Page images

(c) An agency will not grant any license under this section if it determines that such a grant would violate the antitrust laws if the licensee's receipt of such a license were deemed an acquisition of assets of another corporation.

(d) Agencies will maintain periodically updated records of determinations to grant exclusive or partially exclusive licenses. These records will be publicly available.


Sec. 403. Each license granted under section 402 will contain such terms and conditions as the agency finds appropriate to protect the interests of the Government and the public, including provisions reserving to the Government:

(1) The right to require from the licensee written reports on the use of the invention,

(2) A royalty-free, worldwide right to practice the invention or have it practiced for the Government, and

(3) The right to license State, local, or foreign governments to practice the invention or have it practiced for them if the agency determines that reservation of this right would serve the national interest.


Sec. 404. (a) The Government will have the right to terminate any license granted under section 402 in whole or in part, but only

(1) If the licensee has not taken and is not expected to take timely and effective action to achieve practical application of the invention in each of the fields of use affected;

(2) If necessary to protect national security;

(3) If necessary to meet requirements for public use specified by Federal regulation;

(4) If the licensee's rights in the invention violate the antitrust laws if the licensee's original receipt of those rights were deemed an acquisition of assets of another corporation; or

(5) If the licensee has failed to comply with the terms of the license.

(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.

REGULATIONS Sec. 405. The Office of Federal Procurement Policy will direct the issuance of regulations specifying the terms and conditions upon which federally-owned patent rights may be licensed. An agency may deviate from such regulations on a class basis unless prohibited by the Office of Federal Procurement Policy.



Sec. 501. Any exclusive licensee under this Act may enforce rights under the license by bringing suit without joining the United States as a party. However, the licensee will give prompt notice of the suit to the Attorney General and to the agency that granted the license, and all parties will serve copies of papers on the Attorney General and the responsible agency as though they were parties to the suit.

BACKGROUND RIGHTS Sec. 502. Nothing contained in this Act will be construed to deprive the owner of any background patent of rights under such a patent.

NOTICE, HEARING, AND JUDICIAL REVIEW Sec. 503. (a) Agency determinations under sections 201, 206(a), and 206(c), and 404 will be made after public notice and opportunity for a hearing in which the United States, any agency, or any interested person may participate, and will include written reasons for the determination.

(b) The United States or any participant that may be adversely affected by an agency determination covered by subsection (a) of this section may appeal the determination to the United States Court of Claims within sixty days after the determination is issued. That Court will have exclusive jurisdiction to determine the matter de novo and to affirm, reverse of modify the agency determination.


Sec. 504. Nothing in this Act creates any immunities or defenses to actions under the antitrust laws.

AUTHORITY OF FEDERAL AGENCIES Sec. 505. (a) Agencies may apply for, obtain, maintain, and protect patent rights in the United States and in foreign countries on any invention in which the Government has an interest in order to promote the use of inventions having significant commercial potential or otherwise advance the national interest;

(b) Agencies may license federally-owned patent rights on terms and conditions consistent with Title V;

(c) Agencies may transfer patent rights to other agencies and accept them from other agencies, in whole or in part, without regard to the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471);

(d) Agencies may withhold publication or release of information disclosing any invention long enough for patent applications to be filed;

(e) Agencies may promote licensing of federally-owned patent rights by making market surveys, acquiring technical information, or otherwise enhancing the marketability of the inventions; and

(f) Agencies may enter into contracts necessary and appropriate to accomplish the purposes of this section.


Sec. 506. (a) The Secretary of Commerce will

(1) Consult with other agencies about areas of science and technology with potential for commercial development.

(2) Coordinate a program to help agencies in exercising the authority given by section 505;

(3) Evaluate intentions referred by agencies to identify those with the greatest commercial potential and to promote their agencies.

(4) Help agencies seek and maintain patents in the United States and in foreign countries by paying fees and costs and by other means;

(5) Develop and manage a Government-wide program, with appropriate private sector participation, to stimulate transfer to the private sector of potentially valuable federally-owned technology through dissemination of information about the technology; and

(6) Publish notice of all federally-owned patent rights that are available for licensing;

(b) There is authorized to be appropriated to the Secretary of Commerce such sums as may be necessary to enable the Secretary to carry out responsiblities under this section.


Sec. 507. As used in this Act,

(1) Agency" means an "executive agency” of the Federal Government, as defined by section 105 of title 5, United States Code, and the military departments defined by section 102 of title 5, United States Code. "Responsible agency" means the agency which is party to a contract for the performance of research or development, has received patent rights from another agency, or has administrative jurisdiction over an employee-inventor.

(2) “Antitrust laws" means the laws included within the definition of the term "Antitrust laws” in section 1 of the Clayton Act (15 U.S.C. 12), as amended, and the Federal Trade Commission Act (15 U.S.Č. 41 et seq.), as amended.

(3) “Contract” means any Federal contract, cooperative agreement, or grant that provides for performance of research or development substantially funded by the Government. It covers any assignment, substitution of parties, or subcontract of the same type under such a contract. It does not cover Federal price or purchase supports, or Federal loans or loan guarantees.

(4) “Contractor" means any person other than an agency that is a party to a contract.

(5) "Federal employee" means any civil service employee as defined in section 2105 of title 5, United States Code, and any member of the uniformed services.

(6) "Invention” means any invention that is or may be patentable under the laws of the United States. “Contract invention” is defined by section 201. “Employee invention” is defined by section 301.

(7) "Made” when used in relation to any invention means conceived or first actually reduced to practice.

(8) “Nonprofit organization" means universities and other institutions of higher education or an organization of the type described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from taxation under section 501(a) of the Internal Revenue Code (26 U.S.C. 501(a)).

(9) “Patent rights” means patents and patent licenses and sublicenses.

(10) "Practical application" means manufacture of a machine, composition, or product, or practice of a process or system, under conditions which establish that the invention is being worked and its benefits are available to the public on reasonable terms.

(11) "Small business” means a small business concern, as defined in section 2 of Public Law 85-536 (15 U.S.C. 632) and implementing regulations of the Administrator of the Small Business Administration.

(13) "State" means a State or territory of the United States, the District of Columbia, or the Commonwealth of Puerto Rico. “Local” refers to any domestic county, municipality, or other governmental entity.

(14) “Will”, except as the context otherwise requires, has the same meaning as "shall”.

AMENDMENTS TO OTHER ACTS Sec. 508. (a) Section 10(a) of the Act of June 29, 1935, as added by title 1 of the Act of August 14, 1946 (7 U.S.C. 427i(a); 60 Stat. 1085) is amended by striking out the following: "Any contracts made pursuant to this authority shall contain require ments making the results of research and investigations available to the public through dedication, assignment to the Government, or such other means as the Secretry shall determine.”.

(b) Section 205(a) of the Act of August 14, 1946 (7 U.S.C. 1624(a); 60 Stat. 1090) is amended by striking out the following: “Any contract made pursuant to this section shall contain requirements making the result of such research and investigations available to the public by such means as the Secretary of Agriculture shall determine.".

(c) Section 501(c) of the Federal Coal Mine Health and Safety Act of 1969 (30 U.S.C. 951(c); 83 Stat. 742) is amended by striking out the following: “No research, demonstrations, or experiments shall be carried out, contracted for, sponsored, cosponsored, or authorized under authority of this Act, unless all information, uses, products, processes, patents, and other developments resulting from such research, demonstration, or experiments will (with such exception and limitation, if any, as the Secretary or the Secretary of health, Education, and Welfare may find to be necessary in the public interest) be available to the general public.”.

(d) Section 106(c) of the National Traffic and Motor Vehicle Safety Act of 1966 (15 U.S.C. 1395(c); 80 Stat. 721) is repealed.

(e) Section 12 of the National Science Foundation Act of 1950 (42 U.S.C. 1871; 64 Stat. 149, 154) is repealed.

(f) Section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182; 68 Stat. 943) is repealed.

(g) The National Aeronautics and Space Act of 1958 (72 Stat. 426) is amended(1) By repealing section 305 (42 U.S.C. 2457). However, subsections (c), (d), and (e) of section 305 shall continue to be effective with respect to any application for patents in which the written statement referred to in subsection (c) of such section has been filed or requested to be filed by the Commissioner of Patents and Trademarks before the effective date of this Act;

(2) By striking out, in section 306(a) (42 U.S.C. 2458(a), “(as defined by section 305)”; and by striking out “the Inventions and Contributions Board, established under section 305 of this Act” and inserting instead: "an Inventions and Contributions Board which shall be established by the Administrator within the Administration";

(3) By inserting at the end of section 203(c) (42 U.S.C. 2478(c)) the following new paragraph:

"(14) To provide effective contractual provisions for reporting the results of the activities of the Administration, including full and complete technical reporting of any innovation made in the course of or under any contract of the Administration.";

(4) By inserting at the end of section 203 (42 U.S.C. 2478) the following new subsection,”

"(d) For the purposes of chapter 17 of title 35 of the United States Code the Administration shall be considered a defense agency of the United States." and

(5) By striking out the following in such section: "(Including patents and rights thereunder)”.

(h) Section 6 of the Coal Research and Development Act of 1960 (30 U.S.C. 666; 74 Stat. 337) is repealed.

(i) Section 4 of the Helium Act Amendments of 1960 (50 U.S.C. 167b; 74 Stat. 920) is amended by striking out the following: “Provided, however, That all research contracted for, sponsored, cosponsored, or authorized under authority of this Act shall be provided for in such a manner that all information, uses, products, processes, patents, and other developments resulting from such research developed by Government expenditure will (with such exceptions and limitations, if any, as the Secretary may find to be necessary in the interest of national defense) be available to the general public: And provided further, That nothing contained herein shall be construed as to deprive the owner of any background patent relating thereto to such rights as he may have thereunder." and by inserting instead a period.

(j) Section 32 of the Arms Control and Disarmament Act of 1961 (22 U.S.C. 2572; 75 Stat. 634) is repealed.

(k) Subsection (e) of Section 302 of the Appalachian Regional Development Act of 1965 (40 U.S.C. App. 302(e); 79 Stat. 5) is repealed.

(1) Except for paragraph (1), section 9 of the Federal Nonnuclear Energy Research and Development Act of 1974 (42 U.S.C. 5901; 88 Stat. 1878) is repealed.

(m) Section 5(i) of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 831d(i); 48 Stat. 61), is amended by striking both proviso clause at the end.

(o) Section 5(d) of the Consumer Product Safety Act (15 U.S.C. 2054(d); 88 Stat. 1211), is repealed.

(p) Section 3 of the Act of April 5, 1944 (30 U.S.C. 323; 58 Stat. 191), is repealed.

(g) The Resources Conservation and Recovery Act of 1976 (90 Stat. 2795) is amended

(1) By repealing section 8001(c)(3) (42 U.S.C. 6981(c)(3); 90 Stat. 2831); and

(2) By striking out, in section 8004(c)(2) (42 U.S.C. 6984(c)(2)) the second sentence, “notwithstanding section 6881(c)(3) of this titel,.”

(r) Section 12 of the Electric and Hybrid Vehicle Research, Development, and Demonstration Act of 1976 (15 U.S.C. 2511;- Stat. - ) is repealed.

(s) Paragraph (r) of Section 19 of the Federal Nonnuclear Energy Research and Development Act of 1974, Public Law 93-577, as amended, Public Law 95-238, is repealed; subparagraph (g)4 of said Section 19 is amended by striking "under section 9 of this Act' in the first sentence.

(t) Section 112(d)(2) of Public Law 95–39 enacted on June 3, 1977, is amended by striking “shall be governed by the provisions of Section 9 of the Federal Nonnuclear Energy Research and Development Act of 1974 and”.

(u) Section 408 of the Water Research and Development Act of 1978 (42 U.S.C. 7879; 92 Stat. 1316) is repealed.


Sec. 509. This Act will take effect on the first day of the seventh month beginning after its enactment. Implementing regulations may be issued earlier.


TITLE 1-POLICY Sec. 101. Findings. Section 101 states the finds of the Congress; namely, 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.”

Sec. 102. Purpose. Section 102 states the purposes of this Act which are responsive to the directive of Title I, Section 101(c) of P.L. 94-282, The National Science and Technology Policy, Organization and Priorities Act of 1976 that:

"Federal patent policies should be developed based on uniform principles, which have as their objective the preservation of incentives for technological innovation and the application or procedures which will continue to assure the full use of beneficial technology to serve the public.”

The purposes of the 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 nonprofit organizations; "(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 strengthening the Nation's economy and expanding its domestic and foreign markets; and

“(5) To amend or repeal inconsistent laws.”

TITLE II–CONTRACT INVENTIONS Sec. 201. "Contract Inventions"; Reporting.

Section 201 defines "contract inventions” and sets forth a contractor's responsibility with regard to a contract invention.

Subsection (a) defines "contract inventions” as “inventions made in the course of or under Federal contracts.”

Subsection (b) requires that all contractors provide the responsible Federal agency with timely reports on each contract invention containing complete technical information about the information and a list of each country, if any, in which the contractor elects to file a patent application. In addition, unless the contractor is a small business or nonprofit organization, contractors must list each field of use in which the contractor intends to commercialize the invention or otherwise achieve public use of the invention, e.g., by actively licensing it. Each selected field of use is to be described “with sufficient particularity to” distinguish those fields of use selected by the contractor from those fields of use left to the Government. The Government is prohibited from publishing or releasing these reports until the earlier of one year from receipt of all of the required information or the contractor has had a reasonable time to file a patent application; the Government may so withhold such information contained in other records or reports.

The field of use selection process intended to be undertaken unilaterally by the contractor without the need for negotiation with any Federal agency and only after an invention is made and reported to the Government. The standard of precision expected is that associated with normal business practice. The aim is for the contractor to indicate those fields of use in which it is interested commerically so that the Govenment can promote the commercialization of any unselected fields determined to be potentially valuable.

The temporary prohibition on publishing or releasing contractor reports is necessary in order to avoid the possible forfeiture of patent protection in some countries.

Subsection (c) provides for the responsible agency's depriving a contractor who fails to file the reports required by subsection (b) of any or all the rights it otherwise would have under Title II.

Sec. 202. Allocation of Rights—Small Business and Nonprofit Organizations.

Subsection (a) provides for the acquisition of title to contract inventions by contractors which are either a small business or a nonprofit organization. They would acquire title in each country listed under section (b)(2) of section 201 in which they filed a patent application within a reasonable time; their title would be subject to the Government's minimum rights under section 204 and to march-in rights under section 206.

Subsection (b) provides for acquisition of title to contract inventions by the Government in each country in which a small business or nonprofit organization elects not to file a patent application or fails to file within a reasonable time.

Sec. 203. Allocation of Rights-Other Contractors.

Subsection (a) provides for the acquisition of title by the Government to all contract inventions not made by a small business or nonprofit organization.

Subsection (b) provides for the contractor to receive an exclusive license in each field of use described under subsection (b) of section 201 in each country listed under that subsection in which it files a patent application within a reasonable time. The contractor's license is subject to the Government's minimum rights under section 205 and march-in rights under section 206.

« PreviousContinue »