Evaluation Agreement
- Nov 26, 2022
- 3 min read
Written by Sudipta Bandyopadhyay, Advocate
Introduction:
An Evaluation Agreement is done to evaluate a product or service. An evaluation agreement is also known as a “pilot agreement” or “trial agreement”. Evaluation agreements are often done between software, biomedical, and pharmaceutical research entities, such as universities or companies and suppliers.
Example of Evaluation Agreement:
John Hopkins University has a standard evaluation agreement for suppliers of medical research equipment or software.
Glaxo Smith Kline and Aclara entered into an Evaluation Agreement to conduct the Evaluation Program of medical sciences. This was done for the use and performance of ACLARA Technology to determine expression levels, activation state, and interactions of selected target proteins. ACLARA has developed a series of biomarkers and assays that focus on the multiplex and multi-label analysis of signalling pathway proteins. It also includes their expression, post-translational modifications, and protein-protein interactions when texted in frozen and fixed tissue samples.
Explanation of Evaluation Agreement:
It is an agreement between two or more parties.
The parties under the said agreement agree to test and evaluate a new product or service offered by one of the parties.
The purpose of the agreement is to evaluate the given product or service. If the results of the evaluation fulfill the expectations of the company that wants to invest, then further negotiations are done to facilitate a sale of the product.
Purpose of evaluation Agreement:
To check whether the product offered is a good one: Company that is willing to invest in the product offered will test the product or software or technologies.
Fair terms before investment: Before investing money, both companies will have fair terms by offering and testing the products.
Types of Evaluation Agreement:
There are two types of evaluation, i.e.,
1) Short evaluation:
In this type of agreement, the period is short. Once the period ends, either party enters into a new agreement or ends the deal.
2) Long evaluation:
At the end of this agreement, there is no necessity to renegotiate the terms of the agreement.
Terms of Evaluation:
It mentions the starting and ending period of the agreement.
Protecting Intellectual Property Rights:
The agreement must declare the owner of IP rights and the limitations of the rights which are used by another person.
Invention: The agreement must mention any invention made during the agreement.
Each Party shall have the right to prosecute, maintain and apply patent applications.
Confidential Information: According to law, it means any information, technical data, or know-how which cannot be disclosed. The information is related to research, product plans, products, services, developments, inventions, processes, designs, or drawings of a party. In the agreement, both parties acknowledge and agree to the confidential information.
Limitation of liability:
Disclaimer is a necessity these days for businesses. Any company entering into an agreement with software services should put a disclaimer to avoid any liability.
Expenses:
The expenses of the agreement and the payment method should be described in the agreement.
Terms and Termination:
The agreement must mention the commencement and end date of the agreement. Conditions of termination should be added to the agreement. Both parties will serve notice before terminating the agreement.
Conclusion:
Nowadays, many startups are coming up with innovative ideas. Companies have to invest a lump sum of money in using these inventions. So, companies need to test the inventions before investing. An Evaluation Agreement is a legal way to test these ideas. It is the first step before entering into a long-running business. This is how new inventors are boosted to invent ideas and get the scope to apply them.
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