​​Patently Strategic - Patent Strategy for Startups

Government Grants and Patent Rights: SBIR, STTR, and Your IP

Season 3 Episode 7

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In this month's episode, we’re talking about the use of government grants and the strings that can come attached to your IP! We’re exploring the various types of small business research grants, how the Bayh-Dole Act regulates inventions generated under government grants, licensing and ownership implications for your patent when using federal dollars, and the sticky webs that you may find yourself in if you are not carefully tracking IP and adhering to the numerous provisions and timelines.

Dr. Ashley Sloat, President and Director of Patent Strategy here at Aurora, leads the discussion along with our all-star patent panel, exploring:

⦿ How the Bye-Dole Act of 1980 regulates inventions under government grants
⦿ As a small business, what types of grants are available to you and whether or not they can cover IP-related costs
⦿ The rights of the federal government to your Invention when you use grant money
⦿ Implications for using subcontractors to perform the work under the grant
⦿ And of course, some of the biggest gotcha’s and practical tips for avoiding them

Ashley is also joined today by our always exceptional group of IP experts including:

⦿ Kristen Hansen, Patent Strategy Specialist at Aurora
⦿ Dr. David Jackrel, President of Jackrel Consulting
⦿ Ty Davis, Patent Strategy Associate at Aurora

** Mossoff Minute **

This month's Mossoff Minute, featuring Professor Adam Mossoff, looks at the introduction of a very important piece of patent reform legislation called the PREVAIL Act.

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Thanks for listening! 

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Note: The contents of this podcast do not constitute legal advice.

00:05 G'day and welcome to the Patently Strategic Podcast, where we discuss 
      all things at the intersection of business, technology and patents.   
      This podcast is a monthly discussion amongst experts in the field of  
      patenting. It is for inventors, founders and IPO professionals alike, 
      established or aspiring. And in today's episode, we're talking about  
      the use of government grants and the strings that can come attack to  
      your IP.                                                              
                                                                            
00:26 We'll be exploring the various types of small business research       
      grants, how the Bayh-Dole Act regulates inventions generated under        
      government grants, licensing and ownership implications for your      
      patent when using federal dollars, and the sticky webs that you may   
      find yourself in if you're not carefully tracking IP and adhering to  
      the numerous provisions and timelines. The use of government grants   
      for research and development is one of the most common areas of       
      concern we get questions about from our clients. And for good reason. 
                                                                            
00:52 Nondiluting capital can be an essential source of funding when trying 
      to get your innovation off the ground. Investor money comes with loss 
      of equity and or control family and friends money may come with the   
      risk of strained relationships. So essentially, free money by way of  
      government grants can seem like an obvious choice, right? And it is   
      for many.                                                             
                                                                            
01:11 The Small Business Technology Transfer, or STTR, and Small Business   
      Innovation Research, or SBIR grants are the largest source of early   
      stage capital for life science startups in the United States,         
      combining to provide over 2 billion annually in support from federal  
      agencies like the NIH. But like money from investors, friends and     
      families, these grants do still come with some serious strings        
      attached and potential ramifications you need to be aware of. For     
      instance, use of these funds grants the government a royalty free     
      license to practice your invention worldwide, to the surprise of many.
                                                                            
01:44 And as we'll discuss, this can include royalty free use of patents    
      obtained before even applying for the grant. This is potentially a big
      problem, especially if the Federal government could be one of your    
      primary customers. Other provisions can result in lost ownership      
      rights if you fail to commercialize or neglect to file the correct    
      paperwork on time.                                                    
                                                                            
02:02 Most of these things are manageable, but when considering government  
      grants, you need to be aware of these gotchas so you're going in with 
      clear eyes and can manage the hooks in a way that doesn't jeopardize  
      your patent rights. And that awareness is our focus today. Dr. Ashley 
      Sloat, President and Director of Patent Strategy here at Aurora, leads
      the discussion, along with our all star patent panel, exploring how   
      the Bayh-Dole Act of 1980 regulates inventions under government grants.   
                                                                            
02:25 As a small business, what type of grants are available to you and     
      whether or not they can cover IP related costs? The rights of the     
      Federal government to your invention when you use grant money         
      implications for using contractors to perform the work under the grant
      and of course, some of the biggest gotchas and practical tips for     
      avoiding them. Ashley is also joined today by our always exceptional  
      group of IP experts, including Kristen Hansen, patent strategy        
      specialist at Aurora, Dr. David Jackrel, president of Jackrel          
      Consulting, and Ty Davis, patent strategy associate at Aurora.        
                                                                            
02:57 Before jumping in with the panel, we'd like to take you to the third  
      installment of the Mossoff Minute, a new monthly segment that builds  
      on our Patent Wars episode and features short conversations with      
      Professor Adam Mossoff, providing updates and quick takes on movements
      in patent reform, significant court rulings, innovation policy        
      happenings, and occasional Star Wars references. This month we        
      discussed the introduction of a very important piece of patent reform 
      legislation called the Prevail Act. Very important developments this  
      summer in patent policy with the introduction of the Prevail Act of   
      2023, co sponsored primarily in the Senate by Senator Christopher     
      Coons and Senator Tom Tillis, this bipartisan bill would bring much   
      needed reform to the PTAB, the Patent Trial and Appeal Board.         
                                                                            
03:43 Created in 2011 by the American Vents Act, this administrative        
      tribunal at the Patent Office that cancels patents at rates around now
      83% or higher has been, I think, rightly accused of engaging in willy 
      nilly decision making and in many cases, having been captured by its  
      mission to cancel patents. So the Prevail Act would impose important  
      procedural and substantive safeguards and guard rails on how this     
      agency acts and hears the claims that patents are, in fact, invalid or
      not. This is really important.                                        
                                                                            
04:24 It will bring stability and reliability back to the patent system and 
      will help move us forward in restoring the gold standard patent system
      that the United States has historically had. The bill largely seeks to
      curb predatory infringement and undo. Hopefully, a lot of the damage  
      caused by the American Invents Act and its most unfortunate progeny of
      the Patent Trial Appeal Board, which, as you mentioned, collectively  
      resulted in something along the lines of an 84% invalidation rate and 
      the death of thousands of patents at the hands of infringers looking  
      to profit from innovations that they didn't invest in or create.      
                                                                            
05:03 The bill seems to largely be a refined version of the Stronger Patents
      Act, which we discussed previously. In that same discussion. Our      
      Patent Wars episode with you, Judge Michelle Randy Landreno of us.    
                                                                            
05:15 Inventor, we identified the core issues of AIA and the PTAB. Many of  
      those center on differences in how the PTAB operates versus           
      constitutionally defined courts. So among those issues that we sort of
      listed prioritized, one was that the PTAB doesn't require standing so 
      that validity of granted patents can be challenged by any member of   
      the public, offensively or defensively, whether or not they're being  
      sued for infringement, and whether or not they have anything at all to
      do with the patent whatsoever.                                        
                                                                            
05:46 The PTAB also has a lowered burden of proof and a weakened presumption
      of validity that the courts afford to a patent that was previously    
      reviewed by experts for potentially years. PTAB Administrative Patent 
      Judges and I use air quotes intentionally have no code of ethics about
      recusal on conflict of interest. So the individuals deciding validity 
      can own stock in or have been employed by an accused infringer, even  
      as legal counsel sometimes.                                           
                                                                            
06:11 The USPTO has committed to panel stacking its APJs to reach           
      preordained results. The PTAB was sold as a faster, cheaper           
      alternative district courts. But the average cost to defend a patent  
      at the PTAB is somewhere around a half million dollars per case, and  
      it can take five to ten years for a final result.                     
                                                                            
06:28 Petitioners can keep filing petitions repeatedly 30, 40, 50 against   
      the same patent. I think I've heard you say as many as 90. This is    
      referred to as serial petitioning.                                    
                                                                            
06:38 The patent owner has to constantly pay to defend against countless    
      bytes of the same apple. And speaking of double jeopardy, these       
      challenges can also come after a patent is held valid in court under  
      statute grounds, not in purview of the PTAB. That was a lot of        
      context.                                                              
                                                                            
06:54 Does the Prevail Act address some, all or most of these issues? Well, 
      first of all, Josh, that was a spectacular kind of bill. Of           
      particulars in a well pledged complaint detailing everything that is  
      wrong with the PTAB, which is I am on record repeatedly in white      
      papers that I've published in op eds and in my commentary and my      
      academic scholarship in which I have repeatedly identified the PTAB as
      an Administrative Tribunal that is, for all intents and purposes, kind
      of out of control and has wrecked havoc on the US. Innovation economy.
                                                                            
07:45 A lot of this goes back to kind of its very founding generation in the
      American Vents Act, which imposes almost no limits on the PTAB. I     
      think what we refer to as the IPR process, right, the inner party's   
      review process. I think in the American Men's Act, the entirety of the
      provisions that govern how this process will occur, both procedurally 
      and substantively, are about eight provisions.                        
                                                                            
08:17 I mean, for what is supposed to be this very substantive hearing      
      process, supposed to be these hearings, the administrative hearings.  
      And so, for all intents and purposes, what happened here is Congress  
      got caught up in this narrative of the so called patent troll, which I
      think has now been well established as a policy narrative pushed by   
      big tech and other companies to create this notion of a moral panic   
      about a broken patent system and invalid patents. And so you had this 
      very one sided piece of legislation that was enacted where Congress   
      said, we have to address this problem.                                
                                                                            
09:02 We have to address this problem of this alleged abuse of the patent   
      system by people receiving invalid patents and suing companies like   
      Google and Apple, which at the time claimed as the white hat. So we're
      the great innovators. We're not stealing anyone's technology, which   
      also has now shown to be false.                                       
                                                                            
09:26 Do no evil. JK yes, they created this agency where they essentially,  
      or this tribunal where they essentially said to it, all right, you    
      have one mission. Cancel patents, invalidate patents, eliminate       
      patents, and we're going to impose almost no restrictions on you in   
      achieving that mission.                                               
                                                                            
09:46 Now, I mean, in any other context, you say, okay, Congress creates an 
      administrative agency, imposes almost no limits on them, and gives    
      them a mission to achieve. Are any of us shocked that they become     
      captured by that mission and driven by that mission and will do       
      anything in their power to achieve that goal of their mission? And    
      this is exactly what has happened with the PTAB. And so you just have 
      had extensive abuses of process, abuses of basic norms of rule of law.
                                                                            
10:17 Something that Josh And mentioned, among his identification of        
      numerous problems with the PTAB course is panel stacking, where they  
      were literally adding judges. Sorry, I will follow Chief Justice      
      Roberts point in one of the PTAB cases where he said to the attorney, 
      what did you call these people at the PTAB? Judges. I use a different 
      term for that.                                                        
                                                                            
10:42 So these Administrative Patent Judges, as they're called that, they   
      were literally adding administrative Patent Judges to panels. You're  
      supposed to have three judges. In one notorious case, they ended up   
      with seven total APJs in order to reach the preordained right mean.   
                                                                            
10:59 And it's almost shocking that these are lawyers who are these are all 
      lawyers. These are people with law degrees. They went to law school,  
      and even before law school, they learned about and everyone has       
      studied in history the whole controversy over FDR's court packing     
      plan, and yet no one blinked an eye, and no one said, maybe there's a 
      problem here.                                                         
                                                                            
11:20 In Due Process and the Rule of Law more administrative judges to a    
      panel. In order to reach a preordained right result, the Prevail Act  
      really is necessary to just bring some basic norms of due process and 
      the rule of law back to this Tribunal, which is absolutely necessary, 
      especially given that many of the very important reforms that were    
      adopted by Director Iyanku during his tenure at the Patent Office as  
      Director, including the discretionary denials to the Fintiv test and  
      his creation of this kind of appellate and precedential decision      
      making process as a way to address the superficial justification or   
      rationalization for panel stacking that have been eliminated, for all 
      intents and purposes, by the current Director. So you just have this  
      kind of whip sign back and forth of different procedures, different   
      rules, things changing on a month to month basis.                     
                                                                            
12:31 And this is exactly what undermines and kills the function of property
      rights as a reliable and effective legal platform for people to rely  
      on, to say, okay, my rights will be the same today as they will be    
      five years from now. So you can invest in me, and we can go into the  
      market and spend hundreds of millions of dollars, if not billions, to 
      create a supply chain to produce new products and services. The       
      Prevail Act is incredibly important, and it's absolutely necessary if 
      we're going to have any semblance of the patent system that drove the 
      US.                                                                   
                                                                            
13:07 Innovation economy for the 200 years before the AIA was created. PTA  
      we're also publishing clips from the Mossov Minute as, short form     
      videos on Instagram reels, YouTube shorts, and even TikTok. You can   
      check out these shorts and follow us at aurora patents on all three   
      platforms.                                                            
                                                                            
13:23 Now, before diving into the deep on all things SBIR, STTR Bayh-Dole, and 
      patent specific hooks when using government grant money, we'd like to 
      provide some extra context, as we often do for those newer to         
      patenting on some important concepts that come up in today's talk. One
      of the most important things to understand for navigating one of the  
      sharpest patent related corners with government grants is the         
      distinction between enablement and reduction to practice. We've spoken
      a ton about enablement in prior episodes, and I'd highly recommend you
      go back and check those out, because there are a few more important   
      areas of patent law to grasp when it comes to getting a quality patent
      that will actually stand the test when it comes time to assert your   
      hard earned patent rights.                                            
                                                                            
14:01 When patents are examined by the Patent Office and later litigated in 
      a courtroom, several sections of US. Statute come into play in        
      determining if the claims in the patent are eligible. Useful, novel,  
      nonobvious, and enabled reasons for rejection or invalidation fall    
      under a handful of sections of US.                                    
                                                                            
14:18 Code title 35, section 112 covers enablement or describing the        
      invention in sufficient detail to allow it to be practiced by someone 
      skilled in the art without undue experimentation. You're trading      
      disclosure for exclusivity. This is the fundamental deal of the patent
      system, and enabling public disclosure is a core requirement to       
      getting and retaining a granted patent.                               
                                                                            
14:40 This allows others to take the invention and reduce it to practice in 
      other words, practically make it work in the real world, as you have  
      described in your patent application. In many cases, to get a granted 
      patent, you wouldn't have yet had to actually reduce the invention to 
      practice yourself, say, with something like a testable prototype. The 
      panel gets into more particulars on this, but it's important to       
      understand that the government grant stipulations care more about     
      actual reduction to practice and less about basic enablement when it  
      comes to what aspects of your invention will come with automatic      
      license implications when working with grant funds.                   
                                                                            
15:13 How some of this actually plays out, though, in terms of when and why 
      innovators will seek government funding, will often depend somewhat on
      where the invention falls. On the art spectrum, practitioners put     
      inventions into one of two categories predictable and unpredictable   
      art. This distinction comes up quite a bit in today's talk in terms of
      what it means for both enablement and reduction to practice standards.
                                                                            
15:34 We discussed the difference in greater depth back in season two,      
      episode ten on patenting, biological, Chemical, and Emerging          
      technologies. But in essence, some technologies, like those rooted in 
      physics and mechanics, are considered predictable by the US. Patent   
      office, while others, like biological and chemical technologies, are  
      generally considered unpredictable.                                   
                                                                            
15:52 It follows that the amount of disclosure required to enable an        
      invention is related to the predictability of the technology, and     
      socalled unpredictable arts require more description. To teach a      
      reader how to make and use the technology, one last piece of new      
      terminology that comes up is march and rights. This is a provision of 
      the Bidul act that causes some confusion and alarm.                   
                                                                            
16:12 As discussed, when you take government grant money, that often comes  
      with a requirement to license your patent to the government for free. 
      This doesn't prevent you from licensing to others for profit and      
      doesn't have to impact your ownership rights. It just means uncle Sam 
      gets free use in exchange for your now federally supported research.  
                                                                            
16:28 March in rights, however, can take that one step further and would    
      allow the government to demand that you license or even assign your   
      invention to another entity, potentially even outside of the          
      government. As the panel will discuss, this hasn't been as horrifying 
      in practice as it sounds like it could be, but it's important to      
      understand the potential risk and distinction when compared to the    
      express rights that come by default for the federal government. Now,  
      without further ado, here's our conversation on government grants.    
                                                                            
16:53 Take it away, Ashley. So today what I wanted to really talk about.    
      This has been something on my agenda for a long, long time, but we    
      just had other stuff that we wanted to dig into.                      
                                                                            
17:02 But I wanted to basically look into the Bayh-Dole act of 1980s         
      provisions and then look at the types of grants that kind of fell     
      under this, in particular companies that we work with, and then some  
      of the interesting nuances of invention reporting and protection      
      requirements. And so there's definitely some stuff I'm sure most of us
      are familiar with, but there's definitely some nuanced stuff that was 
      even a little surprising to me. So I'll kind of go through some of    
      that.                                                                 
                                                                            
17:29 So the Bayh-Dole act was signed in 1980. This is a picture of Senators 
      Birch Bay and Bob Dole at the US. Capitol in February of 1978.        
                                                                            
17:39 And the act provides NIH funding recipients incentives to promote the 
      utilization of inventions conceived or reduced to practice, or so     
      called the subject invention, which we'll talk about what that        
      definition is, and the performance of federally supported research and
      development. And so, really, the goals of the Baydoll Act were to     
      promote utilization of inventions arising from federal money,         
      encourage maximum participation of small businesses in federally      
      supported research and development. Was to promote collaboration      
      between commercial concerns and nonprofit.                            
                                                                            
18:13 Organizations to ensure that inventions made by nonprofits and small  
      businesses are used in a manner to promote competition and enterprise,
      but without encumbering, research and discovery. Promote the          
      commercialization and public availability of inventions ensure that   
      the government obtains sufficient rights in federally supported       
      inventions to meet the needs of the government and protect the public 
      against non use or unreasonable use of inventions and also minimize   
      the cost of administering policies in this area. So there's lots of   
      reasons that the Bandel Act was put into act, but it's really know,   
      again, incentivize innovation, promote collaboration between small    
      business and nonprofits and the government, and also make sure that   
      the government can get its piece when it wants to.                    
                                                                            
19:00 So, before we get into various provisions of the Betawell Act, I want 
      to go through some definitions because these aren't there's definitely
      some meat here. So they talk about subject invention everywhere. And  
      this is any invention conceived or first actually reduced to practice 
      in the performance of work under a funding agreement.                 
                                                                            
19:21 And so the interesting thing is that even if you are not, and this    
      will come up later, even if you're not going to pursue protection on  
      an invention, you still have a duty to disclose that invention to the 
      federal agency. And so it's not just any invention that you want to be
      protected, it's any invention that you've conceived of or first       
      actually reduced to practice in the performance of the work under the 
      funding agreement. And this is also interesting too, because even just
      from a when you think about the patent process and inventions versus  
      inventions and federal money, you go through the patent process when  
      you've conceived of it and can at least constructively reduce it to   
      practice, right? Whether you can kind of describe it and make some    
      drawings about it.                                                    
                                                                            
20:08 But here the government grant, the provisions of Baydol apply if      
      you've conceived of it or first actually reduce it to practice. And   
      there's actually some meat there. So from a conception perspective,   
      there's lots of areas where this is described in the MPEP and case law
      and different legislation, but it's the formation in the mind of      
      inventor of a definite and permanent idea of complete and operative   
      invention, conception and means of putting the idea into practice.    
                                                                            
20:42 So this again is beyond just I have an idea. It's the fact that I have
      an idea and I have some thoughts around how I would actually put it   
      into practice, right? So it has more formation than just an idea. And 
      that kind of gets at the question we always get also of can I patent  
      my idea? And it's like, well, when does an idea become an invention?  
      And it's really that conception, right? It's that formation in the    
      mind of not only the idea, but the operative nature of it and the     
      means of putting it into practice, right? And that's where you finally
      actually have an invention that is patented rather than just an idea, 
      right? And of course, anybody refute me, speak up, tell me something  
      else.                                                                 
                                                                            
21:25 And then from a first actual reduction to practice, there's quite a   
      bit of case law about this. So a lot of what's in the MPEP. Actually, 
      the only place I could really find good clear definitions in the MPEP 
      was around interference proceedings, which we know are not really a   
      thing anymore with America invents act.                               
                                                                            
21:43 But there's a lot of case law in other parts of federal rules and     
      things that include additional language. A lot of times you'll find it
      as I think, making the invention, I think is a lot of times how you   
      see it. Yeah.                                                         
                                                                            
21:56 The invention term is made basically meaning conception or actual     
      reduction of practice. But it basically means embodiment or a         
      performed process meets every element of the claimed invention and the
      embodiment or process operated for its intended purpose. And in terms 
      of what has tripped a lot of people up in terms of federal money is   
      that last piece there where it operated for its intended purpose? Let 
      me see here.                                                          
                                                                            
22:25 I have some notes here on the side. Yes. Even when tests are conducted
      under bench or laboratory conditions, those conditions must fully     
      duplicate each and every condition of actual use.                     
                                                                            
22:38 Or if they do not, then the evidence must establish a relationship    
      between the subject matter, the test condition, and the intended      
      functional setting of the invention. And where this has trip people up
      is that they think they actually reduce it to practice before they    
      take federal money. And then they take federal money and do more      
      testing, only to find out that the additional testing they're doing   
      was considered by different court systems to be the first actually    
      reduced reduction to practice of the invention.                       
                                                                            
23:04 So their invention actually does fall under the federal money, even   
      though they were trying to avoid that by first actually reducing it to
      practice in advance. And so some of the case law that's around this,  
      some of the older one was this Nray Eddie L. King.                    
                                                                            
23:19 This is kind of a sad story, but like an interesting story. He was    
      literally just a guy that operated forklifts and things like that for 
      the you know, so he's like loading planes and doing all these things. 
      And he notes that the Air Force so he has no employment agreement that
      says that when he invents something the government owns, like he's    
      just a guy.                                                           
                                                                            
23:40 Right. And so he invents he notices that the government needs these   
      pallet couplers. So he basically decides that he's going to, on his   
      own time and with his own money, work in the evenings to come up with 
      a pallet coupler.                                                     
                                                                            
23:56 So he does and he does some preliminary testing on his own and makes  
      this really great coupler. Well, then again, he's contacted a patent  
      practitioner to draft a patent application. So he's clearly conceived 
      of it and at least constructively reduced it to practice.             
                                                                            
24:14 BLC even has a prototype. Right. He's done by all, it seems like all  
      measures a first actual reduction to practice.                        
                                                                            
24:22 He then takes this to the Air Force and hey, like, look at this. I've 
      solved your problem. Why don't you use this and see if it works for   
      you.                                                                  
                                                                            
24:31 And so they basically had these four criteria that these couplers had 
      to have. And it's unclear from the record whether any coupler they had
      ever used had met all four criteria. But Eddie's had met at least     
      three of the four criteria.                                           
                                                                            
24:46 So they're like, oh, this is freaking awesome, especially because it  
      kept the pallets together in flight or something like that. Anyways,  
      but then the government starts to use this without, I think, proper   
      licensing with Eddie because they had contributed to it, right? They  
      did the testing with the Air Force's resources. And so Eddie fights it
      and says, whoa, whoa, whoa, no way.                                   
                                                                            
25:10 Like I did all this stuff before. And it was found that, know, Eddie  
      had not actually tested it for the intended purpose. Like he had not  
      actually taken pallets and done whatever moved them about and whatever
      it was that the first actual reduction to practice was actually with  
      Air Force money.                                                      
                                                                            
25:26 And he prior to that, had not actually reduced it to practice. So the 
      government was able to take a license. I don't think they owned it,   
      but was able to get a license probably with reasonable all paid up    
      license.                                                              
                                                                            
25:43 I don't know what the provisions of the license were. But anyways,    
      suffice it to say that the testing that he did was not sufficient to  
      avoid the government having rights to the invention. And this was     
      another case way more recently that's actually not fully settled out  
      yet.                                                                  
                                                                            
25:58 There was ideal innovations inc. Versus United States, and this has   
      been bouncing around the courts for a number of years, but there was  
      several patent applications filed by Ideal Innovations in 2006. Ideal 
      Innovations tested the material for impact.                           
                                                                            
26:12 So this was like an armored vehicle thing where they were going to    
      basically wrap the chassis in some kind of metal to make it explosion 
      proof or something. So when Ideal Innovations tested the material,    
      they basically did a coupon, a small piece of metal and then tried to 
      blow it up or something like that and said that this was the first    
      actual reduction to practice because it showed that the test armor    
      worked for its intended purpose. Well, one of the initial courts      
      basically said, no, this was a test of the armor, not of the          
      invention.                                                            
                                                                            
26:42 And the invention being the armored vehicle or the chassis wrapped in 
      this armor. And so an actual test was needed to determine whether the 
      prototype worked for its intended purpose. So when in 2007, Ideal     
      Innovations entered in a licensing agreement with the US.             
                                                                            
26:58 I can't remember which branch of the armed Forces it was and then had 
      them do some testing, that was the first actual reduction of practice 
      of the actual invention. And so again, the title and licensing        
      provisions of that agreement were now different than what he had      
      intended because the first actual reduction of practice was using     
      government resources, not his own. And so, again, this is, like, a    
      really tricky thing when there are companies and inventors who want to
      avoid using federal money for conception or actual reduction to       
      practice, to avoid kind of this clause in their patents that we'll    
      talk about and any kind of ability for the government to seek title to
      the invention or a non exclusive license to it because they help fund 
      it.                                                                   
                                                                            
27:44 But it's really hard. You definitely have to do a lot before the grant
      kicks in to avoid the government having those different rights. Do we 
      have any questions about those two cases? Okay.                       
                                                                            
27:57 I remember being back at companies that we had government grants like 
      SBIRS or even bigger government grants. And like you said, we sort of 
      knew that anything invented under using the government's money was    
      subject to these provisions. And as far as I understand it or         
      understood it, I'm not sure if it's changed, is that the government   
      then would be able to use the technology without paying.              
                                                                            
28:30 They would basically own a non exclusive license to anything that was 
      invented under the grant. I don't know all the details. I'm not sure  
      what other rights they may have to be able to like any type of        
      ownership over the IP, or be able to say who could use it or dictate  
      other sorts of licensing agreements.                                  
                                                                            
28:57 I'm not sure. But like you were saying, we knew that was a            
      stipulation, so we would always file all the provisionals or patent   
      applications and do all of the enablement right. Sufficient reduction 
      to practice what have you to enable the actual invention.             
                                                                            
29:17 Before we filed the grant, we saw it as just like any other type of   
      disclosure. So these cases are interesting that I wonder a lot of the 
      things we talk about, it seems like to me, and I'm curious to get your
      take on it, Ashley, if you think that it's really down to the details 
      in these particular cases. From what we know of 112 and enablement and
      clarity and all that, if you filed as an inventor, enough provisionals
      or patent applications before the grant kicked in to fully enable it. 
                                                                            
29:56 Actual reduction to practice to me, is not necessarily required for   
      full enablement. So maybe that's really my question for you. Do you   
      see that as a higher bar in this case? Yes, I would agree that's part 
      of what I researched but didn't include in here because I kind of went
      down that road and I was like, well, it's kind of different because to
      satisfy section 112, it's like the written description requirement,   
      enablement, possession, those kind of terminology.                    
                                                                            
30:27 And I think you could achieve now, again, it depends on what technical
      area we're talking about, right? The less predictable sciences. I     
      think it's very easy, easier. Enable, provide written description,    
      provide possession, proof of possession, because no prototype needs to
      be made to prove possession.                                          
                                                                            
30:51 Right. That's very clearly spelled out in the and so I think for less 
      crazy. Inventions, less word, more predictable art.                   
                                                                            
31:01 I think it's very easy to get a patent without first actual reduction 
      to practice in the more highly technical areas or areas that are way  
      more unpredictable. I think to really, truly enable it to really show 
      possession and written description, you probably have to have some    
      reduction to practice. But is it reach the bar of actual reduction to 
      practice? Right? Because I can show taking it to like a cancer case,  
      right.                                                                
                                                                            
31:31 If I'm, that I want to cure or I want to provide a treatment for a    
      broccogene driven breast cancer, I could put cells in a dish and put  
      in some kind of inhibitor in that dish and show that the broca gene,  
      the transcription of it was decreased. Right. The RNA coming off that 
      gene was reduced.                                                     
                                                                            
31:57 Or I could show protein levels of broca down or I don't even know what
      broca does, frankly. Breast cancer. Right.                            
                                                                            
32:03 Anyway, I could show that broca was affected. Right. But that would   
      not necessarily mean that it actually worked for its intended purpose,
      which was actually treating breast cancer.                            
                                                                            
32:15 Right. You'd actually have to go into humans or at least animals to   
      show that. So in that case, I would say that I can't get first actual 
      reduction to practice until I put it into at least an animal and      
      probably ideally a human.                                             
                                                                            
32:27 Right. And so I think it is going to be super case dependent, but I   
      don't think they're mutually exclusive. But I also don't think that I 
      guess yeah, they're not mutually exclusive, but they're not a complete
      overlap either.                                                       
                                                                            
32:41 Right. You don't get one by getting yeah. So do you think, let's say  
      you're in a predictable art space and you have not actually reduced it
      to practice, only done modeling and what have you, that the patent    
      office under 112 would say, okay, it is enabled even though you       
      haven't actually reduced it to practice.                              
                                                                            
33:04 Now you go into a government grant and they say, oh, well, it was     
      totally enabled, you clearly own this invention. But we still own it  
      because you never reduced it because you reduced it to practice under 
      our dollar 100%. How you understand? Because it's an or provision.    
                                                                            
33:20 Right. So if you either conceive of the invention under the government
      grant or first actually reduce it to practice. So I guess what your   
      point is, depending on the technology, it could be a higher bar or it 
      may not be a higher bar.                                              
                                                                            
33:35 If it's an unpredictable art, it's kind of the similar thing. You have
      to reduce it to practice anyway, or at least pretty close. But if it's
      unpredictable sorry, but if it's predictable, you may by the law, by  
      the patent office own the invention.                                  
                                                                            
33:52 But in terms of the government grant, you would still be under some   
      agreement to license it to the government. Yeah, I think it's         
      honestly, they're really smart in putting this in the Bay Dolph,      
      because I think you'd have to do a lot of development in almost any   
      technical area, but especially the more unpredictable it is to        
      actually first reduce it to practice and prove that it works for its  
      intended purpose. That's a lot of work to do and the whole reason you 
      get these grants is to do that.                                       
                                                                            
34:27 Right. So they were really smart in their language. They kind of      
      right.                                                                
                                                                            
34:32 Yeah. That's interesting. But rest assured I'll share some other stuff
      with you later that it doesn't seem as bad as it appears, but Kristen,
      did you have something to do? I do, I have some clarification.        
                                                                            
34:43 So in our first to file patent system, which is after the America     
      Invents Act occurred, you no longer have to reduce your invention to  
      practice in order to just file your application. Right. And when I say
      reduce to practice, there are two kinds.                              
                                                                            
35:04 You can actually reduce it to practice, which is what we're talking   
      about here and which is what the government grant situation says. And 
      you can constructively reduce to practice. Constructively reduce to   
      practice is what you're doing when you file a regular patent          
      application where the whole invention is completely disclosed.        
                                                                            
35:24 Okay. So it didn't really go away. It was just a different sort of    
      assessment of what reduced to practice means for the patent law side, 
      for the government side.                                              
                                                                            
35:37 I absolutely agree. It can be a much more stringent thing. And because
      of that, if you are a company that has a first product or a first     
      couple of patent applications I don't think it's always smart to go   
      after government grants if you are not reading the fine detail and    
      understanding that they may own and in some cases an exclusive right  
      in some cases a non exclusive right.                                  
                                                                            
36:04 So you want to be careful when you go after these government grants to
      reduce to practice because maybe you don't want to do it with your    
      first few brilliant ideas. Maybe you want to do this a little further 
      along the line. That's helpful.                                       
                                                                            
36:18 Thank you. Chris, I think additional detail quick. I'm just curious if
      it affects kind of the preference between so if one company was to    
      apply for a company or I'm sorry, for a grant that has yet to reduce  
      practice their invention versus another company that has, do you think
      the first company would probably have preference or does that weigh   
      into it from a government grant perspective? I think it'd be pretty   
      surprising.                                                           
                                                                            
36:50 It's one thing if it's a response to a request for proposal. Right.   
      You're going to get a lot of proposals that are competing and I don't 
      know what the provisions are about that.                              
                                                                            
36:58 There's basically two grant types in particular I'm going to talk     
      about today that impact the companies that we work with and under     
      those and I think are more in line with what the Baydoll Act was      
      intending, especially around that partnership between government and  
      small businesses or government and research institutions. Or between  
      government, small businesses and research institutions. But from a    
      request for proposal perspective, that's a really interesting         
      question.                                                             
                                                                            
37:28 And that might get more to Kristen's point, where the licensing       
      provisions of those might be a little bit more case dependent, and    
      then obviously they're weighing different companies on lots of        
      different parameters and that could impact how they're weighing those 
      companies. But I also don't know what the licensing structure looks   
      like for companies in that kind of setting where, like I said, where  
      it's a request for a proposal or something like that. But I don't     
      think it's as much of a in the types of grants I'm talking about      
      today.                                                                
                                                                            
37:58 I would be surprised if you got two companies doing the exact same    
      thing or really highly similar just because there's a whole bunch of  
      just interesting research projects coming in across the whole         
      spectrum. And so it'd be surprising that you would have two companies 
      I mean, that's the hasn't happened, but surprising there'd be two     
      companies at the same time at the same entry period applying for the  
      same thing. Right.                                                    
                                                                            
38:21 What I was kind of getting at, though is as far as not a return on    
      investment, because I doubt that they're looking at it that way, but  
      if they see the opportunity of a licensing agreement or something more
      so with one company versus another, I wonder if that way sorry, go    
      ahead. I was going to say, yeah, well, the license provisions for     
      these two grant types I'm talking about today are just like set. It's 
      basically a non exclusive, non transferable, whatever license.        
                                                                            
38:49 And so it's the same for every company coming through these two       
      particular grant types, but from where the company is in development  
      and how that impacts their decision making, it's hard to say. But I   
      will. Spoiler alert.                                                  
                                                                            
39:03 In all of the years that Baydol has been enacted for their march in   
      rights is basically what we're talking about here. The government's   
      ability to kind of step in and say, okay, you have your invention and 
      now I want to use it. There's only been eight petitions for march and 
      rights since Beidol was enacted almost 40 years ago, and all those    
      petitions were denied.                                                
                                                                            
39:24 So the likelihood of a government stepping in and saying, okay, you   
      use federal money and we have this ability to step in when we want to,
      and then we actually do. There actually is no current case that shows 
      that they did do spoiler alert. So interesting.                       
                                                                            
39:45 All right, so let's get to the provisions of Baydul. And I left out   
      the nonprofit ones because we don't really work with nonprofits. Not  
      to say they're not important, they are immensely important.           
                                                                            
39:53 But I didn't go down the nonprofit trail, so I left off any nonprofit 
      stuff. I think there was seven betal provisions I left off the 7th,   
      which deals with nonprofits. All right, so Bay Dal provisions, you    
      have to disclose each subject invention to the federal agency within  
      two months of becoming aware of the subject invention.                
                                                                            
40:13 You have to make a written election within two years after disclosure 
      to the federal agency, or within 60 days of any statutory period,     
      which means like a public disclosure, an on sale activity or something
      of that nature. And if you don't make that written election to keep   
      the invention within two years, then the government can seek title.   
      Otherwise, if you make the election, you retain the title to that     
      subject invention, which means you own it.                            
                                                                            
40:38 Right. Three, agree to file a patent application prior to any         
      statutory bar date and corresponding patent application in the US.    
      Within one year and other countries within ten months.                
                                                                            
40:50 Both are extendable, and it's actually recommended that you almost    
      automatically extend those timelines because as we know, foreign      
      country stuff, a lot of times you want to take a lot longer to do     
      that. So you almost automatically, as a grant recipient, want to      
      extend that foreign deadline as much as you are able so that you'll   
      have to do it as quickly. For elected inventions, the federal agency  
      shall have a non exclusive, non transferable, irrevocable paid up     
      license to practice any subject invention throughout the world.       
                                                                            
41:19 And that's to your point, the whole paid up license piece. The federal
      agency to require periodic reporting on the utilization of the        
      invention and the obligation to include in patent applications a      
      statement specifying that the invention was made with government      
      support and that the government has certain rights. And then, like I  
      said, there's a 7th one regarding nonprofits, but I didn't include    
      that.                                                                 
                                                                            
41:41 So here's kind of the timeline again that kind of just shows some of  
      the reporting stuff. You have to report inventions. Again, that's all 
      inventions, not just the ones that you want to protect within two     
      months.                                                               
                                                                            
41:46 You have to make an election of that invention to keep the title      
      within two years. And if you don't, then the agency can retain that   
      title. You have to confirm the license with the government along with 
      the initial patent filing.                                            
                                                                            
41:46 You have to do that initial patent filing within one year of election,
      unless there's some kind of extension which is recommended. And then  
      again, you can request extensions of time for any statutory bar stuff.
      You have to do annual reports on utilization.                         
                                                                            
42:23 Anytime you have a change in patent status, you have to update them   
      and let them know. Like if you're going to discontinue prosecution,   
      you need to let them know. And then you have to include a final report
      within 90 days after the project ends.                                
                                                                            
42:34 And there's some details on that final report as well that I'll talk  
      about in terms of inventions, but also data. And all these are        
      reports. Sorry.                                                       
                                                                            
42:43 Yeah, this is a great chart and definitely things that need to be kept
      in mind for companies that are doing this sort of work under          
      government grants. And I'll say this almost in every case there's like
      yearly, if not quarterly reporting that you have to do for the grant  
      itself, especially the bigger ones, you're physically meeting with    
      people generally, right. Regularly, at least once a year.             
                                                                            
43:13 And so the invention report within two months, though, is something   
      that might fall in between those meetings. So I feel like in the      
      grants that I've been involved in anyway, these sort of conversations 
      are naturally always come up at grant review times and in these mini  
      reports and of course in the larger reports. But that remembering that
      all disclosure to the government of any invention within two months is
      sort of its own thing that I think people don't always remember to do.
                                                                            
43:50 Yeah, you'd almost have to have a go to person to put stuff into      
      Iedison or have multiple accounts with the business where anybody I   
      don't know, it's interesting, there's definitely a management piece of
      this right within your company. How do you manage this? Because what  
      do they say? If it's no one person's responsibility, it's nobody's or 
      something? I always look for sayings, but it's something like that,   
      right? If no one person is responsible, then it's nobody. Then        
      nobody's going to do it.                                              
                                                                            
44:20 Right? Yeah, just another we talk a lot in general about marketing and
      sales being looped in to IP team. So when you make an update to the   
      website or when you put out customer material spec sheets, we should  
      make sure that the IP team is in the loop and that all disclosures    
      have been made. And this is sort of another one of those where it's   
      like your grant management team should be looped in with IP.          
                                                                            
44:50 Yeah, exactly. Walma says you should meet monthly probably to review  
      it, and if there's nothing to review, then you just cancel the        
      meeting. But there almost should be like a monthly for those          
      organizations that are moving very quickly.                           
                                                                            
45:02 Right. There should be something more standardized, so kind of getting
      to the margin rights. So, like I said, the federal agency can require 
      the contractor to an assignee or exclusive licensee of a subject      
      convention to grant a non exclusive, partial exclusive or exclusive   
      license in any field of use to a responsible applicant or applicants  
      upon terms that are reasonable under the circumstances.               
                                                                            
45:26 So what does this mean? What are reasonable? So, practical application
      if the government or the agency feels that effective steps are not    
      being taken to achieve practical application of the subject convention
      in such field of use. You can imagine, of course, if you had          
      supposedly a blockbuster drug that was going to cure all cancer, if   
      they didn't feel like you were taking effective steps to achieve that 
      field of use, they might want to march in health and safety need to   
      alleviate health or safety needs which are not currently reasonably   
      satisfied. Public use requirements set by agency are not being        
      reasonably satisfied.                                                 
                                                                            
46:08 And actually, in the 42 years since enactment, the eight petitions    
      that were filed were largely around health and Safety and public use. 
      It was related to various drugs and either price problems with those  
      drugs. Although the agency denied the petition because they said the  
      drug is still adequately it was price in the US.                      
                                                                            
46:31 As compared to other wealthier nations, but they said that was still  
      adequately available to the public. It didn't present any health or   
      safety issues. And another one was around.                            
                                                                            
46:43 Apparently some drug manufacturer was having problems with their      
      manufacturing line. And so somebody petitioned the NIH to basically   
      say, please do marching rights to make this to fix this. And they     
      basically said, by the time that we open this all up, by the time we  
      march in, open it up, and people start making this drug, but go       
      through the FDA to get their approval of the drug because you can't   
      just go under their approval.                                         
                                                                            
47:10 The manufacturing thing should be well remedied by that point. So     
      there's no use in it. Right.                                          
                                                                            
47:16 That's a pointless argument. So they denied that one as well. And then
      breach of agreement.                                                  
                                                                            
47:21 If the government feels like you're in breach of the agreement, then  
      that they might then want to do a march in. But again, has only been  
      petitioned eight times in the 42 years of Bayh-Dole, and all of them   
      have been denied. So that's a good ODS for clients who are concerned  
      that if they use government money to really springboard their         
      technology and have to include this clause in their patent, the       
      likelihood of the government marching in on those rights.             
                                                                            
47:49 If you consider how many have been issued, how many patents with      
      government grant clauses have been issued, how many times march in    
      petitions have been filed, and then those that have been allowed,     
      which is zero, your ODS are pretty good. So these are not the patent  
      holders that are filing these petitions. These are like third parties 
      that are asking the government to step in.                            
                                                                            
48:08 Correct? And I don't know who the third I didn't look that deep into  
      who the third parties were, but yes, I could actually pull it up on   
      the side here because I think the link is in all of it. Interesting.  
      Didn't survive.                                                       
                                                                            
48:18 I'll share that. Apologies if I'm skipping ahead, but I'm curious how 
      this actually works. Let's take the pallet coupler example.           
                                                                            
48:28 So the air force wants to use this pallet coupler. Who do they have   
      fabricated by the government having a license to use it? Are they then
      able to go to whoever they want and say, here's a great design, make  
      this for us, and then that manufacturer is allowed to make it and sell
      it to the government at a profit because it seems like that           
      manufacturer would then need to have the license? That's a good       
      question. Presumably, probably.                                       
                                                                            
48:57 And that's probably totally what the government would do. It seems    
      like it. But if you go back to the provisions, it was like they have a
      fully paid up license.                                                
                                                                            
49:10 Right. Or maybe it's this one. I don't is under Bayh-Dole.                  
                                                                            
49:19 they have a non exclusive, non transferable, irrevocable paid up 
      license to practice it throughout the world? So if they wanted to set 
      up their own manufacturing facility to make it and make it for        
      themselves, they clearly could, but it's non transferable, so they    
      can't just give that to Allied Signal to start producing this pallet  
      coupler. You know what I mean? Yeah. Wouldn't that be an agent        
      relationship? So even being that they're working at the disruption of 
      the licensee, maybe.                                                  
                                                                            
49:59 I'm curious. I mean, it seems like there has to be a vehicle, a       
      mechanism for ty. Maybe you're right.                                 
                                                                            
50:05 Maybe that's exactly what it know. In the past, I worked for Solar,   
      and like so you would get, like, Department of Defense, Department of 
      Energy, tons of big government agencies very interested in Solar.     
      Right.                                                                
                                                                            
50:18 But they were never proposing to build a manufacturing facility to    
      make solar panels or cells. They were always talking about buying     
      these things from third parties. So I've actually always wondered how 
      that would really work in practice.                                   
                                                                            
50:35 Yeah. As part of a license, you would think you would have to be able 
      to set up your own supply chain to be able to do it. Right.           
                                                                            
50:41 But yeah. How do you manage that supply chain to make sure that       
      problem, that as the licensing, you're retaining control because it   
      probably comes down to control. Right.                                
                                                                            
50:53 Maybe that's next month. Dave, you yeah, that's a good question,      
      though. Very good question.                                           
                                                                            
51:05 I do not have a good answer. All right, so switching gears here a     
      little bit. So what types of clients grants are applicable for our    
      clients in particular? And so I'm going to focus on the Small Business
      Technology Transfer Grant, the STTR, and the Small Business Innovation
      Research Grant, the SBIR.                                             
                                                                            
51:23 And I think there's maybe a few others, but not really for our        
      clients. Right. Because these are first, back it for a second.        
                                                                            
51:34 So these two grants are the largest source of early stage capital for 
      life science startups in the United States. So the NIH grants $1.2    
      billion every year in combined SBIR STTR programs.                    
                                                                            
51:47 So that's pretty sizable, if you think about it. And then there was   
      some concern back in 2022 that these were actually going to expire    
      both these grant types, and there was not going to be any funding     
      available for them. But then in September of 2022, congress did pass  
      the Extension Act, the SBIR and STTR Extension Act of 2022, which     
      renewed this, is all administered under the Small Business            
      Administration.                                                       
                                                                            
52:10 So they renewed all of it under the SBA program for the next three    
      years. So it's now available again through 2025, or assuming that     
      takes place as of that date. So, anyways, what are these two grants?  
      So the STTR is to stimulate scientific and technological innovation   
      between small business concerns and research institutions.            
                                                                            
52:32 So you're making a partnership between you and the university down the
      road. And there's a three phase structure, feasibility R D, and       
      commercialization. But the commercialization phase cannot be used for 
      STTR funds cannot be used for the commercialization phase.            
                                                                            
52:48 SBIR it's to stimulate technological innovation in the private sector,
      for profit institutions for ideas that have potential for             
      commercialization. So, again, this is between the private sector for  
      for profit institutions or in the private sector. And again, it's     
      feasibility, R D, commercialization, where the SBIR funds cannot be   
      used for commercialization.                                           
                                                                            
53:14 And I know a lot of our clients actually use SBIR. I've heard less    
      around STTR, but I think when you get into more of the unpredictable  
      sciences, that's where I've seen clients turning more towards STTR,   
      because you need that bench space, that research, to kind of really   
      propel it forward. Whereas when you have SBIR, that's like the IoT,   
      the digital health innovations, where you're really trying to launch  
      your technology forward.                                              
                                                                            
53:42 All right, so do SBIR and STTR grants cover IP costs? They could. So  
      there's a technical and business assistance funds under both of these 
      grants. And so they could be used for patent prosecution costs related
      to obtaining US.                                                      
                                                                            
53:59 Patent protection, which is nice that they include this, because they 
      do require recipients to obtain patent protection. So it's nice that  
      they allow this. It's not a ton of money, though.                     
                                                                            
54:08 In phase one, it's $6,500. In phase two, it's $50,000. Budget         
      location.                                                             
                                                                            
54:14 You need to include these patent costs in the commercialization       
      assistance budget or other direct costs area of the grant. The patent 
      costs do include practitioner fees and USPTO fees. So that's also     
      nice.                                                                 
                                                                            
54:28 Not all grants include fees. A lot of times those are payable by the  
      recipient filings. The grant money can be used for all USPTO related  
      filings.                                                              
                                                                            
54:38 So provisional Pct, non provisional continuation, continuation in     
      part, divisional patent applications can also be used for search,     
      freedom to operate searches, market analysis, competitor IP, landscape
      and products searching costs. These all may be allowable, again,      
      depending on the grant type you need to do your grant research. There 
      are exclusions, though.                                               
                                                                            
54:57 You cannot use it for foreign related costs. So this includes foreign 
      attorneys, foreign patent offices, or translation fees. And generally 
      licensing fees are not allowable, since these are typically not       
      required in the performance of the award.                             
                                                                            
55:13 Another interesting thing that we get asked sometimes, especially now 
      in this large language model, AI, ML, all that kind of world where    
      data and data sets are really important. What are the provisions for  
      data versus inventions under Baydol, specifically SBIR STTR grants? So
      if it's an idea, concept, design or method visible to the naked eye,  
      definitely patent it. Per the SBIR STTR Baydol provisions, if it's    
      recorded or written technical information or data developed under SBIR
      funding agreements, this data and information can be kept secret under
      a government nondisclosure obligation under the grant.                
                                                                            
55:57 This only applies when it has been written down. So the data or       
      whatever the technical information needs to be written down. And there
      is a fixed protection period of 20 years.                             
                                                                            
56:06 Now what does the government would do with that data after 20 years? I
      don't know if they publish it, I don't know if they use it. I'm sure  
      they just had to put a window on it. But it probably just sits in some
      database somewhere, I don't know.                                     
                                                                            
56:19 So that's another thing we'd have to look into. But the caveat is     
      here, don't include your privately funded data then in those data     
      sets, because obviously then that gets confused with those data. And  
      then you have this fixed protection window.                           
                                                                            
56:34 But yes. So you can have protection of data under these grants, but   
      it's not through the I. Edison put the innovation into the system.    
      It's record it, write it down and make sure it's in your final report 
      for the grant to make it clear that you have these data and that they 
      need to be kept under a nondisclosure obligation.                     
                                                                            
56:58 It basically talks about having a legend in your data. Make sure the  
      first page of the COVID page includes statement that it contains SBIR 
      STTR data. And make sure that the subsequent pages include authorized 
      legend of simply SBIR STTR protected data.                            
                                                                            
57:19 Yeah. And so this also could include computer software, right? So you 
      could include a legend on printed material or transmittal page. It may
      say that has both patent and data rights.                             
                                                                            
57:30 So just, you know, again, it's kind of like almost like trade secret, 
      right? You want to include notice of it. And so I think that's really 
      important here too is have put notice on these documents what         
      provisions of the grant apply. So to kind of sum it up in these next  
      two slides.                                                           
                                                                            
57:45 So, advice for government grant recipients. Mark your data, especially
      mark it in a final report. Report all your subject inventions, all    
      inventions through Iedison, not just the patentable ones.             
                                                                            
57:58 Make sure you track your statutory bars. And of course that's for     
      everybody. Your whole company needs to track it for more than just a  
      grant for practitioners like us as well.                              
                                                                            
58:07 And make sure you report these bars to your practitioner and your     
      agency. And also understand us. Manufacturing requirements for I don't
      think I got into this in some of the requirements, but where did that 
      end up? It must be in a note section that I had.                      
                                                                            
58:24 So you can have it's on the next slide. You almost should have been   
      reversed. There are U.                                                
                                                                            
58:30 S. Manufacturing requirements because it is US. Money.                
                                                                            
58:33 And if you want to give a license to somebody else, especially        
      exclusive license to another company, you have to get approval from   
      the agency. And that licensee has to be able to manufacture it in the 
      United States or have a really compelling reason why it cannot. And   
      that's actually in the government grant gotcha slide, which is you    
      cannot give an exclusive license to anybody else, right? Because you  
      already have a non exclusive license with the government.             
                                                                            
59:00 But you could, if it were approved by the agency in advance and is    
      manufactured substantially in the United States. So it is possible,   
      but it has to be requested, approved and manufactured in the United   
      States. Other gotchas again, if the subject invention is unelected at 
      two years, then the government receives title of the invention.       
                                                                            
59:20 So if you don't want them to own it, then make sure that you elect    
      that invention at two years. And this is the biggest one that came    
      across. That kind of blew my mind, but kind of makes sense in terms of
      controlling these things if you hire a subcontractor to perform some  
      of the work.                                                          
                                                                            
59:37 So let's say I'm a main contractor for the grant, right? I'm the      
      contractor that got the government grant, and then I hire some        
      subcontractors to perform the work. And let's say I even have a       
      loctite amazing subcontractor agreement that says that I own as a     
      company, as a contractor, own everything. You have an obligation to   
      assign everything to me that doesn't matter.                          
                                                                            
60:00 Any subject invention that came from that subcontractor cannot be     
      assigned to your company. They still own it and the subcontractor will
      retain ownership. And I think the reason Josh and I opined about this 
      a little bit, I think the reason for that is they don't want some     
      entity being created that takes up all of these grants and then just  
      finds a whole bunch of underlings to do it for them.                  
                                                                            
60:25 And then they get all of the title to it, but then also take up all   
      the government grants. And so this is a huge got you that I wasn't    
      even aware of, that you just need to really make sure that if you use 
      subcontractors to do some of the work, that they are just like        
      executing technical documents and things like that, right. That       
      they're not conceiving or first actually reducing the practice because
      it could be a really huge boondoggle for your company.                
                                                                            
60:54 All right, so that is it. And David J just had to jump off, but       
      anybody, any other thoughts, questions? Just a comment. Know, with    
      grants, and I've been there myself in previous projects, it's always  
      so appetizing to look at nondiluting capital coming in.               
                                                                            
61:12 But man, it's really cool to talk about some of the ramifications     
      because you don't see this part of it. It's always just nondiluting   
      capital. Free money kind of largely is given the marching rights that 
      have been denied over the years and how few of them there have been.  
                                                                            
61:32 But still, there's still some hooks and if you're not dotting all your
      I's and crossing your T's, you can really mess things up. So if there 
      is ever an issue, you've now dug yourself a pretty big hole. Yeah, but
      otherwise I don't have any follow up.                                 
                                                                            
61:50 That's great. I don't work with this a lot, so it's really nice to see
      all the ins and outs. Yeah.                                           
                                                                            
61:56 If anybody's interested, I can share. There's some other stuff in     
      there. Too.                                                           
                                                                            
62:00 But I basically created a huge word doc of know some of the links that
      I used for this. But also just and also I was pulling some of know was
      it David J's question around possession and prototyping and stuff like
      of and also it's partly because Josh, when he thought I was going to  
      do this, he took it in a very different direction than what I had     
      intended. So he had all these questions in there and I was like, I    
      don't know if that really applies, but I'm going to run it to ground  
      to some degree just to make sure I'm not crazy.                       
                                                                            
62:30 Be and it still does apply, kind of, but it's kind of to the extent   
      that we talked about with Dave anyways, I can share that doc with     
      anybody who wants to go slightly deeper or read some of the notes and 
      things I had pulled together, but this, I think, distills it all down 
      relatively concisely. Yeah, it's a good one. Cool.                    
                                                                            
62:51 Well, awesome. Well, thanks everybody then and otherwise. That is it. 
                                                                            
62:56 All right, thanks. Sounds good. Bye.                                  
                                                                            
63:01 Bye. Bye. All right, that's all for today, folks.                     
                                                                            
63:03 Thanks for listening. And remember to check us out@aurorapatents.com  
      for more great podcasts, blogs and videos covering all things patent  
      strategy. And if you're an agent or attorney and would like to be part
      of the discussion or an inventor with a topic you'd like to hear      
      discussed, email us at podcast@aurorapatins.com.                      
                                                                            
63:19 Do remember that this podcast does not constitute legal advice. And   
      until next time, keep calm and patent on.                             


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