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G. Report of the Background Patent Rights Ad Hoc

Subcommittee Regarding the Acquisition of

Background Patent Rights in R&D Contracts
H. Report of the University Patent Policy Ad Hoc

Subcommittee
I. Report Regarding the Implementation of the Executive

Branch Position of Recommendation 1-3 of the

Commission on Government Procurement Report
J. Statistical Report of the Data Collection and Analysis

Subcommittee
K. Current Statutes, Regulations, Orders, Manuals,

Memorandums, and Materials Governing Allocation of
Rights to Inventions Arising from Government-
sponsored Research

358

385

463

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SUMMARY

The Committee on Government Patent Policy, operating under the aegis of the Federal Council for Science and Technology, was established to monitor the activities of the Federal agencies under the 1971 Presidential Memorandum and Statement of Government Patent Policy; and, based upon the experience gained, to offer alternatives to existing Government patent policy as appropriate.

The 1971 Statement of Government Patent Policy primarily provides guidance to the Federal agencies with respect to the allocation of rights between the Government and the contractor in inventions which arise under Federally-sponsored research and development (R&D) contracts. The policy is implemented by inserting a patent rights clause into each R&D contract. The Statement also provides guidance on the licensing of Federally-owned inventions, and on monitoring the use of inventions retained by Government contractors.

The Committee has been active in the development of two regulations implementing the 1971 Statement. The first regulation involved an amendment to the Federal Procurement Management Regulations concerning the comprehensive licensing of Federallyowned patents; the second involved an amendment to the Federal Procurement Regulations concerning the use of standard patent rights clauses. Shortly after their issuance, both regulations were challenged in court on constitutional grounds. In both cases, the Court of Appeals of the District of Columbia found that the plaintiffs lacked standing to sue.

Additional responsibilities to develop policy concerning technical data and copyright matters were assigned the Committee following the recommendations of the bipartisan Commission on Government Procurement Report rendered to Congress on December 31, 1972. At present, implementing reports on the recommendations of that report, relating to patent, technical data, and copyright matters have or are being drafted by the Committee for submission to the Federal Council and the Office of Federal Procurement Policy of the Office of Management and Budget.

As a result of the litigation and two of the Commission recommendations relating to the contested regulations, the Committee embarked on the development of draft legislation. The draft legislation would also codify the principles of Executive Order 10096, covering Federal employee inventions, which also had been subjected to litigation. The draft legislation was submitted to the Office of Management and Budget and was circulated to the Federal agencies for comment. The comments are under consideration with a view to modifying and refining the draft as appropriate.*

The activities of the Committee involved several other areas having substantial policy implications and importance. The Committee approved a broad policy statement which, it is hoped, will provide some guidance and consistency in the acquisition by the Government of a contractor's background rights under R&D contracts; developed a Federal Government-wide patent policy applicable to educational and nonprofit institutions which would permit retention of title to inventions developed under Federallysponsored grants and contracts by universities; suggested a Federal program for providing added incentives to Federal employeeinventors; and endorsed an "invention utilization questionnaire" to obtain information on the commercial use being made of inventions where the contractor retains title to inventions arising from Government-funded research.

The appended tables presenting the patent data collected from the Federal departments and agencies cover the current and five previous years. The questionnaire used to collect the data was revised to reflect the revisions of the 1971 Presidential Statement, and an additional breakdown on the licensing activities pertaining to patent applications is provided.

A list of statutes, regulations, orders, manuals, memorandums and materials governing the allocation of rights to inventions arising from Government-sponsored research is also appended. The listing identifies the office within each agency primarily responsible for patent data and copyright matters.

On August 8, 1978, the successor Committee on Intellectual Property and Information was requested to coordinate its new effort to arrive at an agreed recommendation for Government patent policy with the Domestic Policy Review of Industrial Innovation.

PART I_THE EVOLUTION AND DEVELOPMENT

OF FEDERAL PATENT POLICY

Background

Since World War II, the Federal Government has increasingly supported the overall R&D effort of the United States, and, at least initially, the patent policies of the Federal agencies were generally fashioned without any central guidance or overall coordination.

With the increase in the Federal Government's R&D effort, the individual Federal agencies reacted differently to the problem of allocating rights to resulting inventions. Some agencies, notably the Department of Defense, acquired royalty-free licenses to such inventions and permitted the contractor to obtain title, or exclusive commercial rights. Other agencies conducting research of interest to the private sector, such as the Department of Health, Education, and Welfare, decided to acquire full rights, title and interest to inventions developed under their R&D contracts. Finally, some agencies simply ignored the issue, which in effect permitted the contractors to obtain all rights to inventions.

As Congress became more concerned with rights to inventions, it enacted differing legislative policies for new R&D programs. In some instances, the Congress provided guidance for the entire R&D effort of an agency, while in others, for only a specified R&D program. Generally, the Congress required the Federal Government to take title to all inventions.

Prior to 1963, most arguments, positions, and proposed policy solutions supported Government-take-all or contractor-take-all. That is, some believed that the Government should always take title to all inventions resulting from R&D contracts, while others advocated that the Government should acquire only a license to use these inventions.

1963 Presidential Statement

On October 10, 1963, President John F. Kennedy issued the Presidential Memorandum and Statement of Government Patent Policy (F.R. Vol. 28, No. 200, October 12, 1963), which directed the Federal Council for Science and Technology to make a continuing effort to record, monitor and evaluate the effects of the Policy Statement, and stated that a Patent Advisory Panel should assist the Federal Council in these matters.

The 1963 Presidential Memorandum and Statement of Government Patent Policy was the first attempt of the Executive Branch to bring about more uniformity in Federal agency practices in the allocation of rights to inventions which resulted from Federally-sponsered R&D contracts. It applied to the R&D programs of all Federal agencies except those having specific statutory requirements. The policy attempted to identify certain contracting situations where the public interests would be served best either by title acquisition of invention rights by the Federal agency, acquisition of rights by the contractor, or deferring the disposition of rights until the invention was identified. The policy also specified exceptions to the general rules and provided public interest safeguards against the occurrence of undesirable results.

An unsuccessful attempt to obtain greater uniformity through legislative action occurred in 1965. The result of Congressional hearings on the then-proposed legislation was a Bill providing for a uniform Federal policy recommending substantially the same criteria set forth in the Kennedy Statement. No Congressional action was taken on the Bill after it was reported out of Committee.

1971 Presidential Statement

In late 1965, the Federal Council established the Committee on Government Patent Policy to assess how the Kennedy Statement had worked in practice, to acquire and analyze additional information which would reaffirm or support modification of the policy, and to identify principles underlining sound legislation in this area.

To fulfill its originating functions, the Committee supported a study by Harbridge House, Inc. This was the most extensive study ever conducted of Federal patent policy.

Following the issuance of the Harbridge House Study, (Volumes I-IV, Contract No. 7–35087, Superintendent of Documents, U.S. Printing Office, Washington, D.C. 20402), the Committee concluded that the 1963 Statement, with minor revisions, would satisfy the needs of the Government identified by the Study. Accordingly, legislation was not sought.

Instead, on August 23, 1971, President Richard M. Nixon issued a revised Statement (F.R. Vol. 66, No. 166, August 26, 1971) incorporating the modifications recommended by the Committee, which primarily increased the Federal agencies' flexibility under

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