned, or otherwise declared ineligible from any federal agency or program;

(b) the Trial Product that is delivered to SITE under this Agreement will meet the product specifications identified in the Product label at the time of delivery to SITE; and

(c) the Trial Product and any other drugs supplied as Trial Materials have been manufactured in accordance with Current Good Manufacturing Practices in the United States of America.

SPONSOR shall promptly notify SITE if at any time during the term of this Agreement, SPONSOR learns it can no longer truthfully make any of the representations and certifications in this Article. Upon such notice, SITE shall have the right to immediately terminate this Agreement.

Best Practices for Using Clinical Trial Agreements

To make the most of your Clinical Trial Agreements and ensure their effectiveness, follow these best practices:

1. Start Early: Begin negotiating the CTA as early as possible in the clinical trial planning process. This will give both parties ample time to carefully review and negotiate the terms.
2. Be Transparent: Encourage open and honest communication between the Sponsor and the Site. Transparency about each party's needs, concerns, and limitations can help facilitate a smoother negotiation process.
3. Focus on Subject Safety: Always prioritize the safety and well-being of the trial subjects. Ensure that the CTA includes robust provisions for subject protection, informed consent, and adverse event reporting.
4. Be Clear on IP Rights: Clearly define each party's rights to any intellectual property generated during the trial. This can help avoid disputes down the line.
5. Plan for Contingencies: Consider potential issues that could arise during the trial, such as protocol amendments, subject withdrawal, or early termination, and address these in the CTA.
6. Involve the Right People: Ensure that the negotiation process involves individuals from both parties who have the necessary expertise and authority to make decisions. This often includes legal counsel, clinical operations staff, and the Principal Investigator.
7. Keep Good Records: Maintain copies of all versions of the CTA, as well as any related documents and correspondence. Good recordkeeping can be invaluable in the event of an audit or dispute.

Conclusion

Clinical Trial Agreements are essential for protecting the rights, interests, and responsibilities of both Sponsors and Sites in the conduct of clinical research. By addressing key issues such as subject safety, legal compliance, intellectual property rights, and regulatory requirements, these agreements provide a framework for the successful execution of clinical trials.

To ensure the effectiveness of your Clinical Trial Agreements, it's important to start the negotiation process early, prioritize subject safety, clearly define IP rights, plan for contingencies, involve the right people, and keep good records. By working with experienced legal counsel and following best practices, you can create a strong, mutually beneficial agreement that supports the advancement of medical science while protecting the interests of all parties involved.