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a. Recommendation 1-2
cies to issue exclusive licenses under patents held by them. The Recommendation appears on page 114 of Volume 4 of the Report, and is in Category B.
b. Proposed Position
This Recommendation was based, at least in part, on the Commission's belief that "uncertainty in this area would interfere with the effectiveness of the exclusive licensing program." Reference was made by the Commission as to possible confusion regarding the scope of the authority of the individual agencies and the General Services Administration to provide for the granting of exclusive licenses.
The members of the Executive Subcommittee, however, believe that there is adequate legal authority to support the present licensing program authorized by the President's 1971 Memorandum and Statement of Government Patent Policy, as implemented by the GSA Federal Property Management Regulations (41 CFR 101-4). These regulations were promulgated on the basis of a Department of Justice opinion stating that the grant of limited exclusive licenses of the type provided for by the GSA regulations is an appropriate and authorized utilization of Government property
Most members of the Executive Subcommittee, however, believe that the regulations contain too many restrictions and do not provide sufficient flexibility for a fully effective licensing program.
Uncertainty regarding the extent of the authority of many agencies to license patents held by them exists. This is highlighted by the present litigation over the GSA regulations (Public Citizens, Inc. v. Sampson).
There is a need for specific legislative authority to insure that the Government agencies can conduct a licensing program with the ability to grant rights beyond that presently permitted by the GSA licensing regulations under the authority of the Federal Property Administrative Services Act of 1949, as amended.
The members of the Executive Subcommittee have concluded that uncertainty in this area should be removed, and that additional authority should be provided to the agencies through legislation. It should be emphasized, however, that such legislation would only be useful if it gives greater flexibility than can be provided by the GSA licensing regulations under the authority of the Federal Property Administrative Services Act of 1949, as amended.
The Executive Subcommittee would also like to note that the use of the term "exclusive licenses" in the Commission's Recommendations could cause some confusion. Technically, an "exclusive license” also bars the licensor from practicing the invention. Where a patent licensor wishes to retain the right to practice, a "sole license" is the more appropriate technical term where only one licensor is involved. The Executive Subcommittee assumes that the Commission did not mean to imply that the Government should not retain a license for its own use. Accordingly, it is suggested that in drafting language to implement this Recommendation care be taken so as not to create a technical problem.
Two agency representatives, however, do believe that legislation should not be sought at this time. The Department of Interior representative believed that the present authorities are adequate, but the procedures are considered too restrictive. The Department of Justice representative noted that there is a problem in the use of the term "exclusive license" as noted above, and additional experience should be obtained under the present regulations to better identify the type of legislation which should be considered.
It was noted during the discussion that there is currently a case before the courts challenging the authority of GSA to issue the licensing regulations (Public Citizens, Inc. v. Sampson). Consideration was given to an approach that legislation should be sought only if that decision were to be decided adversely to the Government. Consideration was also given to the effect seeking such legislation might have on this suit while it is pending.
Most members of the Executive Subcommittee, however, disagree with these concerns. It is noted first that this suit could take years to decide and that it could well be decided on issues other than that of whether there is authority to issue limited exclusive licenses under the present statutes. Secondly, if it was by chance decided adversely, the status of licenses issued prior to the decision would be placed in doubt. Finally, most members do not believe that efforts to secure legislation would really influence the outcome of the case. It should be emphasized that legislation is needed to provide greater flexibility than can be provided by the present regulations under the authority of the Federal Property Administrative Services Act of 1949, as amended. This would insure the effectiveness of the agency licensing programs in transferring Government R&D to the private sector.
It is recommended that the Committee on Government Patent Policy of the FCST implement this Recommendation by drafting suitable legislation covering both domestic and foreign licensing.
VII. Dissenting Views
Dissenting viewpoints are set forth in Part V above.
Proposed Executive Branch Position for
Recommendation 1-3 of the
Report of the Commission on Government Procurement
Rendered October 31, 1973 I. Summation
a. Recommendation (-3
Supplement the President's Policy by the adoption of uniform procedures for application of the rights reserved to the
Government under that policy. The Recommendation appears on page 114 of Volume 4 of the Report, and is in Category A.
b. Proposed Position
It is proposed that this Recommendation be adopted by the
One of the premises of the President's Policy Statement is that the Government and the public would be protected by the “march-in" rights of the Statement whenever the contractor retains title. “March-in” rights are those rights reserved by the Government by which it can require the contractor to license others under certain circumstances. And, indeed, the Commission suggested a possible alternate approach to patent policy which emphasized very heavily the "march-in" aspect of the policy. Yet, in fact, no instance of the exercise of these rights is known. The Commission pointed out that in the future these rights could take on increasing importance and effort should be undertaken to ensure that they are properly administered.
The Executive Subcommittee has not been unmindful of the need for greater efforts in this area, and is presently considering a questionnaire and procedures for its use which would provide agencies with information on a systematic basis concerning the utilization of inventions left to contractors. One of the prime reasons for collecting such information would be to enable executive agencies to better evaluate the utilization of inventions and the need to take other steps to promote utilization of technology that is going unused.
One of the keys to making others aware of the existence of "march-in” rights is to ensure that each patent includes a statement indicating that the invention was made under a Government contract and that the Government has rights in it. Indeed this