Some technology transfer is regulated by strict “deemed” export controls

Many companies and research organizations must limit access to their manufacturing or research facilities because of the complex Export Administration Regulations and punitive rules on “deemed exports” of controlled technology.   An export of technology or source code (except encryption source code) is “deemed” to take place when it is released to a foreign national within the United States. Technology is “released” for export when it is available to foreign nationals for visual inspection (such as reading technical specifications, plans, blueprints, etc.); when technology is exchanged orally; or when technology is made available by practice or application under the guidance of persons with knowledge of the technology.

The safe (though expensive) way to ensure compliance is to implement a strict policy for handling all foreign visitors and expatriates at your facilities.  For example, organizations need to establish tight protocols to include the reception of guests, management of tours, student visitations, strict guidelines in conducting sales meetings, etc.  Procedures must be written; employee training must be implemented; detailed records must be kept and a renewal program must be in place to offer continuing training.  Visitors need to face highly-restricted access to manufacturing areas; descriptive literature needs scrubbing; distribution of investment prospectuses would need to be carefully controlled; the company web site will have to be monitored; and human resources must be brought into the process to monitor the transfers of expatriates. 

Before establishing a such an austere plan of limiting access, which is many times anathema to university cultures, it may pay to make absolutely certain your “products,” software or technology are, indeed, controlled, a detailed process that starts here.

 BVR’s IPBlog asked Jim Wickstead, Senior Consultant with American River International how he would approach the issue, given the expense and potential penalties for noncompliance and their effect on IP value: “It’s a long process to sterilize your organization from liability, but taking appropriate steps to determine what is needed is the first and prudent approach.”

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