Information for Licensees

 


ATTENTION FDA LICENSEES: The NIH Office of Technology Transfer is no longer accepting royalty payments on behalf of the Food and Drug Administration (FDA)

As of October 1, 2016, the FDA Technology Transfer Program is managing its own patent and license portfolio and will no longer be affiliated with the NIH Office of Technology Transfer. In view of this change, all reporting obligations or future royalty payments will need to be directed to the FDA. For guidance, refer to the Royalty Payment Options document for FDA license(s). In addition, all future Agreement notices and reports will need to be sent to the FDA. Please email these notices and reports to FDATechLicensingReports@fda.hhs.gov.

 


SUBMITTING ROYALTY PAYMENTS FOR NIH AND CDC LICENSES

 

How do I submit a payment?

Who collects royalty payments?

Where do I send sales and earned royalty reports, progress reports or notices?

Whom should I contact when...

 


TAX EXEMPTIONS

 

If I am a non-US licensee, how do I avoid withholding income taxes on royalty payments made to NIH when local tax regulations may require it?

Where can I obtain a "Request for Taxpayer Identification Number and Certification" form W-9 for the National Institutes of Health?

 


BANK WIRES

 

Our bank charges a fee to wire a payment. Who pays this fee?

Why are our wire payments being rejected by the bank or Federal Reserve?

 


ROYALTY PAYMENT DELAYS

 

What happens if a royalty obligation is not paid by the due date?

What happens if this debt becomes 90 days past due?

What happens if this debt becomes 150 days past due?

What happens if this debt becomes 180 days past due?

Can a licensee request that an accommodation or arrangement be made to delay or suspend payment, to develop a repayment plan, or to waive the debt or additional royalties?

What information needs to be included in this request?

Will additional royalties continue to accrue while the request is reviewed and considered?

 

 


 

Who collects royalty payments?

Royalty payments are made to a bank and are then reported to the Office of Financial Management. OTT reconciles the royalty payments processed by the bank with the terms of the agreement and sends notices to licensees whose payments have not been accounted for.

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Where do I send sales and earned royalty reports, progress reports or notices?

E-mail such reports to LicenseNotices_Reports@mail.nih.gov or mail them to:

License Compliance and Administration
Monitoring & Enforcement
Office of Technology Transfer
National Institutes of Health
6701 Rockledge Dr., Suite 700, MSC 7788
Bethesda, MD 20892 U.S.A.

A sample sales and earned royalty report is available at the following link: Sample Report

 

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Whom should I contact when...

  • We would like to have license royalty payment notices/invoices sent to a different contact at our company?
  • Our address, telephone, e-mail has changed?
  • We are having problems making a payment?
  • We need more materials?

Please contact Royalties Administration by e-mail at OTT-Royalties@mail.nih.gov.

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If I am a non-US licensee, how do I avoid withholding income taxes on royalty payments made to NIH when local tax regulations may require it?

Licensees based in countries outside the U.S. may be required to withhold income taxes on royalties paid out by them. However, exemption from this requirement or a significant reduction in the amount of tax withheld may be possible if the licensee resides in a country that is party to the Double Taxation Convention with the U.S. If this is the case, the licensee should complete and send the appropriate forms required by their local tax authorities to OTT for signature. OTT will sign the documents and return them with U.S. Internal Revenue Service Form 6166, Certification of U.S. Residency. The licensee should then file them with their local tax authorities for the exemption.

Any forms or inquiries about this should be sent to the following address:

Senior Royalties Administrator
Office of Technology Transfer, NIH
6701 Rockledge Dr., Suite 700, MSC 7788
Bethesda, MD 20892 U.S.A.

Inquiries may be e-mailed to us at OTT-Royalties@mail.nih.gov.

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Where can I obtain a "Request for Taxpayer Identification Number and Certification" form W-9 for the National Institutes of Health?

A completed W-9 is available at the following link: W-9_Signed.

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Our bank charges a fee to wire a payment. Who pays this fee?

The Licensee must pay all wire transmittal fees.

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Why are our wire payments being rejected by the bank or Federal Reserve?

There are three common reasons why wires have been rejected.  The first is that the licensee is actually trying to submit an ACH payment and not a wire directly to the Federal Reserve account.  The NIH can only accept ACH payments through the U.S. Treasury web site at: www.pay.gov.  The second reason is that the licensee has entered the account information incorrectly.  The third is that information for all line items has not been included.  In particular, wires drawn on a non-U.S. bank account must include payment details in line 70 and 71a as follows:

Payment Details (Line 70): NIH 75080031, License Number (L-XXX-XXXX), Name of Licensee
Detail of Charges (line 71a): Charge Our

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What happens if a royalty obligation is not paid by the due date?

The National Institutes of Health (NIH), Office of Technology Transfer (OTT), may assess additional royalties.

In February 2005, the Office of General Counsel, Department of Health and Human Services (HHS), determined that technology licenses (patent licenses, biological materials licenses, and commercial evaluation licenses) are executory contracts. It was further determined that while the Office of Technology Transfer is not authorized to impose or collect interest and penalties, it is, under 35 USC 207(a), authorized to impose additional royalties on terms that are validly delinquent.

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What happens if this debt becomes 90 days past due?

Additional royalties may be assessed by NIH on any payment that is more than ninety (90) days overdue at the rate of one percent (1%) per month. The one percent (1%) per month rate may be applied retroactively from the original due date until the overdue payment and additional royalties are remitted by Licensee to NIH. The payment of any additional royalties shall not prevent NIH from exercising any other rights it may have as a consequence of the lateness of any payment.

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What happens if this debt becomes 150 days past due?

At 150 days past due, the additional royalty for late payment will be 1% per month of the principal due. A notice that the license will be terminated in 90 days unless the overdue debt is paid within 30 days, will also be sent.

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What happens if this debt becomes 180 days past due?

  • The license will be terminated unilaterally for breach of contract.
  • The licensee may be referred to the Department of Justice or the NIH Debt Collection Office for further action.
  • Additional royalties may be converted to interest and penalties, at which time they cannot be waived by NIH and will be imposed by the U.S. Treasury (or its designee) as stipulated in the Debt Collection Act of 1996 and 45 CFR 30.
  • The licensee and any person or parties with financial responsibility for the licensee will be excluded from future business with the OTT. Authority for this arises from 35 USC 207(a), the statute that mandates this office to protect the Federal Government's intellectual property rights.
  • The licensee may be reported to credit bureaus as a delinquent debtor.
  • When the debt is referred to the NIH Debt Collection Officer, the OTT will recommend that the licensee be placed on GSA's Excluded Parties Listing. Any company or individual listed is excluded from doing future business with the Federal Government.

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Can a licensee request that an accommodation or arrangement be made to delay or suspend payment, to develop a repayment plan, or to waive the debt or additional royalties?

Yes, such requests should be submitted to the OTT Senior Royalties Administrator, Karen Rogers, by e-mail or by letter to the following address:

National Institutes of Health
Office of Technology Transfer
Senior Royalties Administrator

6701 Rockledge Dr., Suite 700
Bethesda, MD 20892

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What information needs to be included in this request?

The request should identify the license number, explain why payment has not been made, propose a way to resolve the debt, and explain why OTT should consider the request.

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Will additional royalties continue to accrue while the request is reviewed and considered?

Yes.

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