Entitled the `SBIR and STTR Foreign Patent Protection Act of 2001'.

August 2, 2001

Mr. KERRY introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship

Entitled the `SBIR and STTR Foreign Patent Protection Act of 2001'.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `SBIR and STTR Foreign Patent Protection Act of 2001'.

SEC. 2. FINDINGS.

The Congress finds that--

(1) small business concerns represent approximately 96 percent of all exporters of goods;

(2) there has been dynamic growth in the number of small business concerns exporting goods, and the dollar value of their exports;

(3) despite such growth, small business concerns encounter problems in obtaining financing for exports;

(4) growth in United States exports will depend primarily on technology innovation, making the protection of intellectual property in the global market of special national interest;

(5) the costs of filing for initial patent protection in foreign markets can be prohibitive for small business concerns involved in the Small Business Innovation Research Program (referred to in this section as `SBIR') and the Small Business Technology Transfer Program (referred to in this section as `STTR'), representing an insurmountable barrier to obtaining the protection needed to pursue the international markets;

(6) to overcome such barriers and to maximize the Federal investment in the SBIR and STTR programs, the Small Business Administration should be authorized to provide grants to be used to underwrite the costs of initial foreign patent applications by SBIR and STTR awardees; and

(7) a program established to provide such grants should, over time, become self funding.

SEC. 3. ESTABLISHMENT OF GRANT PILOT PROGRAM.

Section 9 of the Small Business Act (15 U.S.C. 638) is amended by adding at the end the following:

`(w) FOREIGN PATENT PROTECTION GRANT PILOT PROGRAM-

`(1) GRANTS AUTHORIZED- The Administrator shall make grants from the Fund established under paragraph (6) for the purpose of assisting SBIR and STTR awardees in seeking foreign patent protection in accordance with this subsection.

`(2) NUMBER OF GRANTS- The Administrator shall make grants under this subsection to not more than--

`(A) a total of 100 SBIR and STTR awardees in fiscal year 2003;

`(B) a total of 200 SBIR and STTR awardees in fiscal year 2004;

`(C) a total of 300 SBIR and STTR awardees in fiscal year 2005; and

`(D) a total of 400 SBIR and STTR awardees in each of fiscal years 2006 and 2007.

`(3) GRANT PURPOSES- Grants made under this subsection shall be used by awardees to underwrite costs associated with initial foreign patent applications for technologies or products developed under the SBIR or STTR program, and for which an application for United States patent protection has already been filed.

`(4) CONSIDERATIONS- In awarding grants under this subsection, the Administrator shall consider--

`(A) the size and financial need of the applicant;

`(B) the potential foreign market for the technology;

`(C) the time frames for filing foreign patent applications; and

`(D) such other factors as the Administrator deems relevant.

`(5) GRANT AMOUNTS- The amount of a grant made to any SBIR or STTR awardee under this subsection may not exceed $25,000, and no awardee may receive more than 1 grant under this subsection.

`(6) ESTABLISHMENT OF REVOLVING FUND- There is established in the Treasury of the United States a revolving fund, which shall be--

`(A) known as the `SBIR and STTR Foreign Patent Protection Grant Fund' (referred to in this subsection as the `Fund');

`(B) administered by the Office of Technology of the Administration; and

`(C) used solely to fund grants under this subsection and to pay the costs to the Administration of administering those grants.

`(7) ROYALTY FEES-

`(A) IN GENERAL- Each recipient of a grant under this subsection shall pay a fee to the Administration, to be deposited into the Fund, based on the export sales receipts or licensing fees, if any, from the product or technology that is the subject of the foreign patent petition.

`(B) ANNUAL INSTALLMENTS BASED ON RECEIPTS- The fee required under subparagraph (A)--

`(i) shall be paid to the Administration in annual installments, based on the export sales receipts or licensing fees described in subparagraph (A) that are collected by the grant recipient in that calendar year;

`(ii) shall not be required to be paid in any calendar year in which no export sales receipts or licensing fees described in subparagraph (A) are collected by the grant recipient; and

`(iii) shall not exceed, in total, the lesser of--

`(I) an amount between 3 percent and 5 percent, as determined by the Administrator, of the total export sales receipts and licensing fees referred to in subparagraph (A); or

`(II) 4 times the amount of the grant received.

`(8) ADMINISTRATIVE PROVISIONS- Not later than 180 days after the date of enactment of this subsection, the Administrator shall--

`(A) issue such regulations as are necessary to carry out this subsection; and

`(B) establish appropriate application and other administrative procedures, as the Administrator deems necessary.

`(9) REPORT- The Administrator shall, on January 31, 2006, submit a report to the Congress on the grants authorized by this subsection, which report shall include--

`(A) the number of grant recipients under this subsection since the date of enactment of this subsection;

`(B) the number of such grant recipients that have made foreign sales (or granted licenses to make foreign sales) of technologies or products developed under the SBIR or STTR program;

`(C) the total amount of fees paid into the Fund by recipients of grants under this subsection in accordance with paragraph (7);

`(D) recommendations for any adjustment in the percentages specified in paragraph (7)(B)(iii)(I) or the amount specified in paragraph (7)(B)(iii)(II) necessary to reduce to zero the cost to the Administration of making grants under this subsection; and

`(E) any recommendations of the Administrator regarding whether authorization for grants under this subsection should be extended, and any necessary legislation related to such an extension.

`(10) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to the Fund, to remain available until expended--

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

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

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

`(D) $10,000,000 for each of fiscal years 2006 and 2007.'.

END