Biotech licenses in the Spanish Public Sector

16 October 2008

Manuel Lobato

Spanish public institutions (Consejo Superior de Investigaciones Cientificas (Research Council) and public universities) are heavily promoting the use of licensing to develop their portfolio of patents and other IP rights. This activity is normally called ‘third stream’ and utilises the collaboration of these public bodies with companies and other entities as a third way of exploiting IP outside the core business of these institutions (typically research and teaching). This trend is also supported by a strong system of subsidies for spin-offs and other technological ventures, especially in the biotech field. The normal vehicle for the private company-public institution collaboration is a licence granted by the public institution to the third party (e.g. a spin-off company or a pharmaceutical company) with various conditions attached depending on the circumstances. These licences are normally approved by the governing body of the public institution (represented by the President of the Research Council or the Rector of the University), but sometimes other bodies intervene (e.g. foundations or trusts established by the Universities).

Spain has a complex legal framework surrounding licensing by public institutions, in which many State, Regional and University regulations are at play. At State level, the main provisions are the University Act (Ley Organica 6/2001), the Public Contracts Act (Real Decreto Legislativo 2/2000) and the Conflict of Interest Act (Ley 53/1984, which sets out the limited cases in which public servants are entitled to pursue an economic activity beyond their public functions). This intricate legal framework has caused a number of problems, the most serious being the application of the Public Contracts Act. This Act provides for a number of requirements in any contract issued by a Public Body (e.g. public tender, possibility of concurring offers, public criteria of selection of the licensees, jurisdiction of administrative courts, etc.), which in many cases do not take into account the consequent risk of invalidity of the licensed rights. Even though there are currently proposals to simplify the contracts regime, any company entering into agreements with public bodies must be aware of that legal framework and minimise any non-compliance risk.

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