Horizon 2020 vs. Federal Grants:What Are the Key Differences?

Ryan Lankton, JD, MSIProject RepresentativeOffice of Research and Sponsored ProjectsUniversity of Michiganrlankton@umich.edu

University of Michigan

• Public university• Recipient of Horizon 2020 grant– Opportunity: H2020-PROTEC-2014 (PROTEC-1-

2014: Space Weather)– Award: PROGRESS (No. 637302)

• 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• 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 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

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

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, MSIrlankton@umich.edu

(734) 764-4750