Security Guidelines for Federally Funded Research Partnerships. A focus on IP, but not just IP.
The Government of Canada recently announced that it is introducing new national security guidelines for federally funded research partnerships. This announcement comes on the heels of a partnership between a university and a private firm that made headlines last Winter. The private firm, Huawei, through its Canadian arm, partnered with the Canadian government through the Natural Sciences and Engineering Research Council (NSERC) to sponsor the research.
The new guidelines are in part a response to the partnership involving Huawei, and in part a direct result of the mandate letter issued to then Minister of Innovation, Science and Economic Development, François-Philippe Champagne. Those instructions were to work “in close collaboration with Canadian industry and postsecondary institutions, to safeguard Canada’s world-leading research ecosystem, as well as our intellectual property (IP) intensive business.” [1]
Thus, any new applications to the Natural Sciences and Engineering Research Council’s (NSERC) Alliance Grants program involving private sector partners, must include a completed risk assessment questionnaire (RAQ) and a risk mitigation plan where appropriate.
The new guidelines confirm the government’s renewed interest in mitigating risk and protecting intellectual property developed at Canada’s post-secondary institutions. This is clearly apparent from the RAQ that must now accompany all applications for research partnerships involving private sector partner organizations to NSERC. Indeed, in the section entitled “Know your Research”, the first question to answer when evaluating the risk, under the header “About Your Research” is [answer by Yes/No/Unsure]:
“The research knowledge or intellectual property (IP) generated by this research could be of interest to foreign governments, militaries, or their proxies” [2]
Leaving aside for the moment that this identification is sometimes difficult to evaluate at the early stages of research, the focus is squarely placed on identifying those research projects that are of interest to governments and their military apparatuses. Writ large, anything that has to do with national security will be scrutinized to prevent leakage to a foreign entity of the IP assets generated.
The RAQ requires the applicant to also identify potential risks by focusing on field of research (having potential military, policing or intelligence applications, whether or not that is the intended use); the question of whether the research falls under export control regulations or is related to goods or technology is identified in the Defense Production Act.
Another area of potential risk is critical minerals and critical mineral supply chains (those identified in the Critical Minerals List) – these include e.g. lithium, graphite, chromium, nickel, uranium, potash, and rare earth elements, some of which are used inter alia in rechargeable batteries for electric vehicles.
Sensitive personal data, or large amounts of data that could be sensitive in the aggregate, as well as the fact that the research facilities or infrastructure used to support the proposed project house sensitive data and/or provide access to infrastructure unrelated to the specific partnership for which funding is sought are other factors that will be evaluated.
A project will also be evaluated on whether it includes a risk mitigation plan, “to reduce the likelihood and impact of risks to a level that is acceptable to the researcher, their institution, the granting agency, and the Government of Canada.” [3] Risk mitigation measures include training, and specifically intellectual property training; and partnership agreements that include intellectual property and technology transfer clauses that address national security risks.
In addition to performing a scientific merit review, NSERC will assess these risks in consultation with national security agencies and departments on a case-by-case basis. Projects deemed to be of high national security risk, or lacking sufficient risk mitigation measures, will not be funded.
According to the Government, the risk assessment of research partnerships is necessary to guard against foreign interference, espionage, and “unwanted knowledge transfer” that threaten Canada’s national security interests. The risks are defined broadly as research that may lead to “advancements in military, security, and intelligence capabilities of states or groups that pose a threat to Canada; or disruption of the Canadian economy, society, and critical infrastructure.” [4]
While the requirements currently apply only to NSERC Alliance grants involving a private sector partner, there is a possibility that they will be extended to other programs in the future.
These new guidelines have not been wholeheartedly welcomed by the research community, as they do impose a greater burden on applicants when seeking funding for a project. In addition, one author has opined that these new guidelines go against the reality of research culture, which is decidedly more open and collaborative.
An increased awareness and focus on intellectual property issues in publicly funded research is welcome. The creation of intellectual property assets flowing from publicly funded research, or lack thereof, has pressured governments to turn their attention to this issue. Initiatives such as the National IP strategy, unveiled a few years ago, as well as more recently promising funding for incubators to help their incubated companies craft an IP strategy in the form of the Elevate IP program, and additional funding to the IRAP program to cover IP costs, are positive steps to continue raising awareness of IP issues. Whether the new Guidelines for publicly funded research will contribute to these initiatives remains to be seen; there is a possibility that researchers will not apply for funding for higher risk projects and rely exclusively on private sector funding. Ultimately, the desire to have intellectual property vest with one or more Canadian institutions may collide with private interests, and fewer sources of funding for projects that are considered too risky for the government to help fund.
