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Sec. 508—Amendments to Other Acts.
FINDINGS Sec. 101. The Congress, recognizing the profound impact of science, engineering, and technology policy on the well-being, health, and safety of the Nation, finds that:
(1) Inventions that result from federally sponsored or supported research and development constitute a valuable national resource;
(2) Federal policy on allocation of patent rights in such inventions should stimulate innovation, should meet the needs of the Government, should foster competition, should recognize the equities of Government contractors and Federal employee-inventors, and should provide small businesses and educational institutions with special incentives to participate in Federal research and development programs and to commercialize resulting inventions; and
(3) The public interest would be advanced if greater efforts were made to promote commercial use of new technology that results from federally sponsored or supported research and development.
PURPOSE Sec. 102. The purposes of this Act are
(1) To establish an effective Federal system for management and use of inventions that result from federally sponsored or supported research and development;
(2) To allocate patent rights in inventions that result from federally sponsored or supported research and development in ways that,
(A) Stimulate innovation, (B) Encourage participation of all qualified contractors, (C) Foster competition, (D) Reduce administrative burdens on Federal agencies and their contractors, (E) Promote widespread public use of inventions made with public support, and (F) Provide special incentives to small businesses and educational institutions; (3) To allocate equitably patent rights in Federal employee inventions;
(4) To provide for domestic and foreign patenting of federally owned inventions and licensing of federally-owned patent rights, with the objective of strengthing the Nation's economy and expanding its domestic and foreign markets; and
(5) To amend or repeal inconsistent laws.
TITLE II—CONTRACT INVENTIONS
CONTRACT INVENTIONS-REPORTING Sec. 201. (a) This Title applies to "contract inventions”, which in this Act are inventions made in the course of or under Federal contracts.
(b) Every contractor will provide the responsible agency with timely written reports on each contract invention containing:
(1) Complete technical information on the invention,
(2) A list of each country, if any, in which the contractor elects to file a patent application on the invention, and
(3) Unless the contractor is a small business or nonprofit organization, a list of each field of use in which the contractor intends to commercialize the invention or otherwise achieve public use of the invention. Each field will be described with sufficient particularity to allow the Government to identify those fields of use not encompassed by the described field.
The Government neither will publish nor release these reports until the contractor or the Government has had a reasonable time to file patent applications or one year has passed since receipt of all the information required by subsection (bX1) of this section, whichever is earlier, and may so withhold such information in other reports or records.
(c) If the responsible agency determines that the contractor has unreasonably failed to file reports as required by subsection (b) of this section, the contractor may be deprived of any or all of the rights it otherwise would have under this Title.
ALLOCATION OF RIGHTS-SMALL BUSINESSES AND NONPROFIT ORGANIZATIONS Sec. 202. (a) A contractor that is a small business or a nonprofit organization will acquire title to its contract invention in each country it lists under section 201(bX2) in which it files a patent application within a reasonable time. However, title will be subject to the Government's minimum rights under section 205 and march-in rights under section 206.
(b) The Government will have the right to acquire title to any patent on a contract invention in each country in which the contractor elects not to file a patent application or fails to file within a reasonable time.
ALLOCATION OF RIGHTS-OTHER CONTRACTORS Sec. 203. (a) The Government will acquire title to all patents on any contract invention whenever the contractor is not a small business or nonprofit organization.
(b) If such a contractor files within a reasonable time a patent application on a reported contract invention in any country it lists under section 201(bX2), it will receive an exclusive license under the patent in each described field of use, with the exclusive right to grant sublicenses. However, its license will be subject to the Government's minimum rights under section 205 and march-in rights under section
(c) The contractor automatically will acquire by operation of law the right to receive an exclusive license, pursuant to subsection (b) of this section, ninety days after it provides the responsible agency with all of the information required to be disclosed by section 2017b), except that it will not acquire the right to receive an exclusive license in any field of use as to which the agency notifies the contractor within the ninety-day period that it has made a determination under subsection (d) of this section.
(d) The contractor will not acquire an exclusive license in any field of use if the responsible agency determines that the contractor's possession of such a license
(1) Would be contrary to the requirements of the agency's mission; (2) Would impair national security; or
(3) Would violate the antitrust laws if the receipt by the contractor of such a license were deemed an acquisition of another corporation.
(e) An agency determination under subsection (d) of this section will include written reasons for the determination. The contractor may appeal the determination to the United States Court of Claims within sixty days after the contractor has been notified of the determination. That Court will have exclusive jurisdiction to determine the matter de novo and to affirm, reverse, or modify the agency determination, specifically including authority to require that the contractor receive any exclusive license provided for by this section.
(f) If the responsible agency determines that the national interest would not be affected adversely, the agency may grant the contractor title to any contract invention in any foreign country in which the contractor agrees to file a patent applica
CONTRACTOR LICENSE Sec. 204. Any contractor that complies with section 201(b) automatically will receive by operation of law nonexclusive, royalty-free licenses to practice the contract invention in all countries where it does not receive title under section 202 and in all fields of use and in all countries in which it does not receive an exclusive license under section 203. These nonexclusive licenses may be revoked only to the extent necessary to allow the Government to grant exclusive licenses under Title IV.
MINIMUM GOVERNMENT RIGHTS Sec. 205. (a) The Government will have the following minimum rights in any contract invention:
(1) The right to require from the contractor written reports on the use of the invention,
(2) A royalty-free worldwide right or license to practice the invention or have it practiced for the Government, and
(3) The right to license or sublicense State, local, or foreign governments to practice the invention or have it practiced for them, if the agency determines at the time of contracting that acquisition of this right would serve the national interest.
(b) Whenever the Government has rights in any invention under this Title, each patent application and patent on the invention will include a statement that the invention was made with Government sponsorship or support and that the Government has rights in the patents.
MARCH-IN RIGHTS Sec. 206. (a) In any field of use, the Government may wholly or partly terminate the contractor's title or exclusive rights in any patent on a contract invention; may require the contractor to grant appropriate licenses or sublicenses to responsible applicants; or, if necessary, may grant such licenses or sublicenses itself. The Government may take such actions only
(1) If the contractor has not taken and is not expected to take timely and effective action to achieve practical application of the invention in one or more of the selected fields of use;
(2) If necessary to protect the national security;
(3) If necessary to meet requirements for public use specified by Federal regulation;
(4) If the contractor's rights in the invention violate the antitrust laws if the contractor's original receipt of those rights were deemed an acquisition of assets of another corporation; or
(5) If the contractor has failed to comply with the reporting requirements of this Act.
(b) These march-in rights may be exercised by the responsible agency on its own initiative or on a petition from an interested person justifying such action.
(c) Whenever under this section an agency requires a contractor to grant a license or sublicense, it may specify reasonable terms, including the royalties to be charged, if any; the duration of the license or sublicense; the scope of exclusivity; and the fields of use to be covered:
DEVIATION AND WAIVER Sec. 207. (a) An agency may deviate from the allocation of patent rights in contract inventions provided for in any standard patent rights clause established under section 209 acquiring more or fewer rights in the inventions, to further the agency's mission and the public interest. It may so deviate on a class basis only in accordance with regulations issued either under section 209 or, unless prohibited by those regulations, by the agency. Case-by-case deviations may be authorized by the head of the agency or his designee, and described in the Federal Register.
(b) The national security and antitrust march-in rights reserved by sections 206(aX2), 206(aX4), and 206(c) may not be waived under any circumstances.
(c) Rights reserved by sections 203 and 206(a)(1) may be waived only:
(1) In contracts involving cosponsored, cost-sharing, or joint-venture research or development to which the contractor makes a substantial contribution of funds, facilities, technology, or equipment; or
(2) In contracts with a contractor whose participation is necessary for the successful accomplishment of the agency's mission but cannot be obtained under the standard patent rights clause.
TRANSFER OF RIGHTS TO CONTRACTOR EMPLOYEES Sec. 208. The contractor's employee-inventor may receive some or all of the contractor's rights under this Title with the permission of the contractor and the approval of the responsible agency. The corresponding obligations of the contractor under this title then will become obligations of the employee-inventor.
REGULATIONS AND STANDARD PATENT RIGHTS CLAUSE Sec. 209. The Office of Federal Procurement Policy will direct the issuance of regulations to implement this Title. The regulations will establish a standard patent rights clause or clauses, to be included in each Federal contract except as provided in section 207.
TITLE III—INVENTIONS OF FEDERAL EMPLOYEES
EMPLOYEE INVENTIONS Sec. 301. This Title applies to "employee inventions”, which in this Act are inventions made by Federal employees.
REPORTING OF INVENTIONS Sec. 302. (a) Federal employees will file timely written reports on any inventions they make. Such reports will be made to the employee's agency and will contain complete technical information concerning the invention. The Government neither will publish nor release a report until there has been a reasonable time to file patent applications or until one year has passed since the final disposition of rights under this Title, whichever is earlier.
(b) If the responsible agency determines that the employee-inventor unreasonably has failed to file a report as required by subsection (a) of this section, the employee may be deprived of any or all of the rights he otherwise would have under the Title.
CRITERIA FOR ALLOCATION OF RIGHTS Sec. 303. The responsible agency will determine the rights of the Government and of Federal employee-inventors in any inventions made by employee-inventors through the use of the following criteria:
(1) If the invention bears a direct relation to the duties of the employee-inventor or was made in consequence of his employment, the Government will acquire all rights in the invention.
(2) If the invention neither bears a direct relation to the duties of the employeeinventor or was made in consequence of his employment, but was made with a contribution from Federal funds, facilities, equipment, materials, or information not generally available to the public, or from services of other Federal employees on official duty, the employee-inventor will receive all rights in the invention, except as provided in paragraph (4) of this section. However, these rights will be subject to a nonexclusive, royalty-free, worldwide license to the Government to practice the invention or have it practiced for the Government.
(3) If the agency finds insufficient interest in an invention to justify exercising its rights under paragraph (1) of this section, it may permit the employee-inventor to receive any or all of those rights, subject to the Government's rights as described in paragraph (2) of this section. However, nothing in this paragraph will prevent the agency from publishing the invention or otherwise dedicating it to the public.
(4) If the agency determines that national security might be impaired if the employee-inventor were to receive rights in an invention under paragraph (2) or (3) of this section, the Government will acquire all rights in the invention.
(5) The Government will claim no rights under this Act in any employee-invention not covered by paragraphs (1) or (2) of this section.
(6) Notwithstanding paragraph (1) of this section, an agency may enter into agreements providing for appropriate allocation of rights in inventions that result from research or development to which other parties have substantially contributed.
PRESCRIPTIONS Sec. 304. (a) There will be a rebuttable presumption that an employee invention falls within the criteria of section 303(1) if it was made by a Federal employee who is employed or assigned to
(1) Invent, improve, or perfect any art, machine, manufacture, or composition of matter;
(2) Conduct or perform research or development work;
(3) Supervise, direct, coordinate, or review federally sponsored or supported research or development work; or
(4) Act as liaison among agencies or individuals engaged in the work specified in paragraphs (1), (2), or (3) of this subsection.
(b) There will be a rebuttable presumption that an invention falls within the criteria of section 303(2) if it was made by any other Federal employee.
REVIEW OF AGENCY DETERMINATIONS Sec. 305. Agency determinations under sections 302 and 303 will be reviewed whenever
(1) The agency determines not to acquire all rights in an invention, or
(2) An aggrieved employee-inventor requests a review. Standards and procedures for this review will be prescribed in the regulations issued under section 309.
REASSIGNMENT OF RIGHTS Sec. 306. If an agency finds on the basis of new evidence that it has acquired rights in an invention greater than those to which the Government was entitled under the criteria of section 303, it will grant the employee-inventor such rights as may be necessary to correct the error.
INCENTIVE AWARDS PROGRAM Sec. 307. (a) Agencies may monetarily reward and otherwise recognize employeeinventors as an incentive to promote employee inventions and the production and disclosure of employee inventions. For this purpose agencies may make awards under the Federal incentive awards system (5 U.S.C. Ch. 45, 10 U.S.C. Ch. 57, and implementing regulations), as modified by this section.
) The amount of an award for an invention will be based on(1) The extent to which the invention advances the state of the art; (2) The scope of application of the invention; (3) The value of the invention to the Government or the public; and (4) The extent to which the invention has come into public use.
(c) Awards for an invention of up to $10,000 may be made by the head of an agency.
(d) Awards of over $10,000 but less than $35,000 may be made by the head of an agency to
(1) Civilian employees, with the approval of the Office of Personnel Management; (2) Members of the Armed Forces, with the approval of the Secretary of Defense;
(3) Members of the United States Coast Guard when not operating as a service in the Navy, with the approval of the Secretary of Transportation;
(4) Members of the Commissioned Corps of the United States Public Health Service, with the approval of the Secretary of Health and Human Services; and
(5) Members of the Commissioned Corps of the National Oceanic and Atmospheric Administration, with the approval of the Secretary of Commerce.
(e) Awards of more than $35,000 may be made to employee-inventors by the President upon recommendation of the head of an agency.
(f) Acceptance of a cash award under this section constitutes an agreement that any Government use of an invention for which the award is made forms no basis for further claims against the Governmetn by the recipient, his heirs, or his assigns.
(g) Any cash award or expense for honorary recognition of an employee-inventor will be paid from the fund or appropriation of the agency receiving the invention's primary benefit.
INCOME SHARING FROM PATENT LICENSES Sec. 308. In addition to awards as provided in section 307, an agency may share income received from any patent license with the employee-inventor.
Sec. 309. (a) The Secretary of Commerce shall issue regulations to implement this Title.
(b) Any determination of an appointing official under subsection 208(b) of title 18, United States Code, that relates to promotion of an employee invention by the employee-inventor will be subject to regulations prescribed by the Secretary of Commerce with concurrence of the Office of Government Ethics and the Attorney General. TITLE IV-LICENSING OF FEDERALLY-OWNED INVENTIONS
COVERED INVENTIONS Sec. 401. This Title applies to the licensing of all federally-owned patent rights, including licenses or sublicenses granted or required to be granted by the Government under section 206. However, it does not apply to licenses established by the other sections of Title II of this Act.
EXCLUSIVE OR PARTIALLY EXCLUSIVE LICENSES Sec. 402. (a) An agency may grant exclusive or partially exclusive domestic licenses under federally-owned patent rights not automatically licensed under section 203 only if, after public notice and opportunity for filing written objections, it determines that
(1) The desired practical application is not likely to be achieved under a nonexclusive license; and
(2) The scope of proposed exclusivity is not greater than reasonably necessary.
(b) An agency may grant exclusive or partially exclusive foreign licenses under federally-owned patent rights after public notice and opportunity for filing written objections and after determining whether the interests of the Government or of United States industry in foreign commerce will be enhanced.