Thank you for your letter dated 10 October[41] requesting an update on the negotiations on ENIAC and ARTEMIS, in particular with reference to the exact level of domestic funding required, the relationship to voting rights and the Government's position once these issues have been agreed. You also asked for clarification on the implications for intellectual property rights.

  The Government intends to participate as founder members of the Joint Undertakings for these Joint Technology Initiatives (JTls). There is no cost associated with the UK joining the ARTEMIS and ENIAC Joint Undertakings JUs) as a founder member and participation as a founder member would provide the UK with the opportunity to influence their shape and direction. Particularly as for the first year voting on the Governing Board is not linked to financial contributions.

  On the issue of the UK's concerns on the proposed governance and voting structures, Member States participating in ARTEMIS and/or ENIAC have equal voting rights on the Governing Board during the first years of the Joint Undertakings when all the key decisions will be made. This will help ensure effective governance of Community funds. We have secured observer status for all Member States on the Public Authorities Board (PAB) which will ensure national representation for project participants when the relative merits of projects are being discussed. In addition, we have obtained more explicit references to the overarching principles of excellence and competition in the selection of projects, there is now direct reference for the need to involve SMEs (as the majority of UK players are), and governance of the JUs has been strengthened by the inclusion of an internal audit requirement.

  There is no legal requirement for Member States that join Artemis to provide funding, although there will be peer pressure to do so and there are incentives through the voting weights. Any funding from the UK to support projects will come from the independent, business-led Technology Strategy Board, established in July this year, or from the Research Councils, most likely the Engineering and Physical Sciences Research Council (EPSRC). The Technology Strategy Board accepts the economic justification for the ARTEMIS JU and there is good alignment between the ARTEMIS technology priorities and the UK's technology priorities with two of the current Technology Strategy Board technology themes mapping directly to ARTEMIS priorities. The funding resource implication for the Technology Strategy Board is currently under consideration.

  There is UK interest in ENIAC with strengths in relevant Design Tools and systems solutions and UK Universities and a small number of companies are willing to engage but this is less of a strategic priority for funding, compared to ARTEMIS, and any UK contribution is likely to be smaller. The EPSRC has indicated that it may be able to direct modest resources (less than £1 million) for UK Universities' collaboration.

  On the issue of the implications for intellectual property rights (IPR), the JTI Articles instruct that IPR Rules are developed in line with FP7 Community Framework Rules of Participation. For ARTEMIS and ENIAC, the Statutes provide for intellctual property (IP) ownership both by the JTI itself and project participants; the JTI may own the IP created with its resources and also project participants may own the IP they create.

  A general approach on the four proposed JTIs for ARTEMIS, ENIAC, Innovative Medicines (IMI) and Aeronautics and Air Transport (Clean Sky) is expected at the Competitiveness Council on 22-23 November and the adoption of the European Parliament's opinion on the proposals is expected in December. A key priority for the UK is the launch of the four JTIs by early 2008.

12 November 2007