When donors fund technology, who owns it?

The global development community is increasingly embracing innovation to aid developing countries. But as donors fund more technology solutions, intellectual property ownership, which can vary across donors and types of awards, also becomes an important consideration. While there are general rules that guide agreements regarding IP ownership, determining to whom IP rights should belong is still a case-to-case decision. This holds true for both the U.S. Agency for International Development and the Bill & Melinda Gates Foundation — two of the most active innovation funders — which make IP decisions by determining how an innovation can benefit the most people. “What’s the best way to treat IP that’s going to further our development objective?” said Gayle Girod, chief innovation counsel at USAID, describing how the agency is evaluating and dealing with IP ownership today. “If some partner comes up with, say, a desalinization process, we don’t want to hold that IP,” Girod told Devex. “That doesn’t serve our purpose, for us to hold it, because we’re not going to go and commercialize it. We want it available to the public.” For the Gates Foundation, that decision is guided by the principle of global access, which requires its grantees and partners “to commit to making the products and information generated by the foundation funding widely available at an affordable price, in sufficient volume, at a level of quality, and in a time frame that benefits the people [the foundation is] trying to help.” “We look at a number of factors in making that determination — including how the IP rights will be managed,” Richard Wilder, associate general counsel of the Gates Foundation, told Devex. Since USAID must comply with U.S. government statutes and regulations to provide funding, IP decisions can get a little more complicated. USAID funding is channeled through either contracts or assistance awards, such as grants and cooperative agreements. An award to design and develop technology, according to Girod, may be appropriate under either mechanism. “I would say that generally, more of our [technology] development may happen under assistance, because we are supporting our partner's program,” Girod said. “But a contract is not precluded.” Contracts follow the Federal Acquisition Regulation, while assistance awards are governed by the policies of both the Office of Management and Budget and USAID’s Automated Directives System. Under these standard terms and conditions, the holder of the contract or the assistance award owns the IP. But Girod pointed out that while it’s “very rare” for USAID or any U.S. government body to take ownership of IP that’s created under a contract or an assistance award, the U.S. government may in some cases retain the IP under the former. While other clauses can be added to the standard terms and conditions governing the contract, they’re not going to take away from the broad license, according to Girod. “Unlimited rights,” as stated in the FAR, are the rights “to use, disclose, reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, in any manner and for any purpose, and to have or permit others to do so.” Unlike USAID contracts, Gates Foundation contracts are solely for procuring products and services, and not for developing technologies that have the potential for larger-scale adoption. The IP created under these contracts, therefore, remain with the Gates Foundation. “In such cases, it is easier to operate on the default of the foundation owning the IP,” Wilder said. In supporting innovations, the Gates Foundation provides funding through either grants or program-related investments, which are “high-impact tools” to spur private sector-driven innovation and attract outside capital to its main initiatives. For these types of awards, the rights go to the grantees and the respective entities that the Gates Foundation invests in. The foundation and its partners, in these situations, enter into specific agreements on how IP rights will be exercised or managed. For example, IP rights for inventions created under the Gates Foundation’s Grand Challenges Explorations, a $100 million initiative launched in 2008 to help researchers and innovators develop, sell, market and distribute inventions that could target global development problems, are owned by the grantees. Grand Challenges Explorations is part of the wider Grand Challenges umbrella initiative, which has recently awarded grants to develop an affordable and accurate malnutrition diagnostic device for children, barcoded insect screens to optimize the artificial diets of blood-breeding mosquitoes, and a software toolkit that enables secure payments through a selfie taken by a simple mobile phone. “If there is a commercial market in wealthy countries, we typically allow the grantee to exploit the IP rights for commercial advantage in those markets — provided that what we require in poor countries, in terms of price, quantity, timing for launch and availability, are met,” Wilder said. “As you can appreciate, these are often complex negotiations that very much depend on a case-by-case negotiation.” Check out more insights and analysis for global development leaders like you, and sign up as an Executive Member to receive the information you need for your organization to thrive.