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the policy and provided direction to the Federal agencies for the licensing of Federally-owned inventions (APPENDIX A).
Regulations Implementing the 1971 Presidential Statement
(A) Regulations Regarding the Licensing of Federally-owned
Section 2 of the 1971 Presidential Statement directed the Administrator of General Services to issue regulations for the comprehensive licensing of Government-owned inventions. In view of this directive, the Administrator issued an amendment to the Federal Property Management Regulations (FPMR, 41 CFR 101-4.1, F.R. Vol. 38, No. 23, February 5, 1973) on January 29, 1973 regarding the licensing of Federally-owned inventions.
The validity of this regulation was challenged in a complaint filed in the U.S. District Court for the District of Columbia on April 25, 1973 by Public Citizen, Inc., et al (Public Citizen, Inc., et al vs. Arthur F. Sampson, GSA, Civil Action No. 781-73, United States District Court of the District of Columbia). The main allegation of the complaint was that the exclusive licensing of a Federally-owned patent constituted a disposal of property in violation of Article IV, Section 3, Clause 2 of the Constitution. The District Court found for the plaintiffs and directed the Administrator to take immediate steps to void the licensing regulations. Accordingly, on February 12, 1974, the Administrator suspended the provisions of the patent licensing regulations, and directed the agencies to take no action pursuant thereto until further notice (FPMR. Temp. Reg. A-10, F.R. Vol. 39, No. 34, February 19, 1974).
The Government appealed to the United States Court of Appeals for the District of Columbia Circuit, and on June 16, 1975, the Court adjudged that the appellees were without standing, thereby reversing the lower court's findings (Arthur F. Sampson, GSA, vs. Public Citizen, Inc., et al, Civil Action No. 74–1619, United States District Court of Appeals for the District of Columbia Circuit). On October 1, 1975, the Administrator reinstated the licensing regulations (APPENDIX B-F.R. Vol. 40, No. 199, October 14, 1975). (B) Regulations Regarding the Use of Standard Patent Rights
On August 29, 1973, the Administrator of General Services further implemented the 1971 Statement with the issuance of an amendment to the Federal Procurement Regulations (FPR, 41 CFR 1-9). This amendment to the FPR provides standard patent rights clauses for use by all the Federal agencies not otherwise subject to statutory requirements (F.R. Vol. 38, No. 170, September 4, 1973). In the drafting of the FPR, representatives of appropriate DOD departments were present which permitted revisions to the Armed Services Procurement Regulations (ASPR, 32 CFR 9), bringing them into harmony with the FPR.
The validity of this amendment was also challenged in a complaint filed in the United States District Court for the District of Columbia by Public Citizen, Inc., et al (Public Citizen, Inc., et al vs. Arthur F. Sampson, GSA, Civil Action No. 74–303, United States District Court for the District of Columbia). In view of the lawsuit, the Administrator cancelled the March 4, 1974 effective date provision of the regulations (39 F.R. 7925, March 1, 1974). In this case, the plaintiffs alleged that whenever the Government acquired less than title in a Government contract, the Government was, in effect, disposing of property, again a violation of Article IV, Section 3, Clause 2 of the Constitution.
On July 24, 1974, the District Court dismissed the complaint on the grounds that plaintiffs did not have sufficient standing to sue. The plaintiffs appealed the dismissal to the Court of Appeals which affirmed the judgment of the District Court on June 16, 1975 (Public Citizen, Inc., et al vs. Arthur F. Sampson, GSA, Civil Action No. 74–1849, United States Court of Appeals for the District of Columbia Circuit).
In these regulations as originally issued, the Administrator invited the public to comment. In light of the comments received, the regulations were revised, and in view of the lower Court's decision, were reissued on May 1, 1975 (APPENDIX C-Amendment 147, F.R. Vol. 40, No. 89, May 7, 1975).
The Committee prepared draft legislation (APPENDIX D) intended to obtain maximum uniformity in the area of Federal patent policy.
The drafting of legislation also responded to the Commission on Government Procurement recommendations, set forth in the bipartisan report to the Congress, that legislation be enacted which would make uniform the Federal practices in the area of allocating the rights to contractor inventions, and make clear the authority to grant exclusive licenses under Federally-owned inventions. The draft legislation would also codify the basic policy concepts of Executive Order 10096 (15 F.R. 389, 3 CFR 1949– 1953 Comp., p. 292). This Executive Order was issued by President Harry S. Truman in an attempt to bring about consistency in the allocation of rights to inventions made by Federal employees. The draft legislation would make the criteria uniformly applicable to all Federal employees. In addition, passage of the proposed legislation would overcome any remaining legal questions raised by past and pending litigation.
In September 1976, the Office of Management and Budget circulated the proposed legislation to the Federal agencies for comment. The comments received are under review with a view of refining the proposal prior to further consideration by the Executive Branch.
PART II-ACTION TAKEN ON THE RECOMMENDATIONS OF THE COMMISSION
ON GOVERNMENT PROCUREMENT
The Commission on Government Procurement was established by Congress by Public Law 91-129 in November 1969 to study and recommend methods to promote the economy, efficiency, and effectiveness of procurement by the Executive Branch of the Federal Government. The Commission rendered a report to the Congress on December 31, 1972 (Volumes I-IV, Report of the Commission on Government Procurement, Superintendent of Documents, U.S. Printing Office, Washington, D.C. 20402, Stock Nos. 5255–00002; 5255-00003; 5255-00004; and 5255–00006). The four-volume report contains 149 recommendations.
Volume IV, Part I, of the Commission's Report, makes 16 recommendations pertaining to patents, technical data and copyrights as they affect the Government's procurement process. An interagency effort resulted in the development, coordination, and adoption of an Executive Branch position on each of the 16 Recommendations (APPENDIX E).
Subsequently, five working groups were established under the Executive Subcommittee of the Committee on Government Patent Policy to draft implementing reports on these Executive Branch positions. They were
Legislation Working Group-1-1, 6, 7, 9, 11, (14) and 15
-1-9, 10, 12, and 13
Except for Recommendations 14 and 1-8 which were rejected, the working groups have drafted or are in the process of drafting such reports. The membership lists of the Working Groups are set forth in APPENDIX F.
Following Committee and Federal Council approval, the implementing reports are to be submitted to the Office of Federal Procurement Policy, Office of Management and Budget, which has the primary responsibility for the Government's overall procurement policy. To assure the timely submission of the reports, Congress directed the Government Accounting Office to monitor the activities of the Executive Branch in the development of such reports.
In view of the involvement of the Committee in these matters, the Federal Council amended the Committee's charter to include the development and consideration of data and copyright policies. Therefore, as is the case with patent policy, recommendations on the refinement to the data and copyright policies adopted by the Executive Branch have become a continuing task of the Committee.
Status of Implementing Reports
The status of the implementing reports of the Executive Branch positions on each of the recommendations, as of September 30, 1976 follows:
RECOMMENDATION 1. Implement the revised Presidential
Statement of Government Patent Pol
icy promptly and uniformly. (A) Action Taken
The Committee activities resulted in the partial implementation of Recommendation 1 with the issuance of (1) the amendment to the FPR providing for the use of a standard patent rights clause in all R&D contracts and grants, and (2) the amendment to the FPMR providing for a comprehensive Federal patent licensing regulation. Subsequent to the amendment to the FPR, revisions were made to the patent section of ASPR to bring them into harmony with the FPR.
A corollary of Recommendation 1, however, requires the repeal of all conflicting statutory provisions. Approximately twenty different statutes exist which establish certain limitations on Federal agency patent policies and restrict those agencies from complete adherence to the revised Presidential Policy Statement and the implementing FPR. The repeal of these statutory provisions would of course require legislation.
Motivated by the lawsuits discussed earlier, and to respond to the Executive Branch position on Recommendation 1, the Committee during its September 23, 1975 meeting decided to prepare draft legislation so as to obtain maximum Government-wide uniformity in the area of Federal patent policy.
The Committee first considered the repeal of all statutory provisions which were inconsistent with the application of the principles of the Presidential Statement. This legislative proposal was in conformance with the original Executive Branch position on Recommendation 1. In this regard, see APPENDIX E. The Committee, however, did not believe the earlier Executive Branch position on Recommendation 1 to be a viable policy solution for Congressional consideration, especially in view of the 1974 Congressional enactment of the ERDA patent provisions (Section 9 (n) of the Federal Nonnuclear Energy Research and Development Act of 1974; Public Law 93-577, 93d Congress, S. 1283, December 31, 1974).
After considering several other legislative proposals, the Committee directed the Executive Subcommittee to prepare two legislative packages.
Subsequently, the Committee was provided with the following two basic legislative options.
Under Option I, which followed a modified ERDA policy, there were to be two presumptions. First, in contracts intended to develop items for public use, it was to be presumed that title to resulting inventions should be acquired by the Government unless waived after reviewing eleven waiver considerations as provided by the ERDA patent policy. Second, in those contracts which were intended to develop items for Government use, it was to be presumed that title to resulting inventions should be obtained by the contractor. Under Option II, two alternative policies were developed. Under Alternative A, the contractor normally would obtain title to every invention on which he filed a patent application and on which he declared his intention to commercialize the invention, subject to certain "march-in" rights. Under Alter