COMMON POSITION (EC) No 45/98 adopted by the Council on 10 July 1998 with a view to adopting Decision 98/.../EC of the Council of ... concerning the rules for the participation of undertakings, research centres and universities and for the dissemination of research results for the implementation of the Fifth Framework Programme of the European Community (1998-2002)
Date: 1998-06-29
Institutions: Council of the European Union
Subjects: dissemination of information, research body, research programme, shareholding, type of business, university

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Official  Journal  of  the  European  Communities

19.8.98

COMMON  POSITION  (EC)  No  45/98

adopted  by  the  Council  on  10  July  1998

with a view to adopting Decision 98/. . ./EC  of  the  Council  of  . . . concerning the rules for the
participation  of  undertakings,  research  centres  and  universities  and  for  the  dissemination  of
research  results  for  the  implementation  of  the  Fifth  Framework  Programme  of  the  European
Community  (1998-2002)

(98/C  262/05)

THE  COUNCIL  OF  THE  EUROPEAN  UNION,

Having  regard  to  the  Treaty  establishing  the  European
Community,  and  in  particular  Article  130j  and  the
second  paragraph  of  Article  130o  thereof,

Having  regard  to  the  proposal  from  the  Commission (1),

Having regard to the Opinion of the Economic and Social
Committee (2),

Acting  in  accordance  with  the  procedure  referred  to  in
Article  189c  of  the  Treaty (3),

to  as 

(hereinafter  referred 

(1)  Whereas  the  Fifth  Framework  Programme  of  the
European  Community  for  research,  technological
development and demonstration activities (1998 to
2002) 
‘the  Fifth
Framework  Programme’)  was  adopted  by  Decision
of  the  European  Parliament  and  Council  No
. . ./98/EC (4);  whereas 
for
financial  participation  by  the  Community,  as  set
out  in  Annex  IV  to  that  Decision,  must  be
supplemented  by  other  provisions  to  be  laid  down
in  accordance  with  Article  130j  and  the  second
paragraph  of  Article  130o  of  the  Treaty;

the  detailed  rules 

may  vary  depending  on  whether  the  participant  is
based in a Member State, an Associated State or a
third  country  and  on  its  legal  structure;

(4)  Whereas,  under  the  Fifth  Framework  Programme,
the  participation  of  legal  entities  of  third  countries
should  be  envisaged,  including  on  the  basis  of
international  agreements;  whereas,  however,  the
agreements  concluded  with  the  Community,  in
particular  on  the  basis  of  Article  130m  of  the
Treaty,  must  be  implemented  in  accordance  with
the  principle  of  reciprocity  and  the  protection  of
intellectual  and  industrial  property  rights;  whereas
the  Community’s  legal  entities  must  accordingly
enjoy  genuine  access  to  the  research  programmes
of  the  third  country  concerned;

(5)  Whereas, 

in  the  specific  case  of  small  and
medium-sized  enterprises,  particular  stress  should
be  laid  on  indirect  RTD  actions  designed  to
encourage 
they  can
their  participation,  since 
contribute to the creation and maintenance of jobs
and  to  innovation;

(2)  Whereas  the  new  provisions  should  be  part  of  a
complete,  coherent  and  transparent  framework  so
that  the  specific  programmes  implementing  the
Fifth Framework Programme may be carried out in
a  harmonised  manner;

(6)  Whereas  the  Joint  Research  Centre  (JRC)  takes
part  in  indirect  RTD  actions  on  the  same  basis  as
legal  entities  established  in  a  Member  State  or  in
an  Associated  State;

(3)  Whereas 

the  rules 

the  participation  of
for 
undertakings,  research  centres  and  universities
must  be  adapted  to  the  nature  of  the  research  and
technological  development  activities, 
including
demonstration  activities  (hereinafter  referred  to  as
‘indirect  RTD  actions’);  whereas,  moreover,  they

(1)  OJ  C  40,  7.2.1998,  p.  14.
(2)  OJ  C  214,  10.7.1998,  p.  51.
(3)  Opinion on the European Parliament of 28 May 1998 (OJ C
195, 22.6.1998), Council Common Position of 10 July 1998
and  Decision  of  the  European  Parliament  of  . . .  (not  yet
published  in  the  Official  Journal).

(1)  OJ  L  . . .

(7)  Whereas  the  rules  should  be  applied  in  a  simple
and  efficient  manner  so  as  to  minimise  the
administrative and financial burden on participants
and  the  Commission,  particularly  with  respect  to
the  time  taken  to  prepare  proposals,  conclude
contract  negotiations  and  make  reimbursements;

(8)  Whereas  the  Community  financial  participation
must  be  paid 
the  participants  against
justification  of  the  eligible  costs  of  the  indirect

to 

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RTD  action,  although  other  more  appropriate
methods  may  be  used;

(9)  Whereas  the  RTD  activities  should  be  carried  out

in  compliance  with  ethical  principles;

(10)  Whereas the rules for the dissemination of research
results  must  guarantee  the  protection  of  rights
linked  to  obtaining  and  using  knowledge;

(11)  Whereas  the  rules  must  take  account  of  the
interests  of  the  Community  and  the  legitimate
interests  of  the  parties  to  any  contract  concluded
as  a  result  of  the  selection  of  the  proposal  for  an
indirect  RTD  action;

(12)  Whereas,  in  the  case  of  indirect  RTD  actions,  the
rules  must,  generally  speaking,  be  adapted  to  the
level  of  the  Community  financial  participation  or
the proximity to the market of the RTD activity in
question,  including  demonstration;

(13)  Whereas  ownership  of  the  knowledge  resulting
from  indirect  RTD  actions  is  normally  determined
in  accordance  with  the 
level  of  Community
financial participation;

(17)  Whereas,  in  the  case  of  certain  indirect  RTD
actions,  a  technological  implementation  plan  must
be  produced  by  the  contractors  to  enable  the
Commission  to  monitor  the  use  and  dissemination
of  the  knowledge;

(18)  Whereas  RTD  activities  should  be  carried  out  in
accordance  with  the  principles  of  sound  financial
management;

(19)  Whereas,  to  the  extent  necessary  for  achieving
their  objectives,  the  specific  programmes  may  set
out in greater detail or supplement the rules for the
participation  of  undertakings,  research  centres  and
universities  and  for  the  dissemination  of  research
results;

training  activities 

(20)  Whereas, in order to ensure coherence between the
activities  carried  out  under  the  Fifth  Framework
Programme  and  those  undertaken  pursuant  to
Council Decision 98/. . ./Euratom of . . . concerning
the  Fifth  Framework  Programme  of  the  European
Atomic Energy Community (Euratom) for research
and 
this
Decision  and  Council  Decision  98/. . ./Euratom  of
. . .  concerning  the  rules  for  the  participation  of
undertakings,  research  centres  and  universities  and
for  the  implementation  of  the  Fifth  Framework
Programme  of 
the  European  Atomic  Energy
Community  (Euratom)  (1998  to  2002) (2)  should
be  adopted  simultaneously  and  for  the  same
period,

(1998-2002) (1), 

(14)  Whereas,  in  the  case  of  indirect  RTD  actions,  the
that,

knowledge  must  be  used  or, 
disseminated;

failing 

(15)  Whereas 

the 

primary 

responsibility 

for  exploitation  by 

for
dissemination  or  use  of  research  results  rests  with
the  contractors;  whereas  for  projects  closer  to  the
market  the  rules  must  promote  the  use  of  results
suitable 
the  contractors;
whereas  the  rules  must  otherwise  promote  the
dissemination  of  suitable  results,  including  those
suitable  for  use  which  have  not  been  exploited,  to
third  parties, 
including  Member  States’  and
Associated  States’  governments,  so  as  to  facilitate
the  use  of  those  results  and  avoid  duplication  of
research  efforts;

(16)  Whereas  agreements  concerning  exclusive  rights
may  be  necessary  to  facilitate  exploitation  of  the
knowledge;  whereas  such  agreements  must  comply
with  the  applicable  rules  on  competition;

HAS  DECIDED  AS  FOLLOWS:

CHAPTER  I

GENERAL  PROVISIONS

Article  1

Definitions

For  the  purposes  of  this  Decision:

(a)  RTD  activities  means  the  research  and  technological
including  demonstration
the  Fifth
to 

development 
activities,  described 
Framework  Programme;

in  Annex 

activities, 

II 

(1)  OJ  L  . . .
(2)  OJ  L  . . .

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(b) indirect  RTD  actions  means  one  of  the  two  ways  of
implementing  RTD  activities,  as  described  in  Annex
IV  to  the  Fifth  Framework  Programme.  Such  actions
are  carried  out  by  third  parties  under  contracts
concluded  with  the  Community;  the  JRC  may  take
part in such actions under the conditions laid down in
Article  7;

(c) direct  RTD  actions  means  one  of  the  two  ways  of
implementing  RTD  activities,  as  described  in  Annex
IV  to  the  Fifth  Framework  Programme.  Such  actions
are  carried  out  by  the  JRC;

agreement 

concluded  with 

(d) Associated  State  means  a  State  which  is  party  to  an
international 
the
Community,  in  particular  on  the  basis  of  Article
130m of the Treaty, under which the State concerned
makes  a 
the  Fifth
Framework Programme. The said agreement relates to
cooperation  in  research,  technological  development
and  demonstration;

contribution 

financial 

to 

(e) third  country  means  a  country  which  is  neither  a

Member  State  nor  an  Associated  State;

(f)  legal  entity  means:

—  any  natural  person,  or

—  any 

legal  person,  provided  that 

it  has  been
established  under  Community 
the
applicable  national  law  and  has  been  given  legal
personality  or  has  the  capacity,  in  its  own  name,
to  hold  rights  and  obligations  of  all  kinds,  to
conclude  contracts  and  to  be  a  party  to  legal
proceedings;

law  or 

(g)  international  organisation  means  any  association  of
States,  other  than  the  Community,  established  on  the
basis  of  a  Treaty  or  similar  act,  having  common
institutions  and  an  international  legal  personality
distinct  from  that  of  its  Member  States;

(h) potential  user  of  RTD  results  means  any  legal  entity,
any  international  organisation  or  the  JRC  which,  by
its  needs  and  capabilities  —  whether
virtue  of 
scientific,  technological,  economic  or  social  —  has  a
specific  contribution  to  make  to  the  use  or  the
ensuring  of  the  use  of  the  results  of  indirect  RTD
actions;

(i)  small  and  medium-sized  enterprises 

(hereinafter
referred  to  as  ‘SMEs’)  means  enterprises  which  meet
the  criteria  set  out  in  Commission  Recommendation
96/280/EC, (1)  namely:

(1)  OJ  L  107,  30.4.1996,  p.  4.

—  have 

fewer 

than  250 

employees 

(full-time

equivalents),  and

—  have either an annual turnover not exceeding ECU
40  million  or  an  annual  balance-sheet  total  not
exceeding  ECU  27  million,  and

—  conform  to  the  criterion  of 
defined  in  the  Recommendation;

independence  as

(j)  knwoledge  means  the  results,  including  information,
which  result  from  RTD  actions  under  the  Fifth
Framework  Programme;

(k) dissemination  means  the  disclosure  of  knowledge  by
any  appropriate  means  other  than  the  publication
resulting  from  the  formalities  for  protecting  the
knowledge,  for  the  purposes  of  promoting  scientific
and  technical  progress;

(l)  use  means  the  direct  or  indirect  use  of  knowledge  in
the  purposes  of

activities  or 

for 

research 
exploitation;

(m) exploitation  means  the  use  of  knowledge  for  creating
and  marketing  a  product  or  process  or  for  creating
and  providing  a  service;

(n) pre-existing  know-how  means  the  information  which
is  held  by  the  proposes  prior  to  the  conclusion  of  a
contract  referred  to  in  Article  12  of  this  Decision  or
acquired in parallel to it and necessary for the proper
execution  of  an  indirect  RTD  action,  and  the  rights
attaching  thereto.

Article  2

Interests  of  the  Community

The interests of the Community, as referred to in Articles
6, 15, 16, 17, 18 and 20, shall be assessed with particular
regard  to:

(a)  the  objective  of  strengthening 

the 
competitiveness  of  Community  industry;

international

(b) the  objective  of  providing  appropriate  incentives  for
maintaining  and  creating  jobs  in  the  Community;

(c)  the  objective  of  promoting  sustainable  development
and  improving  the  quality  of  life  in  the  Community;

(d) the  needs  of  other  Community  policies  in  support  of

which  the  RTD  actions  are  carried  out;

(e)  the  existence  of  scientific  and  technical  cooperation
third

the  Community  and 

agreements  between 
countries  or  international  organisations.

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CHAPTER  II

actions  and  receive  funding  from  the  Fifth  Framework
Programme,  provided  that:

RULES  FOR  THE  PARTICIPATION  OF  UNDERTAKINGS,
RESEARCH  CENTRES  AND  UNIVERSITIES

Article  3

Scope

The  rules  laid  down  in  this  Chapter  shall  apply  to  the
international
participation  of 
organisations  and  of  the  JRC  in  indirect  RTD  actions.

entities 

legal 

and 

SECTION  1: CONDITIONS  FOR  PARTICIPATION  AND
FINANCING

Article  4

Number  of  participants  in  indirect  RTD  actions

—  it  is  carrying  out  or  is  about  to  carry  out  a  research,
technological  development  or  demonstration  activity,
or

—  it  contributes  to  the  dissemination  and  use  of  results
in  accordance  with  the  specific  programme  on
‘Promotion of innovation and encouragement of SME
participation’,  or

—  it  is  a  potential  user  of  RTD  results,

or,  additionally  for  thematic  networks  and  concerted
actions,

—  it  is  instead  in  a  position  to  contribute  substantial
added  value  to  the  quality  of  work  to  be  undertaken
by  virtue  of  its  knowledge  of  the  relevant  area  of
research.

1.

Indirect  RTD  actions  shall  be  carried  out  by:

2. The conditions set out in paragraph 1 do not apply in
the  following  cases:

(a)  at 

least  two  mutually 

legal  entities
established  in  two  different  Member  States  or  in  a
Member  State  and  an  Associated  State;  or

independent 

(b) at least one legal entity established in a Member State

or  in  an  Associated  State  and  the  JRC;  or

(c)  one  or  several  legal  entities  established  in  a  third
country  or 
in
cooperation  with  the  minimum  number  of  legal
entities  established  in  a  Member  State  or  Associated
State  and  the  JRC,  as  required  in  points  (a)  or  (b).

international  organisations,  acting 

2. Exceptionally,  where  the  nature  of  the  indirect  RTD
action  or  activity  to  be  undertaken  requires  it  to  be
carried out by a single participant, it must be carried out
by:

(a)  a  legal  entity  established  in  a  Member  State,  in  an

Associated  State  or  in  a  third  country;  or

(b) an  international  organisation;  or

(c)  the  JRC.

Article  5

Conditions  for  legal  entities  from  the  Member  States
and  Associated  States

1. Any  legal  entity  established  in  a  Member  State  or  in
an  Associated  State  may  take  part  in  indirect  RTD

(a)  for  exploratory  awards,  where  the  legal  entity  must
be an SME or, exceptionally, a potential user of RTD
results. In the latter case, the entity will not normally
receive 
the  Fifth  Framework
Programme;

funding 

from 

(b) for  cooperative  research  projects,  where  the  legal
entity  must  be  an  SME  which  is  a  potential  user  of
RTD  results  but  with  little  or  no  RTD  capability  of
its  own;

(c)  for  accompanying  measures,  where  the  legal  entity
has  the  necessary  technical  know-how  to  carry  out
the  indirect  RTD  action  in  question.

3. Where an Associated State is only partially associated
with  the  Fifth  Framework  Programme,  a  legal  entity  in
that  country  may  only  take  part  and  receive  financing
under  this  Article  in  those  specific  programmes  covered
by  the  association  agreement.  Participation  in  specific
programmes  to  which  that  country  is  not  associated  is
subject  to  Article  6.

4. Where  the  purpose  of  the  indirect  RTD  action
concerned  so  permits,  any  legal  entity  referred  to  in
paragraphs 1 and 2 shall carry out the major part of the
work  within  the  Member  States  or  Associated  States.

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Article  6

Conditions  for  legal  entities  from  third  countries  and
for  international  organisations

1. Any  legal  entity  established  in  a  third  European
country  or  Mediterranean  partner  country  and  any
international organisation may take part in indirect RTD
actions  on  a  project-by-project  basis  in  conformity  with
the  interests  of  the  Community  and  without  financing
from  the  Fifth  Framework  Programme,  provided  that:

(a)  the  number  of  participations  in  the  proposal  for  an
indirect  RTD  action  is  in  accordance  with  Article  4;
and

(b) it  meets  the  conditions  laid  down  in  Article  5(1)  and
5(2)  for  legal  entities  from  the  Member  States  and
Associated  States.

This shall not apply to training fellowships as defined an
Annex  IV  to  the  Fifth  Framework  Programme.

part  provided  that  it  contributes  to  one  of  the  objectives
of  the  specific  programme  and  its  participation  is  in
conformity  with  the  interests  of  the  Community.

Community  financing  will  be  provided  only  for  the
activities  specified  in  this  specific  programme  and  under
the  conditions  laid  down  therein.

6. Any  international  organisation  may,  exceptionally,
receive  financing  from  the  Fifth  Framework  Programme
provided  that:

(a)  in  the  case  of  indirect  RTD  actions  other  than

accompanying measures,

—  the financing is duly justified as being essential for
achieving  the  objectives  of  the  indirect  RTD
action  in  question,  and,

—  where  any  basic  facility  is  to  be  used  which  is
located  in  a  third  country,  it  is  essential  for
carrying  out  the  proposed  work;

(b) in  the  case  of  accompanying  measures,  it  has  the
necessary  technical  skills  and  know-how,  which  are
not  readily  accessible  or  are  unavailable  in  the
Member  States  or  the  Associated  States.

2. Legal entities established in other third countries may
participate  on  the  same  terms  provided  that  their
participation 
is  also  of  substantial  added  value  or
implementing  all  or  part  of  the  specific  programmes  in
accordance  with  the  objectives  of  the  programme.

Article  7

Conditions  for  the  JRC

international  agreement  between 

the
3. Where  an 
Community  and  a  third  country  is  necessary  to  provide
access  to  high-quality  programmes  in  the  third  country
concerned  and/or  to  ensure  suitable  IPR  arrangements,
participation  of  legal  entities  established  in  that  third
country  shall  be  subject  to  the  conclusion  of  such  an
agreement. Where such an agreement exists, participation
shall  additionally  be  subject  to  the  principles,  conditions
and  limits  laid  down  therein.

4. Any  legal  entity  referred  to  in  paragraphs  1,  2  and  3
may,  exceptionally,  participate  with  financing  from  the
Fifth  Framework  Programme  provided  that  the  financing
is  duly  justified  as  being  essential  for  achieving  the
objectives  of  the  indirect  RTD  action  in  question.

This  shall  not  apply  to  training  fellowships  as  defined  in
Annex  IV  to  the  Fifth  Framework  Programme.

5.
In  the  case  of  RTD  activities  under  the  specific
programme  on  ‘Confirming  the  international  role  of
Community  research’,  any  legal  entity  which  meets  the
conditions laid down in paragraph 1(a) and (b) may take

Subject  to  the  internal  budgetary  and  administrative
measures  necessary  to  enable  the  JRC  to  take  part  in
indirect  RTD  actions,  the  JRC  shall  be  bound  by  the
same conditions and have the same rights and obligations
as  the  legal  entities  established  in  a  Member  State  or  an
Associated  State  taking  part  in  indirect  RTD  actions.

Article  8

Conditions  relating  to  resources

1. Any  legal  entity,  international  organisation  and  the
JRC  must:

—  when  filing  its  proposal  for  an  indirect  RTD  action,
have  at  least  the  potential  resources  needed  for
carrying  it  out,

—  when  the  contract  is  signed,  demonstrate  that  it  will
have  all  the  necessary  resources  as  and  when  needed
for  carrying  it  out.

2. The  resources  needed  for  carrying  out  the  indirect
RTD 
resources,
action 
infrastructure, 
and,  where
appropriate,  intangible  property.

shall 
financial 

resources 

comprise 

human 

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SECTION  2: PROCEDURES

Article  10

Selection  criteria  and  conditions  applicable  in
accordance  with  the  type  of  procedure

Article  9

Procedures  to  be  applied

1.
Indirect  RTD  actions  other  than  accompanying
measures shall be the subject of calls for proposals. These
may be preceded by a call of expressions of interest of an
informative  nature.  All  such  calls  shall  be  published  in
the  Official  Journal  of  the  European  Communities  and
should  also  be  disseminated  through  other  appropriate
channels.

1. Proposals  for  indirect  RTD  actions  resulting  from
calls  for  proposals  and  pilot  schemes  shall  be  selected  in
conformity  with  Annex  I  to  the  Fifth  Framework
Programme  on 
for
participation  set  out  in  Articles  4  to  8  and  the  following
criteria:

the  conditions 

the  basis  of 

(a)  scientific excellence;

(b) Community  added  value;

(c)  the  potential  contribution  to  furthering  the  economic

and  social  objectives  of  the  Community;

2. Accompanying  measures  shall,  as  appropriate,  be  the
subject  of:

(d) the  innovative  nature  of  the  proposal  for  an  indirect

RTD  action;

—  calls  for  proposals,  in  accordance  with  procedures

identical  to  those  described  in  paragraph  1,

(e)  the  prospects  for  disseminating/exploiting  the  results,
as  described  in  the  plan  for  dissemination  and  use
attached  to  the  proposal  for  an  indirect  RTD  action;

—  public  procurement  procedures,  where  the  indirect
RTD  action  consists  of  a  purchase  or  a  service,  in
accordance  with  the  applicable  provisions,

(f)  effective  transnational  cooperation;

(g)  effective  and  efficient  management;

—  invitations 

to  apply 

for  appointment  as  an
independent  expert  where  the  measure  concerned
requires  the  Commission  to  take  account 
in  a
balanced  fashion  of  the  various  research  players,
without  prejudice  to  other  procedures  designed  to
achieve the same result in the case of the independent
highly  qualified  experts  appointed  for  the  five-year
evaluation  referred  to  in  Article  5(2)  of  the  Fifth
Framework  Programme.

conferences,  workshops 

In  specific  cases,  for  example  for  a  contribution  to  the
costs  of 
seminars,
spontaneous  applications  for  a  subsidy,  addressed  to  the
international
legal 
Commission  by  a 
organisation,  may  be  supported  by  the  Community.

entity  or 

and 

Indirect  RTD  actions  carried  out  as  pilot  schemes
3.
shall  be  governed  by  procedures  appropriate  to  those
actions  as  set  out  in  the  relevant  specific  programme
decisions.

shall  keep 

4. Subject  to  legal  constraints  and  the  need  to  respect
requirements  of  transparency  and  equal  treatment,  the
the
Commission 
submission,  selection  and  adoption  of  proposals  as  short
as  reasonably  achievable  and  keep  the  administrative
costs  of  the  applicants  and  of  the  Commission  to  the
minimum level necessary.

the  procedures 

for 

(h) any  additional  criteria  set  out 

in 

the  specific

programme  concerned.

These  criteria  shall  be  applied  in  accordance  with  the
category  of  indirect  RTD  action  and  with  the  nature  of
the  RTD  activity.

Any  project  which  contravenes  the  ethical  principles  laid
down  in  the  relevant  international  conventions  and
regulations  shall  not  be  selected.

Proposals  for  accompanying  measures  which  are  subject
to  a  public  procurement  procedure  shall  be  evaluated  on
the  basis  of  selection  and  award  criteria  defined  in
accordance  with  the  relevant  provisions.

2. Applications  for  subsidies  shall  be  selected  on  the
basis  of:

—  the  relevant  conditions  for  participation  set  out  in

Articles  4,  5,  6  and  8,  and

the  objectives  and 

—  their  appropriateness  and  usefulness  in  contributing
to 
scientific  and
the  Fifth  Framework
specific  programme

to 
technological  content  of 
Programme  and/or  of 
concerned.

the 

the 

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3. Applicants  responding  to  an  invitation  to  apply  shall
be  selected  on  the  basis  of  the  criteria  set  out  in  the
relevant  Commission  Decision  and  of  the  relevant
conditions  for  participation  set  out  in  Articles  4,  5  and
6.

SECTION  3: CONTRACTS

Article  11

(b) in  other  cases, 
demonstration 
contractually agreed objectives;

fixed  amounts 
efforts 

best 

of 

linked 
to 

to 

the
complete

(c)  other  arrangements  involving  flat  and  composite  rate

payments  appropriate  to  specific  projects.

5. Additinal eligible costs, as referred to in Annex IV to
the  Fifth  Framework  Programme,  shall  comprise  the
following:

—  the  additional  eligible  costs  generated  simply  by

taking  part  in  the  indirect  RTD  action,

Community  financial  participation  and  eligible  costs

—  a  flat-rate  contribution  to  the  general  expenses.

1.
In compliance with the provisions of Annex IV to the
Fifth  Framework  Programme,  the  Community  financial
participation  shall  consist  of  the  reimbursement,  in  part
or  in  whole,  of  the  eligible  costs  of  the  indirect  RTD
action.

is  provided  for 

2. A  cost  relating  to  an  indirect  RTD  action  shall  be
eligible  where  it  is  necessary  for  the  action  in  question
and 
in  the  contract.  It  shall  be
reimbursable  by  payment  within  a  reasonable  period
provided that the amount has actually been spent and has
been  recorded  in  the  accounts  or  the  tax  documents.

In  the  appropriate  circumstances,  provisions  should  be
made  for  advance  payments.

3.
In  the  case  of  the  research  and  technological
development  projects,  demonstration  projects  and
combined  RTD/demonstration  projects,  recourse  shall  be
had  to  additional  eligible  costs  where,  in  the  view  of  the
Commission,  the  system  of  accounting  used  by  the
participation  in  an  indirect  RTD  action  does  not  enable
the  full  costs  of  carrying  out  the  indirect  RTD  action  to
be  established  with  sufficient  precision.

4. Total  eligible  costs  will  be  reimbursed  by  payments
against  justification  of  the  actual  costs  of  the  indirect
RTD  action  concerned.  The  documents  substantiating
these  costs  must  be  satisfactory.  However,  at  the  request
of  those  taking  part  in  the  proposal  for  an  indirect  RTD
action,  general  expenses  may  instead  be  calculated  on  a
flat-rate  basis  by  agreement  with  the  Commission.

At the request of those taking part in the proposal for an
indirect  RTD  action  and  by  agreement  with 
the
Commission,  the  contract  can  establish  other  conditions:

(a)  in  the  case  of  small-scale  projects,  fixed  amounts
determined  on  the  basis  of  an  assessment  of  the
estimated  costs  of  the  work;

Article  12

Contracts

1. Proposals for indirect RTD actions selected following
any  of  the  procedures  set  out  in  Article  9  shall  be  the
subject  of  a  contract.

2. Contracts  will  be  based  on  the  relevant  model
contract  drawn  up  by  the  Commission  in  consultation
with  Member  States,  taking  account,  where  appropriate,
of  the  different  RTD  activities  involved.

CHAPTER  III

RULES  FOR  THE  DISSEMINATION  AND  USE  OF
RESEARCH  RESULTS

Article  13

Scope

For  the  purpose  of  carrying  out  the  specific  programmes
implementing  the  Fifth  Framework  Programme,  the  rules
for  the  dissemination  and  use  of  research  results  shall:

—  apply  in  compliance  with  international  agreements
concluded  with  the  Community  in  particular  under
Article  130m  of  the  Treaty,

—  take  full  account  of  pre-existing  know-how  including
the relevant existing property rights without prejudice
to  the  contents  of  the  detailed  rules  of  application
provided  for  in  Article  22  and  of  the  contracts
referred  to  in  Article  12.

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Article  14

Adaptation  of  the  rules  for  the  dissemination  and  use  of
research  results

The  rules  for  the  dissemination  and  use  of  research
results relating to knowledge resulting from work carried
out  under  indirect  RTD  actions  shall,  as  a  general  rule,
be  determined  by  the  level  of  Community  financing
reflecting, where appropriate, the different RTD activities
involved  and  the  proximity  to  the  market.

The  Community  shall  disseminate  or  promote  the  use  of
research  results  where  it  has  financed  indirect  actions
entirely.

Article  15

Ownership  of  knowledge

1. Knowledge  resulting  from  work  carried  out  under
direct  RTD  actions  shall  be  the  property  of  the
Community.

2. Knowledge  resulting  from  work  carried  out  under
indirect  RTD  actions  the  full  cost  of  which  is  borne  by
the  Community  shall,  as  a  general  rule,  be  the  property
of  the  Community.

Knowledge  resulting  from  work  carried  out  under
cooperative  research  projects  shall  be  the  property  of  the
SMEs who have entrusted the resolution of their research
problem  to  a  third  legal  entity.

Knowledge  resulting  from  work  carried  out  under  other
indirect  RTD  actions  the  full  cost  of  which  is  not  borne
by  the  Community  shall,  as  a  general  rule,  be  the
property  of  the  contractors  who  have  carried  out  the
work, 
including,  where  applicable,  the  Community,
pursuant  to  Article  7.

Any  subsequent  transfer  of  such  intellectual  property
rights  to  a  third  party  is  for  the  contractors  to  decide
subject to imposing a contractual responsibility to respect
those obligations on them concerning their dissemination
and  use  and, 
the
Community.

in  particular, 

interests  of 

the 

Article  16

Protection  of  knowledge

capable  of 

industrial  or 

Knowledge 
commercial
application  shall  be  protected  in  an  appropriate  manner
and  for  an  appropriate  period  of  time,  with  particular
regard  to  the  interests  of  the  Community  and  of  the
contractors,  and  in  accordance  with  the  contractual
provisions  and  any  applicable  legislation  or  convention.

Article  17

Use  of  knowledge

1. The  Community  and  the  contractors  shall  use,  or
ensure  that  effective  use  is  made  of,  any  knowledge
suitable  for  use  in  their  possession,  in  conformity  with
the  interests  of  the  Community.

2. The  Commission  shall  ensure  that  all  knowledge
belonging  to  the  contractors  which  is  suitable  for  use  is
used  effectively  by  them.  Failing  that,  after  a  specified
period of time, it must be disseminated by the contractors
or,  where  appropriate,  by  the  Commission.

Article  18

Making  knowledge  available  with  a  view  to  its  use

1. As  a  general  rule,  knowledge  resulting  from  work
carried  out  under  direct  RTD  actions,  together  with  any
information  necessary  for 
its  use,  should  be  made
available  to  any  interested  legal  entity  established  in  a
Member  State  or  in  an  Associated  State,  provided  that
the  entity  undertakes  to  use  the  knowledge,  or  to  ensure
that  it  is  used,  in  accordance  with  the  interests  of  the
Community.  The  making  available  of  knowledge  and
information shall be subject to appropriate conditions, in
particular  concerning  the  payment  of  fees.

2. Knowledge  belonging  to  any  of  the  contractors  and
resulting  from  work  carried  out  under  indirect  RTD
actions,  together  with  any  information  necessary  for  its
use,  shall  be  made  available  to  the  other  contractors  in
the  same  project,  provided  the 
interests,
including  commercial  interests,  of  all  the  contractors  are
safeguarded.

legitimate 

The  detailed  arrangements 
for  making  knowledge
available to third parties with a view to its use shall take
account  of  the  interests  of  the  Community  and,  in
principle,  the  level  of  Community  financial  participation
reflecting, where appropriate, the different RTD activities
involved  and  the  proximity  to  the  market.

3. The  making  available  of  such  knowledge  and
information  may  be  subject  to  appropriate  conditions.  It
may  give  rise  to  specific  agreements,  notably  concerning
exclusive  rights,  in  compliance  with  the  applicable  rules
on  competition.  The  grantor  of  rights  shall  in  that
context  take  into  consideration  the  constraints  and  risks
resulting  for  the  recipient  of  rights  from  the  investment
needed  for  exploiting  the  knowledge.

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Article  19

Dissemination  of  knowledge

1. The  Commission 
shall  disseminate  knowledge
resulting from work carried out under direct RTD actions
and  which  is  suitable  for  dissemination.

Particular  account  shall  be  taken  of:

(a)  the  need  to  safeguard  intellectual  and  industrial

property  rights;

(b) confidentiality;

(c)  the  benefits  of  swift  dissemination,  for  example  in

order  to  avoid  duplication  of  research  efforts.

shall  ensure 

that  knowledge
2. The  Commission 
resulting  from  work  carried  out  under  indirect  RTD
actions  and  which 
is
disseminated  through  appropriate  fora  (e.g.  scientific
publications)  by  the  contractors  or,  where  appropriate,
by  the  Commission  itself.

is  suitable  for  dissemination 

For indirect actions, in addition to (a), (b) and (c) above,
particular  account  shall  also  be  taken  of:

—  the  legitimate  interests  of  the  contractors,  including

commercial interests,

—  in  principle, 
participation.

the 

level  of  Community 

financial

3. Subject to the conditions set out in paragraphs 1 and
2, Member States and Associated States shall, on request,
for  reasons  of  public  and  in  specific  cases,  have  access,
without  undue  delay,  to  useful  knowledge  which  is
relevant  to  policy-making.  General  requirements  in  this
respect shall be set out in the relevant calls for proposals
and arrangements, or any exceptions to this principle, for
individual  projects  shall  be  agreed  in  the  contract.

2. The  technological  implementation  plan  shall  set  out
the  conditions,  including  a  timetable,  under  which  the
knowledge  is  to  be  disseminated  and  used.  It  shall  be
approved  by  the  Commission,  which  shall  assess  its
content  with  regard  to  the  interests  of  the  Community
and  of  the  contractors.

3. The  contractors  shall  inform  the  Commission  of  the
technological
steps 
implementation  plan.  They  shall  justify  any  material
subsequent  change  in  the  plan.

taken 

carry 

this 

out 

to 

CHAPTER  IV

FINAL  PROVISIONS

Article  21

Provisions  which  may  be  laid  down  in  the  specific
programmes

centres 

and  universities 

1. The  rules  for  the  participation  of  undertakings,
the
research 
dissemination  and  use  of  research  results  may  be  set  out
in greater detail or supplemented in the Council Decision
adopting the specific programmes implementing the Fifth
Framework  Programme.

and 

for 

2. The  first  paragraph  shall  not  apply  in  the  case  of  the
definitions set out in Article 1 or the training fellowships
referred  to  in  the  second  subparagraphs  of  Article  6(1)
and  (4).

Article  22

Detailed  rules  of  application

The detailed rules for applying Articles 4, 8, 11 and 14 to
20  shall  be  drawn  up  and  amended  as  necessary  in
accordance  with  the  procedure  provided  for  in  Article
23.

Article  20

Procedure  for  drawing  up  the  rules  of  application

Article  23

Technological  implementation  plan

actions 

1. Depending  on  the  nature  of  the  RTD  activity
concerned, contractors taking part in work under indirect
technological
RTD 
implementation plan. It shall reflect the broad outlines of
the  dissemination  and  use  plan  evaluated  as  part  of  the
original  proposal  presented  to  the  Commission  for
participation  in  indirect  RTD  actions.

produce 

shall 

a 

1. The  Commission  shall  be  assisted  by  a  committee
composed  of  the  representatives  of  the  Member  States
and  chaired  by  the  representative  of  the  Commission.

2. The representative of the Commission shall submit to
the  Committee  a  draft  of  the  measures  to  be  taken.  The
Committee  shall  deliver  its  opinion  on  the  draft  within  a
time-limit  which  the  Chairman  may  lay  down  according
to  the  urgency  of  the  matter.  The  opinion  shall  be

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delivered  by  the  majority  laid  down  in  Article  148(2)  of
the  Treaty  in  the  case  of  decisions  which  the  Council  is
required  to  adopt  on  a  proposal  from  the  Commission.
The  votes  of  the  representatives  of  the  Member  States
within the Committee shall be weighted in the manner set
out  in  that  Article.  The  Chairman  shall  not  vote.

The  Commission  shall  adopt  the  measures  envisaged  if
they  are 
the
committee.

in  accordance  with 

the  opinion  of 

Article  24

Reports

1. The  annual  report  which  the  Commission  sends  to
the  European  Parliament  and  the  Council  in  accordance
with Article 130p of the Treaty shall contain information
on  the  implementation  of  this  Decision.

2. Before  the  end  of  the  Fifth  Framework  Programme
the  Commission  shall  present  a  report  to  the  Council  on
the  application  of  this  Decision.

Article  25

Duration

If  the  measures  envisaged  are  not  in  accordance  with  the
opinion  of  the  committee,  or  if  no  opinion  is  delivered,
the  Commission  shall,  without  delay,  submit  to  the
Council  a  proposal  relating  to  the  measures  to  be  taken.
The  Council  shall  act  by  qualified  majority.

This  Decision  shall  apply  to  direct  RTD  actions  and
indirect  RTD  actions  implementing  the  Fifth  Framework
Programme.

If,  within  three  months  from  the  date  of  referral  to  the
Council,  the  Council  has  net  acted,  the  proposed
measures  shall  be  adopted  by  the  Commission.

For  the  Council

The  President

Done  at  . . .

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STATEMENT  OF  THE  COUNCIL’S  REASONS

I. 

INTRODUCTION

On  16  December  1997,  the  Commission  submitted  its  proposal  for  a  Council  Decision
concerning the rules for the participation of undertakings, research centres and universities
and  for  the  dissemination  of  research  results  for  the  implementation  of  the  Fifth
Framework  Programme  of 
technological
the  European  Community 
development  and  demonstration  activities  (1998-2002).

for  research, 

This  proposal  is  based  on  Article  130j  of  the  EC  Treaty. (1)

The  European  Parliament  delivered  its  opinion  on  the  proposal  on  28  May  1998 (2).

II.  COMMON  POSITION  OF  THE  COUNCIL

The  Council  adopted,  by  qualified  majority,  its  common  position  on  the  proposal  for  the
EC  rules  on  10  July  1998 (3).

1.  In the main, the Council’s common position follows the Commission’s initial proposal.

It  differs  only  on  a  limited  number  of  points.

(a)  The most important modification concerns the definition of small and medium-sized
enterprises  (SMEs)  in  Article  1.  Here  the  Council  has  chosen  to  restrict  the
definition to legal entities with fewer than 250 employees (or full-time equivalents);
with  an  annual  turnover  of  no  more  than  ECU  40  million  and/or  a  balance  sheet
total  of  no  more  than  ECU  27  million;  and  which  are  independent.  This  definition
line  with  Commission  Recommendation  96/280/EC (4)  concerning  the
is 
definition  of  SMEs,  which  the  Commission  had  undertaken  to  apply  to  all
programmes managed by it, as from 31 December 1997. However, for the purposes
of this decision on the rules of participation and dissemination, the Commission had
proposed  to  derogate  from  its  own  recommendation  and  apply  a  limit  of  500
employees  for  ‘cooperative  research’  and  ‘exploratory  awards’.

in 

The  Council’s  reasons  for  setting  the  SME  limit  at  250  employees  for  all  indirect
RTD  actions  are:

(i) 

it was felt that a single, uniform definition was needed, not a dual definition as
proposed  by  the  Commission;

(ii)  a  derogation  from  the  Commission’s  recommendation  of  3  April  1996  in  this

particular  case  could  set  a  precedent  for  future  derogations;

(1)  The Commission also submitted at the same time a proposal for a Council Decision concerning the rules
for  the  participation  of  undertakings,  research  centres  and  universities  for  the  implementation  of  the
Fifth  Framework  Programme  of  Community  activities  in  the  field  of  research  and  training  for  the
European  Atomic  Energy  Community  (1998-2002),  based  on  Article  7  of  the  EAEC  Treaty.

(2)  OJ  C  195,  22.6.1998.
(3)  At its meeting on 22 June 1998, it also registered agreement on the text of the participation rules for the
EAEC research and training framework programme, on the understanding that the final adoption of the
Decision would take place simultaneously with the adoption of the EC rules. This text is transmitted to
the  European  Parliament  for  information. 

(1)  OJ  L  107,  30.4.1996,  p.  4.

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(iii) ‘cooperative research’ and ‘exploratory awards’ are the only two activities open
exclusively  to  SMEs;  since  both  are  of  a  rather  limited  scale  it  would  seem
inappropriate  to  extend  those  activities  to  a  larger  number  of  enterprises.

(b) The common position also entails changes to the rules for the participation of legal
entities  from  associated  states  and  other  non-Member  States  (Articles  5  and  6)  to
align  them  on  the  common  position  of  the  Council  on  the  Fifth  EC  Framework
Programme (1).

(c) Finally,  provisions  have  been  introduced  in  Article  19  to  facilitate  the  access  of

Member  States  to  information  relevant  to  policy-making.

At  the  Council  meeting  on  22  June  1998,  the  Commission  accepted  these
modifications  to  its  proposal.

Moreover, certain drafting changes have been made in order to improve the clarity of
the  text.

2.  In its common position, the Council has incorporated, in a modified form, or in spirit,
3  of  the  15  amendments  proposed  by  the  European  Parliament  (nos.  6,  9  and  10) (2).
In addition, some amendments (nos. 13, 16, 17 and 18) were considered to be already
implicitly  covered  by  the  Commission  proposal  (as  modified  by  the  Council) (3).

following  amendments  were,  however,  not  considered  appropriate 

The 
incorporation,  for  the  reasons  indicated:

for

—  No  3  (cluster  of  SMEs  and  one  large  enterprise):

no  reason  to  derogate  from  general  rules;  special  measures  already  exist  for
SMEs,

—  Nos.  4,  5  (special  provisions  for  innovative  projects  in  rapidly  changing  markets);
—  No  4:  unnecessary  since  the  rule  referred  to  by  the  European  Parliament  does

not  apply,

—  No  5:  too  much  detail;  more  appropriate  for  contracts,

—  No  8(a)  (contractors  may  negotiate  during  preparatory  stage):

inappropriate  for  legislative  texts  although  this  can  happen  in  practice,

—  No  8(b)  (Commission  withdrawing  its  approval  if  contract  not  concluded  within

four  months):
impractical  and  too  rigid;  flexibility  in  individual  cases  needed;

—  No  11  (content  of  contracts):

too  much  detail;

—  No 12 (ownership of knowledge resulting from indirect RTD actions for which the

Community  pays  up  to  50 %):
impractical;  could  deter  contractors  from  participating;

—  Nos.  14,  15  (protection  of  financial  interests  and  fighting  fraud):

whilst agreeing with the principles behind these amendments, the Council considers
the  participation  and  dissemination  rules  not  to  be  the  right  place  for  this.

(1)  OJ  L  178,  10.6.1998,  p.  49.
(2)  The  same  three  amendments  have  also  been  incorporated  into  the  Euratom  rules.
(3)  It  is  recalled  that  the  Commission  rejected  all  amendments  except  nos.  6  and  10.