(Final policy statement as of 01.09.2001)

The Interagency Working Group (IWG) on Intellectual Property Rights Provisions in International Science and Technology Agreements, under the direction of the Committee of International Science, Engineering and Technology (CISET) of the National Science and Technology Council, has succeeded in reaching consensus on a revised policy approach. The core of the Working Group’s suggestions is to revise the policy approach to emphasize flexibility. This revised policy is described below.

A FLEXIBLE POLICY APPROACH

Objectives: To better facilitate and promote international S&T cooperation while providing for a fair allocation of any intellectual property rights (IPR) that may result; to take into account the need for effective protection of IP; to accelerate the internal USG review process with regard to the determination of IPR Annex language in international science and technology agreements.

Method: To increase "flexibility" by providing additional options of IPR Annex texts which can be used (where appropriate) and by improving communication links between USTR/PTO/agencies prior to negotiations with international S&T partners, as required by the C-175 process.

A more flexible approach must be taken to formulating the IPR Annex used in international S&T agreements. That is, USG agencies should take the full range of factors into account in the selection of appropriate IPR Annex language for international science and technology agreements, including the nature of the science and technology collaboration, issues related to foreign policy, trade, etc. This flexible policy approach utilizes a package of options of IPR Annex texts. As "one size does not fit all," the IPR Annex language for each agreement would be based on a case-by-case review. In general, the 1990 Model Annex would be the preferred starting point in the interagency process for all proposed S&T agreements for countries with inadequate IPR protection. The Revised 2000 IPR Annex Text would be the preferred starting point in the interagency process when an S&T or implementing arrangement is not expected to generate IP or the prospective collaborator is in compliance with international IPR practices.

SUGGESTED TEXT MODIFICATIONS

In cases where it would be appropriate, the Revised 2000 IPR Annex Text provides a substantially different approach than the 1990 Model Annex approach. Two particular clauses of the 1990 Model Annex have been problematic over the past decade: the geographic allocation and the equity clauses. The Revised 2000 IPR Annex Text changes these clauses in the following way:

Rights in own country: The Revised 2000 IPR Annex Text provides for each Party to have a right in its own country [Reference: Revised 2000 IPR Annex Text III.B.(2).(b).] The proposed change makes the inventing party the owner, although the owner still only has "a right" in its own territory.

This is substantially different from the 1990 Model Annex which provides that each Party has all rights and interest in their own country, regardless of other factors [Reference: 1990 Model Annex II.B.(2).(a).]

Rights in other countries: The Revised 2000 IPR Annex Text provides for Parties to have rights in other countries determined by mutual agreement and based on a number of factors, including the relative contributions of the Parties, the level of IP protection and other factors deemed appropriate. This is similar to the 1990 Model Annex which calls for rights in third countries to be determined in implementing arrangements. However the Revised text adds new flexibility by also allowing rights in the Parties’ own countries to be negotiated.

Where level of IP protection differs between the two countries: The Revised 2000 IPR Annex Text requires that in cases where IP is likely to lead to, or has led to, the creation of intellectual property not protected by the laws of the other Party, the parties shall immediately hold discussions to determine the allocation of rights to the intellectual property [Reference: Revised 2000 IPR Annex Text III.B.(2).(c).(d).]

This new language is substantially different from the 1990 Model Annex which stipulates that if protection of a type of intellectual property is available under the laws of one Party but not the other Party, the Party whose law provides for this protection shall be entitled to all rights and interests worldwide [Reference: 1990 Model Annex II.B.(2).(b).]

With the changes introduced in the Revised 2000 IPR Annex Text, the USG hopes to avoid unnecessary future conflict with some international S&T partners who often perceive the 1990 Model Annex language to be structurally inequitable (the U.S. market is often far greater in size than the partner country and U.S. laws provide the broadest protection in most cases). Only international S&T partners, which meet the conditions for the use of the Revised 2000 IPR Annex Text, would be entitled to the revised language.

It must be noted that the Guidelines to the 1990 Model Annex also recommended a flexible approach, but the practice over the last ten years has not followed this recommendation. By providing the Revised 2000 IPR Annex Text as a ready-made option on a case-by-case basis, the problem of having only one IPR Annex text for all situations can be avoided.

In addition to the 1990 Model Annex and the Revised 2000 IPR Annex Text, the IPR Annex Package contains a version (the Updated 1990 Annex) which retains the original geographic allocation and equity clauses but incorporates other new improvements, such as the clarification of the rights to be afforded by institutions to visiting researchers.

Some agencies have a preferred text that they frequently use in their proposed international S&T implementing arrangements; however, any arrangement which is unfamiliar to the wider interagency community is more likely to be delayed or disapproved in the interagency clearance process. Therefore, the IPR Interagency Working Group agreed that the "IPR Annex Package" should also contain examples of IPR Annexes that have been approved in the past in order to facilitate expeditious review and clearance. NASA and DOE have submitted their own IPR Annex texts to the IPR Annex Package.

SUGGESTED IMPROVEMENTS TO THE INTERAGENCY PROCESS

The more flexible, coordinated approach calls upon an agency, which develops a draft international S&T agreement, to select an IPR Annex text option appropriate to the agreement the agency is considering, based on the new IPR Annex Package and on consultations with agencies with specific interest in IPR issues, e.g., State and USTR. The agency should then submit a request for C-175 clearance for the proposed agreement in accordance with the process set forth in the C-175 Handbook and a new Supplementary Handbook.

Agencies will develop their preferred IPR Annex text language (for use in a specific international S&T agreement) as an initial basis for internal U.S. government discussion (C-175), and prior to the start of formal negotiations with other governments. To best facilitate this process, USTR and PTO shall provide prompt and thorough guidance to agencies about prospective countries’ IPR regimes (e.g., compliance with TRIPS and compatibility to U.S. IP protection). In all cases in which specific proposals are made to negotiate and conclude S&T agreements and implementing arrangements, USTR and PTO shall provide expeditious guidance and clear rationale for the starting point and ending point of negotiations. Agencies are strongly encouraged to consult with USTR to seek guidance in formulating the basis of their negotiations for an implementing arrangement before seeking C-175 clearance.

New Guidelines are being drafted by the interagency working group to provide further instructions for agencies to implement the new policy approach. Finally, some agencies have taken steps to streamline the C-175 review and clearance process by providing a designated point of contact for international S&T agreements (USTR), by increasing the use of e-mail (STATE) and by exploring steps to remove additional bottlenecks.

FINAL RECOMMENDATIONS OF THE INTERAGENCY WORKING GROUP

CISET Principals direct the IPR Interagency Working Group to write new guidelines for the interagency process for determining IPR allocation for S&T agreements based on these recommendations:

1)  A flexible approach must be taken to formulating the IPR annex based on a number of factors. The process should have, as its core objective, agreement on the form of an appropriate IPR annex before negotiations are initiated with a prospective S&T collaborator.

2)  An "IPR Annex Package" to assist agencies in determining the appropriate form of an IPR annex should include the 1990 Model Annex, the Revised 2000 IPR Annex Text, and other acceptable alternatives. Each agreement would be based on a case-by-case review. In general, the 1990 Model Annex would be the preferred starting point in the interagency process for all proposed S&T agreements for countries with inadequate IPR protection. The Revised 2000 IPR Annex Text would be the preferred starting point in the interagency process when an S&T agreement or implementing arrangement is not expected to generate IPR or the prospective collaborator is in compliance with international IPR practices.

3)  To best facilitate this process, USTR and PTO shall provide prompt and thorough guidance to agencies about prospective collaborating countries’ IPR regimes (e.g., compliance with TRIPS and comparability to U.S. IP protection). In all cases where specific proposals are made to negotiate and conclude S&T agreements and implementing arrangements, USTR/PTO shall provide expeditious guidance and clear rationale for the starting point and ending point for the negotiations. Implementing arrangements may also vary from the umbrella and still must go through the C-175 clearance process prior to the formal start of negotiations with other governments or international agencies. Agencies are strongly encouraged to consult with USTR to seek guidance to shape their negotiating before sending around a C-175 clearance before sending around a C-175 clearance request.

4)  For implementing arrangements and/or memoranda proposed under existing umbrella agreements with approved IPR annexes, USTR/PTO shall provide expeditious review.

5)  The Department of State is asked to complete its assessment for improving the Circular-175 process. This assessment will generate a Supplementary C-175 Handbook to provide agencies with background information on the mechanics of the C-175 process and to guide them in preparing and submitting standardized requests for C-175 authority. The submission of standardized requests will facilitate State’s expeditious processing of C-175 requests. The aim is to have the Supplementary C-175 Handbook completed by mid-January, 2001.

6)The IPR Interagency Working Group will strive to finalize new Guidelines by mid-January, 2001 and will continue to monitor the implementation of the improved interagency policy process for an additional two-year trial period, that is, until December 2002.

PACKAGE OF IPR ANNEXES

Federal law (Pub. L. 100-418, August 23, 1988) requires that all international science and technology agreements to which the United States Government or its agencies are party include provisions for protection of intellectual property rights (IPR). A selection of options for use in international S&T agreements is listed below:

1.  ORIGINAL 1990 MODEL ANNEX TEXT AND GUIDELINES

2.  UPDATED 1990 ANNEX TEXT (With geographic allocation and equity clause as written in 1990, but improvements to other parts of the Model Annex text)

3.  REVISED 2000 IPR ANNEX TEXT

4.  NASA ANNEX OPTION

5.  DOE ANNEX OPTION

6.  OTHER OPTIONS (to be added at an Agency’s request)

ORIGINAL 1990 MODEL ANNEX TEXT AND GUIDELINES

Pursuant to Article of this Agreement:

The Parties shall ensure adequate and effective protection of intellectual property created or furnished under this Agreement and relevant implementing arrangements. The Parties agree to notify one another in a timely fashion of any inventions or copyrighted works arising under this Agreement and to seek protection for such intellectual property in a timely fashion. Rights to such intellectual property shall be allocated as provided in this Annex.

I. Scope

A. This Annex is applicable to all cooperative activities undertaken pursuant to this Agreement, except as otherwise specifically agreed by the Parties or their designees.

B. For purposes of this Agreement, "intellectual property" shall have the meaning found in Article 2 of the Convention Establishing the World Intellectual Property Organization, done at Stockholm, July 14, 1967.

C. This Annex addresses the allocation of rights, interests, and royalties between the Parties. Each Party shall ensure that the other Party can obtain the rights to intellectual property allocated in accordance with this Annex, by obtaining those rights from its own participants through contracts or other legal means, if necessary. This Annex does not otherwise alter or prejudice the allocation between a Party and its nationals, which shall be determined by that Party's laws and practices.

D. Disputes concerning intellectual property arising under this Agreement should be resolved through discussions between the concerned participating institutions, or, if necessary, the Parties or their designees. Upon mutual agreement of the Parties, a dispute shall be submitted to an arbitral tribunal for binding arbitration in accordance with the applicable rules of international law. Unless the Parties or their designees agree otherwise in writing, the arbitration rules of UNCITRAL shall govern.

E. Termination or expiration of this Agreement shall not affect rights or obligations under this Annex.

II. Allocation of Rights

A. Each Party shall be entitled to a non-exclusive, irrevocable, royalty-free license in all countries to translate, reproduce, and publicly distribute scientific and technical journal articles, reports, and books directly arising from cooperation under this Agreement. All publicly distributed copies of a copyrighted work prepared under this provision shall indicate the names of the authors of the work unless an author explicitly declines to be named.

B. Rights to all forms of intellectual property, other than those rights described in Paragraph II.A above, shall be allocated as follows:

(1) Visiting researchers, for example, scientists visiting primarily in furtherance of their education, shall receive intellectual property rights under the policies of the host institution. In addition, each visiting researcher named as an inventor shall be entitled to share in a portion of any royalties earned by the host institution from the licensing of such intellectual property.

(2) (a) For intellectual property created during joint research, for example, when the Parties, participating institutions, or participating personnel have agreed in advance on the scope of work, each Party shall be entitled to obtain all rights and interests in its own country. Rights and interests in third countries will be determined in implementing arrangements. If research is not designated as "joint research" in the relevant implementing arrangement, right to intellectual property arising from the research will be allocated in accordance with paragraph II.B.(1) above. In addition, each person named as an inventor shall be entitled to share in a portion of any royalties earned by either institution from the licensing of the property.

(b) Notwithstanding paragraph II.B.(2)(a) above, if a type of intellectual property is available under the laws of one Party but not the other Party, the Party whose laws provide for this type of protection shall be entitled to all rights and interests worldwide. Persons named as inventors or authors of the property shall nonetheless be entitled to royalties as provided in paragraph II.B.2(a).

III. Business Confidential Information

In the event that information identified in a timely fashion as business-confidential is furnished or created under this Agreement, each Party and its participants shall protect such information in accordance with applicable laws, regulations, and administrative practices. Information may be identified as "business-confidential" if a person having the information may derive an economic benefit from it or may obtain a competitive advantage over those who do not have it, the information is not generally known or publicly available from other sources, and the owner has not previously made the information available without imposing in a timely manner an obligation to keep it confidential.

ATTACHMENT: Guidelines for use with the original 1990 Model Annex Text

Attachment to the Original 1990 Model Annex: 1990 GUIDELINES 

THE WHITE HOUSE
WASHINGTON
May 1, 1990

MEMORANDUM FOR THE FEDERAL COORDINATING COUNCIL FOR SCIENCE, ENGINEERING, AND TECHNOLOGY (FCCSET)

THE COMMITTEE ON INTERNATIONAL SCIENCE, ENGINEERING, AND TECHNOLOGY (CISET)

SUBJECT: INTELLECTUAL PROPERTY RIGHTS ANNEX AND GUIDELINES

I am pleased to announce that after careful review and discussion, the FCCSET Committee on International Science, Engineering, and Technology has approved the attached new intellectual property rights (IPR) annex and accompanying guidelines. They are for use by U.S. Government departments and agencies in concluding international science and technology agreements. The guidelines and annex, which are effective immediately, address many concerns raised by foreign governments with the former annex.

I also want to take this opportunity to thank the CISET and its IPR Working Group for their efforts on this important matter. I look forward to working with the other FCCSET committees on similarly important issues in the future.

 D. Allen Bromley

Assistant to the President
for Science and Technology

Attachment

Explanatory Notes on the Model IPR Annex for Science and Technology (S&T) Agreements

The model, or standard, annex or intellectual property rights in international cooperative science and technology activities is designed to address the protection and allocation of such rights for all cooperating entities. Its substance is straightforward and relatively simple. The allocation provisions are broadly applicable and can be used for framework or umbrella agreements as well as agency-to-agency arrangements. Where specific activities planned warrant, alternative arrangements may be developed by the cooperating agencies, even where a framework agreement is in place.

The model annex language is both standard and flexible. Its provisions are transparent and uncomplicated; they allow for wide discretion by the cooperating entities in the design for allocation of IPR in specific activities. This language is being used, in its broad outlines, with S&T partners in all regions of the world.

Preamble

Simply states the Parties’ intent to provide protection for intellectual property created or furnished during activities under the particular S&T agreement to which the annex applies.

Article I:

Discusses the scope of the coverage, and the means for dispute resolution. Section B adopts the definition of intellectual property from the World Intellectual Property (WIPO) Convention of 1967. Section C addresses the possibility that the cooperating Party’s legal system grants rights to individuals or nongovernment entities but not to the government itself. Each Party must ensure that the other can obtain the rights allocated under the agreement, if necessary by obtaining those rights from its own participants-for example, by contract—but not in a manner that would deprive its own participants of any rights accorded them by national law. Section D calls for settlement of disputes by discussion between the affected participants, or by the Parties or their designees. It further allows for binding international arbitration if the two Parties agree. As such recourse to arbitration is entirely voluntary, the two Parties may decide to omit this language (such an omission does not preclude subsequent mutual agreement to use such arbitration).

Article II:

Provides allocation of rights for various situations. Section A gives each Party the right to a license to prepare and distribute written materials arising from cooperation under the agreement.

Section B is the most detailed portion of the model annex, as it covers the various types of collaboration and the allocation schemes that apply to them. It first discusses the rights of visiting researchers (for example, scientists who come to join a pre-existing team in the other country) and specifies that they receive their rights according to the host institution’s policies for such researchers. Joint research will be treated differently and implementing agreements must designate activities as joint research in order for this different treatment to apply. The central element is that each Party will have all rights in its own country for any intellectual property resulting from joint research. Implementing agreements may determine rights in third countries on a case-by-case basis. Persons named as inventors are entitled to share in some portion of the royalties earned.

The final clause (normally section IIB2b) is often referred to as the "equity clause." It allocates intellectual property rights in the event that intellectual property created in joint research of is a type not covered by one Party’s legal system. If further provides that persons named as inventors will be entitled to share in the royalties regardless of the disposition of rights between the Parties.

Article III:

This article provides a definition of "business-confidential" information (sometimes designated as "proprietary" in other nomenclature) and establishes the basic rules for its protection.

GUIDELINES FOR USING THE IPR ANNEX

These Guidelines describe how intellectual property rights in international science and technology agreements should be protected. The Annex for the Protection of Intellectual Property Rights (IPR Annex) attached to these Guidelines is applicable to a wide range of cooperative activities. Modifications to the Annex are nonetheless encouraged, insofar as the modifications are consistent with the Guidelines. These modifications will be subject to interagency review. The Annex and Guidelines do not, however, limit the discretion of agencies to propose alternative arrangements for protecting and allocating rights to intellectual property.

I. Agency Responsibilities

A program agency wishing to engage in international cooperation shall perform the following steps before requesting interagency review:

Review the intellectual property and technology transfer implications with the likely participants. The review must include at least the project managers and the offices within the agency or in the research institutions charged with monitoring intellectual property and technology transfer matters;

Include the results of that review, including the names of the officials involved, in its Circular 175 request.

Agencies are encouraged to draft international agreements that authorize only the activities anticipated or planned at the time the agreement enters into force. This may be difficult, especially when an agency expects to engage in many cooperative activities, a wide range of activities, or to allow its cooperation to change during the course of an agreement.

The attached IPR Annex represents the position of the United States Government on the protection and allocation of intellectual property rights in international science and technology agreements. Use of the IPR Annex, or of any alternative arrangements for the protection and allocation of intellectual property, will be reviewed in the Circular 175 process.

The considerations relevant to using the Annex will vary with the type of agreement under the consideration – government-to-government, agency-to-agency, or project-level. This section of the Guidelines describes some factors that should guide decisions with regard to the protection of intellectual property in the different types of agreements. These factors are primarily applicable for agreements with nations that provide adequate and effective protection of intellectual property. It may be necessary to secure protection for intellectual property in addition to that set out in the attached IPR Annex when cooperation is proposed with nations that lack adequate protection, especially when those nations have expressed opposition to protection of some or all types of intellectual property.

A.  Government-to-Government Agreements

When an agreement will be entered into by the United States Government and another government, the attached IPR Annex should be proposed. Each government-to-government agreement is an umbrella under which agencies may undertake cooperative activities; the agreement itself need not specify the types of cooperation that will be undertaken. In this context, the substance of the IPR Annex is straightforward. The governments agree to protect intellectual property created or furnished under the Agreement. Further, they agree to follow the provisions of the Annex that set forth rules and procedures for allocating rights to intellectual property created in the course of activities under the Agreement. The simplicity of the Annex’s allocation provisions makes them broadly applicable and thus generally suitable for all cooperative activities undertaken pursuant to the umbrella agreement. They may not be appropriate for all types of cooperation begun under an umbrella, however. Consequently, Article I(A) of the Annex allows agencies to develop arrangements for protecting and allocating intellectual property rights that are tailored to the intellectual property issues raised by their activities. In deciding whether to deviate from the attached IPR Annex, agencies should take into account the considerations discussed in the Guidelines.

B. Agency-to-Agency Agreements

Many agencies of the U.S. Government are authorized by statute to enter into cooperative science and technology agreements with their counterparts in foreign governments. This section explains how agencies can ensure that their agreements adequately protect and allocate rights to intellectual property. These Guidelines apply to agency-level agreements whether they encompass a broad range of cooperative activities or are limited to cooperative activity specified in the agreement itself. The latter agreements are often referred to as "project agreements."

1.  Agency-Level Agreements Pursuant to a Government-to-Government Agreement

Often, agency-level agreements are made pursuant to a government-government umbrella agreement. In that case, an agency need not include a separate IPR Annex in their agreements as long as the agency’s agreement allows intellectual property to be protected and allocated in accordance with the Annex to the umbrella agreement. Where appropriate, however, agencies should develop protections tailored to their cooperative activities. These guidelines discuss considerations that agencies should take into account when altering the attached IPR Annex or developing alternative arrangements.

2.  Agency-Level Agreements Not Pursuant to a Government-to-Government Agreement

Agencies may enter into agreements with agencies of government that have not entered into umbrella agreements with the United States. Also agencies may place their agreements outside an umbrella when one exists. (This option may be taken only after appropriate interagency review). Agency-level agreements not pursuant to a government-to-government agreement must follow one of the following options:

(i)  Propose the attached IPR Annex; or

(ii) Propose substitute or alternative protection and/or allocation in a modified IPR Annex or in the agreement for example, in accordance with these Guidelines.

III. Applicability of Provisions Protecting and Allocating Intellectual Property

Agencies may argue that no provisions specifically addressing intellectual property rights are necessary for a particular cooperative activity, either because there is no significant potential that intellectual property will be created or furnished under an agreement, or because the national interest of the United States militates in favor of cooperation in specified areas and concerns for the proper protection of intellectual property are satisfied. The contention that specific provisions are not necessary will be evaluated in interagency review on the basis of the following factors:

(1)  The outcome of the agency’s review of intellectual property and technology transfer implications;

(2)  The nature of the activities proposed. For example, collection of environmental and earth science data, exchange of information and data available in the public domain, and training of technicians for maintenance of low technology equipment are not expected to give rise to intellectual property concerns;

(3)  Whether anticipated activities could be designed to avoid technology transfer and intellectual property issues, for example, by processing data in the United States to avoid sending software abroad, by using software indigenous to the other country, or by including provisions that preclude the exchange of intellectual property or permit such exchange only with proper protections, for example, a license or contract limiting use of the property to the specific objectives of the agreement;

(4)  Whether the proposed agreement authorizes activities beyond those anticipated at the time the agreement is proposed;

(5)  Whether the foreign government(s) involved will continue to work toward protection of intellectual property and inclusion of protection in the agreement;

(6)  Whether the proposed cooperation has the potential to affect U.S. commercial competitiveness adversely;

(7)  Whether cooperation will be consistent with efforts in other for a, for example, the Special 301 process, to persuade the foreign government(s) to improve protection of intellectual property rights;

(8)  Whether the proposed cooperation has significant potential to benefit United States scientific, economic, political, or defense interests.

IV. Section-By-Section Considerations

There has been little difficulty in reaching agreement on the general statement of obligation preceding Article I, except when the national laws of the other party have not provided for adequate and effective protection of intellectual property.

Agencies may add language to the second sentence requiring a party to delay publication for up to six months upon request of the other party.

There has been little difficulty reaching agreement on the five subsections of Article I. An agency anticipating that cooperative activities may involve types of intellectual property for which protection is unclear may wish to list it specifically in Article IB.

Under this section, the policy of the host institution determines the disposition of intellectual property rights.

The section allocates rights arising from the work of visiting researchers. It is intended to apply, for example, in the common situation of a scientist on a postdoctoral fellowship. That example is not intended to be limiting, however. The central idea is that much cooperative activity will involve scientists whose work fits into activities ongoing at the host institution, in which that institution has made a substantial investment. It is equitable that the host institution’s policies control with respect to intellectual property arising from such activities. The distinction between joint research and visiting researchers are discussed further in the section concerning article IIB(2)(a); below.

Rights to intellectual property will be allocated in accordance with this section, unless the relevant implementing arrangement designates the activity as "joint research." This rule applies even if the cooperative activity does not obviously fall within the category of visiting research.

The section as written entitles visiting researchers to royalties. Agreement to this language by other countries may benefit United States scientists. Federal laboratories in the United States are required by law to pay royalties to visiting scientists who are named as inventors, when the inventors have assigned their rights to the U.S. Government and the Government receives royalties from licensing the invention. Many university laboratories and private contractors pay royalties to visiting researchers as a matter of policy. Some nongovernmental laboratories in the United States may not pay royalties, however. Therefore, a program agency should ensure that its participating institutions in fact have policies of paying royalties before it proposes the language in the attached IPR Annex.

If either the U.S. program agency or the foreign agency cannot assure that its participating institutions will pay royalties, agencies should substitute the following language for the second sentence of article II (B)(1):

In addition, each visiting researcher named as an inventor shall be entitled to national treatment with regard to awards, bonuses, benefits, or any other rewards, in accordance with the policies of the host institution and should be entitled to royalties.

If the foreign agency will not agree to the hortatory language with regard to royalties, or if the U.S. agency cannot ensure that its participating institutions will pay royalties, the U.S. agency may delete the reference to royalties. The language concerning awards, bonuses, benefits, and other rewards should remain, however. It does not obligate parties or institutions to pay rewards, etc., if the participating institutions do not already do so; it requires only that visiting researchers receive national treatment with regard to rewards, etc., already offered. Consequently, this language should prove to be acceptable to other countries.

Language entitling participants to royalties appears four times in the IPR Annex, in article IC, in article IIB1, and in both paragraphs of article IIB2. If changes are made in the language of article IIB1, agencies should take care that the language proposed in the latter paragraphs conforms to the altered language of IIB1.

The phrase "national treatment" is a term of art in the field of intellectual property law. It establishes a principle of nondiscrimination between visiting foreign participants and nationals of the host country with regard to intellectual property rights. The United States has long subscribed to this principle. It is reflected in the provisions of the Federal Technology Transfer Act, which extend rights to royalties to "guest workers" (which are labeled "visiting researchers" in the Annex). The United States and participating scientists may receive significant benefits if this principle is followed by nations with which the United States cooperates. Agencies should ensure that their participating institutions adhere to this principle.

The line between "visiting researchers" and joint research," although commonsensical, is difficult to draw with precision. Essentially, when a scientist visits a laboratory in another country with the expectation of being made a member of a team engaged in work planned primarily by the host institution, that scientist is a visiting researcher. When the institutions, participants, or agencies of the two countries negotiate to shape the nature and scope of the research, conversely, the cooperative activity is "joint research." The example used in the text is, accordingly, joint research with an "agreed scope of work."

Not surprisingly, "joint research" often involves prestigious scientists or other workers with credentials greater than those of visiting researchers. The distinction is made even less clear by the fact that "joint research" projects may include "visiting scientists." To avoid difficulties with defining the terms, the IPR Annex provides that the agencies must designate what is "joint research." Rights to intellectual property arising from cooperation that is not so designated will be allocated in accordance with the provisions for visiting researchers.

Article IIB2(a) allocates rights to each party in its own "territory." In proposing the attached IPR Annex to European nations, agencies should substitute "country" for "territory." Several European nations have argued that economic integration in Europe expands their home markets to include all member states of the European Economic Community (EEC), as well as some neighboring states. By using the word "country," agencies reinforce the U.S. position that the home market is limited by national boundaries.

Article IIB2(b) is essentially the same equity clause used in previous agreements. Inclusion of this clause is essential in all agreements with countries that do not provide adequate and effective protection for intellectual property rights, especially if it is agreed in the interagency process that the proposed cooperative activities include types of intellectual property that are not adequately and effectively protected. For countries that do provide adequate and effective protection, it is useful to seek its inclusion in the agreement in order to protect all current and future innovations and to set a precedent for use of the clauses with other countries. The determination that a country provides adequate and effective protection will be made by the appropriate agencies in the U.S. Government.

There is one significant change in the equity clause. It includes a provision entitling inventors and authors to a share of royalties. As explained in the comments above concerning article IIB1, federally funded research institutions are required to pay those person’s royalties under U.S. law, and many private research institutions pay royalties as a matter of policy.

No generally applicable system of ownership for intellectual property will be appropriate for every type of cooperative activity. Agencies are therefore encouraged to develop substitute or alternative provisions, in a modified annex or elsewhere in the agreement, that are better suited to the cooperative activities they anticipate, including, for example, structuring the cooperative activities to limit the exchange of information or personnel that might give rise to intellectual property to the specific objectives of the agreement or to avoid such exchanges altogether. Any such alternative should be based upon consideration of at least the following factors, in addition to the relevant factors described above:

(i)   a conclusion, concurred in by the appropriate offices responsible for technology transfer and intellectual property rights, that the commercial exploitation of intellectual property arising from cooperative activities will be appropriately enhanced by the proposed alternative allocation; and

(ii)  the allocation equitably reflects the contributions of the Parties.

All agencies agree that there will be a presumption in favor of alternative arrangements concerning intellectual property that meet these conditions.

UPDATED 1990 ANNEX TEXT
(With geographic allocation and equity clause, but using the improved language of the Revised 2000 Text)

ANNEX I

I. General Obligation

The Parties shall ensure adequate and effective protection of intellectual property created or furnished under this Agreement and relevant implementing arrangements. Rights to such intellectual property shall be allocated as provided in this Annex.

II. Scope

A.  This Annex is applicable to all cooperative activities undertaken pursuant to this Agreement, except as otherwise specifically agreed by the Parties or their designees.

B.  For purposes of this Agreement, "intellectual property" shall mean the subject matter listed in Article 2 of the Convention Establishing the World Intellectual Property Organization, done at Stockholm, July 14, 1967 and may include other subject matter as agreed by the Parties.

C.  Each Party shall ensure, through contracts or other legal means with its own participants, if necessary, that the other Party can obtain the rights to intellectual property allocated in accordance with this Annex. This Annex does not otherwise alter or prejudice the allocation between a Party and its nationals, which shall be determined by that Party's laws and practices.

D.  Except as otherwise provided in this Agreement, disputes concerning intellectual property arising under this Agreement shall be resolved through discussions between the concerned participating institutions, or, if necessary, the Parties or their designees. Upon mutual agreement of the Parties, a dispute shall be submitted to an arbitral tribunal for binding arbitration in accordance with the applicable rules of international law. Unless the Parties or their designees agree otherwise in writing, the arbitration rules of UNCITRAL shall govern.

E. Termination or expiration of this Agreement shall not affect rights or obligations under this Annex.

III. Allocation of Rights

A.  Each Party shall be entitled to a non-exclusive, irrevocable, royalty-free license in all countries to translate, reproduce, and publicly distribute scientific and technical journal articles, reports, and books directly arising from cooperation under this Agreement. All publicly distributed copies of a copyrighted work prepared under this provision shall indicate the names of the authors of the work unless an author explicitly declines to be named.

B.  Rights to all forms of intellectual property, other than those rights described in paragraph IIIA above, shall be allocated as follows:

(1) Visiting researchers shall receive rights, awards, bonuses and royalties in accordance with the policies of the host institution.

(2) (a) Any intellectual property created by persons employed or sponsored by one Party under cooperative activities other than those covered by paragraph III.(B)(1) shall be owned by that Party. Intellectual property created by persons employed or sponsored by both Parties shall be jointly owned by the Parties. In addition, each creator shall be entitled to awards, bonuses and royalties in accordance with the policies of the institution employing or sponsoring that person.

(b) Unless otherwise agreed in an implementing or other arrangement, each Party shall have within its territory all rights to exploit or license intellectual property created in the course of the cooperative activities.

(c) The rights of a Party outside its territory shall be determined by mutual agreement considering the relative contributions of the Parties and their participants to the cooperative activities, the degree of commitment in obtaining legal protection and licensing of the intellectual property and such other factors deemed appropriate.

(d) Notwithstanding paragraphs III.B(2)(a) and (b) above, if a particular project has led to the creation of intellectual property protected by the laws of one Party but not the other, the Party whose laws provide for this type of protection shall be entitled to all rights to exploit or license intellectual property worldwide although creators of intellectual property shall nonetheless be entitled to awards, bonuses and royalties as provided in paragraph III.B(2)(a).

(e) For each invention made under any cooperative activity, the Party employing or sponsoring the inventor(s) shall disclose the inventions promptly to the other Party together with any documentation and information necessary to enable the other Party to establish any rights to which it may be entitled. Either Party may ask the other Party in writing to delay publication or public disclosure of such documentation or information for the purpose of protecting its rights in the invention. Unless otherwise agreed in writing, the delay shall not exceed a period of six months from the date of disclosure by the inventing Party to the other Party.

IV. Business Confidential Information

In the event that information identified in a timely fashion as business-confidential is furnished or created under this Agreement, each Party and its participants shall protect such information in accordance with applicable laws, regulations, and administrative practices. Information may be identified as "business-confidential" if a person having the information may derive an economic benefit from it or may obtain a competitive advantage over those who do not have it, and the information is not generally known or publicly available from other sources, and the owner has not previously made the information available without imposing in a timely manner an obligation to keep it confidential.

REVISED 2000 IPR ANNEX TEXT
(JUNE 9, 2000)

ANNEX I

I. General Obligation

The Parties shall ensure adequate and effective protection of intellectual property created or furnished under this Agreement and relevant implementing arrangements. Rights to such intellectual property shall be allocated as provided in this Annex.

II. Scope

A. This Annex is applicable to all cooperative activities undertaken pursuant to this Agreement, except as otherwise specifically agreed by the Parties or their designees.

B. For purposes of this Agreement, "intellectual property" shall mean the subject matter listed in Article 2 of the Convention Establishing the World Intellectual Property Organization, done at Stockholm, July 14, 1967 and may include other subject matter as agreed by the Parties.

C. Each Party shall ensure, through contracts or other legal means with its own participants, if necessary, that the other Party can obtain the rights to intellectual property allocated in accordance with this Annex. This Annex does not otherwise alter or prejudice the allocation between a Party and its nationals, which shall be determined by that Party's laws and practices.

D. Except as otherwise provided in this Agreement, disputes concerning intellectual property arising under this Agreement shall be resolved through discussions between the concerned participating institutions, or, if necessary, the Parties or their designees. Upon mutual agreement of the Parties, a dispute shall be submitted to an arbitral tribunal for binding arbitration in accordance with the applicable rules of international law. Unless the Parties or their designees agree otherwise in writing, the arbitration rules of UNCITRAL shall govern.

E. Termination or expiration of this Agreement shall not affect rights or obligations under this Annex.

III. Allocation of Rights

A. Each Party shall be entitled to a non-exclusive, irrevocable, royalty-free license in all countries to translate, reproduce, and publicly distribute scientific and technical journal articles, reports, and books directly arising from cooperation under this Agreement. All publicly distributed copies of a copyrighted work prepared under this provision shall indicate the names of the authors of the work unless an author explicitly declines to be named.

B. Rights to all forms of intellectual property, other than those rights described in paragraph IIIA above, shall be allocated as follows:

(1) Visiting researchers shall receive rights, awards, bonuses and royalties in accordance with the policies of the host institution.

(2) (a) Any intellectual property created by persons employed or sponsored by one Party under cooperative activities other than those covered by paragraph III.(B)(1) shall be owned by that Party. Intellectual property created by persons employed or sponsored by both Parties shall be jointly owned by the Parties. In addition, each creator shall be entitled to awards, bonuses and royalties in accordance with the policies of the institution employing or sponsoring that person.

(b) Unless otherwise agreed in an implementing or other arrangement, each Party shall have within its territory a right to exploit or license intellectual property created in the course of the cooperative activities.

(c) The rights of a Party outside its territory shall be determined by mutual agreement considering the relative contributions of the Parties and their participants to the cooperative activities, the degree of commitment in obtaining legal protection and licensing of the intellectual property and such other factors deemed appropriate.

(d) Notwithstanding paragraphs III.B(2)(a) and (b) above, if either Party believes that a particular project is likely to lead to or has led to the creation of intellectual property not protected by the laws of the other Party, the Parties shall immediately hold discussions to determine the allocation of rights to the intellectual property. If an agreement cannot be reached within three months of the date of the initiation of the discussions, cooperation on the project in question shall be terminated at the request of either Party. Creators of intellectual property shall nonetheless be entitled to awards, bonuses and royalties as provided in paragraph III.B(2)(a).

(e) For each invention made under any cooperative activity, the Party employing or sponsoring the inventor(s) shall disclose the invention promptly to the other Party together with any documentation and information necessary to enable the other Party to establish any rights to which it may be entitled. Either Party may ask the other Party in writing to delay publication or public disclosure of such documentation or information for the purpose of protecting its rights in the invention. Unless otherwise agreed in writing, the delay shall not exceed a period of six months from the date of disclosure by the inventing Party to the other Party.

IV. Business Confidential Information

In the event that information identified in a timely fashion as business-confidential is furnished or created under this Agreement, each Party and its participants shall protect such information in accordance with applicable laws, regulations, and administrative practices. Information may be identified as "business-confidential" if a person having the information may derive an economic benefit from it or may obtain a competitive advantage over those who do not have it, and the information is not generally known or publicly available from other sources, and the owner has not previously made the information available without imposing in a timely manner an obligation to keep it confidential.

NASA ANNEX OPTION

Pursuant to Article __ of this Agreement:

The Parties shall ensure adequate and effective protection of intellectual property created or furnished under this Agreement and relevant implementing arrangements. The Parties agree to notify one another in a timely fashion of the making of any inventions or the creation of copyrighted works or other intellectual property arising under this Agreement and to seek protection for such intellectual property in a timely fashion. Rights to such intellectual property shall be allocated as provided in this Annex.

I.  Scope

A.  This Annex is applicable to all cooperative activities undertaken pursuant to this Agreement, except as otherwise specifically agreed by the Parties or their designees.

B.  For purposes of this Agreement, "intellectual property" shall have the meaning found in Article 2 of the Convention Establishing the World Intellectual Property Organization, done at Stockholm, July 14, 1967.

C.  This Annex addresses the allocation of rights, interests, and royalties between the Parties. Each Party shall ensure that the other Party can obtain the rights to intellectual property allocated in accordance with this Annex, by obtaining those rights from its own participants through contracts or other legal means, if necessary. This Annex does not otherwise alter or prejudice the allocation between a Party and its nationals, which shall be determined by that Party’s laws and practices.

D.  Disputes concerning intellectual property arising under this Agreement should be resolved through discussions between the concerned participating institutions, or, if necessary, the Parties or their designees. Upon mutual agreement of the Parties, a dispute shall be submitted to an arbitral tribunal for binding arbitration in accordance with the applicable rules of international law. Unless the Parties or their designees agree otherwise in writing, the arbitration rules of UNCITRAL shall govern.

E.  Termination or expiration of this Agreement shall not affect rights or obligations under this Annex.

II.  Allocation of Rights

A.  Cooperative Activities

(1) For intellectual property created during cooperative activities other than those covered by paragraph II.C.1, for example, when the Parties, participating institutions, or participating personnel have agreed in advance on the scope of the work, each Party shall be entitled to obtain all rights and interests to intellectual property it solely creates worldwide. For intellectual property that is jointly created during such cooperative activities, the parties shall consult and agree as to the protection and commercial exploitation of such intellectual property in accordance with paragraphs II.B.2, II.B.3, and II.B.4. In addition, each person named as an inventor shall be entitled to awards, bonuses and royalties in accordance with the policies of the host institution and national law.

B.  Joint Activities

(1) No joint activities will be undertaken unless specifically agreed to in an implementing agreement.

(2) For intellectual property which is or may be jointly created during joint research, the Parties or their participants shall jointly develop an intellectual property management plan. The plan shall consider the relative contributions of the Parties and their participants, the benefits of licensing by territory or for fields of use, requirements imposed by the Parties’ domestic laws, and other factors deemed appropriate.

(3) If the parties or their participants did not agree to an intellectual property management plan in the initial research agreement and cannot reach an agreement within a reasonable time, not to exceed six months, from the time a Party becomes aware of the creation or likely creation of the intellectual property in question as a result of the joint research, the Parties or their participants shall resolve the matter in accordance with the provisions of paragraph 1 (D). Pending resolution of the matter, such intellectual property shall be owned jointly by the Parties or their participants, but shall be commercially exploited (including product development) outside of each Party’s country only by mutual agreement.

(4) In the event that either Party believes that a particular joint research project under this Agreement has led or will lead to the creation or furnishing of a type of intellectual property that it protects but is not protected throughout the territory of the other Party, the Parties shall immediately hold discussions to determine the allocation of the rights to the said intellectual property. The joint activities in question will be suspended during the discussions, unless otherwise agreed by the Parties thereto. If no agreement can be reached within a three month period from the date of the request for discussions, cooperation on the project in question will be suspended or terminated at the request of either Party.

C.  Visiting Researchers

(1) Visiting researchers, for example, scientists visiting primarily in furtherance of their education, shall receive intellectual property rights under the policies of the host institution. Each Party shall accord to the visiting researcher no less favorable treatment than it accords its own nationals with regard to the grant of intellectual property rights. In addition, each visiting researcher named as an inventor shall be entitled to treatment as a national of the host country with regard to awards, bonuses and royalties in accordance with the policies of the host institution and national law.

D.  Invention and Patent Rights

(1) Nothing in the agreement shall be construed as granting or implying any rights to, or interest in, patents or inventions of the parties or their contractors or subcontractors.

(2) In the event that an invention is jointly made by employees of the parties, their contractors or subcontractors, during the implementation of this agreement, the parties shall consult and agree, in accordance with paragraphs II.B.2, II.B.3, and II.B.4, as to the responsibilities and costs of actions to be taken to establish and maintain patent protection (in any country) for such invention and on the terms and conditions of any license or other rights to be exchanged or granted by or between the parties.

(3) In addition to the notification of the making of any invention as required by the preamble to this Annex, the inventing Party shall promptly furnish to the other Party documentation and responsibilities with regard to interface, integration, and safety shall normally be made without restriction, except as required by national laws and regulations relating to export control or the control of classified data. If design, manufacturing, and processing data and associated software, which is proprietary but not export controlled, is necessary for interface, integration, or safety purposes, the transfer shall be made and the data and associated software shall be appropriately marked. Nothing in this article requires information necessary to enable the other Party to establish any rights to which it may be entitled. The inventing Party may request the other Party in writing to delay publication or public disclosure of such documentation or information for the purpose of protecting its rights in the invention. Unless otherwise agreed in writing, the delay shall not exceed one year form the date of disclosure by the inventing Party to the other Party.

E.  Transfer of Technical Data

The parties are obligated to transfer only those technical data (including software necessary to fulfill their respective responsibilities under this agreement, in accordance with the following provisions:

(1) The transfer of technical data for the purpose of discharging the parties’ the parties to transfer technical data contrary to national laws and regulations relating to export control or control of classified data.

(2) All transfers of proprietary technical data or export controlled technical data are subject to the following provisions. In the event a party finds it necessary to transfer technical data which is proprietary or subject to export controls, and for which protection is to be maintained, such technical data shall be marked with a notice to indicate that they shall be used and disclosed by the receiving party and its related entities (e.g., contractors and subcontractors) only for the purposes of fulfilling the receiving party’s responsibilities under the programs implemented by this agreement, and that the marked technical data shall not be disclosed or retransferred to any other entity without the prior written permission of the furnishing party. The receiving party agrees to abide by the terms of the notice, and to protect any such marked technical data from unauthorized use and disclosure, and also agrees to obtain these same obligations from its related entities prior to the transfer.

(3) All marked proprietary data and marked or unmarked technical data subject to export control, which are transferred under this agreement, shall be used by the receiving party exclusively for the purposes of the programs implemented by this agreement.

F.  Rights in Resulting Data

(1) Data generated under this agreement will be reserved to the Principal Investigators [and Co-Investigators, where appropriate] for scientific analysis and first publication rights for a period of time [generally not more than 1 year] beginning with receipt of the data and any associated data in a form suitable for analysis. The parties may also have access to, and use of, the data and any associated data during the agreed-upon period, but such access and use will not prejudice the first publication rights of the investigators.

(2) Final results of the experiments will be made available to the scientific community through publication in appropriate journals or other established channels as soon as practicable and consistent with good scientific practice. In the event such reports or publications are copyrighted, the parties shall have a royalty-free right under the copyright to reproduce, prepare derivative works, distribute, and use such copyrighted work for their purposes.

DOE ANNEX OPTION

ANNEX

TO THE AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA
AND THE GOVERNMENT OF THE RUSSIAN FEDERATION

REGARDING COOPERATION IN THE AREA OF NUCLEAR MATERIAL PHYSICAL PROTECTION, CONTROL AND ACCOUNTING

The Parties shall ensure adequate and effective protection of intellectual property created or furnished under this Agreement and relevant implementing agreements. The Parties agree to notify one another in a timely fashion of all intellectual property created and results of scientific and technical work obtained under this Agreement and to seek protection for such intellectual property in a timely fashion. Rights to such intellectual property shall be allocated in keeping with the provisions of this Annex.

I. Definitions

A. The term "intellectual property" shall have the meaning found in Article 2 of the Convention Establishing the World Intellectual Property Organization, which was signed in Stockholm on July 14, 1967.

B. The term "participants" shall mean natural persons or legal entities participating in joint activities within the framework of implementation of this Agreement.

C. The term "background intellectual property" shall mean intellectual property created outside this Agreement and belonging to the participants, the use of which is necessary for the implementation of activities under the Agreement.

II. Scope

A. This Annex is applicable to all cooperative activities undertaken pursuant to this Agreement, except as otherwise agreed by the Parties or their Executive Agents.

B. This Annex addresses the allocation of intellectual property rights and takes into consideration the interests of the Parties.

C. Each Party shall ensure that the other Party can obtain the rights to intellectual property allocated in accordance with this Annex. If necessary, each Party shall obtain those rights from its own participants through contracts, license agreements or other legal documents. This Annex does not in any other way alter or prejudice the allocation of rights between a Party and its participants.

D. Disputes concerning intellectual property arising under this Agreement shall be resolved through discussions between the participants, or, if necessary, the Parties or their Executive Agents, which may in this context utilize the Joint Coordinating Committee. Upon mutual agreement of the Parties or participants, a dispute shall be submitted to an arbitral tribunal for binding arbitration in accordance with the Agreement and the applicable rules of international law. Until such time as the Parties or their participants have agreed otherwise in writing, they shall be governed by arbitral rules.

III. Allocation of Rights

A. Each Party, its Executive Agent or other authorized representative designated by a Party shall be entitled to a nonexclusive, irrevocable, royalty-free license for non-commercial purposes in all countries to translate, reproduce, and publicly distribute scientific and technical journal articles, papers, reports, and books directly resulting from cooperation under this Agreement. All publicly distributed copies of a copyrighted work prepared under this provision shall indicate the names of the authors of the work unless an author explicitly expresses the desire to remain anonymous.

B. Rights to all forms of intellectual property created under this Agreement, other than those rights described in Section III.A above, shall be allocated as follows:

1. For intellectual property created during joint research, for example, if the Parties or their participants have agreed in advance on the scope of work, each Party, its Executive Agent or other authorized representative designated by a Party shall be entitled to all rights and interests in its own country. Rights and interests in third countries shall be determined in implementing agreements, taking into consideration the following factors, as appropriate:

a) the nature of the cooperation,

b) the contributions of each of the Parties and its participants to the work to be performed, including background intellectual property,

c) the intentions, capabilities, and obligations of each of the Parties and its participants to provide legal protection of intellectual property created, and

d) the manner in which the Parties and their participants will provide for the commercialization of intellectual property created, including, where appropriate and possible, joint participation in commercialization.

In addition, each person named as an inventor or author shall be entitled to receive rewards in accordance with the policies of each Party’s participating institution.

2. Visiting researchers not involved in joint research, for example, scientists visiting primarily in furtherance of their education, shall receive intellectual property rights under arrangements with their host institutions. In addition, each such visiting researcher shall be entitled to receive rewards in accordance with the policies of the host institution.

3. In the event either Party believes that a particular joint research project under this Agreement will lead, or has led, to the creation or furnishing of intellectual property of a type that is not protected by the applicable laws of the Russian Federation or the United States of America, the Parties shall immediately hold consultations to determine the allocation of the rights to the said intellectual property. Such joint activities shall be suspended during the consultations unless otherwise agreed to by the Parties. If no agreement can be reached within a three-month period from the date of the request for consultations, the Parties shall cease the cooperation under the project in question.

C. Rights to background intellectual property may be transferred by the Parties and their participants through license agreements between individuals and/or legal entities. Such license agreements may reflect the following:

1. definitions,
2. identification of intellectual property being licensed and the scope of the license,
3. royalty rates and other compensation,
4. requirements for protection of business-confidential information,
5. requirement to comply with the relevant intellectual property and export control laws of the Russian Federation and the United States of America, |
6. procedures for record keeping and reporting,
7. procedures for dispute resolution and termination of each agreement, and
8. other appropriate terms and conditions.

IV. Business-Confidential Information

In the event that information identified in a timely fashion as business-confidential is furnished or created under this Agreement, each Party and its participants shall protect such information in accordance with applicable laws, regulations, and administrative practices. Information may be identified as "business-confidential" if a person having the information may derive an economic benefit from it or may obtain a competitive advantage over those who do not have it, if the information is not generally known or publicly available from other sources, and if the owner has not previously made the information available without imposing in a timely manner an obligation to keep it confidential. Neither Party nor its participants shall publish or transfer to third parties business-confidential information furnished or created under this Agreement without the prior written consent of the other Party or its participants.

New Guidelines are in the process of being drafted and will be added to this Appendix when final.

For questions please contact:

• Wendy Hall, Office of Science and Technology Policy, 202-456-2894 or
• Jasemine Chambers, Patent and Trade Office, 703-308-2035

[End.]