§ 1160.2 - Definitions.

(a) Industrial Technology Partnerships (ITPs). As used in this subpart, ITPs include research and development limited partnerships (RDLPs) and cooperative R&D arrangements of companies, non-profit organizations, and Federal agencies or some combination thereof.

(b) Research and Development Limited Partnership (RDLP). In general, the RDLP is a type of business organization to raise venture capital from the private sector to fund specified research and development projects. Additional characteristics are as follows:

(1) Establishment in general. An RDLP can be established by an existing firm, or by an independent entrepreneur, to finance specified research and development projects. It can effectively finance both small and large scale projects. It is established by a partnership agreement tailored to the particular projects to be funded.

(2) Classes of partners. In general, a partnership agreement establishing an RDLP will provide for two classes of partners, as follows:

(i) The General Partner or partners provide the management for the partnership, obtain funding, make arrangements for the conduct of research, and ultimately either manufacture any new products resulting from the research and development or license out the resulting technology; and

(ii) The Limited Partners invest in the partnership, bear most or all of the financial risk, share in the financial success from proceeds of manufacture, royalties or other paybacks, and receive tax benefits, but exercise no active management role in the partnership.