Subcommittee established a Background Patent Rights Ad Hoc Subcommittee. This Ad Hoc Subcommittee, after studying the issues involved at considerable length, submitted a majority and minority report.

The Executive Subcommittee, following lengthy discussions of these reports, referred them to a small Task Group with the instructions to (1) identify the major unresolved policy issues, (2) identify alternative policies for each major issue, and (3) discuss the advantages and disadvantages for each alternative policy. In response thereto, the Task Group drafted a report which provided a measure of the magnitude and complexity of the problem. Subsequently, the Executive Subcommittee again considered all of the materials developed on the subject and concluded that a single Federal policy of acquiring a contractor's background patent rights, for either the Government or the general public, is neither feasible nor desirable in view of the wide variation of responsibilities in the Federal Government's research efforts. Nevertheless, the Executve Subcommittee believed that a set of basic principles permitting variation in acquisition would be useful in achieving greater consistency in the Federal agency practices. The report of the Executive Subcommittee, APPENDIX G, was approved by the Committee on Government Patent Policy at its September 23, 1975 meeting.

2. University Patent Policy Report

The Report of the University Patent Policy Ad Hoc Subcommittee dated July 1975 (APPENDIX H), paralleling the policy concept of the Alternate Approach of the Commission on Government Procurement Report, basically recommends that all agencies of the Executive Branch provide the universities and nonprofit organizations a first option of title retention to substantially all inventions generated by them with Federal support if the universities and nonprofit organizations are found to have an established technology transfer capability.

The recommendations of the report were adopted by the Committee on Government Patent Policy at its September 23, 1975 meeting as the policy to be followed by all agencies of the Executive Branch. Following its approval of the Report, the Committee directed the Executive Subcommittee to work with the General Services Administration to develop appropriate implementation of the report by developing regulatory language for promulgation in the Federal Procurement Regulations. The Committee also directed that a Task Group be formed for this purpose

and for the purpose of identifying those universities and nonprofit organizations having an established technology transfer capabil

ity.

The Task Group has completed its proposed revision to the Federal Procurement Regulations incorporating the recommendations of the University Patent Policy Report and has submitted the proposal to the General Services Administration for its consideration. Comments were solicited from agencies and other interested parties. The task force is now evaluating the comments.

3. Legislation Regarding Inventions of Federal Employees

The Employee Inventor Ad Hoc Subcommittee was established to study and make recommendations regarding the proper and equitable allocation of rights, both domestic and foreign, to inventions made by Federal employees.

As a result of the court order of the U.S. District Court for Northern Illinois (Ervin Kaplan vs. Donald E. Johnson and John J. Corcoran, February 18, 1976; No. 74C2004), declaring Executive Order 10096 unconstitutional, the Executive Subcommittee, during its meeting of March 31, 1976, directed the Employee Inventor Subcommittee to draft legislation intended to codify the principles of Executive Orders 9865 and 10096 as they have been implemented in practice. Subsequently, the United States Court of Appeals for the Seventh District reversed the district court ruling (Ervin Kaplan vs. John J. Corcoran and Donald E. Johnson, November 24, 1976; No. 76–1515).

In addition, the work of the Subcommittee was to include the development of provisions covering the allocation of foreign rights under the principles of 37 CFR 101, and an employee incentive awards provision, both to be included in the draft legislation. A subcommittee drafting group was formed to prepare the draft legislation. The proposal of the drafting group was approved by the full Employee Inventor Subcommittee on May 4, 1976 and forwarded to the Executive Subcommittee for its review and consideration for inclusion in the proposed draft legislation.

The proposal was included in the earlier mentioned draft legislation circulated by OMB in September 1976 and is presently under further consideration by the Executive Branch.

B. Data Collection and Analysis Subcommittee

The Data Collection and Analysis Subcommittee is responsible for acquiring data from the Federal agencies on the disposition of patent rights to inventions resulting from Federallyfinanced research and development and on the use and practice of

such inventions to serve as bases for policy review and development. Its responsibilities include compiling and analyzing data, identifying trends, and making recommendations to the Committee, through the Executive Subcommittee.

The Data Collection and Analysis Subcommittee rendered a report on the acquisition of data regarding use and practice on inventions in which the principal or exclusive rights have been left to the contractor. The report was generated pursuant to Section 3(b) of the President's 1971 Statement on Government Patent Policy, and included a comprehensive questionnaire designed to obtain the type of information required by Section 3 (b) of the Presidential Statement.

Later, in the implemention of the Executive Branch position of Recommendation I-3 of the Commission on Government Procurement Report, a task force under the Data Subcommittee was established to study the need for further action to strengthen the administration of the march-in provisions of the 1971 Presidential Statement. It was determined that the data acquired by the completion of the questionnaire proposed by the Data Subcommittee would provide baseline material from which the individual Federal agencies could judge whether additional steps should be taken to exercise march-in rights.

The Subcommittee task group submitted its report to the Executive Subcommittee for consideration. The use of a long form questionnaire recommended by the report was rejected by the Executive Subcommittee in favor of a short form questionnaire with the proviso that an agency could use the long form questionnaire after obtaining OMB approval. With this added flexibility, the report (APPENDIX I) was approved by the Executive Subcommittee at its January 23, 1975 meeting and by the Committee on Government Patent Policy at its September 23, 1975 meeting.

APPENDIX J, also prepared by the Data Collection and Analysis Subcommittee, presents statistics on patent practices and an analysis thereof covering Fiscal Years 1970 through 1975. While previously published statistics showed many years of data, this report is based on data from the current and five previous years. However, data for Fiscal Year 1976, received prior to printing, has been included as a separate italicized line item in Table I. Further, the data shown for Fiscal Year 1976 include statistics covering the additional three-month period from July 1, 1976 to September 30, 1976. This was done to make adjustment for the change to the start of the Fiscal Year from July 1 to October 1.

Data for Fiscal Years 1963-1969 are found in the Combined December 1971-December 1972 Report on Government Patent Policy. Beginning with Fiscal Year 1975, the Data Collection questionnaire was revised to reflect the revisions of the 1971 Presidential Statement, and an additional breakdown on licensing activities pertaining to patent applications was added.

C. Implementation Subcommittee

The Implementation Subcommittee is responsible for reviewing and determining conformance of contract patent provisions employed by the Federal agencies with the provisions of the Presidential Memorandum and Statement of Government Patent Policy.

At the request of the General Services Administration, the Implementation Subcommittee drafted a proposed addition to the Federal Procurement Regulations which provided standard patent clauses for all contracts subject to the Federal Property and Administrative Services Act of 1949, as amended. The proposal was coordinated with all Federal agencies in order to provide the greatest consistency possible. On August 29, 1973, the Administrator of General Services issued an amendment to the FPR regarding the allocation of patent rights, which appeared as Appendix D in the Combined December 1971-1972 Report on Government Patent Policy.

As previously discussed, these regulations were challenged in the courts with the plaintiffs alleging that the regulations were unconstitutional in that they provided for the disposition of Government-owned property, not authorized by Congress. In view of the lawsuit, the Administrator of General Services cancelled the March 4, 1974 effective date provision of the amendment. The challenge to the regulation was defeated when the Court of Appeals of the District of Columbia affirmed the decision of the District Court holding that the plaintiffs lacked standing to sue.

At the time of issuing the original FPR amendment, interested parties were invited to comment. The comments received by the General Services Administration were reviewed by the Implementation Subcommittee and extensive revisions were made to the amendment. In view of the District Court's decision and the revisions made, the regulations were reissued on May 1, 1975. The revisions are set forth in FPR Amendment 147, APPENDIX C of this report.

Subcommittee review of the conformance of individual Federal agency patent regulations with the Presidential Statement was deferred to provide sufficient time to the agencies to implement the May 1, 1975 FPR amendment.

The Subcommittee also compiled an up-dated list of statutes, regulations, orders, manuals, memorandums and materials governing the allocation of rights to inventions arising from Federally-sponsored research (APPENDIX K).

D. Patent Management Subcommittee

The Patent Management Subcommittee is responsible for study and recommendations concerning the identification, retrieval, evaluation, protection, utilization and management of Government-owned inventions, both domestic and foreign.

As mentioned earlier, the validity of the amendment to the Federal Property Management Regulations issued by the Administrator of General Services on January 29, 1973, which was developed by the Patent Management Subcommittee of the Committee, and appeared as Appendix E in the Combined December 1971-1972 Report on Government Patent Policy, was also challenged in the courts. The court found for the plaintiffs and directed the Administrator to void the licensing regulations. Accordingly, on February 12, 1974, the Administrator suspended the regulations.

The Government appealed the decision and the challenge to the regulations was defeated when the Appellate Court reversed the lower court's decision. The Administrator reinstated the patent licensing regulations on October 1, 1975, providing for an immediate effective date. During the pendency of the lawsuit, Sections 101-4.103-5 and 101-4.105 were amended. The language changes are specifically noted in APPENDIX B of this Report.

Section 101-4.104-1 of the licensing regulation directs that each Government agency publish in the Federal Register and the Official Gazette of the Patent and Trademark Office, and one other publication, a list of Government inventions in its custody available for licensing, the report to be revised periodically to include all inventions currently available for licensing.

As early as 1971, the Subcommittee recognized the desirability for some official notice to the general public of those inventions being placed into the licensing program and recommended using the established publication facilities of the National Techncal Information Service (NTIS), and the capabilities of the NTIS data bank. The NTIS publication, "NTIS Weekly Government Abstracts-Government Inventions for Licensing" has been published since early 1974 and includes descriptions of all Government patents issued and patent applications filed during the week, together with drawings of the inventions in addition to abstracts. This publication is available on an annual subscription basis from NTIS, 5285 Port Royal Road, Springfield, Virginia 22161.