European Innovation Act: IP Financing and Cross-Border R&D

Introduction

Part 1 of this series covered how the Innovation Act decides who owns an R&D breakthrough. This part covers what happens either side of that question: how a buyer protects sensitive R&D from security risk while it is still underway, how several buyers pool resources to fund it across borders, and — in the most structurally novel part of the whole proposal — what happens once useful intellectual property exists and someone has to turn it into actual financing.

Security, with an R&D accent

The security chapter here runs on almost identical architecture to the security chapter in the main Public Procurement Act, covered in Part 5 of that series — the same catalogue of protected interests, from critical and dual-use infrastructure through espionage and technology leakage to third-country state-controlled influence, and the same operator-level risk factors: ownership and financing structure, security track record, personnel vetting capacity, and exposure to foreign legislation that could compel disclosure of sensitive information¹. That repetition is not an accident of drafting. R&D contracts are, by definition, dealing with results that do not exist yet, which makes the same security concerns that apply to a finished critical asset apply just as sharply to the research that might produce one.

Two provisions go further than a simple checklist. A buyer must exclude, at any point in an R&D procurement, an operator identified as a high-risk supplier of ICT components for key ICT assets under a forthcoming Cyber Security Act — a mandatory bar that appears twice in the text, once in…