Horizon 2020 vs. Federal Grants: What Are the Key Differences? Ryan Lankton, JD, MSI Project Representative Office of Research and Sponsored Projects University of Michigan

University of Michigan Public university Recipient of Horizon 2020 grant – Opportunity: H2020-PROTEC-2014 (PROTEC : Space Weather) – Award: PROGRESS (No ) Part of eight-member consortium coordinated by University of Sheffield

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery  Agreement structure  Roles and governance structure  Electronic exchange system  Agreement structure  Roles and governance structure  Electronic exchange system

Agreement Structure Model agreements used to craft actual agreements Many models available – Similar, but not the same – Choice driven by grant program type (general vs. specific) – Choice also driven by number of beneficiaries (mono- vs. multi- beneficiary) Multi-beneficiary grant Other supplemental agreements Consortium agreement Grant agreement

Roles and Governance Structure Article 41.2 & Section 6 Formal division of roles and obligations – Coordinator manages grant activities for all beneficiaries and serves as the single point of contact for the funding agency – Consortium agreement used to create additional rights and responsibilities among beneficiaries Consortium agreement imposes a pre-established governance structure on the beneficiaries

Electronic Exchange System Articles 17 & 52 Electronic exchange system used for all formal communication with agency and all financial and legal administration of the grant by beneficiaries Access to system requires registration and validation of the organization and of the Legal Entity Appointed Representative (LEAR)

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery  Promoting the grant action and results  Protecting the results  Open access dissemination of results  Promoting the grant action and results  Protecting the results  Open access dissemination of results

Promoting Grant Action and Results Article 38 Must implement a strategic and effective plan to promote the grant action and its results Plan must ensure the visibility of EU’s funding for grant action and results

Protecting the Results Articles 26 & 27 For four years after the project ends, must take adequate steps to protect the results Protective measures include coordinating with funding agency and other grant beneficiaries before licensing or disseminating results Failure to protect may result in assumption of ownership by the funding agency

Open Access Dissemination Article 29 Must provide free and online access to scientific publications, data, and bibliographic metadata Must also report on compliance with this obligation

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery  Joint and several liability for implementation  Financial statements and payments made in euros  Potential financial or administrative penalties  Joint and several liability for implementation  Financial statements and payments made in euros  Potential financial or administrative penalties

Joint and Several Liability Article 41.1 Consortium members are jointly and severally liable for the technical implementation of the grant action The grant action will be described in Annex 1 of the grant agreement

Financial Statements and Payments Articles 20.6 & 21.6 Financial statements must be drafted in euros Payments to grant beneficiaries will be made in euros

Potential Penalties Articles 43 & 45 Funding agency may reduce the grant award for improper implementation or for breach of the agreement terms Funding agency may also impose financial or administrative penalties for substantial errors or serious breach – Agency will follow contradictory procedure outlined in grant

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery  European law and jurisdiction  Other obligations rooted in EU law  European law and jurisdiction  Other obligations rooted in EU law

European Law and Jurisdiction Article 57 Grant agreement is governed by applicable EU law, supplemented by Belgian law where necessary Jurisdiction for adjudicating disputes resides with the General Court, or the Court of Justice of the European Union on appeal

Other Obligations Rooted in EU Law Articles 32 & 33 Some obligations are based on EU law Grant recipients must comply with and report on their adherence to these obligations – Recruitment and working conditions – Gender equality Failure to comply may result in grant reduction

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery  Access rights to results and background IP

Access Rights to Results and Background IP Articles 25 & 31 Must authorize use of results or background technology identified to the project when needed to implement actions under the project – This use must be authorized on a royalty-free basis For one year after the project ends, access must also be granted when needed to exploit results – This use shall be under fair and reasonable conditions

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery  Capped rate of indirect cost recovery

Capped Rate of Indirect Cost Recovery Article 6.2 E Entitled to recover a flat rate of 25% of the eligible total direct costs, minus any – Costs for subcontracting – Costs of in-kind contributions incurred by third parties not used on the beneficiaries’ premises – The costs of providing financial support to third parties

Added Complexity More Responsibility Increased Risk Foreign Law Greater IP Exposure Reduced Cost Recovery Questions? Ryan Lankton, JD, MSI (734) Questions? Ryan Lankton, JD, MSI (734)