Research and Intellectual Property

• Transfers of controlled information, including technical data, to persons and entities outside the U.S.
• Shipments of controlled physical items, such as scientific equipment, that require export licenses from the U.S. to a foreign country
• Verbal, written, electronic, or visual disclosures of controlled scientific and technical information related to export controlled items to foreign nationals in the U.S. (including any company not incorporated in the United States). Such a transfer is termed a “deemed export” and is regulated because the transfer is “deemed” to be to the country where the person is a resident or a citizen
• Travel to certain sanctioned or embargoed countries for purposes of teaching, speaking engagements, or performing research

Corporate activities that can be subject to legal export control constraints range from design, marketing and demonstration through sales, training, implementation and service. For “military” designation either under the CCL or the USML, keep in mind the implications of your design and sourcing as they affect export control requirements.

Compliance requires obtaining licenses for communication of controlled information, or, restricting through technology control plans (TCP) access to controlled information through education and certifications signed by employees and others who may be in a position to transfer restricted information to ineligible parties.

Goods or technologies classified under these regimes have restrictions that can require export licenses or agreements, establishing technology control plans, and controlling access.

For this, you will need solutions that can manage your ongoing screening processes against the Department of Commerce Bureau of Industry and Security (BIS) denied persons, unverified and entity lists, the Department of State Directorate of Defense Trade Controls (DDTC) debarred list and nonproliferation sanctions lists, amongst others.

In addition to actual shipment of a commodity out of the country, the export regulations also control the transfer, release or disclosure to foreign persons in the United States of technical data about controlled commodities. The “deemed export” regulation states that a transfer of “technology” (EAR term—Export Administration Regulations, Commerce Department) or “technical data” (ITAR term—International Traffic in Arms Regulations, State Department) to the foreign person is “deemed” to be an export to the home country of the foreign person. Accordingly, for all controlled commodities, a license or license exception is required prior to the transfer of “technology” or “technical data” about the controlled commodity to foreign persons inside the U.S.

These phrases refer to technical information beyond general and basic marketing materials about a controlled commodity. They do not refer to the controlled equipment/commodity itself, or to the type of information contained in publicly available user manuals. Rather, the terms “technology” and “technical data” mean specific information necessary for the development, production, or use of a commodity, and usually takes the form of blueprints, drawings, photographs, plans, diagrams, models, formulae, tables, engineering specifications, and documentation. The “deemed export” rules apply to transfer of such technical information to foreign nationals inside the U.S.

The export control regulations exempt from licensing requirements technical information (but not controlled items) resulting from “fundamental research”. Fundamental research is defined as basic and applied research in science and engineering conducted at an accredited U.S. institution of higher education where the resulting information is ordinarily published and shared broadly within the scientific community. Such research can be distinguished from proprietary research the results of which ordinarily are restricted for proprietary reasons or specific national security reasons. As used in the export regulations, it is the actual and intended openness of research results that primarily determines whether the research counts as “fundamental” and not subject to the export regulations. University based research is not considered “fundamental research” if the university or its researchers accept (at the request, for example of an industrial sponsor) restrictions on publication of scientific and technical information resulting from the project.

Information is “published” (and therefore not subject to export controls) when it becomes generally accessible to the interested public in any form, including: (1) publication in periodicals, books, print, electronic, or other media available for general distribution (including websites that provide free uncontrolled access) or to a community of persons interested in the subject matter, such as those in a scientific or engineering discipline, either free or at a price that does not exceed the cost of reproduction and distribution; (2) readily available at libraries open to the public or at university libraries; (3) patents and published patent applications available at any patent office; and (4) release at an open conference, meeting, seminar, trade show, or other open gathering held in the U.S. (International Traffic in Arms Regulations, State Department) or anywhere (Export Administration Regulations, Commerce Department). Note, a conference or gathering is “open” if all technically qualified members of the public are eligible to attend and attendees are permitted to take notes or otherwise make a personal record of the proceedings and presentations. A conference is considered open notwithstanding a registration fee reasonably related to cost, and there may be a limit on actual attendance as long as the selection is either ‘first come’ or selection based on relevant scientific or technical competence.

Whether in the U.S. or abroad, the educational exclusions in EAR (Export Administration Regulations, Commerce Department) and ITAR (International Traffic in Arms Regulations, State Department) cover instruction in science, math, and engineering taught in courses listed in catalogues and associated teaching laboratories of academic institutions, even if the information concerns controlled commodities or items. Dissertation research must meet the standards for “fundamental research” to qualify as “publicly available.”

The U.S. National Security Directive 189 (1985) states: “It is the policy of this Administration that, to the maximum extent possible, the products of fundamental research remain unrestricted. It is also the policy of this Administration that, where the national security requires control, the mechanism for control of information generated during federally funded fundamental research in science, technology and engineering at colleges, universities and laboratories is classification. Each federal government agency is responsible for: a) determining whether classification is appropriate prior to the award of a research grant, contract, or cooperative agreement and, if so, controlling the research results through standard classification procedures; b) periodically reviewing all research grants, contracts or cooperative agreements for potential classification. No restriction may be placed upon the conduct or reporting of federally funded fundament research that has not received national security classification, except as provided in applicable U.S. Statutes.”

If the U.S. Government funds research and specific controls are agreed on to protect information resulting from the research, information resulting from the project is not considered fundamental research. Examples of “specific controls” include requirements for prepublication review by the Government, with right to withhold permission for publication; restrictions on prepublication dissemination of information to non-U.S. citizens or other categories of persons; or restrictions on participation of non-U.S. citizens or other categories of persons in the research.

In addition to actual shipment of a commodity out of the country, the export regulations also control the transfer, release or disclosure to foreign persons in the United States of technical data about controlled commodities. The “deemed export” regulation states that a transfer of “technology” (EAR term—Export Administration Regulations, Commerce Department) or “technical data” (ITAR term—International Traffic in Arms Regulations, State Department) to the foreign person is “deemed” to be an export to the home country of the foreign person. Accordingly, for all controlled commodities, a license or license exception is required prior to the transfer of “technology” or “technical data” about the controlled commodity to foreign persons inside the U.S.

Technical data that is “in the public domain” under ITAR (International Traffic in Arms Regulations, State Department) “publicly available” under EAR (Export Administration Regulations, Commerce Department), including “fundamental research”, is not subject to deemed export controls. There are three different ways that the technical information may qualify for an exemption from the deemed export regulations. It is exempt if it:

1. Is published or disseminated,
2. Arises during, or results from, fundamental research, or
3. Is educational information released by instruction in catalog courses or associated teaching laboratories of academic institutions.

The export regulations allow foreign students, researchers and visitors to use (and receive information about how to use) controlled equipment while conducting fundamental research on U.S. university campuses or while studying at the institution, as long as the technical information about the controlled equipment qualifies as “in the public domain” or “publicly available.” Otherwise, a “deemed” export license would be required before information is conveyed (even visually thorough observation) to foreign students, researchers, staff or visitors on campus, and an actual export license would be required before information is conveyed abroad to anyone.

The Commerce Department has export jurisdiction over all goods and all “technology” (Commerce Department term for information) in the United States, unless some other agency has expressly been given such authority. However, this does not mean that a license must be obtained before any item or piece of information can be shipped.

If a commodity is controlled under ITAR (International Traffic in Arms Regulations, State Department), then a license is always required before it can be shipped to any country outside the United States, except in limited circumstances.

For commodities controlled under EAR (Export Administration Regulations, Commerce Department), whether a license is required depends upon the country to which the item is being shipped. Even in cases where license approval from the Department of Commerce is not required to ship the item to the country, there are administrative requirements and records that must be maintained regarding shipments of EAR controlled items out of the United States including screening for end uses and end users.