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ARCHIVED - NIH Grants Policy Statement (10/98)

Part II: Terms and Conditions of NIH Grant Awards-Part 5 of 7

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NIH grantees are, in general, allowed a certain degree of latitude to rebudget within and between direct cost budget categories to meet unanticipated needs and to make other types of postaward changes. Some changes may be made by the grantee only within limits established by NIH. Other changes require NIH prior written approval before modifying the budget or undertaking the activity in question. The degree of discretion permitted varies by type of grant, grantee, and coverage by, or participation in, a special initiative. The changes that may be made under the grantee's authority and the changes that require NIH approval are outlined below and in Part III. In addition, individual awards may restrict grantees' authorities to make budget and project changes without NIH prior approval. This section deals only with grantee-initiated changes. Changes in project or budget resulting from NIH-initiated actions are discussed in later sections of this Part.

If NIH approval is required, it must be requested of, and obtained from, the NIH awarding office GMO in advance of the change or obligation of funds as specified below under " Requests for Approval".

The following listing of prior approval requirements applies in its entirety to NIH grants other than those operating under expanded authorities and construction grants. If an approval requirement does not apply under expanded authorities, it is noted in this list. Part III should be reviewed for other prior approval requirements unique to a type of grant, such as construction grants, or type of recipient, such as for-profit organizations. Additional prior approval requirements may be imposed by specific terms of the NGA, program legislation, regulations, or policies. Therefore, the following list may not be all-inclusive; however, it is NIH's implementation of 45 CFR 74.25, Revision of budget and program plans, and 45 CFR 92.30, Changes. If a prior approval category specified in those regulations is not included in this list, NIH has waived the requirement, as permitted by those regulations.

For those categories or types of actions listed below, prior approval is required whether or not the change has a budgetary impact.

Change in Scope, including Significant Rebudgeting: In general, the PI may make changes in the methodology, approach, or other aspects of the project objectives. However, the grantee must obtain prior approval from NIH for changes in scope, direction, type of training, or other areas that constitute a significant change from the aims, objectives, or purposes of the approved project (hereafter "change in scope"). The grantee must make the initial determination of the significance of a change and should consult with the GMO as necessary.

Actions likely to be considered a change in scope include, but are not limited to, the following:

  • Change in the specific aims approved at the time of award.
  • Substitution of one animal model for another.
  • Any change from the approved use of animals or human subjects.
  • Shifting the research emphasis from one disease area to another.
  • Applying a new technology; i.e., changing assays from those approved to a different type of assay.
  • Transferring the performance of substantive programmatic work to a third party through a consortium agreement, by contract, or any other means. NOTE: This type of action always requires NIH prior approval for grants not subject to expanded authorities (see "Expanded Authorities" below).

Once approval is obtained, transferring the same work to a different third party does not require NIH approval.

  • Change in key personnel whose expertise is critical to the approved project.

    (Note: The following section has been revised in accordance with the 12/18/98 NIH Guide Notice)
  • Significant rebudgeting, whether or not the particular expenditure(s) require prior approval under rules governing budget changes. Significant rebudgeting occurs when expenditures in a single direct cost budget category deviate (increase or decrease) from the categorical commitment level established at the time of the competing award by more than 25 percent of the total costs awarded. For example, if the award budget for total costs is $200,000, NIH prior approval is required for any rebudgeting that would result in an increase or decrease of more than $50,000 in a budget category. The baseline used for determining significant rebudgeting excludes the effects of prior year carryover balances but includes competing and noncompeting supplements. When the applicable threshold is reached, the grantee must consult with the GMO for a decision as to whether the rebudgeting constitutes a change of scope. If the GMO determines that the significant rebudgeting constitutes a change of scope, NIH prior approval is required.

  • Incurrence of patient care costs if not previously approved by NIH or if a grantee desires to rebudget additional funds into or rebudget funds out of the patient care category. NOTE: These types of actions always require NIH prior approval for grants not subject to expanded authorities (see " Expanded Authorities" below).

Preaward Costs: See "Cost Considerations     Allowability of Costs/Activities     Selected Items of Cost     Preaward (Preagreement) Costs".

Change in Status, Including Absence, of Principal Investigator and Other Key Personnel: The grantee is required to notify NIH if the PI or other key personnel named in the NGA will withdraw from the project entirely, be absent from the project during any continuous period of 3 months or more, or reduce his or her time devoted to the project by 25 or more percent from the level that was approved at the time of award (for example, a proposed change from 40 percent effort to 30 percent or less effort). NIH must approve any alternate arrangement, including any replacement PI or other key personnel proposed by the grantee.

The request for approval of a substitute PI/key person should include a justification for the change, the curriculum vitae of the individual proposed, other sources of support, and any budget changes resulting from the proposed change. If the arrangements proposed by the grantee, including the qualifications of any proposed replacement, are not acceptable to NIH, the grant may be suspended and/or terminated. If the grantee wishes to terminate the project because it cannot make suitable alternate arrangements, it must notify the awarding office GMO, in writing, of its wish to terminate, and NIH will forward closeout instructions.

Change of Grantee Organization: NIH prior approval is required for the transfer of the legal and administrative responsibility for a grant-supported project or activity from one legal entity to another before the expiration date of the approved project period. Such a change of grantee organization may be accomplished under most NIH grants, including construction grants, if:

  • The grant to be transferred has been terminated in accordance with 45 CFR 74.61 or 92.43;
  • A noncompeting continuation award that is within an approved project period has been withheld because of the grantee's actions (see "Administrative Requirements     Enforcement Actions     Suspension, Termination, and Withholding of Support"); or
  • The original grantee has agreed to relinquish responsibility for an active project before the expiration of the approved project period. This includes any proposed change of grantee as a result of a PI on a research project transferring from one domestic organization to another domestic organization or from a foreign organization to a domestic organization. The project under the same PI may be supported at a new organization for a period up to the remainder of the previously approved project period in an amount not to exceed that previously recommended for direct costs (plus applicable F&A costs) for the remaining period.

A change of grantee organization may not take place where it will involve the transfer of a grant to or between foreign institutions or international organizations. In addition, a grant to an individual may not be transferred. However, an individual fellowship may be transferred to a new organization and this would be considered a change of grantee organization. A change in an individual fellow's department or sponsor within the same organization is not considered a change of grantee organization.

A request for a change of grantee organization must include submission of a Relinquishing Statement and a Final Invention Statement and Certification from the original grantee as well as submission of an application (PHS-398) from the proposed grantee. The application from the proposed grantee should include, at a minimum:

  • A face page;
  • Budget pages (current and future years);
  • An updated biographical sketch;
  • A statement indicating whether the overall research plans/aims have changed from the original submission, and, if so, providing updated information;
  • An updated "other support" page(s), if necessary;
  • A resources page;
  • A checklist page;
  • An approved IRB/IACUC assurance, if applicable; and
  • If the change includes the transfer of equipment purchased with grant funds, the application must include a detailed list. This list, as part of a transfer application, serves as an acceptance of title by the new organization.

NIH may request additional information necessary to accomplish its review of the request.

A change of grantee organization request must be made prior to the anticipated start date at the new organization and preferably several months in advance. Failure to provide timely notification may result in disapproval of the request or a delay in processing.

A change of grantee request will normally be permitted only when all of the permanent benefits attributable to the original grant can be transferred, including equipment purchased in whole or in part with grant funds. In reviewing a request to transfer a grant, NIH will consider whether there is a continued need for the grant-supported project or activity and the impact of any proposed changes in the scope of the project. A change may be made without competitive review, provided the PI plans no significant change in research objectives and the facilities and resources at the new organization will allow for successful performance of the project. If these conditions or other programmatic or administrative requirements are not met, the NIH awarding office may require a competitive review or may disapprove the request and, if appropriate, terminate the award.

As stated above, the original grantee must provide a written statement relinquishing its interests and rights to the grant in accordance with instructions from the NIH awarding office. Acceptance of a Relinquishing Statement by NIH does not guarantee approval of a transfer application for the continued funding of a project.

NIH will accomplish a change of grantee organization by issuing a revised NGA to the original grantee, which will reflect the revised budget/project period end dates, deletion of any future-year support, and deobligation of remaining funds, if applicable. (A deobligation of funds will be based on the estimated grant expenditures through the relinquishment date, as determined from the Relinquishing Statement.) Concurrently, the new grantee will receive an NGA reflecting the balance reported on the Relinquishing Statement or, if the change of grantee organization occurs on the anniversary date of the project, the NGA to the new grantee will reflect the direct cost level (plus applicable F&A costs) previously committed.

Change in Grantee Organizational Status: Grantees must notify NIH, in advance, of certain changes in organizational status. This notification is required to ensure that the grantee is still able to meet its legal and administrative obligations to NIH and that payments are not interrupted.

The following organizational changes must be reported to NIH prior to the change:

  • Successor-in-Interest: A process whereby the rights to, and obligations under, an NIH grant(s) are acquired incidental to the transfer of all of the assets of the grantee or the transfer of that part of the assets involved in the performance of the grant(s). A transfer of this type may result from legislative or other legal actions, such as a merger or other corporate change.
  • Name Change: An action whereby the name of an organization is changed without otherwise affecting the rights and obligations of that organization as a grantee.
  • Merger: A legal action resulting in the unification of two or more legal entities. When such an action involves the transfer of assets, the procedures for recognition of a successor-in-interest will apply. When the action does not involve the transfer of assets, the procedures for recognition of a name change will normally apply.

Neither a name change nor a successor-in-interest is considered a "change of grantee organization" (as described above).

Grantees are encouraged to contact the GMO of the lead IC to explain the nature of the change and receive guidance on whether it will be treated as a name change or successor-in-interest. The lead IC will ordinarily be the IC with which the organization has the most NIH grants. If there is no advance consultation, NIH reserves the right to review the material provided, seek clarification or additional information, and make an independent determination.

A grantee's formal request for a successor-in-interest or name change should be submitted to NIH as soon as possible so that NIH can determine whether the organization will continue to meet the grant program's eligibility requirements and take the necessary action to reflect the change in advance of the change in status.

For a successor-in-interest, a letter signed by the appropriate institutional officials of the current grantee (transferor) and the successor-in-interest (transferee) must be sent to the affected NIH ICs, following consultation with the GMO of the lead IC. The letter must:

  • Stipulate that the transfer was properly effected in accordance with applicable law,
  • Indicate that the transferor relinquishes all rights and interests in all of the affected grants,
  • Request that the NIH awarding office(s) modify its records to reflect the transferee as the grantee of record, and
  • State the effective date of the transfer.

The letter should be accompanied by: a list of the grants to be transferred; a revised completed grant application face page for the affected grant(s) showing the transferee as the applicant organization, along with information regarding changes in taxpayer identification or entity identification numbers, F&A costs (including a copy of the rate agreement), and the use of human subjects or animals. Upon receipt and acceptance of this information, NIH will revise the NGA(s) to show the transferee as the grantee of record.

For name changes, the grantee's written notification to the lead NIH IC must include the effective date of the change. Revised face pages are not required for name changes since name changes are processed with the next award action and a face page will be received from the organization as part of that action.

Addition of a Foreign Component: Addition of a substantial foreign component under a grant to a domestic organization.

Award Terms and Conditions: Deviations from special terms or conditions stated in the NGA or from the terms and conditions included in this policy statement.

Restrictions on Notice of Grant Award: Undertaking any activities disapproved or restricted as a condition of the award.

Carryover of Unobligated Funds from One Budget Period to Another Within an Approved Project Period: NOTE: This action is generally allowable without prior approval under expanded authorities unless restricted (see "Expanded Authorities " below).

Extension of a Project Period With or Without Additional Funds: A request for a noncompeting extension of a project period should be submitted to the IC GMO, in writing, at least 30 days before the project period is scheduled to expire. Such requests are usually for a period up to 12 months, based on a need to provide continuity of project activities while a competing continuation application is being reviewed or to permit orderly phaseout of project activities for which there will be no further NIH support, and may be made without funds or with a minimal amount of additional funds. The request must specify the proposed revised ending date and must include justification for both the extension and any additional funds requested. Special justification will be required for an additional extension that would exceed an initial 12-month extension. NIH will not approve such requests if the primary purpose of the proposed extension is to permit the use of unobligated balances of funds. NOTE: These requirements do not generally apply under expanded authorities with respect to a "no-cost" extension of the final budget period of a project period (see "Expanded Authorities" below).

Equipment Purchase: Equipment exceeding $25,000 per unit, regardless of the amount of NIH funding to be used. NOTE: This requirement is not generally applicable under expanded authorities unless the purchase may result in a change in scope (see "Expanded Authorities" below).

Retention of Research Grant Funds When an Independent Scientist Award is Made: Funds budgeted under an NIH grant for an individual's salary and/or fringe benefits, but available as a result of receiving an Independent Scientist Award (ISA) for that individual, may not be used for any other purpose without NIH prior approval.

Alterations and Renovations: NIH prior approval is required for an A&R project exceeding $300,000 (see "Construction Grants" in Part III for documentation requirements).

Transferring Amounts from Trainee Costs: The transfer of amounts previously awarded for trainee costs (stipends, tuition, and fees) to other categories of expense. This excludes trainee travel, which NIH does not consider to be a trainee cost, and training-related expenses (see "National Research Service Awards" in Part III).

Capital Expenditures: Capital expenditures for land or buildings. Also, real property acquired with NIH grant funds may not be conveyed, transferred, assigned, mortgaged, leased, or in any other manner encumbered by the grantee without the written prior approval of the NIH awarding office or its successor organization.

Need for Additional NIH Funds: A request for additional funding for a current budget period to meet increased costs that are within the scope of the approved application, but that were unforeseen when the new, noncompeting continuation, or competing continuation application was submitted, is a noncompeting supplemental application. Such requests are submitted directly to the GMO, in writing, and are not required to compete with other applications for funding.

Closely Related Work: When salaries or other costs are being supported by two or more scientifically and technically related NIH grant projects with the same PI and funded by the same IC, grantees may charge those costs to any one of those projects or treat multiple projects as a single cost objective only with NIH prior approval. NIH will not approve such requests if there is a change in the scope of the individual grants involved, relating the costs will be detrimental to the conduct of work approved under each individual award, or the projects are being related to circumvent the terms and conditions of an individual award. (See "Cost Considerations     Allocation of Costs and Closely Related Work".)

Transfer of Funds Between Construction and Nonconstruction: Under awards that provide for both construction and nonconstruction work, NIH prior approval is required to transfer funds between the two types of work.

Program Income: The use of any alternative for disposition of program income other than that specified in the terms and conditions of award must have NIH prior approval (see "Administrative Requirements     Management Systems and Procedures     Program Income").

NIH has waived the requirement for its approval of specified actions under certain awards and has provided the authorities (hereafter "expanded authorities") to grantees to take such actions without NIH prior approval. This subsection describes the authorities unique to grants subject to expanded authorities. In using these expanded authorities, grantees must ensure that they exercise proper stewardship over Federal funds and that costs charged to the awards are allowable, allocable, reasonable, and consistently applied regardless of the source of funds. Expanded authorities apply to the following mechanisms:

  • "R" series (Research Project Grants), except R41, Phase I Small Business Technology Transfer (STTR) Grants, and R43, Phase I Small Business Innovation Research (SBIR) Grants
  • Program Project Grants (P01)
  • "K" series (Career Development Awards)
  • Minority High School Student Research Apprentice Program Awards (S03).

NIH ICs may also authorize some or all of the expanded authorities for additional awards or classes of awards.

Expanded authorities are not provided under awards to individuals. Certain support mechanisms or grantees may also be excluded from expanded authorities. If excluded, the NGA will indicate this change from the standard terms and conditions. This may include grants or grantees that require closer project monitoring or technical assistance, such as clinical trials and certain large multi-project grants. Therefore, grantees must review the NGA to determine whether they are permitted to use expanded authorities.

When a grant is under expanded authorities, the grantee may take the following actions without NIH prior approval unless one or more of these authorities is overridden by a special term or condition of the award. Several of the expanded authorities have specific deadlines for submission of reports or for timely notification to the NIH awarding office. Grantees should be aware that any consistent pattern of failure to adhere to those deadlines for reporting or notification shall be grounds for excluding that grantee from these special authorities. Even where the grantee is authorized to use expanded authorities, if it is determined, through audit or otherwise, that costs do not meet the tests of allowability, allocability, reasonableness, and consistency, the costs may be disallowed.

Extension of a Project Period Without Additional Funds: The grantee may extend the final budget period of the project period one time for a period of up to 12 months beyond the original expiration date shown in the NGA if no additional funds are required to be obligated by the awarding office, there will be no change in the project's originally approved scope or objectives, and any one of the following applies:

  • Additional time beyond the established expiration date is required to ensure adequate completion of the originally approved project.
  • Continuity of NIH grant support is required while a competing continuation application is under review.
  • The extension is necessary to permit an orderly phaseout of a project that will not receive continued support.

The fact that funds remain at the expiration of the grant is not, in itself, sufficient justification for an extension without additional funds. The grantee must notify the NIH awarding office, in writing, of the extension 10 days prior to the expiration date of the project period. Upon notification, the NIH awarding office will revise the project period ending date and provide an acknowledgment to the grantee. In extending the final budget period of the grant through this process, the grantee agrees to update all required certifications, including human subjects and animal welfare, in accordance with applicable regulations and policies. Grantees may not extend project periods previously extended by the NIH awarding office. Any additional project period extension beyond the one-time extension of up to 12 months requires NIH prior approval. (See "Prior Approval Requirements" above for extensions requiring additional funds.)

Carryover of Unobligated Balances: Except for funds restricted in an NGA, grantees are authorized to carry over unobligated funds remaining at the end of a budget period. For awards under the Streamlined Noncompeting Award Process (SNAP), funds are automatically carried over and are available for expenditure during the entire project period. However, under those awards, the grantee will be required to indicate, as part of its noncompeting continuation request, whether its estimated unobligated balance (including prior year carryover) is expected to be greater than 25 percent of the current year's total budget. If so, the grantee must provide an explanation and indicate plans for expenditure of those funds if carried forward. (See "Administrative Requirements     Noncompeting Continuation Awards".)

For those awards subject to expanded authorities but excluded from SNAP; e.g., P01s and R35s, the FSR must specify the amount to be carried over. The notification must be provided under item 12, "Remarks," on the FSR. When a grantee reports a balance of unobligated funds in excess of 25 percent of the total amount awarded, the awarding office GMO will review the circumstances resulting in the balance to ensure that these funds are necessary to complete the project, and may request additional information from the grantee, including a revised budget, as part of the review. If the GMO determines that some or all of the unobligated funds are not necessary to complete the project, the GMO may take one, or a combination, of the following actions: restrict the grantee's authority to automatically carry over unobligated balances in the future or use the balance to reduce or offset NIH funding for a subsequent budget period. Any amount not identified for carryover may be used as an offset. A revised NGA will not be issued to reflect the carryover.

Use of Program Income: The additive costs alternative for the use of program income will apply to awards subject to expanded authorities unless program regulations or the NGA specify another alternative or a combination of alternatives or the grantee is a for-profit organization other than an SBIR/STTR awardee (see "Administrative Requirements     Management Systems and Procedures     Program Income").

All requests for NIH awarding office prior approval must be made, in writing, to the awarding office GMO no later than 30 days before the proposed change. The request must be signed by both the PI and the authorized institutional official. Failure to obtain prior approval, when required, from the appropriate NIH awarding office may result in the disallowance of costs, termination of an award, or other enforcement action within NIH's authority.

The GMO will review the request and inform the authorized institutional official, in writing, of the final disposition of the request. Only responses signed by the GMO are to be considered valid. Grantees that proceed on the basis of actions by unauthorized officials do so at their own risk, and NIH is not bound by such responses.

Whenever grantees contemplate rebudgeting or other postaward changes and are uncertain about the need for prior approval, they are strongly encouraged to consult, in advance, with the GMO.

Under a consortium agreement, the prior approval authority is usually the grantee. However, the grantee may not approve any action or cost that is inconsistent with the purpose or terms of the NIH grant. If an action by a consortium participant will result in a change in the overall grant project or budget requiring NIH approval, the grantee shall obtain that approval from NIH before giving its approval to the consortium participant.

The "Application for Continuation of a Grant" (PHS-2590) or equivalent documentation must be submitted to, and be approved by, NIH to noncompetitively fund each additional budget period within a previously approved project period. Except for awards subject to SNAP (see below), the application includes an updated budget, progress report, and other required information.

Noncompeting continuation applications must be submitted directly to the IC GMO 2 months before the beginning date of the next budget period, unless instructed otherwise. (OPERA will provide the grantee with a computer-generated face page and necessary mailing labels approximately 4 months before the end of the current budget period.) Late submission or receipt of an incomplete noncompeting continuation application will result in delaying the issuance and funding of the noncompeting continuation award and may result in a reduced award amount.

NIH grantees (including those participating in the Federal Demonstration Partnership) are expected to follow the streamlined noncompeting process (SNAP) for mechanisms routinely covered under expanded authorities except Program Project Grants (P01s) and Outstanding Investigator Grants (R35s). NIH routinely applies expanded authorities to Program Project Grants (P01s), Minority High School Research Apprentice Program Awards (S03s), Research Career Awards (K series), and all Research Project Grants (R series) except Phase I SBIR (R43) and STTR (R41) awards.

Any additional activity that has been included under expanded authorities at the discretion of an IC (e.g., centers, training grants, or cooperative agreements) will be excluded under SNAP unless inclusion is specifically footnoted as a term or condition of the award.

Any award excluded from expanded authorities is routinely excluded from SNAP unless specifically included in SNAP as a term or condition of the award. Individual awards may be excluded from routine inclusion under SNAP (and expanded authorities) on the basis of the following criteria:

  • Grants that require close project monitoring or technical assistance; e.g., clinical trails, exceptional (high-risk) grantees, certain large individual or multi-project grants, or grants with significant unobligated balances.
  • Grantees that have a consistent pattern of failure to adhere to appropriate reporting or notification deadlines.

Under SNAP, the GMO negotiates the direct costs for the entire competitive segment at the time of the competing award. This eliminates the need for annual budget submissions and negotiations and reduces the information NIH requires to review and approve noncompeting continuation applications and to monitor these awards. As a result, for awards under SNAP, grantees are required to submit only limited portions of the PHS-2590, including an annual progress report. Grantees are also required to submit a quarterly Federal Cash Transactions Report (FCTR) (SF-272) to PMS.

As part of the progress report, grantees must answer the following questions:

  • Has there been a change in the "other support" of key personnel since the last reporting period? If so, the change(s), including termination of a previously active grant or activation of a previously pending grant, must be explained. If not, the grantee must so state.
  • Will there be, in the next budget period, significant rebudgeting of funds from what was approved for the project? If so, the grantee must explain; if not, the grantee must so state. "Significant rebudgeting" occurs when expenditures in a single direct cost budget category deviate (increase or decrease) from the categorical commitment level established at the time of the competing award by more than 25 percent of the total amount awarded. The basis for determining significant rebudgeting in relation to SNAP excludes the effects of prior year carryover balances but includes competing and noncompeting supplements.
  • Will there be, in the next budget period, a change in the level of effort for key personnel from what was approved for this project? A "significant change" is a 25 percent or greater reduction in time devoted to the project. If so, the grantee must explain; if not, the grantee must so state.
  • Does the grantee anticipate that it will have an estimated unobligated balance (including prior year carryover) that will be greater than 25 percent of the current year's total budget? If so, the grantee will be required to explain why there is a significant balance and how it will be spent if carried forward into the next budget period. If not, the grantee should so state.

The IC will rely on the grantee's assessment of whether significant changes have occurred or will occur in these areas; however, the GMO may require additional information in order to evaluate the project for continued funding. Failure to provide this information will result in a delayed award.

For awards under SNAP, an FSR (SF 269) is required only at the end of a competitive segment rather than annually. This FSR must be submitted within 90 days after the end of the competitive segment and must report on the cumulative support awarded for the entire segment. An FSR must be submitted at this time whether or not a competing continuation award is made. If no further award is made, this report will serve as the final FSR (see "Administrative Requirements--- Closeout").

It is NIH policy to make available to the public the results and accomplishments of the activities that it funds. Therefore, PIs and grantee organizations are expected to make the results and accomplishments of their activities available to the research community and to the public at large. This policy notwithstanding, NIH recognizes that certain research findings may result in inventions. Grantees have the prerogative to protect these inventions, as long as they abide by the provisions of the Bayh-Dole Act of 1980, as implemented in 37 CFR 401. In general terms, these regulations require the grantee to utilize patent and licensing processes to transfer grant-supported technology to industry for development. Alternatively, technology transfer may take place in the form of journal articles or other publications or through the availability of research products or resources.

The importance of each of these outcomes of funded research is reflected in the specific policies pertaining to rights in data, unique research resources, and inventions and patents that follow.

RIGHTS IN DATA (Publication and Copyrighting)

In general, grantees own the data generated by or resulting from a grant-supported project. Special terms and conditions of the award may specify alternative rights; e.g., under a cooperative agreement or if there are shared rights to data. Except as otherwise provided in the terms and conditions of the award, the grantee is free to copyright without NIH approval when publications, data7, or other copyrightable works are developed under, or in the course of, work under an NIH grant. Copyrighted or copyrightable works also include materials developed by students, fellows, or trainees under awards whose primary purpose is to further the education or training of such individuals. Whenever any work subject to this copyright policy is developed by a consortium participant or a contractor (or subcontractor) under a grant, the written agreement/contract must require the consortium participant/contractor (subcontractor) to comply with these requirements and can in no way diminish NIH's rights in that work. NIH must be provided a royalty-free, nonexclusive, and irrevocable license for the Government to reproduce, publish, or otherwise use the material and to authorize others to do so for Federal purposes.

Grantees may arrange for publication of initial reports of original research, supported in whole or in part by NIH grant funds, in primary scientific journals and for copyright by the journal unless the journal's copyright policy would preclude individuals from making or having made, by any means available to them without regard to the copyright of the journal and without royalty, a single copy of any such article for their own use (see 45 CFR 74.36 and 92.34). The disposition of royalties and other income earned from a copyrighted work is addressed in "Administrative Requirements     Management Systems and Procedures     Program Income". Grantees are encouraged to assert copyright in scientific and technical articles based on data produced under the grant where this is necessary to effect publication in academic, technical, or professional journals, symposia, proceedings, or similar works.

Grantees are required to place an acknowledgment of NIH grant support and a disclaimer, as appropriate, on any publication written or published with such support and, if feasible, on any publication reporting the results of, or describing, a grant-supported activity. An acknowledgment shall be to the effect that:

"This publication was made possible by Grant Number ________ from _________" or "The project described was supported by Grant Number ________ from ________" and "Its contents are solely the responsibility of the authors and do not necessarily represent the official views of the (name of awarding office) or NIH."

In the event that the recipient wishes to join with NIH in a simultaneous news release announcing the results of a project, the action should be coordinated with the awarding office.

One copy of each publication resulting from work performed under an NIH grant-supported project must accompany the annual progress report submitted to the NIH awarding office (see "Administrative Requirements     Noncompeting Continuation Awards").

Investigators conducting biomedical research frequently develop unique research resources. Categories of these resources include synthetic compounds, organisms, cell lines, viruses, cell products, and cloned DNA, as well as DNA sequences, mapping information, crystallographic coordinates, and spectroscopic data. Specific examples include specialized and/or genetically defined cells, including normal and diseased human cells; monoclonal antibodies; hybridoma cell lines; microbial cells and products; viruses and viral products; recombinant nucleic acid molecules; DNA probes; nucleic acid and protein sequences; certain types of animals, such as transgenic mice; and intellectual property, such as computer programs.

Restricted availability of unique resources upon which further studies are dependent can impede the advancement of research and the delivery of medical care. Therefore, when these resources developed with NIH funds and the associated research findings have been published or after they have been provided to NIH, it is important that they be made readily available for research purposes to qualified individuals within the scientific community. This policy applies to grants, cooperative agreements, and contracts.

Investigators who believe they will be unable to implement this policy should promptly contact the appropriate Program Official to discuss the circumstances, obtain information that might facilitate compliance with this policy, and reach an understanding in advance of the subsequent award. In order to facilitate the availability of unique or novel biological materials and resources developed with NIH funds, investigators may distribute the materials through their own laboratory or organization or submit them, if appropriate, to entities such as the American Type Culture Collection or other repositories. In the case of unique biological information, such as DNA sequences or crystallographic coordinates, investigators are expected to submit them to the appropriate data banks, because, otherwise, they are not truly accessible to the scientific community. When distributing unique resources, investigators are to include pertinent information on the nature, quality, or characterization of the materials.

Investigators must exercise great care to ensure that resources involving human cells or tissues do not identify original donors or subjects, directly or through identifiers such as codes linked to the donors or subjects.

Pursuant to the Bayh-Dole Act and Executive Order 12591 (April 10, 1987), all recipients of NIH research funding (i.e., all NIH grantees and contractors and consortium participants and other organizations receiving funds under NIH grants and contracts, whether small businesses, large businesses, or non-profit organizations) are subject to the same invention reporting requirements and regulations. These are included in the regulations issued by the Department of Commerce, found at 37 CFR Part 401.

Grantees (and, in some cases, employee inventors) have rights to inventions ("subject inventions") conceived or first actually reduced to practice in the performance of work under an NIH award. Grantee organizations must fulfill the following requirements:

  • Establish and implement an employee invention reporting policy (37 CFR 401.14(f)(2));
  • Report all subject inventions within 2 months to OPERA (37 CFR 401.14(c) and (l));
  • Elect title (or waive title) within 2 years of reporting to OPERA (37 CFR 401.14(c)(2) and (l));
  • File for patent within 1 year of electing title or public disclosure, whichever comes first (37 CFR 401.14(c)(3));
  • Upon election of title, provide a confirmatory license to the Government (37 CFR 401.14(b));
  • Acknowledge NIH support in any patent application or patent (37 CFR 401.14(f)(4));
  • Notify OPERA of any decision not to pursue patent rights (or licensing) (37 CFR 401.14(f)(3) and (l));
  • Submit an annual utilization report for all inventions where election of title is made and for unpatented, yet licensed, inventions (37 CFR 401.14(h));
  • Exercise preference for U.S. industry and, if the grantee is a non-profit organization, preference for small businesses (37 CFR 401.14(i));
  • Provide one copy of each publication resulting from work performed under an NIH grant-supported project to the NIH awarding office with the annual progress report; and
  • Submit a final invention statement and certification to the NIH awarding office within 90 days of the end of the project period. (37 CFR 401.14(f)(5)).

Failure of the grantee to comply with these provisions may result in the loss of patent rights. If the grantee waives its rights to the employee-inventor, these requirements apply to the employee-inventor.

As specified in 45 CFR Part 74 and 37 CFR 401.1(b), fellowships, scholarships, and training grants, which are funded by NIH primarily for educational purposes, are not subject to invention reporting requirements. The Federal Government (NIH) has no rights to any inventions, or any income resulting from inventions conceived or first actually reduced to practice during the course of such educational activities.

Invention reporting requirements and the use of the Extramural Invention Information Management System (Edison) are discussed under "Administrative Requirements     Monitoring     Reporting".

To provide a more complete description of the invention and patent reporting requirements, the complete text of the standard patent rights clauses (37 CFR 401.14) is included below and may also be found on the NIH link to the Interagency Edison Web site.

Sec. 401.14, Standard Patent Rights Clauses (Small Business Firms and Non-profit Organizations) (July 1997) (NOTE: While the title of these clauses refers to small businesses and non-profit organizations, the provisions also apply to large for-profit businesses. The term "contractor" in the text applies equally to grantees.)

401.14(a) Definitions.

(1) Invention means any invention or discovery which is or may be patentable or otherwise protectable under Title 35 of the United States Code, or any novel variety of plant which is or may be protected under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).

(2) Subject invention means any invention of the contractor conceived or first actually reduced to practice in the performance of work under this contract, provided that in the case of a variety of plant, the date of determination (as defined in section 41(d) of the Plant Variety Protection Act, 7 U.S.C. 2401(d)) may also occur during the period of contract performance.

(3) Practical Application means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and that its benefits are, to the extent permitted by law or Government regulations, available to the public on reasonable terms.

(4) Made when used in relation to any invention means the conception or first actual reduction to practice of such invention.

(5) Small Business Firm means a small business concern as defined at section 2 of Pub. L. 85-536 (16 U.S.C. 632) and implementing regulations of the Administrator of the Small Business Administration. For the purpose of this clause, the size standards for small business concerns involved in Government procurement and subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, will be used.

(6) Non-profit Organization means a university or other institution of higher education or an organization of the type described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from taxation under section 501(a) of the Internal Revenue Code (25 U.S.C. 501(a)) or any non-profit scientific or educational organization qualified under a state non-profit organization statute.

401.14(b) Allocation of Principal Rights.

The contractor may retain the entire right, title, and interest throughout the world to each subject invention subject to the provisions of this clause and 35 U.S.C. 203. With respect to any subject invention in which the contractor retains title, the Federal Government shall have a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the subject invention throughout the world.

401.14(c) Invention Disclosure, Election of Title and Filing of Patent Application by Contractor.

(1) The contractor will disclose each subject invention to the Federal agency within two months after the inventor discloses it in writing to contractor personnel responsible for patent matters. The disclosure to the agency shall be in the form of a written report and shall identify the contract under which the invention was made and the inventor(s). It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological or electrical characteristics of the invention. The disclosure shall also identify any publication, on sale or public use of the invention and whether a manuscript describing the invention has been submitted for publication and, if so, whether it has been accepted for publication at the time of disclosure. In addition, after disclosure to the agency, the contractor will promptly notify the agency of the acceptance of any manuscript describing the invention for publication or of any on sale or public use planned by the contractor.

(2) The contractor will elect in writing whether or not to retain title to any such invention by notifying the Federal agency within two years of disclosure to the Federal agency. However, in any case where publication, on sale or public use has initiated the one year statutory period wherein valid patent protection can still be obtained in the United States, the period for election of title may be shortened by the agency to a date that is no more than 60 days prior to the end of the statutory period.

(3) The contractor will file its initial patent application on a subject invention to which it elects to retain title within one year after election of title or, if earlier, prior to the end of any statutory period wherein valid patent protection can be obtained in the United States after a publication, on sale, or public use. The contractor will file patent applications in additional countries or international patent offices within either ten months of the corresponding initial patent application or six months from the date permission is granted by the Commissioner of Patents and Trademarks to file foreign patent applications where such filing has been prohibited by a Secrecy Order.

(4) Requests for extension of the time for disclosure, election, and filing under subparagraphs (1), (2), and (3) may, at the discretion of the agency, be granted.

401.14(d) Conditions When the Government May Obtain Title.

The contractor will convey to the Federal agency, upon written request, title to any subject invention-

(1) If the contractor fails to disclose or elect title to the subject invention within the times specified in (c), above, or elects not to retain title; provided that the agency may only request title within 60 days after learning of the failure of the contractor to disclose or elect within the specified times.

(2) In those countries in which the contractor fails to file patent applications within the times specified in (c) above; provided, however, that if the contractor has filed a patent application in a country after the times specified in (c) above, but prior to its receipt of the written request of the Federal agency, the contractor shall continue to retain title in that country.

(3) In any country in which the contractor decides not to continue the prosecution of any application for, to pay the maintenance fees on, or defend in reexamination or opposition proceeding on, a patent on a subject invention.

401.14(e) Minimum Rights to Contractor and Protection of the Contractor Right to File.

(1) The contractor will retain a nonexclusive royalty-free license throughout the world in each subject invention to which the Government obtains title, except if the contractor fails to disclose the invention within the times specified in (c), above. The contractor's license extends to its domestic subsidiary and affiliates, if any, within the corporate structure of which the contractor is a party and includes the right to grant sublicenses of the same scope to the extent the contractor was legally obligated to do so at the time the contract was awarded. The license is transferable only with the approval of the Federal agency except when transferred to the successor of that party of the contractor's business to which the invention pertains.

(2) The contractor's domestic license may be revoked or modified by the funding Federal agency to the extent necessary to achieve expeditious practical application of the subject invention pursuant to an application for an exclusive license submitted in accordance with applicable provisions at 37 CFR part 404 and agency licensing regulations, if any. This license will not be revoked in that field of use or the geographical areas in which the contractor has achieved practical application and continues to make the benefits of the invention reasonably accessible to the public. The license in any foreign country may be revoked or modified at the discretion of the funding Federal agency to the extent the contractor, its licensees, or the domestic subsidiaries or affiliates have failed to achieve practical application in that foreign country.

(3) Before revocation or modification of the license, the funding Federal agency will furnish the contractor a written notice of its intention to revoke or modify the license, and the contractor will be allowed thirty days (or such other time as may be authorized by the funding Federal agency for good cause shown by the contractor) after the notice to show cause why the license should not be revoked or modified. The contractor has the right to appeal, in accordance with applicable regulations in 37 CFR part 404 and agency regulations, if any, concerning the licensing of Government-owned inventions, any decision concerning the revocation or modification of the license.

401.14(f) Contractor Action to Protect the Government's Interest.

(1) The contractor agrees to execute or to have executed and promptly deliver to the Federal agency all instruments necessary to:

(i) establish or confirm the rights the Government has throughout the world in those subject inventions to which the contractor elects to retain title, and

(ii) convey title to the Federal agency when requested under para-graph (d) above and to enable the Government to obtain patent protection throughout the world in that subject invention.

(2) The contractor agrees to require, by written agreement, its employees, other than clerical and non-technical employees, to disclose promptly in writing to personnel identified as responsible for the administration of patent matters and in a format suggested by the contractor each subject invention made under contract in order that the contractor can comply with the disclosure provisions of paragraph (c), above, and to execute all papers necessary to file patent applications on subject inventions and to establish the Government's rights in the subject inventions. This disclosure format should require, as a minimum, the information required by (c)(1), above. The contractor shall instruct such employees through employee agreements or other suitable educational programs on the importance of reporting inventions in sufficient time to permit the filing of patent applications prior to U.S. or foreign statutory bars.

(3) The contractor will notify the Federal agency of any decisions not to continue the prosecution of a patent application, pay maintenance fees, or defend in a reexamination or opposition proceeding on a patent, in any country, not less than thirty days before the expiration of the response period required by the relevant patent office.

(4) The contractor agrees to include, within the specification of any United States patent applications and any patent issuing thereon covering a subject invention, the following statement, "This invention was made with Government support under (identify the contract) awarded by (identify the Federal agency). The Government has certain rights in the invention."

(5) The contractor agrees to provide a final invention statement and certification prior to close-out listing all subject inventions or stating that there were none.

(6) The contractor will provide the patent application filing date, serial number and title; copy of the page of the patent application with the statement identified in (4) above (and, upon request, a copy of the patent application); and patent number and is due date for any subject invention in any country in which the contractor has applied for patent.

401.14(g) Subcontracts.

(1) The contractor will include this clause, suitably modified to identify the parties, in all subcontracts, regardless of tier, for experimental, developmental or research work to be performed by a small business firm or domestic non-profit organization. The subcontractor will retain all rights provided for the contractor in this clause, and the contractor will not, as part of the consideration for awarding the subcontract, obtain rights in the subcontractor's subject inventions.

(2) The contractor will include in all other subcontracts, regardless of tier, for experimental developmental or research work the patent rights clause required by (cite section of agency implementing regulations or FAR).

(3) In the case of subcontracts, at any tier, when the prime award with the Federal agency was a contract (but not a grant or cooperative agreement), the agency, subcontractor, and the contractor agree that the mutual obligations of the parties created by this clause constitute a contract between the subcontractor and the Federal agency with respect to the matters covered by the clause; provided, however, that nothing in this paragraph is intended to confer any jurisdiction under the Contract Disputes Act in connection with any proceedings under paragraph (j) of this clause.

401.14(h) Reporting on Utilization of Subject Inventions.

The contractor agrees to submit on request periodic reports no more frequently than annually on the utilization of a subject invention or on efforts at obtaining such utilization that are being made by the contractor or its licensees or assignees. Such reports shall include information regarding the status of development, date of first commercial sale or use, gross royalties received by the contractor, and such other data and information as the agency may reasonably specify. The contractor also agrees to provide additional reports as may be requested by the agency in connection with any march-in proceeding undertaken by the agency in accordance with paragraph (j) of this clause. As required by 35 U.S.C. 202(c)(5), the agency agrees it will not disclose such information to persons outside the Government without permission of the contractor.

401.14(i) Preference for United States Industry.

Notwithstanding any other provision of this clause, the contractor agrees that neither it nor any assignee will grant to any person the exclusive right to use or sell any subject inventions in the United States unless such person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the United States. However, in individual cases, the requirement for such an agreement may be waived by the Federal agency upon a showing by the contractor or its assignee that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.

401.14(j) March-in Rights.

The contractor agrees that with respect to any subject invention in which it has acquired title, the Federal agency has the right in accordance with the procedures in 37 CFR 401.6 and any supplemental regulations of the agency to require the contractor, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the contractor, assignee, or exclusive licensee refuses such a request the Federal agency has the right to grant such a license itself if the Federal agency determines that:

(1) Such action is necessary because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use.

(2) Such action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee or their licensees;

(3) Such action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the contractor, assignee or licensees; or

(4) Such action is necessary because the agreement required by paragraph (i) of this clause has not been obtained or waived or because a licensee of the exclusive right to use or sell any subject invention in the United States is in breach of such agreement.

401.14(k) Special Provisions for Contracts with Non-profit Organizations.

If the contractor is a non-profit organization, it agrees that:

(1) Rights to a subject invention in the United States may not be assigned without the approval of the Federal agency, except where such assignment is made to an organization which has as one of its primary functions the management of inventions, provided that such assignee will be subject to the same provisions as the contractor;

(2) The contractor will share royalties collected on a subject invention with the inventor, including Federal employee co-inventors (when the agency deems it appropriate) when the subject invention is assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;

(3) The balance of any royalties or income earned by the contractor with respect to subject inventions, after payment of expenses (including payments to inventors) incidental to the administration of subject inventions, will be utilized for the support of scientific research or education; and

(4) It will make efforts that are reasonable under the circumstances to attract licensees of subject invention that are small business firms and that it will give a preference to a small business firm when licensing a subject invention if the contractor determines that the small business firm has a plan or proposal for marketing the invention which, if executed, is equally as likely to bring the invention to practical application as any plans or proposals from applicants that are not small business firms; provided, that the contractor is also satisfied that the small business firm has the capability and resources to carry out its plan or proposal. The decision whether to give a preference in any specific case will be at the discretion of the contractor. However, the contractor agrees that the Secretary may review the contractor's licensing program and decisions regarding small business applicants, and the contractor will negotiate changes to its licensing policies, procedures, or practices with the Secretary when the Secretary's review discloses that the contractor could take reasonable steps to implement more effectively the requirements of this paragraph (k)(4).

401.14(l) Communication.

All NIH-related disclosures, elections, confirmatory licenses to the Government, face page of a patent application, waivers and other routine communications should be sent to the following address:

Inventions and Extramural Reporting Branch
Division of Grants Policy, OPERA/OER/NIH
Rockledge II, Room 3190, MSC 7750
Bethesda, MD 20892-7750
(301) 435-1986
FAX: (301) 480-0272

For other awarding agencies, please follow their instructions. In most cases, invention information and communications should be sent to the cognizant GMO.

The NIH link to the electronic Interagency Edison extramural invention reporting system can be accessed through the Web at http://www.iedison.gov. This electronic reporting system was designed to facilitate reporting compliance and timeliness, and to reduce paperwork. Edison also has an e-mail address (Edison@od.nih.gov).

(End of clause)

In the most recent revision of 37 CFR 401, grantees are provided the option of meeting reporting requirements through electronic filing. Section 401.16, as stated below, describes changes in provisions to accommodate electronic filing.

401.16 Electronic Filing.

Unless otherwise requested or directed by the agency:

  1. The written report required in (c)(1) of the standard clause in sec. 401.14 may be electronically filed;
  2. The written election required in (c)(2) of the standard clause in sec. 401.14 may be electronically filed; and
  3. The closeout report in (f)(5) of the standard clause in sec. 401.14 and the information identified in (f)(2) and (f)(3) of sec. 401.5 may be electronically filed.


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