The consortium agreement clause that UK SMEs never negotiate — and always regret

When you join a Horizon Europe consortium, you sign a consortium agreement — usually based on the DESCA template. Most SMEs sign whatever the coordinator sends them without having these documents appropriately reviewed. This is a mistake, and there's one clause in particular that UK SMEs should negotiate every time.

1. Background IP access rights: what you're actually agreeing to

The standard DESCA template grants other consortium partners access rights to your "Background" IP for the purposes of performing the Project (which is standard), but also provides for an option which allows access to Background on "fair and reasonable conditions" for the purpose of another party exploiting its own results. If the latter option is included within the draft, this can mean your consortium partners — including competitors if any are involved — may have a basis to access your pre-existing technology introduced into the project in order to allow them to exploit their own proprietary results arising from the Project.

2. The "needed for exploitation" access right is the dangerous one

If certain wording options are included, consortium partners can require that you give access to your Background IP not just for the project, but for exploiting their own results commercially. If your background IP is core to your business, this clause could give a consortium partner the ability to take a licence to your IP for their own benefit. The standard DESCA provision requires "fair and reasonable" conditions to be imposed on any use — but negotiating those terms after the project can be much harder than setting out specific and agreed access rights before signing, particularly as in the event of any dispute, "Fair and Reasonable" conditions could be imposed upon you by an arbitrator or court (depending on the dispute resolution mechanism chosen).

3. UK SMEs have a specific post-Brexit vulnerability

Before Brexit, IP disputes between Horizon Europe consortium partners were resolved under a shared EU legal framework. Now, a UK SME's relationship with EU consortium partners involves cross-border enforcement complexities. If a dispute arises over access rights, you're navigating different jurisdictions. This makes upfront clarity in the consortium agreement important as enforcement and dispute resolution is likely to be more complex and expensive than prior to Brexit.

4. The negotiation you should be having

Before signing, it may be best practice to explicitly list your Background IP that you are introducing into the Project in Annex 1 of the consortium agreement. For each item, you then have the option to specify: whether access rights are granted, to whom, for what purpose (project only vs. exploitation), and on what terms. The default "all background is accessible" is almost never in the SME's interest due to the additional exploitation rights of access mentioned above which are included in the standard wording options.

5. Most coordinators will accept reasonable restrictions

Most coordinators will accept reasonable restrictions if you propose them professionally and early. As with all IP and ownership matters, don't raise this issue two days before the submission deadline. Instead, this should have been dealt with at the outset of discussions in relation to putting a project plan together with your consortium partners. This can be as simple as: "We'd like to discuss the background IP provisions in the consortium agreement. We have specific core technology that we'd like to limit access to project purposes only." This is normal. Coordinators expect it from commercially aware partners.

Always read Articles 8 and 9

Always read the consortium agreement and ideally seek legal advice on it before you sign it. If you don't have time to read 40 pages of legal text yourself, for the reasons set out above it is important to be aware that Articles 8 (Background) and 9 (Access Rights) can have significant effects on your business for years after the project ends.