ment of carefully worked out new patterns of action which include the application of recent experience in efforts to advance as well as preserve the public interest. The requirements for success in creating significant new patterns under which the currently required largescale organized efforts in science and technology can advance, as well as preserve the public interest, are much more difficult in the programs conducted by NASA than in previous more limited efforts. To succeed in the development and use of today's potential in aeronautical and space systems means that we must work in and advance the technologies in every area related to economic growth as well as national strength-new fields of energy use, very advanced electronics, sophisticated use of new materials, total systems engineering concepts, new ways to use the unique capabilities of highly trained men and women, and major new requirements for overall reliability.

The issue certainly includes assuring that the Government retain all the patent rights to which it is entitled, but it cannot be limited to that one factor alone. The issue is also how to stimulate inventiveness and innovation, how to spread our most pressing problems over the largest number of able minds, how to expand the Nation's resources in science, technology, engineering, and production, and how to put the results to work to the fullest possible extent in the mainstream of our national economy in ways that will yield the maximum results. This is a major area of predominant public interest. This is also an area of NASA responsibility under the Space Act of 1958.

As you know, ever since the enactment of the National Aeronautics and Space Act of 1958, which contained provisions dealing specifically with property rights in inventions, NASA has been among those at the center of the controversy regarding Government patent policy. This is understandable. Prior to the issuance of the President's statement on Federal patent policy in 1963, there was a great diversity of policy and practice among the several agencies engaged in research and development in allocating rights to inventions made under Government contracts. While these differing policies could be explained partially on historical grounds, in large part they resulted from each agency viewing the problem from its own vantage point, and in the context of its own statutory base as well as its missions and goals.

In enacting patent provisions for NASA in 1958, Congress chose a middle ground by coupling a title-taking provision with broad waiver authority and vested wide administration discretion in the Administrator, charging him with the following heavy responsibilities:

BASIC NASA AERONAUTICAL AND SPACE OBJECTIVES

I. The scientific measurement and understanding of the space environment. II. The development of a broad-based national capability for manned and unmanned operations in space and close cooperation with the Department of Defense and other agencies having current or potential needs related to such capabilities.

III. The development of the practical uses of space.

IV. Continued advancement in all areas of aeronautics in order to maintain world leadership in this field.

V. An adequate level of research and development to support other Government agencies with needs or interests in aeronautics and space.

VI. The bringing together of Government, industry, and university capabilities into an effective national system for meeting the needs of space exploration and use.

VII. The maintenance of a technological base in aeronautics and space adequate to meet all nonmilitary needs.

VIII. The strengthening and efficient utilization of the Nation's aeronautical and space-related resources in science, engineering, and technology.

IX. The maximum utilization of the scientific and technical results of the space effort for nonspace purposes.

X. The use of space for furthering international cooperation and understanding and for the good of all mankind.

In 1958, when those responsibilities were placed on a new agency yet to be formed, the successful flight of Sputnik I had burned into our national consciousness the fact that man had taken his first step toward the exploration of a completely new environment by means of a completely new technology-that of the utilization of an engine which could deliver its power in a vacuum-the rocket engine. We had become keenly aware that in the U.S.S.R., which accomplished this first step, new horizons were opened and there was a surge of national pride and accomplishment. We were aware that a new initiative and drive had been created that changed the posture of the Soviet society, widened its horizon, and vastly ennhanced its international image and capability for leadership.

We were also aware that in the free world the immediate effects were quite the opposite.

Down through the course of history, the mastery of a new environment, or of a major new technology, or of the combination of the two as we now see in space, has had profound effects on the future of nations, on their relative strength and security, on their relations with one another, and on their internal economic, social, and political affairs as well as on the concepts of reality held by their people. The National Aeronautics and Space Act of 1958, including its provision for the handling of proprietary rights and its requirement for the creation of national capabilities to retrieve our lost position of leadership, took into account the fact that, when a Nation masters a new environment and a new technology, history shows that it inevitably achieves an increase in power and position and that there also inevitably follows an adjustment in relationships among nations by negotiation, by cooperation, or by conflict. The 1958 act also took account of the historical knowledge that in such a situation important changes within national societies come about from actions taken to compete in the new environment and to develop and use the new technology. It was clearly seen that in the space age the interplay of new knowledge, new thought, increased resources and changed social relationships would inevitably require the United States to develop new and more effective patterns in the relationships between universities, industry, and the Government in the areas specifically related to science and technology. The patent and many other provisions of the act reflect this wise view of the requirements of the future.

The middle ground approach adopted with respect to the policy of the new agency, NASA, has been an important factor in permitting the development of all of the factors which have brought together a strong and vigorous aeronautical and space effort by those in the Nation best capable of making this effort-in universities, in industry, and in Government laboratories. As a result of the work of these past 6 years, we already have a broad base of scientific and technical knowledge about many of the basic factors of space and are entering

a period of rapidly expanding launch capability which we will use to achieve a far broader scientific and technical base and to gain wide experience in manned space flight. Our nine successful Saturn I test launches point to the operational use of the much greater booster power of the Saturn I-B by 1966 and to the use of the giant Saturn V booster by 1967.

By 1970, Mr. Chairman, we will be able to launch 6 of each of these large rockets per year, a total of 12 of the 2, putting up to 2 million pounds in orbit. That is the very large capability that is being created.

In the critical area of determining man's capabilities in space, Gemini operations with two-man crews, supported by a worldwide net of stations and recovery forces have already begun. Apollo opertions with three-man crews will begin in 1967 and will significantly extend the Gemini experience so that, by the time we undertake the first manned landing on the moon, the Gemini and Apollo programs will have provided thousands of man-hours of flight time.

In science, the measurements and knowledge acquired over the next few years will become increasingly valuable as they are used and refined. More sophisticated questions will be asked by scientists and more sophisticated spacecraft such as the Orbital Astronomical Observatory and the Surveyor, together with manned spacecraft, will be used to search for answers.

In communications and meteorology, the imminent operational use of satellite systems will answer many questions as to the current value of these systems and further research will answer many questions as to their potential for the future.

These activities will uncover new uses for space, force the solution of many emerging technical problems, and reveal others not now identified. This has been the way of all new areas of scientific and technical development and it will certainly be true in space. The creation of the effective relationships which have produced this increased national power rests on the proper combination, or merging, or articulation of a number of elements which, working together, have produced this forward thrust and, at the same time, have operated to protect the public interest with respect to the new inventions and new technologies arising in this rapid development period. The fact that NASA's research and development activities involve virtually every field of science and technology have made NASA policies a focal point for discussions which took place over a number of years and culminated in a set of Government-wide patent policy guidelines issued by President Kennedy in 1963.

In the fall of 1964, NASA revised and republished its patent regulations, including the standards which would govern the use of the Administrator's broad waiver authority. These 1964 revised regulations were based on the criteria and guidelines contained in the President's patent policy statement. This action was taken in accordance with the authority provided by the patent provisions of the Space Act, and was an appropriate and responsible action to take to meet agency responsibilities under policies established by the President. Undoubtedly, the most controversial portion of the Governmentwide patent policy established by President Kennedy in 1963 and of NASA's operations under this policy relates to the matter of advance

waiver, or the granting at the time of contracting of commercial rights to the contractor. Up to 1963, in all but a few cases NASA avoided settling the disposition of domestic commercial rights to inventions at the time of contracting because speed was necessary in getting its program underway and because it was concerned that the negotiations required would unduly delay the procurement process. Exceptions to this were made in the case of advanced waiver of foreign rights and the waiver back to the contractor of a royalty-free, nonexclusive, irrevocable license.

Experience has shown, however, that there are a number of situations where advance waivers serve both equity and the public interest. Such waivers serve to encourage reporting of inventive activity by contractors, since under our regulations an advance waiver is not effective with respect to an invention made under a contract unless the contractor submits promptly a full technical report of the invention. Also, the waiver is voided unless the contractor files a patent application within 8 months of reporting.

- NASA's success depends on rapid advances in technology and a full utilization without delay of each new advance made by any of its 20,000 prime and subcontractors. Therefore, effective reporting of inventions must be at all times an overriding consideration in the administration of its patent provisions. No factor can undermine our efficiency more than a system with inadequate incentives and penalties which operate on contractors to insure timely reports regarding inventions made during the course of research. Advance waivers are, when properly used, part of the NASA system to create positive incentives as well as penalties for contractors to make sure that their employees prepare and submit such reports. This requires more effort on the part of contractors than is often realized and, in some cases, requires a priority on the time of the very scientists and engineers who are most needed to push on with the project work. It is easy, in industry as in Government, to do the main project work and put off the documentation and reporting of innovations. The reality of the present situation is met better in the NASA system than in any other that we have been able to examine. Still, we must gain even further experience and make further improvements. This we are doing and the knowledge and feedback will be used to make refinements.

The Government's massive efforts in research and development, and the use of the skills and competence of industry and universities to accomplish much of it, have resulted in increased emphasis on cooperation between industry and Government, so that Government programs may benefit from the investment a contractor has made or is prepared to make in the buildup of his technical and scientific capabilities. Advance waiver, when appropriate, is also utilized to create a framework and pattern of stimulation from a crossflow of technical information and know-how between a contractor's scientists working on commercial applications and those working under a Government contract.

In view of the very broad base of NASA's research and development contracts, requiring advances in all fields of science and technology, a rigid compartmentation of Government contract work is highly undesirable. Cross-fertilization and a full use of previous commercial developments, particularly those which contribute to reliability, is of great value to the Government.

Under the provisions of the President's policy, which have been incorporated into NASA's new regulations, contractors are encouraged to put inventions made under Government contracts to work in nongovernmental fields without delay. In cases where a contractor retains commercial rights to an invention, he must develop and market the invention or license others to do so within 3 years of issuance of a patent. If he does not, the Government has the right to compel royalty-free licensing of the patent. The Government has the right in all cases to require the granting of licenses, either royalty free or on reasonable terms, "to the extent that the invention is required for public use by Government regulations or as may be necessary to fulfill health needs."

Mr. Chairman, that answers one of the questions addressed to Dr. Hornig with respect to inventions not visualized at the time of the making of a contract. There is this retained right-if new things show up which were not contemplated at the time of signing the contract, the Government still has the right to require the granting of licenses, either royalty free or on reasonable terms. So there is nothing that can happen after the contract is signed that gets into the area of public use or public regulation requirement that cannot be protected by Government action under these regulations.

Senator MCCLELLAN. Mr. Webb, let me ask you, then: Is this applicable only to NASA, what you have just described here, or is it true with respect to all Government agencies?

Mr. WEBB. I am speaking here only of our own regulations. Maybe Mr. Sohier can answer with respect to other agencies.

Mr. SOHIER. Mr. Chairman, this is contained in the President's patent policy, so it would apply to other Government agencies.

Senator MCCLELLAN. Then this is a proper interpretation of the President's patent policy directive?

Mr. SOHIER. Yes.

Senator MCCLELLAN. But it is also the practice of NASA, and has been?

Mr. SOHIER. Yes.

Senator MCCLELLAN. Is that true? Was this your policy prior to the President's directive?

Mr. WEBB. Well, we followed a slightly different policy, Mr. Chairman. We had the right to void the waiver of the patent to the contractor. And our policy then was to retain the Government's right by voiding the waiver, should public regulation require its use. Here we have fallen into line with the President's policy, which is to compel licensing, rather than to void the waiver. Under section. 1245.106 (c) (2) of the NASA Patent Waiver Regulations issued October 29, 1959 (24 Fed. Reg. 8788), which regulations were in effect from that date through September 27, 1964, all waivers granted were voidable at the option of the Administrator for failure to comply with: "Such special conditions applicable to the particular invention as may be required in the interests of the United States."

Senator MCCLELLAN. All right.

Mr. WEBB. Under this policy, in those fields which had been principally developed by the Government, the vital question of whether the waiver of exclusive rights would possibly confer upon the contractor a preferred or dominant position is carefully considered in