obvIPat - Obviously Patentable

The blog for inventors, in-house counsel, & entrepreneurs.

Don’t be Afraid of Participating in SBIR Program

by Jesse Erlich

Many small companies have questioned whether participating in the Small Business Research and Development (SBIR) program, and therefore entering into a contract with the US government or receiving a grant from the US government, is worthwhile.  How many times have you heard, “the risks are too great”?  Do not turn down the opportunity to help fund your company’s research, design or development by not participating in the SBIR program.  In fact, receiving funds from the SBIR program is an excellent source of non-dilutive financing.

Most skeptics worry about losing ownership of their intellectual property when dealing with the government.  There is very little downside with respect to losing ownership of your inventions made under a government contract if you follow the rules and regulations (to be discussed in greater detail in future posts).  With respect to any inventions made under the SBIR contract or grant, the contractor (your company) and even the subcontractor will have the right to retain ownership of your inventions if title to your invention is elected and a provisional or non-provisional application is filed.  The only rights the government would obtain to your invention made under the contract or grant would be a nonexclusive, irrevocable, paid-up license for government use (confirmatory license).  In other words, the government has the right to use such an invention for governmental purposes (another topic we will address in future posts).  But remember, as an SBIR recipient you may be entitled to a sole source procurement contract related to the technology involved in your SBIR award.  When it comes to technical data and software, the contractor or subcontractor also has control of their use by the government.

Don’t forgo the opportunity to do business with the government.  Just seek out the proper advice, and soon you will receive additional funding for your company.


Leave a Reply