Intellectual Property Rights and Federally Funded Research
Under typical Phase 1 contracts with the Department of Defense (DoD), such as the Air Force Research Lab (AFRL), default ownership of domestic and international intellectual property rights belong to the Contractor. However, if the Contractor fails to report any inventions to the contracting officer within two months of preparing the corresponding patent applications, the Contractor risks losing ownership of those inventions.
When a contractor reports an invention to the AFRL, the report must contain four elements:
1. The nations in which the Contractor seeks to file the patent application
2. The inventor of the invention and the corresponding contract number that the agreement was conceived under
3. Sufficient technical detail of the invention to convey a clear understanding of the subject invention; and
4. Identification of any publication, sale, offer for sale, or public use of the subject invention, or publication of the invention. If the subject invention was submitted for publication, it should also indicate whether the invention was accepted for publication.
Summary of Intellectual Property Rights For Federally Funded Research
Even when the Contractor retains global intellectual property rights, the federal government shall retain the right to exercise a nonexclusive, nontransferable, irrevocable, paid-up license to practice, and may license to practice any subject invention conceived under the funding agreement throughout the world.
If a contractor decides against seeking patent protection on the subject invention, the Contractor shall notify the Contracting Officer no less than 30 days before any deadline. While the Contractor may wish to abandon their prosecution of the patent application. For example, the contracting officer should be notified when the Contractor decides against filing a nonprovisional application, abandons prosecution of the patent application, or fails to defend against reexamination or opposition proceedings of the patent application throughout the world.
Additionally, no more frequently than once a year, the Contractor shall submit a report to the funding agency. The report will include information regarding the utilization of a subject invention or on the efforts at obtaining utilization of the subject invention by the Contractor and any licensees or assignees of the invention. Specifically, the reports shall include information regarding the status of development, date of first commercial sale or use, gross royalties received by Contractor, and any other data and information that may the funding agency may reasonably specify. Additionally, the Contractor shall provide additional reports as the agency may request them in connection with any march-in proceeding undertaken by the agency in accordance with paragraph (h) of this clause. The Contractor shall also mark any utilization report as confidential/proprietary to help prevent inadvertent release outside the government.
Reporting Requirement for Inventions Conceived Under a Federal Funding Agreement
(a) Interim reports every twelve (12) months (or such longer period as may be specified by the Contracting Officer) from the date of the contract, listing subject inventions during that period and stating that all subject inventions have been disclosed or that there are no such inventions.
(b) A final report, within three (3) months after completion of the contracted work, listing all subject inventions or stating that there were no such inventions.
(c) Upon request, the filing date, serial number and title, a copy of the patent application and patent number, and issue data for any subject invention for which the Contractor has retained title.
(d) Upon request, the Contractor shall furnish the government an irrevocable power to inspect and make copies of the patent application file.
John DeStefano, is a patent and technology technical advisor at Founders Legal. He received his Bachelor’s Degree in Electrical Engineering from Missouri University of Science and Technology (Rolla) and is pursuing a J.D. at Franklin Pierce School of Law with a focus on Intellectual Property.