New UK rules on international research partnerships now in force

Legislation gives Westminster government power to block or impose conditions on acquisition of intellectual property in 17 areas

January 5, 2022
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UK university research programmes, centres and PhDs focused on topics potentially relating to national security and involving international partners face greater scrutiny under new legislation that has come into force.

The National Security and Investment Act, which commenced on 4 January, gives the Westminster government the power to block or impose conditions on the acquisition of intellectual property in 17 sensitive areas of the economy, such as advanced robotics and artificial intelligence.

New guidance sets out how the law will affect universities and other research institutions, including where organisations will be required to notify the government of an acquisition and where ministers have the power to call in such a transaction.

The document says that the government’s approach will be guided by the level of control that a foreign party will gain over material relating to national security. For example, if an overseas company was to acquire 30 per cent of the shares in a university subsidiary that undertakes research in one of the 17 listed areas, the would-be buyer would be legally required to notify the government of the planned investment and to obtain approval before proceeding.

In a scenario in which a foreign corporation provided funding for a UK university to carry out research on its behalf, sitting on the steering board for the project and entitled to all intellectual property generated from the collaboration, there is not a legal requirement to notify the government – because a research project is not a “qualifying entity” – but the government may choose to call the deal in “if it reasonably suspects the acquisition may give rise to a risk to national security”.

The rules may also cover PhDs in cases in which a foreign doctoral student – or an overseas company funding them – will gain the rights over any intellectual property they generate. Such cases are not subject to mandatory notifications but may be called in by the government.

The Department for Business, Energy and Industrial Strategy said that the “vast majority” of transactions would face no intervention and would proceed without delay.

“The UK is world-renowned as an attractive place to invest but we have always been clear that we will not hesitate to step in where necessary to protect our national security,” said business secretary Kwasi Kwarteng.

“The new investment screening process in place is simple and quick, giving investors and firms the certainty they need to do business, and giving everyone in the UK the peace of mind that their security remains our number one priority.”

The act applies to all acquisitions made from 12 November last year. The 17 sensitive areas of the economy listed under the act are: advanced materials; advanced robotics; artificial intelligence; civil nuclear communications; computing hardware; critical suppliers to government; cryptographic authentication; data infrastructure; defence; energy; military and dual-use; quantum technologies; satellite and space technologies; suppliers to the emergency services; synthetic biology; transport.

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