Challenges & Competitions: Managing Intellectual Property Rights
This Q&A Document is intended for HHS officials functioning as challenge managers to guide them through the intellectual property requirements set forth in 15 U.S.C. § 3719(j) of the America Competes Act (Pub. L 111-358, Jan. 4, 2011). The HHS Innovation Council developed guidance for the handling of intellectual property rights in prize competitions authorized pursuant to the COMPETES Act. The suggested language should not be construed to preclude policy limitations that agencies or the Innovation Council determine may be appropriate.
Question: How are intellectual property rights handled in the America COMPETES Act regarding challenges and competitions?
The America COMPETES Act prohibits agencies from gaining an interest in intellectual property developed by a participant in a competition without the written consent of the participant. The Act also permits agencies to "negotiate a license for the use of intellectual property developed by a participant for a competition." 15 U.S.C. § 3719(j)(2)
Agencies may handle intellectual property considerations a number of ways. For example, agencies could indicate in the rules that for an entry to be considered, the participant must grant in writing a license to the solution (a copyrightable work or patentable invention) at the time of submission, or even a written assignment to all rights in the solution (which might be coupled to a retained license by the participant in the solution). Furthermore, the agency could indicate in contest rules that it may choose to negotiate a license with the prize contest winner at some later point. In choosing how to handle intellectual property rights in prize competitions, agencies should consider the aim of the competition, the extent to which obtaining a Government license may impact implementation of the solution outside the Government, the agency's need and intended application for the solution, as well as how treatment of intellectual property rights may influence the interest of solutions providers to participate in the contest.
Treatment of intellectual property rights will vary between competitions, and will depend upon a number of factors. Agencies are encouraged to consult with their respective points of contact in the Office of the General Counsel for assistance in developing terms such as this in their prize contests.
Question: Is a one-size-fits all intellectual property regime required by § 105 of the America COMPETES Act?
No. From a policy perspective, agencies should select an intellectual property regime based on a careful analysis of the goals of the prize competition, an analysis of the full set of incentives for potential participants in light of any agreement about sharing intellectual property rights, and a theory of how the solutions will be implemented post-prize award.
Agencies should note that the America COMPETES Act prohibits agencies from gaining an interest in intellectual property developed by a participant in a competition without the written consent of the participant (15 U.S.C. § 3719 (j)(1). Agencies should clearly articulate the intellectual property treatment for winning solutions in the prize competition’s rules, and they should ask all participants to provide written consent to the rules upon or before submitting an entry. Agencies choosing to use an electronic signature to fulfill 15 U.S.C. § 3719(j)(1) should comply with all applicable statutes, including the Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001 et seq.) and the Government Paperwork Elimination Act (44 U.S.C. § 3504(a)(1)).
In addition, the Act specifically permits agencies to “negotiate a license for the use of intellectual property developed by a participant for a competition” 15 U.S.C. § 3719(j)(2), which can be done at any time during or after the competition.
Question: Are program managers required to post the intellectual property rights considerations in the Federal Register Notice along with other required information about their challenge?
In general, the America COMPETES Act does not require that treatment of intellectual property rights be included in the Federal Register Notice; however, the agency would need to include the treatment of IP rights in the Federal Register Notice if either or both of the following two conditions is/are met:
1) The treatment of the intellectual property rights is a requirement for solutions providers to meet as a condition of eligibility to participate in the competition under 15 U.S.C. § 3719(f)(2). If the treatment of intellectual property amounts to a condition of eligibility to participate in the contest, then it must be included in the Federal register notice under 15 U.S.C. § 3719(f)(2) . One example of this would be where the agency indicates in the rules for the competition that for an entry to be considered, the participant must grant in writing a license to the solution (for example for a copyrightable work or a patentable invention) at the time of submission.
2) The treatment of the intellectual property rights amounts to a "basis on which a winner would be selected" (such as an evaluation factor considered in the selection of the winner) under 15 U.S.C. § 3719(f)(5). If the treatment of intellectual property rights is, in essence, an evaluation factor that the agency would consider in the selection of the prize winner, then the program manager must include that information in the Federal Register Notice as part of the "basis on which a winner would be selected" under 15 U.S.C. § 3719(f)(5). For example, a challenge may identify that the agency wishes to evaluate the intellectual property treatments that would provide options for licensing to the government and may consider this in the evaluation of the solutions. Under this scenario, the challenge manager should include a description of the intellectual property treatment in the Federal Register Notice.
Question: If a program manager is unsure whether the government is interested in obtaining rights to a challenge solution and may want to consider a licensing agreement after the contest is concluded, is this consideration required to be described in the intellectual property rights considerations in the Federal Register Notice along with other required information about their challenge?
No. The lack of a statement in the Federal Register Notice addressing intellectual property rights considerations under this scenario does not preclude the program manager from seeking licensing rights to the solution after the challenge is concluded. Please note that as described in the question and answer above, the treatment of intellectual property rights must be published in the Federal Register Notice under certain circumstances.
Question: Do the COMPETES Act and the Bayh-Dole Act conflict with respect to intellectual property?
There is generally no conflict between the COMPETES Act and the Bayh Dole Act with respect to intellectual property; the two Acts work independently. If, for a example, a university with a government grant were to enter a COMPETES Act competition that called for a typical disposition of intellectual property rights such as a license, the University could generally grant that license under a COMPETES Act prize competition without creating a conflict with any of its Bayh-Dole Act rights or responsibilities.