#SBIR & Patents

  • June 26th, 2022

Small business firms may normally retain the principal worldwide patent rights to any invention developed with Government support. Under existing regulations, the Government receives a royalty-free license for general Government use, 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. To the extent authorized by law, the Government will not make public any information disclosing a Government-supported invention to allow the awardee reasonable time to file a patent application, nor will the Government release any information that is part of that application.

In plain English, you own the patent rights, with three reasonable caveats. The “royalty-free” part means that if someone licenses your patent, they cannot pass on any royalty fees owed to you back to the Government. Of course, they can pass these fees along to other customers. The “license to others” part means that the Government retains march-in rights if you fail to adequately develop technology deemed to be in the security interest of the Nation. This stipulation is legally required under the law but of little practical consequence to most proposers. The “substantially in the US” part goes to the heart of the intent behind the SBIR legislation. The aim is to promote US economic development, not subsidize foreign competition.

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