II

107TH CONGRESS

1ST SESSION S. 1323

Entitled the ‘‘SBIR and STTR Foreign Patent Protection Act of 2001’’.

IN THE SENATE OF THE UNITED STATES

AUGUST 2, 2001

Mr. KERRY introduced the following bill; which was read twice and referred

to the Committee on Small Business and Entrepreneurship

A BILL

Entitled the ‘‘SBIR and STTR Foreign Patent Protection

Act of 2001’’.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘SBIR and STTR For5 eign Patent Protection Act of 2001’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—

8 (1) small business concerns represent approxi9 mately 96 percent of all exporters of goods;
2

•S 1323 IS

1 (2) there has been dynamic growth in the num2 ber of small business concerns exporting goods, and

3 the dollar value of their exports;

4 (3) despite such growth, small business con5 cerns encounter problems in obtaining financing for

6 exports;

7 (4) growth in United States exports will depend

8 primarily on technology innovation, making the pro9 tection of intellectual property in the global market

10 of special national interest;

11 (5) the costs of filing for initial patent protec12 tion in foreign markets can be prohibitive for small

13 business concerns involved in the Small Business In14 novation Research Program (referred to in this sec15 tion as ‘‘SBIR’’) and the Small Business Technology

16 Transfer Program (referred to in this section as

17 ‘‘STTR’’), representing an insurmountable barrier to

18 obtaining the protection needed to pursue the inter19 national markets;

20 (6) to overcome such barriers and to maximize

21 the Federal investment in the SBIR and STTR pro22 grams, the Small Business Administration should be

23 authorized to provide grants to be used to under24 write the costs of initial foreign patent applications

25 by SBIR and STTR awardees; and
3

•S 1323 IS

1 (7) a program established to provide such

2 grants should, over time, become self funding.

3 SEC. 3. ESTABLISHMENT OF GRANT PILOT PROGRAM.

4 Section 9 of the Small Business Act (15 U.S.C. 638)

5 is amended by adding at the end the following:

6 ‘‘(w) FOREIGN PATENT PROTECTION GRANT PILOT

7 PROGRAM.—

8 ‘‘(1) GRANTS AUTHORIZED.—The Adminis9 trator shall make grants from the Fund established

10 under paragraph (6) for the purpose of assisting

11 SBIR and STTR awardees in seeking foreign patent

12 protection in accordance with this subsection.

13 ‘‘(2) NUMBER OF GRANTS.—The Administrator

14 shall make grants under this subsection to not more

15 than—

16 ‘‘(A) a total of 100 SBIR and STTR

17 awardees in fiscal year 2003;

18 ‘‘(B) a total of 200 SBIR and STTR

19 awardees in fiscal year 2004;

20 ‘‘(C) a total of 300 SBIR and STTR

21 awardees in fiscal year 2005; and

22 ‘‘(D) a total of 400 SBIR and STTR

23 awardees in each of fiscal years 2006 and 2007.

24 ‘‘(3) GRANT PURPOSES.—Grants made under

25 this subsection shall be used by awardees to under-
4

•S 1323 IS

1 write costs associated with initial foreign patent ap2 plications for technologies or products developed

3 under the SBIR or STTR program, and for which

4 an application for United States patent protection

5 has already been filed.

6 ‘‘(4) CONSIDERATIONS.—In awarding grants

7 under this subsection, the Administrator shall

8 consider—

9 ‘‘(A) the size and financial need of the ap10 plicant;

11 ‘‘(B) the potential foreign market for the

12 technology;

13 ‘‘(C) the time frames for filing foreign pat14 ent applications; and

15 ‘‘(D) such other factors as the Adminis16 trator deems relevant.

17 ‘‘(5) GRANT AMOUNTS.—The amount of a

18 grant made to any SBIR or STTR awardee under

19 this subsection may not exceed $25,000, and no

20 awardee may receive more than 1 grant under this

21 subsection.

22 ‘‘(6) ESTABLISHMENT OF REVOLVING FUND.—

23 There is established in the Treasury of the United

24 States a revolving fund, which shall be—
5

•S 1323 IS

1 ‘‘(A) known as the ‘SBIR and STTR For2 eign Patent Protection Grant Fund’ (referred

3 to in this subsection as the ‘Fund’);

4 ‘‘(B) administered by the Office of Tech5 nology of the Administration; and

6 ‘‘(C) used solely to fund grants under this

7 subsection and to pay the costs to the Adminis8 tration of administering those grants.

9 ‘‘(7) ROYALTY FEES.—

10 ‘‘(A) IN GENERAL.—Each recipient of a

11 grant under this subsection shall pay a fee to

12 the Administration, to be deposited into the

13 Fund, based on the export sales receipts or li14 censing fees, if any, from the product or tech15 nology that is the subject of the foreign patent

16 petition.

17 ‘‘(B) ANNUAL INSTALLMENTS BASED ON

18 RECEIPTS.—The fee required under subpara19 graph (A)—

20 ‘‘(i) shall be paid to the Administra21 tion in annual installments, based on the

22 export sales receipts or licensing fees de23 scribed in subparagraph (A) that are col24 lected by the grant recipient in that cal25 endar year;
6

•S 1323 IS

1 ‘‘(ii) shall not be required to be paid

2 in any calendar year in which no export

3 sales receipts or licensing fees described in

4 subparagraph (A) are collected by the

5 grant recipient; and

6 ‘‘(iii) shall not exceed, in total, the

7 lesser of—

8 ‘‘(I) an amount between 3 per9 cent and 5 percent, as determined by

10 the Administrator, of the total export

11 sales receipts and licensing fees re12 ferred to in subparagraph (A); or

13 ‘‘(II) 4 times the amount of the

14 grant received.

15 ‘‘(8) ADMINISTRATIVE PROVISIONS.—Not later

16 than 180 days after the date of enactment of this

17 subsection, the Administrator shall—

18 ‘‘(A) issue such regulations as are nec19 essary to carry out this subsection; and

20 ‘‘(B) establish appropriate application and

21 other administrative procedures, as the Admin22 istrator deems necessary.

23 ‘‘(9) REPORT.—The Administrator shall, on

24 January 31, 2006, submit a report to the Congress
7

•S 1323 IS

1 on the grants authorized by this subsection, which

2 report shall include—

3 ‘‘(A) the number of grant recipients under

4 this subsection since the date of enactment of

5 this subsection;

6 ‘‘(B) the number of such grant recipients

7 that have made foreign sales (or granted li8 censes to make foreign sales) of technologies or

9 products developed under the SBIR or STTR

10 program;

11 ‘‘(C) the total amount of fees paid into the

12 Fund by recipients of grants under this sub13 section in accordance with paragraph (7);

14 ‘‘(D) recommendations for any adjustment

15 in the percentages specified in paragraph

16 (7)(B)(iii)(I) or the amount specified in para17 graph (7)(B)(iii)(II) necessary to reduce to zero

18 the cost to the Administration of making grants

19 under this subsection; and

20 ‘‘(E) any recommendations of the Adminis21 trator regarding whether authorization for

22 grants under this subsection should be ex23 tended, and any necessary legislation related to

24 such an extension.
8

•S 1323 IS

1 ‘‘(10) AUTHORIZATION OF APPROPRIATIONS.—

2 There is authorized to be appropriated to the Fund,

3 to remain available until expended—

4 ‘‘(A) $2,500,000 for fiscal years 2003;

5 ‘‘(B) $5,000,000 for fiscal year 2004;

6 ‘‘(C) $7,500,000 for fiscal year 2005; and

7 ‘‘(D) $10,000,000 for each of fiscal years

8 2006 and 2007.’’.

Æ