Many stakeholders in the AgTech industry are interested in collaborating with or obtaining funding from the United States Department of Agriculture (USDA), but are unsure what implications such collaborations may have on their intellectual property (IP) obligations, opportunities, and strategy. Here, we summarize key IP implications of entering into a Cooperative Research and Development Agreement (CRADA) with the USDA.
What is a CRADA?
CRADAs are the basis for research collaboration between federal agencies and private sector businesses and organizations. CRADAs are derived from the Stevenson-Wydler Technology Innovation Act of 1980, Public Law 96–480, 94 Stat. 2311 (Oct. 21, 1980), as amended by the Federal Technology Transfer Act of 1986, Public Law 99–502, 100 Stat. 1785 (Oct. 20, 1986) (FTTA). CRADAs are different than grants and procurement contracts in that CRADAs emphasize collaboration between federal laboratories and non-federal parties to undertake joint research as opposed to the transfer of funding.
How are rights in inventions developed under CRADAs allocated?
The allocation of rights in inventions developed under CRADAs are generally subject to a different and more flexible set of rules (described in 15 U.S.C. § 3710(a)) than those prescribed in the Bayh-Dole Act (35 U.S.C. §§ 200–212), which generally applies to inventions developed with federal government funding under grants and contracts. In contrast, the government generally has wide latitude in negotiating certain aspects of CRADAs, including, in particular, with respect to rights in inventions and subsequent patents related thereto. Overall, the allocations will depend on inventorship: was the invention made in whole or in part by a government employee or solely by a collaborator’s employee?
Inventions made by government employee(s) under a CRADA
Where inventions are made either in whole or in part by a government employee (i.e., either government inventions or joint inventions), the government may either assign or license the invention to the collaborator (for reasonable compensation, if appropriate; see 15 U.S.C. § 3710(b)(1)).
The collaborator also has the option for an exclusivelicense in a pre-negotiated field of use (see 15 U.S.C. § 3710(b)(1)). Assignments or licenses to the collaborator of government-developed or jointly developed inventions are subject to the government’s retention of a nonexclusive, nontransferable, irrevocable, paid-up license to practice the invention or have it practiced throughout the world by or on behalf of the government. Further, where the government either assigns or grants an exclusive license to the collaborator, the government retains “march-in” rights to force a license to a third party in “exceptional circumstances” (i.e., where necessary to meet health or safety needs or public use requirements) or if collaborator fails to comply with domestic manufacturing requirements, where applicable. Alternatively, if the collaborator has a non-exclusive license, the government could simply give a license to a third party.
Inventions made by collaborator’s employee(s) under a CRADA
In contrast, where CRADA inventions are made solely by a collaborator’s employee(s), the collaborator may retain title, but must provide the government with a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced the invention throughout the world for government purposes (see 15 U.S.C. § 3710(b)(2)). While negotiating the terms of the CRADA, the collaborator may want to thoroughly describe all background IP (including any patents) related to the research project and clearly exclude the background IP from the rights scheme that applies to CRADA-subject inventions.
USDA CRADA policy and templates
The USDA Agricultural Research Service (ARS) provides a number of template agreements, including a template CRADA, on its website.
Some CRADA terms are more open to negotiation than others. For instance, collaborators will not be able to negotiate out terms required under the licensing requirements of 35 U.S.C. § 209, which apply to both joint inventions and government inventions licensed by a collaborator and are outlined in Section 7.1 of the USDA template. Under this statute, wholly government inventions and joint inventions (by the government and the collaborator) are treated the same.
Key takeaways
Overall, CRADAs can offer collaborators potential advantages over competitors by, for example, facilitating confidential access to USDA’s research capacity, license negotiations, and global network of partners, while also helping USDA scientists contribute more directly to economic development and facilitating licensing of USDA technologies. Potential collaborators should be aware that they have some degree of latitude in negotiating CRADAs and should take care to consider the implications of inventorship on title of resulting IP, among other considerations. Our government contracts and IP teams have negotiated CRADAs with USDA in the past and can provide assistance with CRADA negotiations. Please reach out to MoFo’s Government Contracts + Public Procurement or Patent Strategy + Prosecution teams if you have any questions or if you are interested in learning more about how MoFo could help your company navigate CRADAs with USDA.