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Beware – Untangling Stimulus Strings

Posted by keelynet on July 19, 2009

Man, if you want to lose control of your invention or work, this is the way to do it…

“Clean-tech clients eager to compete for stimulus funds are learning fast that government money doesn’t come without quite a few strings attached. A few examples:

The government has free license to anything you invent with stimulus money.

The government can take that license and give it to your competitor if that company can make the final product cheaper than you can.

If you license your invention to a third party to produce a product, it must be made in the United States.

And if you violate any terms of your stimulus funds contract, you could be accused of fraud and possibly go to prison.

Government contracts mean more red tape to explain to clients. That’s not necessarily a roadblock, lawyers said, but clients will need good compliance infrastructure as they go down that road. The regulations mean more paperwork and cost controls than commercial contracts.

Companies must document what they invented before they received government money or risk losing rights to that IP. And when they invent something with government money, they must inform the government promptly.

They must use their invention, or risk the government seizing title to it. James Clessuras, who leads the technology transactions practice in Wilson Sonsini’s D.C. office, said one thing he particularly warns clients about is the government’s rights to use any inventions for its own purposes, which means it can decide to pay a competitor to develop the product.

There are scores of rules other than Bayh-Dole. The stimulus bill requires that companies track and report how many jobs their projects create. If a company accepts a certain amount of money, it will have to report how much its executives earn. Costs have to be strictly controlled. No alcohol and no entertaining on taxpayer money.” – Source

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