Fred Briggs
April 7, 2021
1:08 p.m. PDT

IP rights

I was signing up for this and have an idea for a submission. However, upon reading the terms related to the IP I had some concerns I would like to address. Below is copy and paste from the terms sheet.

"If Challenge Sponsor notifies Innovator that Submission is eligible for a Prize, Innovator will be considered qualified as a finalist (“Finalist”). To receive a Prize, Finalist must agree to grant The United States Government an irrevocable, royalty free, perpetual, sublicensable, transferable, and worldwide license to use and permit others to use all or any part of the submission including, without limitation, the right to make, have made, sell, offer for sale, use, rent, lease, import, copy, prepare derivative works, publicly display, publicly perform, and distribute all or any part of such submission, modifications, or combinations thereof and to sublicense (directly or indirectly through multiple tiers) or transfer any and all such rights. Notwithstanding granting the Challenge Sponsor such license for any Intellectual Property demonstrated by the Submission, Finalist retains title (e.g., ownership) of such Intellectual Property."

I see that you can use the IP for your own purposes which is normal and expected. However, you also stipulate that you can sell, offer for sale, and transfer the IP rights to anyone you choose and this is not normal. This potentially makes you a direct competitor or you could sell my IP to a direct competitor. The issue that this creates is that the money in this prize is enough to validate an idea, but not enough to actually build a business that scales. The next step beyond this contest is to leverage the IP for investment and that would be difficult with this language. The winner would have to disclose these terms to potential investors which makes the company difficult to invest in. I understand the agencies desire to maintain some control and use it for your own purposes, but certain elements in here make long term success complicated. Any clarification on this point would be appreciated.

With that said I would like to get some thoughts and feedback on what the intention is behind that language. Perhaps some clarification on the intent would smooth over some of this language.
4 Replies

Jonathan Brown
April 16, 2021
4:17 p.m. PDT
I share your concerns.

Steven Wu
April 17, 2021
5:27 p.m. PDT
Agree with the concerns

Kyla Jeffrey HeroX team
April 19, 2021
8:38 a.m. PDT
Reclamation is interested in seeing this capability developed so that it is eventually available for use in the field.  They are not interested in manufacturing the devices themselves or selling the licenses-to-use for the winning solutions. IP  The final demonstration event at the close of Phase 3 is an opportunity for teams to demonstrate their prototypes to the Reclamation, USACE, and potential commercial partners.  There is a potential opportunity for post-challenge development work with a commercial partner. Reclamation optimal scenario would be for the winning team to develop their final technology to a commercial product that Reclamation could purchase.

Steven, Jonathan, and Fredd - please let us know if this helps to address your concerns.

Jonathan Brown
April 19, 2021
12:06 p.m. PDT
Thank you Kyla for your reply. Although this clarification does address my concerns, it unfortunately does not trump or modify the language in the Challenge's legal document. Since my submittal involves the application of existing technology found in patented commercially available equipment the holders of these patents require clear non-equivocal language in the Challenge's legal document that protects such patented intellectual property from being disclosed, shared, copied. or otherwise utilized in the manufacturing of similar analytical instruments by the Sponsor, its commercial partners, sublicensees, or any other entities. Without some form of written modification to the Challenge's legal document I will not be able to make a submittal for this stage of the Challenge. Furthermore, as the equipment in my draft submittal is currently commercially available, there is no need to develop a prototype.
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