Defense Trade Advisory GroupHarmonization of Fundamental

Research

Plenary SessionMay 9, 2013

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Dava Casoni, Co-Chair, University of Southern California Michael Miller, Co-Chair, University of Central FloridaBrooke Butler, GlobaleyesStephen Cope, Avion SolutionsSandra Cross, Huntington IngallsBJ Demery, Bell HelicopterKim DePew, GE AviationBarbara Dudas, Northrop GrummanLawrence Fink, SAICAlfred Furrs, Johns Hopkins University, Applied Physics Lab Beth Parrish, Lockheed MartinDeborah Shaffer, Southwest Research InstituteGeorge S. Sevier, Sam Sevier LLCWilliam Wade, L3 Communications

Working Group Members

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Discussion Agenda

• Tasking• Methodology• History• Proposed Harmonized Definition• Analysis• Comparison, Observations, Perspectives• Recommendations to Harmonize Definition• Summary• Back-Up

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Review the various U.S. Government definitions of ‘fundamental research’ in use and recommend a harmonized definition that can be used in both the ITAR and the EAR.

DTAG Tasking

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Methodology

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Definitions

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History 1919: Restriction of First Amendment free speech for national

security reasons 1970’s: Export control regulations enacted, constitutionality

questioned

1980’s:1982: OSTP: cost/benefit analysis1985: National security classification should be the mechanism to restrict (NSDD-189)

1993: 120.11 now includes a definition of fundamental research consistent with NSDD-189 (53 FR 39280)

2000’s: OIG/deemed export concerns, reiteration of NSDD-189 in memos, attention to input v. conduct v. results

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Assumptions

• Proposed definition of “Defense services” or similar variant will become a final rule. (April 13, 2011; 76 Federal Register 20592)

• Proposed revisions to 22 CFR 124.1(a) will be implemented. (April 13, 2011; 76 Federal Register 20591)

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Proposed Harmonized Definition

§ 120.11 Public Domain(a) Public Domain means…(8) Through fundamental research as defined in §120.XX. § 120.XX Basic ResearchBasic research is a systemic study directed toward greater knowledge or understanding of the fundamental aspects of phenomena and of observable facts. § 120.XX Applied ResearchApplied research is a systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met. It is a systematic application of knowledge toward the creation of useful materials, devices, and systems or methods, including design, development and improvement of prototypes and new processes to meet specific requirements.

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§ 120.XX Fundamental Research (a)Fundamental research is basic and applied research the results of which may be disseminated without restriction (see “Research Restrictions” in § 120.XX of this subchapter) [or] (See EAR § [new section of the EAR] and, accordingly, such research is not subject to U.S. export controls.

(b)Fundamental research is not limited to performance at accredited U.S. institutions of higher learning and may be conducted by other persons (see 120.14).

(c)The information resulting from fundamental research shall remain unrestricted to the maximum extent possible and; where 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 national security classification.

Proposed Harmonized Definition

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Proposed Harmonized Definition

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Proposed Harmonized Definition

(b) The following prepublication reviews are not research restrictions:1) Reviews to ensure that information subject to specific access or

dissemination controls (such as Controlled Unclassified or Sensitive But Unclassified Information) is not released, when such information is provided by the U.S. Government for research;

2) Reviews to ensure compliance with statutory or funding agency requirements other than export controls;

3) Reviews to ensure that publication would not inadvertently divulge trade secret information furnished by the sponsor; or

4) Reviews to ensure that publication would not compromise patent rights.

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•Guidance to Academia and Industry• Update and Harmonize current Commerce and State FAQs (slide 20)

•Guidance to Funding Government Agencies & Other Funding Entities• Reminder that Commerce and State have jurisdiction

• Need clear and harmonized guidance to funding agencies that classification is the mechanism for control and that contractual restrictions should only be included when they are strictly necessary and directly related to national security concerns

Proposed Harmonized Guidance

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EAR/ITAR Analysis• Definitions are similar; harmonious with NSDD 189, national FR policy

• Both include: • basic and applied research• results ordinarily published/publicly available• distinguishable from other research results with proprietary or national

security restrictions

• Differences: • EAR - 15 sections; several performance locations• ITAR - 3 sections; U.S. as the locus; specific to institutions of higher

learning

• DTAG explored:• Aspects of FR: Input, Conduct and Output (slide 16)• Complex stakeholder perspectives

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Comparison

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Aspects

Restricted Input

Restricted Conduct

Restricted Output

Not Fundamental

Research

Unrestricted Input

Unrestricted Conduct

Unrestricted Output

Fundamental Research

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PerspectivesApproach to Jurisdiction/Exemption

University: Fundamental research analysis• No access, dissemination, publication or participation restrictions = no basis for excluding non-U.S. researchers, unless Defense Article

Industry: Jurisdictional analysis identifies EAR vs. ITAR •EAR controlled = look for publication restrictions•ITAR controlled = no fundamental research exclusion

Complication

Industry and university research collaboration is complex due to mixed licensing requirements

Industry research may taint “fundamental research” conducted by a university

Approach to Publication

University: Intend to publish all research, only accept restrictions where absolutely necessary

Industry: Intent to place the research into the public domain is not always known at the onset of research

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SurveyHypothetical

Example

Contract: U.S. Government funded contract to investigate the utilization of insects to detect Improvised Explosive Devices (IEDs) on the battlefield.

Research: The research involved the exposure of insects to munitions grade explosives to sensitize the insects to recognize such explosives in the field.

ResponseUniversity: Omission of access and dissemination restrictions by the U.S. Government sponsor led them to conclude that the project work would qualify as fundamental research. Several respondents noted that the explosives require restrictions on handling explosives but the project was otherwise unrestricted and the project work could be published.

Industry: Considered munitions grade explosives as Category V defense articles and treated the project as ITAR controlled. Accordingly, Industry would require government approval for foreign participants.

Survey ConclusionUniversities and industry treat the same work differently from inception to publication.

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ConsiderationsProposed harmonized “fundamental research” definition should consider:

• Character of research;

• Existence of national security classifications;

• Existence of specific access and dissemination restrictions;

• Physical location of performance is inconsequential;

• Fundamental research is performed by various entities;

• Distinction between research input, conduct and output;

• Color of money used to fund the research (e.g., 6.1, 6.2, 6.3, etc.) is not determinative of FR application;

• When fundamental research stops being fundamental and becomes subject to export controls.

• [Not proprietary]

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Steps To Harmonize•Define basic, applied, fundamental research and research restrictions in §772.1 of the EAR and in new sections of the ITAR (Sections (120.XX)

•Modify EAR (e.g. §734.8 and 734.11) and ITAR (e.g., §120.11 and §120.XX) to adopt DTAG proposed harmonized definition

•Clarify and consolidate Supplemental Guidance in the EAR in Supplement No. 1 to Part 734

•Create Fundamental Research Guidance for the ITAR in “Frequently Asked Questions (FAQs) in Defense Trade”

• Clarify what is defense service vs. fundamental research

•Other sections might be impacted by the DTAG proposed definition of “fundamental research” so perform final review before implementing

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Additional ITAR Changes

Section 123.16(b)(10): temporary export and return exemption not be limited to “accredited U.S. institutions of higher learning”

125.4(c)(3): delete definition of “basic” and “applied” and refer to proposed DTAG definitions

125.4(d): delete “accredited U.S. institutions of higher learning” throughout this section, except 125.4(b)(10)

USML Category VIII(f): clarify application of “fundamental research” under U.S. Department of Defense contracts

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•DTAG proposes clear definitions of Fundamental Research, Basic Research, Applied Research and Restricted Research which will work well together in both the EAR and the ITAR

•DTAG assumes proposed changes to Defense Service and Technical Data will be implemented which will further clarify application of Fundamental Research

•DTAG proposal: • Preserves access and dissemination restrictions [and proprietary

information] as distinguishing characteristics of unclassified research • Clarifies that in absence of restrictions/[proprietary information],

research is fundamental • Provides a “bright-line” for clarity and consistency of implementation

and enforcement

Summary

Questions?

Back Up Information

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NSDD - 189

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DoD Memo on “Fundamental Research” 24 MAY 2010

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DoD Memo on “Fundamental Research” 24 MAY 2010

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DoD Memo on “Contracted Fundamental Research” 26 June 2008

 

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DoD Memo on “Contracted Fundamental Research” 26 June 2008

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Aspects of FR

The definition clarifies that (1) the inclusion of defense articles in the conduct of research does not preclude the outcomes of the research from potentially qualifying as FR (2) that industry can now handle their research the same as academia. Same measuring stick applied to all entities

Restrictions on publication or access & dissemination

ITAR or EAR Controlled

All aspects of project Yes N/A Project not Fundamental Research

Inputs to research No Yes Without authorization, non-US cannot be given access to data and information about inputs cannot be published

Conduct of research No Yes Without authorization, non-US cannot access ITAR/EAR, and information about the conduct of research may be able to published depending upon publication restrictions

Inputs to research No No Non-US can be given access to data and information about inputs can be published

Conduct of research No No Non-US can participate and information about the conduct of research can be published

Output of research No N/A Project fundamental research and results can be published

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Various Definitions of Fundamental Research Reviewed

ITAR, 22 CFR Section 120.11 EAR, 15 CFR Section 734.8 Federal Acquisition Regulation Title 32 – National Defense Part 272 (section 272.3) OMB Circular A-110 OMB Circular A-133 45 CFR 74.2 NIH website glossary DHHS definition (45 CFR 46.102) FDA definition (21 CFR 50.3(c)) Merriam-Webster dictionary American Heritage Dictionary Collins English Dictionary Department of Defense, 32 CFR Section 272.3 NSDD-189; National Policy on the Transfer of Scientific, Technical and Engineering

Information DARPA definition (

http://www.darpa.mil/Opportunities/Universities/Fundamental_Research.aspx)

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Various Definitions of Fundamental Research Reviewed

ITAR, 22 CFR Section 120.11 EAR, 15 CFR Section 734.8 Federal Acquisition Regulation Title 32 – National Defense Part 272 (section 272.3) OMB Circular A-110 OMB Circular A-133 45 CFR 74.2 NIH website glossary DHHS definition (45 CFR 46.102) FDA definition (21 CFR 50.3(c)) Merriam-Webster dictionary American Heritage Dictionary Collins English Dictionary Department of Defense, 32 CFR Section 272.3 NSDD-189; National Policy on the Transfer of Scientific, Technical and Engineering

Information DARPA definition (

http://www.darpa.mil/Opportunities/Universities/Fundamental_Research.aspx)

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History

1978 DOJ Office of General Counsel legal opinion: certain applications of the ITAR are unconstitutional impositions on the dissemination of scientific ideas.

1978, U.S. v. Edler: violations of ITAR technical data licensing scheme punishable only when the violator is knowing and intentional.

1982, Richard DeLauer: no restriction can be placed on conduct or reporting of research that has not received national security classification.

1982, OSTP studies benefits of USG restrictions on unclassified scientific research against costs of impeding scientific and technical progress, resulting in NSDD-189.

1985, NSDD-189: where national security requires control, the mechanism ought to be classification.

1993, 58 FR 39280 July 22

2010, Ashton Carter: products of fundamental research are to remain unrestricted to the maximum extent possible, when control is necessary for national security reasons, classification is the only appropriate mechanism.

Comparing EAR to ITARAssociated Definitions

EAR 734.3(b)(2),(3) “Publically Available”

• 734.7 Published information and software

• 734.7(a) Accessible to Public

• 734.7(a)(2) Available at Libraries

• 734.7(a)(3) Patents and patent applications (see also 724.10)

• 734.7(a)(4) Open conference, seminar, tradeshow

• Spread across multiple sections: 734.8(a), (b)(2)(3), (d)(2)(3)(a)

ITAR 120.11 “Public Domain”

• 120.11(a) Generally accessible/available to public

• 120.11(a)(1) On sale at newsstands and (2) subscriptions and (3) through 2nd class mailing privileges

• 120.11(a)(4) Libraries open to the public

• 120.11(a)(5) Patients available at any patent office

• 120.11(a)(6) Conference, meeting, seminar, tradeshow accessible to public

• 120.11(a)(7) Public release

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Comparing EAR to ITARDefinitions, Cont’d.

EAR 734.8(a), “Fundamental Research”• 734.8(b) University based research• 734.8(c) Research based at federal

agencies• 734.8(d) Corporate research• 734.8(e) Research based elsewhere• 734.9 Educational information

• 734.10 Patent applications• 734.11(a) Govt sponsored research

• Part 772 Definition of “Basic Scientific Research” (not “Applied”)

120.11, “Public Domain”

• 120.11(a)(8) Fundamental research• No equivalent

• No equivalent• No equivalent• 120.10(a)(5) and 120.11(a)(6) general

scientific principles• 120.11(a)(5) Patents• 120.11(a)(8)(i),(ii) University

restrictions on publications• 125.4(c)(3) Basic Research and

Applied Research

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Comparing EAR to ITARGuidance

EAR Supplement No. 1 to Part 734

• Section C: Educational instruction• Section D: Research, correspondence

and informal scientific exchanges• Section E: Federal contract controls

ITAR No equivalent

• No equivalent• No equivalent

• No equivalent

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Comparing EAR to ITARUSML

EAR No equivalent• No equivalent

• No equivalent

ITAR• Category VIII(f), Developmental

aircraft and specifically designed parts, components, accessories and attachments therefor funded by the Department of Defense

• Category XI(a)(7) Any experimental or developmental electronic equipment specifically designed or modified for military application or specifically designed or modified for use with a military system

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Comparing EAR to ITARExemptions

EAR• No equivalent

• No equivalent

• Partial equivalent ; Disjointed - Part 732 Steps to follow to determine requirements

• No equivalent

• No equivalent; Part 772 defines “Basic scientific research”

ITAR• 122.1(b)(2), (4) Registration

exemption• 123.16(b)(10) Cat XV(a),(e) articles

fabricated for fundamental research purposes

• 125.4(b)(10) bona fide employee

• 124.5(b)(13) Technical data approved for public release

• 125.4(c)(3) Basic and Applied research

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Comparing EAR to ITARExemptions, Cont’d.

EAR• No equivalent; Reliant upon

definitions of development, production and use

• No equivalent; Reliant upon definitions of development, production and use

• No equivalent

ITAR• 125.4(d)(1) Defense services for

123.16(b)(10) for universities

• 125.4(d)(2) Space scientific meetings defense services by universities, including specific limitations

• 126.17 Pursuant to UK Defense Trade Cooperation Treaty

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1. 734.8(a) Definition2. 734.8(b)(1) University-based research3. 734.8(b)(2) Prepublication review for proprietary information4. 734.8(b)(3) Prepublication review for patent information5. 734.8(b)(4) Initial transfer agreement to restrict6. 734.8(b)(5) Publication and other restrictions7. 734.8(b)(6) National security controls8. 734.8(c) Research based at Federal agencies or FFRDCs9. 734.8(d)(1) Corporate research10. 734.8(d)(2) Prepublication review for proprietary information11. 734.8(d)(3) Prepublication review for patent rights12. 734.8(d)(4) Initial transfer agreement to restrict13. 734.8(e) Research based elsewhere14. 734.11(a) Government-sponsored research15. 734.11(b) Specific national security controls

EAR Definition

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1. 120.11(a)(8) Definition (includes publication restrictions)2. 120.11(a)(8)(i) Non-publication restrictions3. 120.11(a)(8)(ii) Specific national security controls

ITAR Definition