Last updated May 2006

For the purposes of this paper, "global start-up" means a company created in order to exploit Sixth Framework Programme (FP6) project knowledge that has a global market application. The global start-up thus aims to develop its activities within a global market from the moment of its inception.

Not all kinds of knowledge meet the "global market application" requirement and, therefore, not all kinds of FP6 projects could create a global start-up. Typically, projects from the information technology and the biotechnology sectors are more likely to produce results capable of commercial exploitation with a global dimension, as these sectors involve both broad and basic technologies that are likely to be used in different products or services1.

Even though creating a global company is a challenge, FP6 projects have resources that can serve this purpose.

Firstly, FP6 projects benefit from the Community contribution, which generally covers costs related to the exploitation of knowledge and thus can support the launch of a global company, mainly in the initial stages: feasibility studies for the creation of a global start-up and the protection of results by intellectual property rights (IPR) could count as eligible costs2.

Secondly, FP6 contractors can base a global start-up on their experience in international cooperation and related activities, and on the complementary combination of their capacities (commercial, academic, industrial) and know-how.

Contractors have to choose a legal form for the start-up (private or public limited national company, holding company, European Company, etc.), agree on its Articles of Association and register it with the competent authority. The incorporation of such a company and the implementation of its business plan will require other actions and agreements, including the very important ones related to IPR.

Before the global start-up enters into license or collaboration agreements and implements its commercial activities, contractors should already have ensured that their knowledge is adequately protected and can thus serve as an IPR-portfolio in the market.

Patents and utility models constitute the strongest elements of IPR-portfolios. They contribute to an exclusive and monopolist market position, provide a solid basis for licensing-out knowledge and constitute an asset which is crucial, e.g. for valuation by potential investors of the start-up. Patents and utility models can, therefore, ensure a direct competitive lead in the target market and prove critical for the success of a business. In order to reduce patent costs, contractors may use international or regional patent registration systems such as the PCT and the EPC.

In some cases, trade secrets can be an alternative (or complement) to patents. Although they offer a weaker market position than patents, trade secrets can be less expensive or more appropriate when it is not certain that project results could be protected by a patent. In order to establish and maintain a trade secret, the conclusion of strict confidentiality agreements with any licensee or other partner is clearly necessary, and a contractual strategy should be defined well before entering any market3.

With regard to the IT sector, Open Source Software (OSS) is another option to be considered, especially when the knowledge does not consist exclusively of software but also of other support services. Under such a scheme, global start-ups could use OSS in order to make software rapidly known and available worldwide, while at the same time providing solutions (related services) and generating profits on the basis of the latter.

Contractors should ensure that any licensing or other IPR-related agreements between the global start-up and third parties do not contradict any of their obligations as contractors in the FP6 project.

For instance, such agreements should respect the access rights of contractors not participating in the start-up. These access rights can be requested for a period of 2 years (or longer, if agreed) after the end of the FP6 project (article II.35.3.b of the Annex II).

Moreover, the start-up contractors shall inform the Commission of any intended licensing of IPR related to project results to third parties if it could be contrary to the European economy or to ethical principles4. If exclusive licences5 were to be granted to entities not established in a Member or an Associated State, there could be a conflict with these principles and the Commission could object. However, the start-up contractors can present these licences in the context of a broader exploitation strategy and thus enable the Commission to more accurately evaluate the agreements in a complete context. The exploitation strategy should be part of the plan for using and disseminating the knowledge, including information on:

• the knowledge to be exploited by the global start-up;
  
  
• the legal procedure and the means of establishing the global start-up;
  
  
• the plans for granting licences to third parties;
  
  
• the maintenance of the contractors' obligations under the EC contract;
  
  
• the feasibility study for the creation of the start-up.
  
  

The global start-up might also need access rights from contractors not participating in its creation in order to exploit its knowledge. Similarly, knowledge or pre-existing know-how of such contractors may be amalgamated into the knowledge used by the global start-up. In either case, the contractors behind the start-up should conclude agreements with the other contractors in order to obtain the necessary access rights. Such agreements should be valid beyond the duration of the FP6 project, for the expected business lifetime of the global start-up and thus correspond to the exploitation plans as set out in the plan for using and disseminating the knowledge.