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the technical services, Army Service Forces, to such officer or officers as the chief of the technical service may from time to time designate, such redelegations, however, to be subject to such rules and regulations governing the exercise of delegated powers under the act as have been or may from time to time be prescribed by or on behalf of the Secretary of War.

(k) Factors to be considered before notice is given and in the making of an order. Before notice is given there will be taken into account so far as practicable, and in the making of any order there will be taken into account, thc following factors:

(1) The conditions of wartime production;

(2) The production and use of the invention prior to any increase due to wartime procurement, including

(1) Any established royalty rate,

(11) The volume on which royalty was paid,

(iii) The yearly aggregate royalty paid, and

(iv) The circumstances under which the licensing and the establishment of the roy. alty rate occurred;

(3) The character of the invention and any patent protection therefor, the value of its contribution to the art in which it is used, and the character and expense of research and development that have been devoted to the invention;

(4) The extent of use and proposed use of the invention by other departments or agencies of the Government and the amounts of royalties involved in the aggregate in such use; and

(5) All other considerations which are ordinarily and properly taken into account in determining fair and just royalties or which appear to be appropriate to the particular case.

(1) Duties of the technical services. Subject to the rules and regulations set forth in this section and in $ 811.1114 (a) to (c), inclusive, the chiefs of the technical services are, in matters properly before them and acting under the direction of the Under Secretary of War, under the duty of causing the powers, duties and authorities delegated under the act to be exercised in such manner and at such times as may be necessary to prevent unreasonable or excessive royalties from being charged to the War Department. This duty may be discharged pursuant to such instructions as may be issued by the chiefs of the technical services for the guidance of their respective services.

(m) Policy of the War Department in the Administration of the Act. The policy of the War Department is (1) that, so far as practicable, a licensor shall not be subjected to duplicating interrogation by two or more technical services in relation to his royalty receipts from the use of a particular invention or series of related inventions; and (2) that, so far as practicable, each licensor shall, where such royalties are believed to be unreasonable or excessive, be given fair opportunity to effect a voluntary adjustment thereof before notice is given. The regulations set forth in paragraph (n) and in $ 811.1113, are designed to effectuate this policy.

(n) Procedure in the giving of notice. (1) An initial inquiry may be sent to a licensor or a licensee requesting all or any part of the following and no more (a) the names and addresses of licensor and licensee(s), (b) a copy of the license agreement, (c) a list of patents and patent applications involved, and (d) a statement of the royalties received (or paid) under such license during each year for the years 1936 to date of inquiry. Such inquiry shall include a provision to relieve the addressee from compiling information previously supplied upon an inquiry of any other branch of the War Department or of any other department or agency of the Government by permitting the addressee to respond by sending a copy of the reply to the previous inquiry or the name and address of the person who made the previous inquiry. Such inquiry to a licensee shall not be sent to any contractor who has furnished the relevant patent royalty information upon the War Department Standard Procurement Form ($ 813.1327 (b) or in renegotiation proceedings.

(2) If, upon consideration of the reply to the initial inquiry, further investigation is believed to be advisable, a memorandum shall, before the licensor is further interrogated in relation to the matter, be transmitted to the Director requesting clearance to do so. The office of the Director may thereupon grant such clearance as appears proper in the light of the information which the records of that office contain regarding the issuance by any other technical service of the War Department or by any other department or agency of the Government of a notice in the same matter, or the

consideration which has been or is being able to the War Department, every reagiven to the issuance of such a notice. sonable effort shall be made before The request for clearance shall state the and after the giving of any notice, to name and address of licensor, and the determine what, if any, departments or inventive subject matter, and so far as agencies of the Government other than known and practicable the name(s) and the War Department are or may be conaddress(es) of the licensee(s) and the cerned in the payment of royalties for numbers of the patent(s) and patent the same invention. If, at any time application(s) concerned. A clearance after clearance has been given as proonce given remains in force till modified vided in subparagraph (2) of paraor revoked by the Director.

graph (n), it appears that a depart(3) If, upon such investigation as ap- ment or agency other than the War Depears proper (after clearance from the partment is so concerned, the service Director), the delegate having the mat

having the matter in hand shall forthter in hand believes that the royalties in with communicate with such other dequestion are not unreasonable or exces- partment or agency and shall thereafter sive, he shall transmit to the Director a

coordinate all further proceedings with report (in triplicate) stating his findings

such department or agency. and conclusions, including so far as prac- (p) Procedure when more than one ticable the data specified in paragraph technical service of the War Department (aa).

is concerned. Any delegate to whom the (4) If, upon such investigation as ap

authority referred to in subparagraph pears proper (after clearance from the (1) of paragraph (i) has been or may Director), the delegate having the mat- hereafter be delegated shall exercise such ter in hand believes that the royalties are authority, under the direction of the unreasonable or excessive, he shall (un. Director, in respect to all such royalties less he has previously been expressly au- which are charged or chargeable to any thorized by the Director to omit such ac- and all technical services of the War Detion) afford licensor fair opportunity to partment. If, at any time after cleareffect a voluntary adjustment thereof.

ance has been given to a technical serve Where, in the opinion of the delegate, ice as provided in subparagraph (2) of fair opportunity has been afforded and

paragraph (n), it appears that more a satisfactory adjustment cannot be ef

than one technical service of the War fected, such delegate thereupon may is

Department is concerned, that fact shall sue notice in respect of the royalties in question, subject however to the require

be reported forthwith to the Director ments of paragraphs (0) and (p) hereof.

and shall be accompanied by a recomWhere, however, the delegate believes mendation of the reporting service as to that circumstances exist making it nec

the service believed to be in the best poessary or desirable in the interests of sition to carry on the proceeding. The the War Department that notice should Director may thereupon give directions be given without first affording licensor as to how, and by whom, the authority an opportunity to effect a voluntary ad- referred to in subparagraphs (1), (2), justment, the delegate may issue notice (3), (4) and (5) of paragraph (i) shall in such case provided he has first ob

be exercised on behalf of the Secretary tained from the Director authority to do

of War. so.

(q) Form of the notice. The following (5) Promptly upon the giving of no

form of notice is approved for use subtice under the act, the delegate who is

ject to such deviations as may be necessued the notice shall transmit to the

sary or appropriate in any given case: Director a report (in triplicate) giving

(Letterhead of Delegate] the names and addresses of licensor and licensee and three copies of each notice

In the Matter of issued.

(et al.)

Licensor(s) (0) Procedure when a department or

and agency, other than the War Department,

(et al.) is concerned. Inasmuch as any order

Licensee(s) entered by or under the authority of

NOTICE the Secretary of War affects only those

To: Licensor(s) and Licensee(s): You and royalties which are charged or charge- each of you will hereby take Notice, that:

Pursuant to the Royalty Adjustment Act 1942 (Public No. 768, 77th Congress; 35 U.S.C., 8996), Notice is hereby given that the royalties which are charged or chargeable directly or indirectly to the War Department on account of the manufacture, use or sale to or for the United States of the alleged Inventions relating to

(subject-matter ] by virtue of the license agreement(s) between

as licensor, and the following licensees, are believed to be unreasonable or excessive:

(Names of all licensees)

otherwise than under the provisions of and in the manner prescribed in subparagraph (3) of paragraph (i). Upon execution by a licensor of the form of consent and release specified in subparagraph (3), of paragraph (i), three copies of the instrument vacating and withdrawing the notice and one copy duly executed by the licensor of the said form of consent and release shall be promptly transmitted to the Director.

(2) In the event a licensor refuses to execute said form of consent and release or an approved deviation therefrom and the Director has not authorized the omission thereof, an order shall be made and submitted for approval in the manner hereinafter specified.

(t) Form of the order. The following form of order is approved for use subject to such deviations as may be necessary or appropriate in any given case and subject to the instructions contained in paragraph (u).

WAR DEPARTMENT

This Notice becomes effective upon its receipt by you or five (5) days after the malling hereof, whichever dates is the earlier.

The licensor or any licensee, if he so requests within ten (10) days from the effective date of this Notice, may within thirty (30) days from the date of such request present in writing or in person any facts or circumstances which may, in his opinion, have a bearing upon the rates or amounts of royalties, if any, to be determined, fixed and specified.

From and after the effective date of this notice and until the making of an order under said Act, each licensee is hereby directed (a) not to pay to licensor any royalties under said license(s) which are charged or chargeable directly or indirectly to the War Department and (b) to segregate said royalties from licensee's general funds and safely keep the same until such time as the disposition thereof is directed by such order.

The foregoing Notice is hereby given in behalf of the Secretary of War.

By direction of the Under Secretary of War:

WASHINGTON

ROYALTY ADJUSTMENT ORDER NO. W

In the Matter of

(Insert name of each Licensor)

Licensor(s), -and

(Signature (and title) of delegate) The foregoing Notice is directed to the following: (Names and addresses of all licensors and licensees)

The foregoing notice shall be forwarded by registered mail, return receipt requested, to the last known address of each licensee and licensor named therein.

(r) Forwarding of copies of notice. Copies of all notices issued shall be forwarded forthwith to:

(1) The Chief of each technical service of the War Department.

(2) The Director (in triplicate).

(s) Withdrawal of notice previously given. (1) Notice under the act once given by any delegate shall not be vacated or withdrawn, in whole or in part,

(Insert name of each Licensee)

Licensee(s). War Department Contract Nos. (Insert the identifying number of each

War Department contract, 11 ascertained, which it is believed will be affected by the order; if no contract is ascertained,

omit the above heading Contractor: (Insert names of Contractors in respect of

each of the above identified contracts; if no contract is identified, omit the above

heading] Whereas, pursuant to authority contained in the Royalty Adjustment Act 1942, Public No. 768, 77th Cong.; 35 U.S.C., 89--96, written notice was given on or about the (Insert date of notice] to (Insert name of each licensor) (individually and collectively hereinafter called “Licensor") and to (Insert name of each licensee) (individually and collectively hereinafter called “Licensee") that the royalties, provision for the payment of which by Licensee to Licensor is included in the [license(s) dated

--) (licenses specified in

Column 4 of Schedule A annexed hereto and by this reference made a part hereof), and which said royalties are charged or chargeable directly or indirectly to the War Department for or on account of the manufacture, use or sale to or for the United States of certain alleged Inventions (pertain to

- ] (specified in Columns 1, 2 and 3 of said Schedule A), were believed to be unreasonable or excesssive, and that until the making of an order herein no royalties were to be paid by Licensee to Licensor under the license(s) above referred to which are charged or chargeable directly or indirectly to the War Department, and

Whereas, Licensor and Licensee, upon their request, have presented in writing and in person such facts and circumstances as they desired having a bearing upon the rates or amounts of royalties to be determined, fixed and specified by order pursuant to said Act;

Now, therefore, pursuant to the authority of and for the purposes set forth in said Act, and upon taking into account the facts and circumstances presented as aforesaid, the conditions of wartime production, and such other facts and circumstances as are proper to be considered in determining a fair and just rate or amount of royalties in the premises, it is hereby Ordered as follows, viz:

(1) that fair and just rates or amounts of royalties for the manufacture, use, sale or other disposition for the War Department of the said alleged inventions are hereby determined, fixed and specified to be I --

--(the rates or amounts set forth in Column 5 of said Schedule A);

(2) that, until further order, Licensee is hereby authorized to pay to Licensor, on account of the manufacture, use, sale or other disposition of said alleged inventions for the War Department heretofore occurred, or hereafter occurring while Sections 1 and 2 of said Act remain in force, royalties, if any, at the rates or in the amounts determined, fixed and specified in paragraph (1) hereof, and no more, under

(a) the said license(s) [dated

-------] (identified in Column 4 of said Schedule A), (and)

(b) any license between them, entered into on or after the effective date of said notice and so long as Sections 1 and 2 of said Act remain in force, which in any respect continues, supplements, modifies or supersedes (the license! (any of the licenses) referred to in subparagraph (a) hereof, (and

(c) any license between them, entered into on or after the effective date of said notice and prior to the date of this Order, which grants rights to practice the said alleged inventions; }?

(Alternate A) (3) that Licensee is hereby directed to pay over to the Treasurer of the United States (through

---) the balance, in excess of the payments authorized by paragraph (2) next above, of all royalties specified in the licenses referred to in said paragraph (2) which were due to Licensor and were unpaid on the effective date of said notice, and which since said date have or may hereafter become due to Licensor, for or on account of the manufacturer, use, sale or other disposition of said alleged in. ventions for the War Department heretofore occurred or hereafter occurring while Sections 1 and 2 of said Act remain in force, and demand is hereby made for payment forthwith of the monies so directed to be paid; and

(Alternate B) (3) that Licensee is hereby directed

(a) to pay over to the Treasurer of the United States (through

----) the balance, in excess of the payments authorized by paragraph (2) next above, of all royalties specified in the licenses referred to in said paragraph (2) which were due to Licensor and were unpaid on the effective date of said notice, and which since said date have accrued or may hereafter accrue in respect of supplies, equipment, materials or parts thereof delivered to or for the War Department prior to the tenth (10th) day next following the receipt of this order by the Licensee, and demand is hereby made for payment forthwith of the monies so directed to be paid; and

(b) to reduce the contract price of all supplies, equipment, materials and parts thereof delivered to or for the War Department on and after the tenth (10th) day next following the receipt of this order by the Licensee, to the extent necessary to secure to the Government the full benefit of the reduction in royalties effected by this order; and

(4) that reservation is hereby expressly made of the right to amend, modify, revoke or extend this Order and of the right of the head of any department or agency of the Government, including but not limited to the War Department, to take such other, further and different action as may be authorized by any statute of the United States with respect to the subject matter.

It is recommended that the Secretary of War make the foregoing Order.

(Signature (and title) of the delegate who recommends the making of the order, if different from the delegate

who signs next below) The foregoing Order is hereby made.

1 As to use of Schedule A see paragraph (u) (1) of this section.

2 As to use of subclause (c), see paragraph (u) (5) of this section.

(Signature (and title) of a delegate specified in paragraph 1112.9)

The foregoing Order is hereby approved in behalf of the Secretary of War.

By direction of the Under Secretary of War:

(Leave two lines blank] Director, Purchases Division Head

quarters, Army Service Forces 8 Dated: Washington, D. C.

194... (u) Preparation of the order. The following instructions are prescribed for use in the preparation of suitable orders in various types of cases, based upon use of the form of order set forth in paragraph (t), without prejudice to such other deviations from that form as may be necessary and appropriate in any given case.

(1) Schedule A is to be used only when it is impracticable to include the same information in the text of the order.

(2) To the extent that the licensee is a War Department prime contractor, the order shall (unless the Director otherwise directs) be drawn in such manner as to require that the benefits of any adjustment of royalties accruing after the date of the order will inure to the War Department in the form of a corresponding price reduction. To accomplish this purpose, Alternate B of clause (3) of the form of order as given in paragraph (t) would be used. Clauses (1), (2) and (4) would be used substantially as set forth.

(3) To the extent that the licensee is a subcontractor for the War Department, or for the War Department and

other departments, the order may be drawn in such manner as either (i) to effect reduction of the price paid to the licensee for articles or services furnished by licensee to or for War Department contractors or subcontractors where by reason of contract provisions or otherwise there is assurance that the benefits of the order will be transmitted by such contractors or subcontractors to the War Department, or (ii) to effect running recapture of excess royalties from the licensee by direct payment by him to the Treasurer of the United States when and as royalty payments fall due. In either case provision will be made requiring the licensee to pay over to the Treasurer of the United States the balance, in excess of royalty payments allowed by the order, of the accumulated fund in the hands of the licensee on the date of the order.

(4) In a case of the kind mentioned in subparagraph (3) above,

(i) If it is believed preferable to effect price reductions, Alternate B of clause (3) of the form given in paragraph (t) would be used.

(ii) If it is believed preferable to make running recapture of excess royalties from the licensee when and as royalty payments fall due, without price reduction, Alternate A of clause (3) of the form given in paragraph (t) would be used. In either of these cases clauses (1), (2) and (4) of the form would be used substantially as set forth.

* In the case of orders originating in the Army Air Forces the legend should be as follows:

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