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Posts Tagged ‘SBIR’

How Do I Own My Inventions Under the SBIR/STTR Program?

by Jesse Erlich

As summarized in FAR 52.227-11:

The contractor may retain the entire right, title and interest throughout the world of each subject invention. With respect to any subject invention in which the contractor retains title, the Government shall have a nonexclusive, nontransferable, revocable, paid-up license to practice or have practiced for or on behalf of the United States the subject invention throughout the world.

It should be noted within this context, “contractor” may be replaced by “subcontractor” if applicable.

First, the contractor must recognize what a subject invention is. A subject invention under a government contract (includes SBIR/STTR Program) means any invention of the contractor made in the performance of work under the contract (the SBIR/STTR Program); and “made” means, when used in relation to any invention other than a plant variety, the conception or first actual reduction to practice of the invention.


  1. The inventor must disclose the subject invention to his or her employee (the contractor);
  2. Within two months of receipt of the subject invention disclosure, the contractor must disclose the subject invention to the contract administrator;
  3. Within two years after disclosure to the contract administrator or at least 60 days prior to the end of the statutory bar period, the contractor must elect to take title to the subject invention;
  4. Within one year after election or prior to the end of a statutory bar period, the contractor must file a provisional or nonprovisional patent application in the U.S. Patent and Trademark Office (USPTO) on the elected subject invention; and
  5. Within ten months after the earliest priority filed application or (when applicable) six months from date permission is granted in cases under secrecy order, the contractor files a nonprovisional application (if applicable) and files in additional countries if foreign rights are elected.

Regardless of the above, please make sure to confer with a patent attorney in order to prevent any accidental loss of rights when filing provisional and/or nonprovisional patent applications.

Note that extensions of time may be requested from the contract administrator except for time lines that fall within the statutory bar period.

If the contractor or subcontractor elects to retain title to a subject invention, a few of the important requirements that the contractor must be aware of are as follows:

  1. The contractor or subcontractor must identify publications, offers for sale and public use of the subject invention;
  2. The contractor must, by written agreement, require its employees (other than clerical and/or non-technical employees) to disclose promptly in writing to personnel identified as responsible for the administration of patent matters each subject invention made under the contract in order that the contractor can comply with the appropriate disclosure provisions. The contractor must also execute all papers necessary to file provisional or patent applications on subject inventions and to establish the government’s rights in the subject inventions;
  3. The contractor must notify the contracting officer of a decision not to file a provisional or nonprovisional patent application on the subject invention, not to continue prosecution of a patent application, not to pay a maintenance fee on an issued patent, or defend re-examination or an opposition proceeding on a patent in any country not less than 30 days before expiration of such a response or filing period;
  4. The contractor must execute or have executed and promptly delivered to the contracting federal agency all instruments necessary to establish or confirm the rights the government has throughout the world in those subject inventions to which the contractor elects to retain title;
  5. To convey title to the contracting agency (U.S. Government) if the contractor or subcontractor does not elect to take title or does not fulfill the relevant requirements above, when requested by the government to enable the government to obtain patent protection throughout the world in that subject invention; and
  6. To include in the specification of a provisional or non-provisional application the statement: “This invention was made with Government support under (identify the contract) awarded by (identify the agency). The Government has certain rights in the invention.”

In addition to the above, when dealing with a government contract, the contractor agrees that neither it, nor any assignee, will grant any person exclusive right to use or sell the subject invention unless such person agrees to manufacture substantially in the United States. Since many components cannot be manufactured within the United States it is possible for the contractor to obtain from the government a waiver to such a manufacturing provision.


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.


How Sequestration Will Affect the SBIR/STTR Programs

by Orlando Lopez

One topic of interest and importance to most entrepreneurs is funding, and one popular form of funding is through SBIRs (the Small Business Innovation Research Programs). My colleague Jesse Erlich focuses much of his practice on assisting clients with SBIR and STTR programs, as well as the intellectual property issues associated with SBIRs and STTRs and other government funding.  This week he has provided some information on how he anticipates the sequestration will affect these programs. 

– Orlando


The below information is a summary of a more detailed analysis presented by Rick Shindell in his recent newsletter, “SBIR Insider.”  This and back issues of the “SBIR Insider” are available here

“Just the threat of sequestration has already had a negative impact on some SBIR awards, and that is likely to worsen unless congress and the administration “acts” on how the $85 billion in across the board budget cuts are to be handled for the remainder of FY-13…  The smart money is now saying that sequester will be here for a while, perhaps through May or longer. Most may not see much happen until April. However, many experts agree that the $85 billion in cuts for FY-13 will stay, but there is hope that something will be done to allow a more targeted approach to the cuts rather than the broad based across the board meat cleaver approach the sequestration calls for…  To our SBIR community, the net effect of these threats have resulted in many new SBIR awards being slowed down or halted. We hear reports from SBIR selectees that agencies want to fund their proposals but are unable to due to lack and/or uncertainty of funds…  Don’t blame the agency SBIR program managers because it is not their fault. Orders come down from “on high” i.e. agency comptrollers, who offer the spending guidance within their agency.

In light of the sequester (as described above) the Small Business Technology Council (SBTC) is concerned that small business programs such as SBIR may be disproportionately targeted for cuts.  Small business programs are often lower on agencies’ lists of priorities than they should be, and in fact many of their members have already reported that awards and contracts have slowed down or even stopped.  Some firms have even been given stop-work orders on contracts they already have in anticipation of budget cuts.  In response to these concerns, the SBTC has drafted a letter to the President and Congress urging them to take steps to ensure that small businesses are not disproportionately and unfairly targeted by the upcoming cuts.  SBTC is asking every technology-oriented small business to read this letter, and if you agree with it, add your company’s signature.”