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Non Profit Scientific Research Organization

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Non Profit Scientific Research Organization

Postby Caswallon » Mon Dec 05, 2016 8:24 am

Recently I have become active with the open source alternative energy movement. We would like to start a non profit foundation that will patent open source concepts and release them to the public under a GPL for personal research. However we would like to charge commercial companies who wish to sell products based on the technology patented by the non profit for a certain fixed amount...call it license fee if you will to sustain our R&D efforts.

Is this possible? I understand a non profit has to make available all its advances, patents etc free to the public...do private corporations count as general public? We are hoping to allow the public at large to replicate and study the patent but we want to raise money from private corporations by licensing the patents for further R&D through the non profit. Is this possible?

I also have my own private for profit company. If I use this company to provide the seed capital for the non profit, are there any rights I can claim over the non profits assets?
Caswallon
 
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Non Profit Scientific Research Organization

Postby Beornet » Tue Dec 06, 2016 12:48 am

Recently I have become active with the open source alternative energy movement. We would like to start a non profit foundation that will patent open source concepts and release them to the public under a GPL for personal research. However we would like to charge commercial companies who wish to sell products based on the technology patented by the non profit for a certain fixed amount...call it license fee if you will to sustain our R&D efforts.

Is this possible? I understand a non profit has to make available all its advances, patents etc free to the public...do private corporations count as general public? We are hoping to allow the public at large to replicate and study the patent but we want to raise money from private corporations by licensing the patents for further R&D through the non profit. Is this possible?

I also have my own private for profit company. If I use this company to provide the seed capital for the non profit, are there any rights I can claim over the non profits assets?
Beornet
 
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Non Profit Scientific Research Organization

Postby Spenser » Tue Dec 06, 2016 5:51 pm

The type of IRS regulations that you are referring to are for what the IRS calls "Scientific Research" organizations. The organization must be acting for the public interest and not substantially for private interests. The term "public" in the regulations refers to all entites, corporate or non-corporate.

However, an IRS Regulation at 26 C.F.R. 1.501(c)(3)-1(d)(5)(iv)(b) provides that a patent, copyright, process, or formula will be considered as "made available to the public" even though one person has been granted an exclusive right to the use of the patent, copyright, process, or formula if the granting of the exclusive right is the only practicable way in which the patent, copyright, process, or formula can be utilized to benefit the public. http://snipr.com/9wxry(about 90% of the way down the page which section is found quickly by searching for the term "such organization retains" when you are on that page)

From that regulation we see that there are situations when the nonprofit does not need to license all its patents free to the public.  Even if licensing is done it does not have to be free but on a "nondiscriminatory basis". I would need to analyze the details of your operation and the ability of entities, other than private corporations, to fulfill the mandate to benefit the public as stated in the regulation above before I could inform you that you could withhold from private corporations the grant of licenses on the same basis that you would grant them to the non-corporate entities. I would need to spend a substantial amount of time on that issue and that would be beyond the scope of this free forum. If you want to hire me for such work, please contact me directly to the email address below. As for you claiming ownership of a nonprofit's assets, that would not be possible in your context. It is only done in the context of a person who, for example, owns something or some real estate and loans or leases it to a nonprofit. Harvey Mechanic

Attorney at Law

[email protected]
Spenser
 
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