Intellectual property rights are a frequent topic of concern for our clients, especially those pursuing research grants like Small Business Innovation Research. It can be scary to offer up that many trade secrets without anything official on the books like a non-disclosure agreement. Many clients wonder who will have access to their intellectual property and how their idea will remain safe in federal hands. But rest assured, in terms of the government, most IP is inherently protected. What will be public-facing includes your business name, the title of the research project, the dates, award amount, and any information in the three-paragraph Project Summary (which states in the instructions not to include any proprietary information). Here is a quick summary of what happens to your IP when you collaborate with the Federal Government. We first covered this topic in 2017 (https://www.ebhoward.com/sbir-patents/) to clear up any misinformation clients and readers might have about intellectual property rights as they relate to Small Business Innovation Research (SBIR) or government funding in general.
On products developed with government support
Just because the funding you use to research and develop a concept or product is furnished by the government does not mean that the government expects you to cede all rights to your intellectual property. So long as the small business has a patent, the business will retain the worldwide patent rights to any invention developed with government support. While it is true that the government receives a royalty-free license for general use of the product, they do not own the IP rights. During research and development activities the government will not disclose any information publicly pertaining to the government-supported invention. This is to allow the awardee sufficient time to file for and obtain a patent. The patent will allow the business to retain the intellectual property of their idea and will prevent the government from disclosing any trade secrets.
There is one caveat to developing products with government aid. The government reserves the right to require the patent holder to license others in certain circumstances and requires that anyone exclusively licensed to sell the invention in the United States must normally manufacture it substantially in the U.S. In the event that the small business concern fails to adequately develop technology deemed to be in the security interest of the Nation and no patent exists, the government has a right to acquire that intellectual property.
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