Strategic Considerations Regarding Intellectual Property And Government Funding

Transcription

1 Strategic Considerations Regarding Intellectual Property And Government Funding Tim Smith, Associate Aly Dossa, Partner 242 nd ACS National Meeting Denver, Colorado August 29, 2011

2 Overview Tax Credits/Bonds Loans Grants

3 Tax Credits/Bonds Tax credits commonly exist for R&D, manufacturing, and production Federal Some state sources Bonds are sometimes offered as an alternative to tax credits for entities with no tax appetite

4 Tax Credits/Bonds (cont.) Amount of funding varies widely Generally no government rights to IP Company retains full ownership rights to IP

5 Government loans May be available for one or more aspects of business development R&D Infrastructure Generally no government IP rights (as long as the loan is timely repaid) Company retains full ownership rights in IP

6 Grants More common at federal level than state level Common federal funding agencies are EPA, DOE, DOD, FDA, NSF Are often offered on a competitive basis Provide money to an entity for a specific purpose Develop a technology Build a business

7 Bayh-Dole Act Enacted in 1980 Gives the federal government certain rights to inventions funded by federal government grants Applies to Universities Not-for-profit organizations Small businesses Large businesses

8 Inventions Funded by the Bayh-Dole Act An invention is any idea conceived or first actually reduced to practice under a funding contract If inventor developed idea for invention or made invention while receiving a government grant, the invention is subject to the terms of the act If the actual inventor assigns rights to employer, then the employer is the owner for purposes of the act

9 Inventions Funded by the Bayh-Dole Act Must disclose the invention to the government agency providing the grant funding Must submit written request to retain title to invention Can be submitted within two years of disclosure Must file a patent application in each country where inventor wants to retain title Funding source must be disclosed in the patent application When requested by funding government agency, must provide regular reports on the status of invention

10 Government rights under Bayh-Dole Small businesses (defined by Small Business Adminstration), universities, non-profits Inventor/owner retains all rights to IP Government has nonexclusive, nontransferrable, irrevocable, paid-up license to practice or have practiced the funded invention throughout the world Large businesses Government has rights to IP Inventor/owner has rights to paid-up license Paid-up license includes the right to sub-license patented technology to any third party

11 Government rights under Bayh-Dole (cont.) Agency offering grant retains march-in rights Agency can require inventor to grant a nonexclusive, partially-exclusive, or exclusive license in any field of use to any third party Intended for when agency believes, after a formal investigation, rights are needed to Achieve practical use of invention Alleviate health/safety issues Meet public-use requriements Can be initiated by the agency or a third party

12 Strategic Considerations Read grant application carefully (especially IP provisions) Use government grants properly (for the purpose intended) Keep detailed accounting of activities to which the grant money is applied Consult with a professional for legal advice If the government will be the main user of your technology, strongly consider other sources of funding, if possible

13 Legal Disclaimer The views expressed in this presentation are the authors own personal opinions and beliefs. The information presented is not legal advice tailored to any particular factual circumstances and does not necessarily reflect the views of the firm or its clients.

14 Conclusion Questions? Thank you for your attention Aly Dossa Tim Smith

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