Presentation on theme: "Defense Trade Advisory Group Harmonization of Fundamental Research Plenary Session May 9, 2013."— Presentation transcript:
Defense Trade Advisory Group Harmonization of Fundamental Research Plenary Session May 9, 2013
2 Dava Casoni, Co-Chair, University of Southern California Michael Miller, Co-Chair, University of Central Florida Brooke Butler, Globaleyes Stephen Cope, Avion Solutions Sandra Cross, Huntington Ingalls BJ Demery, Bell Helicopter Kim DePew, GE Aviation Barbara Dudas, Northrop Grumman Lawrence Fink, SAIC Alfred Furrs, Johns Hopkins University, Applied Physics Lab Beth Parrish, Lockheed Martin Deborah Shaffer, Southwest Research Institute George S. Sevier, Sam Sevier LLC William Wade, L3 Communications Working Group Members
4 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
5 Methodology Reviewed Definitions & History Compared ITAR and EAR Surveyed Industry and Academic Interpretations of FR Drafted and Evaluated Harmonized Definition Proposed Harmonized Definition
6 ITAR 120.11 DHHS 45 CFR 74.2 Various Dictionaries EAR 734.8 DOE 10 CFR 1017.11(b) National Institute of Health FAR 272.3 DHHS 45 CFR 46.102 Case Law & Law Reviews OMB Circular A-110 FDA 21 CFR 50.3(c) NSDD - 189 OMB Circular A-133 DOD 32 CFR 272.3 DARPA Definitions
7 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 analysis 1985: 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
8 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)
9 Proposed Harmonized Definition § 120.11 Public Domain (a) Public Domain means… (8) Through fundamental research as defined in §120.XX. § 120.XX Basic Research Basic research is a systemic study directed toward greater knowledge or understanding of the fundamental aspects of phenomena and of observable facts. § 120.XX Applied Research Applied 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.
10 § 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
11 Proposed Harmonized Definition § 120.XX Research Restrictions (a)Research is restricted if: (1) The research is funded by the U.S. Government and includes specific access and dissemination controls to protect information resulting from the research; or (2) Dissemination of the information resulting from the research is restricted or not published for proprietary reasons, (with the exception of prepublication editorial review to ensure proprietary information is not released or patent rights compromised). Our task was to harmonize: both regulations consider proprietary research to be restricted, therefore we included (ii). However, DTAG proposes deleting this language. Whether research is proprietary or not is irrelevant in making an export control determination.
12 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.
13 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
14 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
16 Aspects Unrestricted Input, Conduct or Output Restricted Input, Conduct or Output Mixed: Fundamental + Controlled Restricted Input Restricted Conduct Restricted Output Not Fundamental Research Unrestricted Input Unrestricted Conduct Unrestricted Output Fundamental Research
17 Perspectives Approach 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
18 Survey Hypothetical 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. Response University: 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 Conclusion Universities and industry treat the same work differently from inception to publication.
19 Considerations Proposed 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]
20 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
21 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
22 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
26 DoD Memo on “Fundamental Research” 24 MAY 2010
27 DoD Memo on “Fundamental Research” 24 MAY 2010
28 DoD Memo on “Contracted Fundamental Research” 26 June 2008
29 DoD Memo on “Contracted Fundamental Research” 26 June 2008
30 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
31 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)http://www.darpa.mil/Opportunities/Universities/Fundamental_Research.aspx
32 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)http://www.darpa.mil/Opportunities/Universities/Fundamental_Research.aspx
33 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 ITAR Associated 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 2 nd 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 34
Comparing EAR to ITAR Definitions, 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 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 35
Comparing EAR to ITAR Guidance 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 36
Comparing EAR to ITAR USML EAR 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 37
Comparing EAR to ITAR Exemptions EAR 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 38
Comparing EAR to ITAR Exemptions, Cont’d. EAR 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 39
40 1.734.8(a) Definition 2.734.8(b)(1) University-based research 3.734.8(b)(2) Prepublication review for proprietary information 4.734.8(b)(3) Prepublication review for patent information 5.734.8(b)(4) Initial transfer agreement to restrict 6.734.8(b)(5) Publication and other restrictions 7.734.8(b)(6) National security controls 8.734.8(c) Research based at Federal agencies or FFRDCs 9.734.8(d)(1) Corporate research 10.734.8(d)(2) Prepublication review for proprietary information 11.734.8(d)(3) Prepublication review for patent rights 12.734.8(d)(4) Initial transfer agreement to restrict 13.734.8(e) Research based elsewhere 14.734.11(a) Government-sponsored research 15.734.11(b) Specific national security controls EAR Definition
41 1.120.11(a)(8) Definition (includes publication restrictions) 2.120.11(a)(8)(i) Non-publication restrictions 3.120.11(a)(8)(ii) Specific national security controls ITAR Definition