"Third party research" is not defined in EC rules concerning FP7 projects. The expression is commonly intended to indicate research activities not covered by the project ("further research activities") that are carried out with third parties. The term "third party" refers to any entity which is not a project "participant" (as defined in art. 2.6 of the Rules for participation): any entity that is not a "participant" is considered a third party with regard to the implementation of the project.

"Third party research" may take place with any type of partner, both scientific/academic and industrial ones and shall concern research purposes (not commercial ones).

• FP7 Rules for participation

The core content of a licensing agreement consists of:

1. Parties - details of the parties.

2. Preamble - defines the intentions of the contracting parties and lists the intellectual rights concerned.

3. Definitions - very useful for a unified interpretation of the agreement. They refer to the subject of the license and to the licensed property rights as described in the preamble.

4. Territory or field of application/use - defines the area or scope for which the license is granted.

5. Exploitation means and use of the subject matter of the license in the defined territory/field of the application or use.

6. Scope of the license can refer to the production, distribution, making, use, sale, leasing. It can vary from non-exclusive to exclusive. It can include the right to a grant sub-license, and can, but need not be, assignable to third parties.

7. Royalties are the core of the negotiation of a licensing agreement.

8. Clauses on the term, termination and expiration, applicable law, dispute resolution, jurisdiction or arbitration, language.

Royalties vary considerably in different licensing agreements but, in principle, royalties can be charged as a lump sum or as a percentage of sales (royalties), and also as a combination of both.

Recurrent royalties is the most common method for calculating payments in licensing agreements. It mostly consists of percentages with reference to the licenseeŽ s net sales for products which incorporate the licensed technology. The percentage amount needs to be negotiated individually, preferably by a specialised patent lawyer or attorney.

In principle, annual licensing fees can also be requested as minimum fees, independent of actual profits made by the licensee. Minimum fees can be provided in combination with recurrent royalties. They help to minimize the risks of a commercialisation which may not meet the licensor's expectations.

In addition, an initial payment may be advisable upon signature of a licensing agreement, in particular for an exclusive licensing agreement, as it serves as a reminder of the licenseeŽ s obligations and will encourage him to make his best effort to commercialise the licensed technology.

So-called "milestone payments" are especially interesting for biotechnology licensing agreements, e.g. when phases of further development and testing have to be performed by the licensee, like in the pharmaceutical or food sectors.

Milestone payments work with the flexible structure of licensing agreements that include several phases before the final launch and distribution of an approved product. They are made as lump sums which fall due upon the occurrence of specific events, e.g. when a patent application is filed, when a patent is granted, at the start of a particular stage of commercialisation, such as the beginning of pre-clinical development, the beginning of test phases or clinical phases, when obtaining governmental approval, or when the product is finally launched on the market.