[Code of Federal Regulations]
[Title 32, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR37.550]

[Page 212-213]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
 
PART 37_TECHNOLOGY INVESTMENT AGREEMENTS--Table of Contents
 
                 Subpart E_Pre-Award Business Evaluation
 
Sec.  37.550  May I accept intellectual property as cost sharing?

    (a) In most instances, you should not count costs of patents and 
other intellectual property (e.g., copyrighted material, including 
software) as cost sharing, because:
    (1) It is difficult to assign values to these intangible 
contributions;
    (2) Their value usually is a manifestation of prior research costs, 
which are not allowed as cost share under Sec.  37.545; and
    (3) Contributions of intellectual property rights generally do not 
represent the same cost of lost opportunity to a recipient as 
contributions of cash or tangible assets. The purpose of cost share is 
to ensure that the recipient incurs real risk that gives it a vested 
interest in the project's success.
    (b) You may include costs associated with intellectual property if 
the costs are based on sound estimates of market value of the 
contribution. For example, a for-profit firm may offer the use of 
commercially available software for

[[Page 213]]

which there is an established license fee for use of the product. The 
costs of the development of the software would not be a reasonable basis 
for valuing its use.