Operational Directions Governing NSTC Grants for the Taiwan Germination Program
Amended by the National Science and Technology Commission in letter NSTC No. 1110051581 dated August 10, 2022
I. The National Science and Technology Council (hereinafter referred to as the NSTC) has formulated these Directions to improve the feasibility of commercializing R&D results and to promote R&D results with originality and significant commercial potential to the market for the purpose of spinning off a new company or facilitating the merger and acquisition of science and technology teams by manufacturers.
II. The terms used herein are defined as follows:
(I) Applicant organization (hereinafter referred to as the implementing organization): Applicants who meet the requirements of Point 2 of the Operational Guidelines Governing Grants for Research Projects by NSTC.
(II) TGP Team: Members of spin-off companies that are expected to be established under these Directions.
(III) Qualifications of the project director and co-director: Those who meet the requirements of the Point 3 of the Operational Guidelines Governing Grants for Research Projects by NSTC.
III. Implementing organizations should establish mechanisms for the management, promotion and utilization of R&D results in order to achieve the goal of commercialization of R&D results.
The aforementioned mechanisms include the following:
(I) Improvement of intellectual property management rules and regulations and establishment of an intellectual property assessment mechanism.
(II) Creation of a flowchart for the technical pricing of the implementing organization and related specifications for innovation spin-offs.
(III) Development of provisions for the allocation and ownership of the results of the TGP program and the distribution of derivative benefits.
IV. The implementing organization is required to submit the program application within the designated acceptance period, as announced by the Council. However, if the timeliness of the market opportunity requires that an application be submitted outside of the published acceptance period, the implementing organization may do so by submitting a justification to the Council.
V. The review methodology and focuses are outlined below:
(I) Review method: A two-stage review may be conducted in the preliminary and final stages, with scholars and experts in the relevant fields being invited to serve as review committee members to conduct a written review or convene a meeting to conduct a review.
(II) Review focuses
1. Originality of core technology.
2. Market analysis and commercialization planning
3. Expected benefits.
4. Professionalism and completeness of the implementation team.
5. Reasonableness of funding and specific planning of checkpoints.
(III) Program review results are not appealable.
VI. Implementing organizations may apply for the following subsidies according to their actual needs:
(I) Operational costs: This includes research labor and consumables, supplies, books and miscellaneous costs.
1. Project Director: Monthly expenses up to NT$15,000.
2. Co-Director: Monthly expenses up to NT$10,000.
3. Research labor costs: This includes the cost of hiring doctoral researchers, full-time staff, part-time staff, and temporary staff.
4. Costs of market research and analysis, as well as patent applications and maintenance.
5. Other costs directly related to program implementation.
(II) Research equipment fee:
1. Not available in principle. However, an exception may be made, with the agreement of the Council, if it is required for commercialization and the implementing organization does not have an existing equipment to use.
2. Those who apply for the research equipment fee in accordance with the proviso of the preceding item should write a letter stating the planning and management mechanism for the subsequent use of the equipment by the implementing organization after the completion of the program.
(III) Expenses for out-of-country travel: Travel expenses to foreign countries or mainland China for the purpose of program implementation.
1. Travel expenses for visits: Program staff visiting institutions or organizations relevant to the implementation of the program may apply for this funding.
2. Travel expenses for international cooperation: Program staff may apply for this when undertaking international cooperation.
(IV) Overhead costs: Costs incurred to support the conduct of research projects by the implementing organization shall be used by the implementing organization in a coordinated manner, subject to relevant government regulations. Overhead costs are capped at 15% of total program funding.
If the funding for the annual budget is not approved by the Legislative Yuan or if part of the funding is reduced, the Council may reduce the subsidy in accordance with the results of the deliberation, as stipulated in Article 54 of the Budget Act.
VII. Annual funding for the program will be disbursed in two installments, in accordance with the conditions set forth in the following paragraphs:
(I) Upon completion of the project contract, submit the "Contract for the Funding of Scientific Research Projects," a detailed requisition form, and payment receipts for 50% of the funds.
(II) Upon completion and approval of the interim report of the program and completion of the management, promotion, and utilization mechanism as stipulated in Point 3, and upon submission of the detailed requisition form, receipts of the requisition, and supporting documents that have been examined and approved by the Council, the other 50% of the funds may be requisitioned.
VIII. The implementing organization shall submit the final report one month prior to the due date of the program. If a renewal plan is proposed for the following year, the results of the review of the final report will be used as a reference for the review of the renewal plan for the following year.
If one of the following objectives of the program is achieved during the implementation period, the implementing organization shall terminate the program, submit a final report within one month, and pay back the unspent funds, unless the Council reviews and approves the continuation of the program.
(I) The start-up company has already been established and there is no plan to establish other spin-off start-up companies.
(II) Mergers or acquisitions of the TGP team.
IX. The Council may terminate, change, or reduce the approved funding of the program in accordance with the results of the audit, and may request the replacement of the program director if any of the following circumstances occur during the implementation of the program. In case of serious violations, the Council may terminate or cancel the contract, and the implementing organization shall pay back the unspent funds or the full amount of funds:
(I) The progress of implementation is behind schedule and cannot be improved.
(II) The implementation of the project is not in accordance with the contract.
(III) Failure to achieve expected results after review and on-site inspection during program implementation.
(IV) Violation of relevant contract provisions.
(V) Failure to reach project checkpoints.
X. When the implementing organization establishes a spin-off start-up company, the following principles should be applied to the technical pricing process.
Relevant supporting documents shall be submitted to the Council for record within the requisition review period:
(I) The scope, terms and conditions, and duration of authorization or transfer of R&D results.
(II) The proportion of technical stocks allocated to the implementing organization, the science and innovation team, and the Taiwan Science and Technology Development Fund of the Executive Yuan via the Council.
(III) The secondment and part-time employment of the program director and other program staff.
The technical stocks allocated to the implementing organization should, in principle, represent 6% of the total number of shares of the start-up company. However, a maximum of 16% of the total number of shares in the start-up company may be allotted to persons providing customized consulting services, after the content and planning of the consulting has been presented to and approved by the Council.
XI. If the implementing organization has accomplished the objectives set forth in Paragraph 8.2.1 or 8.2 and has not applied for another government entrepreneurship program for the same R&D results, the revenue from the R&D results may be paid to the Council in accordance with the following terms and conditions after reporting to the Council for approval:
(I) Achievement of program objectives during the project implementation period or within 12 months after project completion:
1. If the implementing organization is a public or private school or a public research institution, the revenues from the R&D results is exempt from payment.
2. For other implementing organizations, the percentage of revenue to be paid is 20%.
(II) Achievement of program objectives more than 12 months but less than 24 months after program completion:
1. If the implementing organization is a public or private school or a public research institution, the percentage of revenue to be paid is 10%.
2. For other implementing organizations, the percentage of revenue to be paid is 30%.
If there are other regulations on payment rates applicable to the R&D profit obtained under the program, the implementing organization should pay the Council in accordance with the payment rates stipulated in the regulations.
In principle, revenues from R&D results exempted or deducted by the implementing organization from payment to the Council in accordance with the preceding provision should be given priority for distribution to the TGP team.
XII. Within three months after the completion of the program, the implementing organization should submit a concise report of the research results and a complete closure report (electronic file), as well as register the R&D results and performance and other related information.
The project director shall be solely responsible for the content of the concise report, the complete project closure report, and the registration of the R&D results and performance of the project mentioned above. Please do not include in the concise report any content that should not be disclosed to the public due to the involvement of patents, technology transfer cases, or other intellectual property rights. In principle, we will publish the concise report, but not the full report.
XIII. If there is any balance of the funds granted under these Directions, the implementing organization should pay it back in full.
XIV. Implementing organizations and project directors shall comply with relevant laws and regulations, fulfill their obligations as good administrators, and shall not use the subsidy funds for purposes other than those approved.
Expenditure reports should be submitted within three months after the completion of the program in accordance with the regulations of the Operational Guidelines Governing Grants for Research Projects by NSTC.
The implementing organization should follow the Management Guidelines for The Government Disposal of Expenditure vouchers to manage the vouchers, and organize and audit the vouchers according to the funding items, and keep them in a proper place for inspection in accordance with relevant regulations. The Council may send its staff or accompany the auditors to conduct on-site inspections. If it is found that the vouchers have not been properly stored in accordance with the regulations, resulting in damage or loss, the subsequent subsidy will be reduced or suspended for one to five years, depending on the severity of the case.
XV. Implementing organizations and TGP teams should cooperate with the Council to participate in activities such as the presentation of results and provide information on the effectiveness of the program and the operation of the spin-off companies for subsequent tracking and evaluation of the program.
XVI. The ownership, management, and utilization of the research and development results and their revenues obtained by the implementing organization shall be handled in accordance with the provisions of the Fundamental Science and Technology Act, Government Scientific and Technological Research and Development Results Ownership and Utilization Regulation, NSTC Scientific and Technological Research and Development Results Ownership and Utilization Regulation, and the relevant laws and regulations.
XVII. Matters not covered herein shall be handled in accordance with the Operational Guidelines Governing Grants for Research Projects by NSTC, the Principles for the Administration of Research Project Grants, and other relevant regulations.