Last updated December 2005

Under the rules of the EC Sixth Framework Programme (FP6), compulsory access rights (which are licences and user rights to the results of the project or to contractors' pre-existing know-how) are only recognised among contractors of the same project. Affiliates are not recognised as having such access rights and are, technically speaking, "third parties".

Within this framework, nonetheless, consortium agreement models tend to govern the issue of affiliates' access rights in a global way, and most attribute them access rights as though they were project contractors1.

Experience shows that quite a good number of consortia sign consortium agreements that mostly reproduce the clauses contained in the models, without carrying out a detailed clause-by-clause discussion and negotiation.

This document will try to identify possible difficulties in order to smooth the decision-making process for consortia2.

The FP6 rules expressly recognise the possibility of granting access rights to third parties, and among these third parties, the "enterprises associated with the contractors" are mentioned in particular3.

However, the option of granting third parties access rights to the results generated under the project is subject to certain conditions:

1. as a matter of principle, any agreement providing access rights to contractors and/or third parties must ensure that the grant of the basic access rights guaranteed by the FP6 rules is still possible. Furthermore, such agreements must comply with the applicable competition rules.
   
   
2. the Commission has to be notified in advance and can object to the planned grant, especially where it is to a third party not established in an EU Member State or an Associated State, if it may be inconsistent with the interests of developing the competitiveness of the dynamic knowledge-based European economy or with ethical principles4.
   
   

The obligation of notifying in advance also applies in relation to affiliates regardless of the commitments made at consortium level. In other words, despite the contractors' approach towards affiliates in the consortium agreement, there will be an obligation to notify the Commission in advance if contractors understand that the EU economy or ethical principles may be put at risk by the conditions of the planned grant5.

Without the assistance of an expert, contractors may find it very difficult to know when such interests may be negatively affected, especially as regards prejudice to Community interests. The Commission has published a note with some examples in order to help them identify risky situations. Our piece of advice is to inform the Commission whenever any doubt arises6.

Finally, it is important to mention that the question of granting access rights to third parties/affiliates can be dealt with in two different ways:

1. Contractors can study the grant of access rights to third parties/ affiliates on an ad-hoc basis, that is to say, whenever a contractor plans a grant to a third party.
   
   In this scenario, even if certain provisions could be included in the consortium agreement it is, clearly, not essential, as negotiation is free. The only limit to the freedom of the parties is the obligation to notify the Commission in advance in the aforementioned cases.
   
   
2. Contractors can deal with the question of affiliates in a comprehensive and general way in their consortium agreement. This is the option followed by most consortium agreement models.
   
   

Besides the more or less standard meaning found at international level in the field of Commercial Law, what really matters is what common people understand.

In this sense, most people from current or potential FP6 participants with whom IPR-Helpdesk has had the opportunity to talk have given a straightforward answer here: affiliate means "subsidiary" or "dependent entity". Some people also think that "associates at the same level" may be included. But few people think that "controlling companies" may be considered affiliates too.

This is what really matters. Whereas many people understand affiliate as "subsidiary", this is not the tendency of many consortium agreement models, which assimilate affiliates to any linked entity (thus including "controlling companies").

In order to define the limits of the affiliates' situation as regards access rights, many consortium agreement models combine a definition (which is usually placed within the "additional definitions" section) with one or two clauses on the regime (placed within the provisions devoted to "access rights".)

The definition is generally composed of a broad structural term of "affiliate"7 (usually completed with control rates), followed by requirements of another nature (like restricting the place of establishment to EU Member States or Associated States8 in order to minimise the grounds for objection on the Commission's part, and/or listing the affiliates in an annex9 in order to provide contractors with some control). Altogether this delimits what is to be understood by affiliate as regards the grant of access rights.

Regarding the access rights regime, the most widespread idea is the assimilation of affiliates to contractors as regards access rights. Most models foresee granting access rights to affiliates on the same footing as contractors. The approach for Networks of Excellence (NoE) though, seems more prudent, and not all the models related to NoE address the matter in the same way10.

It also seems a general practice to make the grant of access rights to affiliates conditional on, i.a., a confidentiality commitment and, sometimes, on the grant of access rights by affiliates 11 (which may leave some doubts in practice). Cessation of control usually means that access rights granted to affiliates lapse.

Planning to grant access rights to affiliates as if they were contractors may be a perfect way of ensuring the widest possible access to the results obtained in an FP6 project, therefore enabling a broad sector of society, both from the EU and abroad, to benefit from the results obtained thanks to EC funding.

The only remark to be made is that the consortium members have to be fully aware of the obligations they assume by means of their consortium agreement. They have to be clear regarding the grant of access rights to affiliates in particular, and to third parties in general. They should be aware of the possibilities the FP6 rules give and of the commitments they freely assume.

Our piece of advice when working with any model is to carefully read the clauses related to the definition of affiliates and the associated regime, and to check whether this fits the interests of the consortium or not. It is important for the consortium to discuss this issue adequately, as the consortium members should know what the implications and scope of the suggested regimes are.