Purchase of Property

The Act and Order require that property purchased with Board funds remain the property of USB or QSSBs. This includes intellectual property. However, universities may maintain ownership in intellectual property, provided that USB maintains certain rights with regard to the intellectual property. These rights include an irrevocable paid-up license to use the information, certain sub-licensing or march-in rights to ensure exploitation and a sharing of royalties or other benefits commensurate with the proportional contribution of each party to the research. The USDA Office of General Counsel has approved provisions in research agreements that allow ownership to reside with the universities while retaining for USB or QSSBs licensing interests and a share of royalties. Therefore, USB and QSSB agreements should provide for the following:

A. That ownership of inventions be in the name of the funding entity

B. If, as a result of discussion with a university, it is determined that ownership must reside in the university for the project to be conducted, then ownership may reside in the university subject to the following:

1. That the funding entity receive a nonexclusive paid-up license to use and sublicense the invention; or

2. If the right to sublicense cannot be negotiated, then USB/QSSBs shall have the right to require the university or licensees of the university to issue licenses to eligible parties to ensure exploitation (march-in rights).

C. Where USB/QSSBs are providing all funding for a project, any royalty income resulting from the project should be retained by the USB/QSSB, but where funding is provided by another party (including contribution of indirect costs by the university), the agreement shall include a sharing of royalties based upon the pro rata contribution by each party.

USB strongly discourages the funding of equipment. Checkoff funds can be used to purchase equipment in connection with a specific project where such equipment is necessary to complete the project. However, the USB or QSSB board must retain ownership of the equipment for the duration of the research period. At the conclusion of the research project, the university may be given the first opportunity to purchase the equipment at fair market value. USB Policy defines “depreciable capital equipment” as any tangible property with a value of $2,000.00 or more and a useful life of more than one year.