Win Cash and IP Rights

Citizens who enter innovation contests that the government plans to launch this year could rake in cash on top of the prize money that agencies are allowed to award. The White House on Monday released a legal framework for giving away money and other incentives during competitions aimed at improving open government, spurring research and development and addressing national priorities.

In addition to collecting cash for their endeavors, winners also can make money from their intellectual property. Just because the government is entitled to use the winning ideas, the government does not have exclusive rights to the inventions, say some IT industry officials.

Guido Jouret, chief technology officer for Cisco's emerging technologies group, noted that the government's intellectual property guidelines are similar to the non-binding agreements Cisco uses during its own innovation competition. Cisco runs the I Prize contest, which challenges entrepreneurs to submit proposals that have the potential to become billion-dollar business ideas for the networking provider. The grand prize for the winning team is $250,000.

In return, Cisco gets a perpetual, royalty-free, non-exclusive license to distribute the winning product. Because the terms of the agreement are non-exclusive, the winners retain the right to sell the application to other companies.

"A lot of the debates we had with our lawyers were around the intellectual property angle," he said. "We want to be able to come up with great ideas, but not exclusively."

Participants in the virtual online world of Second Life have proven that such free enterprise can unleash a flood of creativity in communities.

"Users control the intellectual property rights to whatever they build, giving them economic incentive to create things. And create they do," the Washington Post reported on Monday. "Newbies show up in Second Life without so much as 40 acres and a mule, so their avatars need hair, and fancy shoes for a concert or suits for business meetings, and a house, and art for the house, and maybe a waterfall for the living room -- virtual goods that cost real money."

The Washington Post also said that Second Life participants "cashed out $55 million of their Second Life earnings last year" in the real world.