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furnish copies of any relevant documents as requested; and

(vi) Provide the Agency with a copy of the patent within 2 months after a patent issues on the application.

(3) For each Subject Invention in which the Institution initially elects not to retain rights or requests an extension of the elec tion period, the Institution shall inform the Agency promptly in writing of the date and identity of any on sale, public use, or publi. cation of the invention which may constitute a statutory bar under 35 U.S.C. 102, which was authorized by or known to the Institution or any contemplated action of this nature.

(g) Filing of foreign patent applications. (1) With respect to each Subject Invention in which the Institution elects to retain principal rights in a foreign country pursuant to paragraph (c)1) of this Agreement, the Institution shall have a patent application filed on the invention in that country, in accordance with applicable statutes and regulations, and within one of the following periods:

(1) Eight months from the date of a corresponding United States application filed by or on behalf of the Institution, or if such an application is not filed, 6 months from the date the invention is submitted in a disclosure pursuant to paragraph (ex1) of this Agreement;

(1) Six months from the date a license is grated by the Commissioner of Patents and Trademarks to file foreign applications when such filing has been previously prohibited by security reasons; or

(1) Such longer periods as may be approved by the Agency.

(2) The Institution shall notify the Agency of foreign applications filed and, upon request, shall furnish an English version of the application without additional compensation.

(h) Subcontracts. (1) The Institution shall include the following clause in any subcontract where a purpose of that subcontract is the conduct of experimental, developmental, or research work, except when the subcontractor holds an Institutional Patent Agreement with the Agency or the subcontractor refuses as provided in (2) of this paragraph (h).

PATENTS RIGHTS

(a) The Contractor hereby agrees to furnish a complete technical disclosure to the (Institution) within six months after any invention is conceived or first actually reduced to practice in the course of or under this contract (hereinafter referred to as "Subject Invention(s)") and, subject to (b), below, to assign all right, title, and interest in and to such invention to (Institution) or its designee. (b) At the time the Contractor reports any "Subject Invention" to (Institu

tion) the Contractor, at its option, may also report the invention to the Agency with which the Institution holds the prime contract and request the Agency to determine whether and on what terms the Contractor may retain principal rights in the invention in lieu of assigning it to (Institu

tion). Such determinations by the Agency shall be in accordance with the policies and procedures of 41 CFR 1-9.109-6 and/or applicable Agency regulations. Such determinations shall be final on both the Contractor and , (Institution), Provided, That the Contractor may elect not to accept the Agency determination and instead

RULES AND REGULATIONS

assign all right, title, and interest in the invention to (Institution) or its designee.

(c) In addition, the Contractor agrees to furnish the following materials, disclosures and reports:

(1) Upon request, such duly executed instruments (prepared by the (Institution) or its designee) and such other papers as are deemed necessary to vest in the (Institution) or its designee

the rights granted under this clause and to enable the (Institution) or its designee to apply for and prosecute any patent application, in any country, covering such invention.

(1) A final report, prior to final settlement of this contract, listing all Subject Inventions or certifying that no inventions were conceived or first actually reduced to practice under the contract.

(d) The Contractor shall include in any subcontract a clause identical to this clause, If a purpose of the subcontract is experimental, developmental, or research work. If a Subcontractor refuses to accept this clause or if, in the opinion of the Contractor. this clause is inconsistent with the policy set forth in 41 CFR 1-9.107-3, the Contractor (1) shall promptly notify the Institution and (ii) shall not proceed with the subcontract without the written authoriza tion of the Institution. It is understood that the Institution will seek direction from the (insert name of appropriate Agency).

(e) The contractor shall not be obligated to enforce the agreements of any Subcontractor hereunder relating to the obligations of the Subcontractor to the Government in regard to Subject Inventions.

[End of Clause)

(2) In the event of a refusal by a subcontractor to accept the clause specified in (hx1) of this agreement, or if, in the opinion of the Institution, this clause is inconsistent with the policy set forth in 41 CFR 19.107-3, the Institution (1) shall promptly submit a written notice to the Agency setting forth reasons for the subcontractor's refusal and other pertinent information which may expedite disposition of the matter, and (ii) shall not proceed with the subcontract without the written authorization of the Agency.

(3) It is understood that the Government is a third party beneficiary of any subcontract clause granting rights to the Government in Subject Inventions, and the Institu tion hereby assigns to the Government all rights that it would have to enforce the subcontractor's obligations for the benefit of the Government with respect to Subject Inventions. The Institution shall not be obligated to enforce the agreements of any subcontractor hereunder relating to the obligations of the subcontractor to the Government in regard to Subject Inventions.

(4) Nothing in this Agreement is intended to preclude the Institution from granting a subcontractor rights or an option to rights in any inventions made by the subcontractor to the extent such rights are consistent with the provisions of this Agreement.

(1) Administration of inventions in which the Institution elects to retain rights. (1) The Institution shall administer those SubJect Inventions to which it elects to retain title in the public interest and shall, except as provided in subsection (2), below, make them available through licensing on a nonexclusive, royalty-free, or reasonable royalty basis to all qualified applicants.

(2) The Institution may license a Subject Invention on an exclusive basis if it deter mines that an exclusive license is required in the public interest because (A) It is necessary as an incentive for development of the invention or (B) market conditions are such as to require licensing on an exclusive basis in order to bring the invention to the point of practical application. Any exclusive li cense issued by the Institution under a US patent or patent application shall be for a limited period of time and such period shall not, unless otherwise approved by the Agency, exceed 5 years from the date of the first commercial sale or use in the United States of America of a product or process embodying the invention, or 8 years from the date of the exclusive license excepting that time before regulatory agencies necessary to obtain premarket clearance, whichever occurs first. Such license shall also provide that the licensee shall use all reasonable effort to effect introduction into the commercial market as soon as practicable, consistent with sound and reasonable business practices and judgment. Any extension of the maximum period of exclusivity shall be subject to approval of the Agency. Upon expiration of the period of exclusivity or any extension thereof, licenses shall be offered to all qualified applicants at a reasonable royalty rate not in excess of the exclusive license royalty rate.

(3) Royalties shall not normally be in excess of accepted trade practice.

(4) The Institution agrees to refund any amounts received as royalty charges on any Subject Invention in procurements for or on behalf of the Government and to provide for that refund in any instrument transferring rights to any party in the invention.

(5) The balance of the royalty income after payment of expenses, including payments to inventors, incidental to the administration of all inventions assigned to it pursuant to the provisions of this Agreement shall be utilized for the support of educa tion or research.

(6) All licenses issued by the Institution to parties, other than the Government of the United States, under any patent application or patent on a Subject Invention shall be made expressly subject to the conditions of this Agreement. The Institution shall, upon request, promptly furnish copies of any l cense agreements to the Agency.

(1) Patent Management Organizations The Institution shall not assign any Subject Invention to parties other than the Agency, except that, it may make such an assignment to the following patent management organizations(7) or any

other patent management organization if subsequently approved by the Agency. Any assignment to a patent management organization shall be made subject specifically to all the terms and conditions of this Agreement.

(k) Reports on Development and Commer cial Use. The Institution shall provide a written annual report to the Agency on or before December 31st of each year covering the preceding year ending September 30th, regarding the status of development and commercial use that is being made or intended to be made of each Subject Invention left for administration to the Institution and the steps that have been taken by the Institution to bring the invention to the point of practical application. (8) Such reports shall include information regarding the status of development, date of first com. mercial sale or use, gross royalties received

FEDERAL REGISTER, VOL 43, NO. 23-THURSDAY, FEBRUARY 2, 1978

by the Institution, and such other data and Information as the Agency may reasonably specify. To the extent data or information supplied to this section is considered by a licensee to be privileged or confidential and is so marked, the Agency agrees that, to the extent permitted by law, it will not disclose such information to persons outside the Government.

(1) Reporting of Policy and Administrative Changes. The Institution shall promptly notify the Agency of any significant changes in the information submitted by it in support of its request for an Institutional Patent Agreement; particularly, changes in Its patent policies or its administrative capabilities.

(m) Termination. This Agreement may be terminated by either party upon 30 days written notice. Disposition of rights in and administration of inventions made under contracta subject to this Agreement will not be affected by such a termination; except that, in the event the Government terminates this Agreement because of a failure or refusal by the Institution to comply with any of its obligations under sections (ex1), (D.), and () of this Agreement, the Agency has the right to require that the Institution's entire right, title, and interest in and to the particular invention with respect to which the breach occurred be assigned to the United States of America, as represented by the Agency.

(n) Communications (9) Requests for Agency approvals, extensions, or similar actions and other correspondence required by this Agreement should be addressed to

Except where specifically provided otherwise in this Agreement, the or his designee shall act as the point of authority within the Agency to grant such approvals, extensions, or take such other Agency actions as may be authorized in this Agreement.

In witness whereof, each of the parties hereto has executed this Agreement as of the day and year below.

UNITED STATES OF AMERICA

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RULES AND REGULATIONS

It is understood and agreed that this document does not preclude the Government from asserting rights under the provisions of said Agreement or of any other agreement between the Government and the Contractor, or any other rights of the Gov. ernment with respect to the above-identifled invention.

The Government is hereby granted an irrevocable power to inspect and make copies of the above-identified patent application. Signed this day of, 19-.

(Institution)

(Signature)

(Print or type name)

(Official title)

(End of Agreement)

(1) Insert name of Agency. (2) Insert reference to Institution's official policy statements.

(3) Some agencies may wish to have the agreement apply to all Subject Inventions reported after the execution of the agreement, even where the contract was entered into prior to the agreement. In such cases, the following language may be substituted:

"This Agreement defines the rights of the parties hereto regarding the allocation of rights in Subject Inventions reported after the execution of the Agreement, including contracts entered into prior to this Agree ment, except such contracts as may be spe cifically excluded by the Agency."

Agencies using this language which wish to exclude any current contracts from the agreement should add a statement such as the following:

"This Agreement shall not apply to the following contracts:..."

(4) The bracketed language may be deleted but normally it is expected that Institutional Patent Agreements will apply to grants as well as contracts.

(5) Agencies may specify a form.

(6) Agencies may find it useful to include more detailed instructions here on the format of these reports and the persons to whom they should be supplied. The exact clause may have to be varied according to the agency's normal contract close-out procedures.

(7) If none are to be used, insert "none." (8) Different dates may be substituted depending on the Agency's needs.

(9) Insert applicable addresses and officers.

(10) in accordance with Section (d1) of the Agreement, if the Agency has determined that a license for State and domestic municipal governments will not be obtained, the following should be added to the Confir matory Instrument:

"The license granted to the Government does not include State and domestic municipal governments."

Section 1-9.109-7 is added as follows:

81-9.109-7 Negotiation of institutional patent agreements.

(a) Information to be submitted by nonprofit organization. A nonprofit organization desiring to enter into an

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Institutional Patent Agreement with an agency shall be required to provide the agency with the following information:

(1) General information concerning the organization including:

(1) A copy of the organization's Articles of Incorporation;

(11) A statement of the organization's purpose and aims; and

(iii) A statement indicating the source of the organization's funds;

(2) A copy of the organization's established patent policy, together with the date and manner of its adoption;

(3) The name, title, address, and telephone number of the officer responsible for administration of patent and invention matters and a description of staffing in this area, including all offices which contribute to the organization's patent management capabilities;

(4) A description of the organization's procedures for (A) identifying and reporting inventions and (B) for the evaluation of such inventions for inclusion in the organization's promotional program;

(5) A copy of the agreement signed by employees engaged in research and development, indicating their obligation with regard to inventions conceived or for the first time reduced to practice in the course of their assigned duties;

(6) A copy of the invention report form or outline utilized for preparation of invention reports;

(7) A statement indicating whether the organization has an agreement with any patent management organizations or consultants and a copy of any such agreements;

(8) A description of the plans and intentions of the organization to bring inventions to the market place to which it retains title, including a description of the efforts typically undertaken by the organization to license its inventions;

(9) A description of the organization's past patent application and patent licensing activities, including the following:

(1) Number of inventions reported to the organization during each of the past 5 years;

(i) Number of patent applications filed during each of the past 5 years; (iii) Number of patents obtained during each of the past 5 years;

(iv) Number of exclusive licenses issued during each of the past 5 years; (v) Number of nonexclusive licenses, other than those to sponsoring Federal agencies, issued during each of the past 5 years;

(vi) Gross royalty income during each of the past 5 years;

(vii) A general description of royalties charged, including minimum and maximum royalty rates;

(10) A list of subsidiary or affiliate organizations, which would be covered

FEDERAL REGISTER, VOL. 43, NO. 23-THURSDAY, FEBRUARY 2, 1978

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by an agreement signed by the organization;

(11) If the organization is a subsidiary or affiliate organization, the name of the other organization and a description of the relationship;

(12) The amount of support from each Federal agency for research and development activities currently being administered by the organization;

(13) A statement of the organization's policies with respect to the sharing of royalties with employees; and

(14) A description of the uses made of any net income generated by the organization's patent management program.

(b) Criteria for evaluation of a technology transfer program. Before an Institutional Patent Agreement is entered into with a nonprofit organization, the organization shall have a technology transfer program which, as a minimum, shall include:

(1) An established patent policy which is consistent with the policy in 81-9.107-3 and is administered on a continuous basis by an officer or an organization responsible to the organization;

(2) Agreements with employees requiring them to assign to the organization, its designee, or the Government any invention conceived or first actually reduced to practice in the course of or under Government contracts or assurance that such agreements will be obtained from employees prior to the assignment of employees to Government-supported research and development projects;

(3) Procedures for prompt Invention identification and timely disclosure to the officer or organization administering the patent policy of the institution;

(4) Procedures for invention evaluation; and

(5) An active and effective promotional program for the licensing and marketing of inventions.

(c) Federal Coordinating Council for Science, Engineering, and Technology List A list of organizations that have technology transfer programs meeting the critieria set forth in § 1-9.109-7(b), prepared by a subcommittee of the Committee on Intellectual Property and Information of the Federal Coordinating Council for Science, Engineering, and Technology, may be used in lieu of individual agency determinations of eligibility for Institutional Patent Agreements. However, the inclusion of an organization on the list will not preclude the agency from declining an application for an Institutional Patent Agreement. It is also expected that the list may be used by some agencies in connection with greater rights determinations or requests for the inclusion of clauses in contracts giving the nonprofit organization the first option to principal

RULES AND REGULATIONS

rights in inventions made under the contract.

(Sec. 205(e), 63 Stat. 390; 40 U.S.C. 486(c).)

NOTE-The General Services Administration has determined that this document does not contain a major proposal requiring preparation of an Inflationary impact Statement under Executive Order 11821 and OMB Circular A-107.

Dated: January 20, 1978.

JAY SOLOMON, Administrator of General Services.

(FR Doc. 78-2874 Filed 2-1-78; 8:45 am)

FEDERAL REGISTER, VOL. 43, NO. 23-THURSDAY, FEBRUARY 2, 1978

RULES AND REGULATIONS

[6820-24]

Title 41-Public Contracts and
Property Management

CHAPTER 1-FEDERAL
PROCUREMENT REGULATIONS

[FPR Amdt. 187]

PART 1-9-PATENTS, DATA, AND
COPYRIGHTS

Patents; Change of Effective Date

AGENCY: General Services Adminis-
tration.

ACTION: Final rule: Change of effec-
tive date.

SUMMARY: The effective date of the
Federal Procurement Regulations
(FPR) Amendment 187 is changed
from March 20, 1978, to July 18, 1978.
FPR Amendment 187 was issued Janu-
ary 20, 1978, and was published in the
FEDERAL REGISTER (43 FR 4424, Febru-
ary 2, 1978). The change of the effec-
tive date for the amendment is based
on a request of the Administrator,
Office of Federal Procurement Policy.
DATES: effective date of this docu-
ment: April 11, 1978; Revised effective
date for FPR Amendment 187: July
18, 1978.

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association of american
medical colleges

June 22, 1978

Mr. Gerry Sturges

c/o Senator Gaylord Nelson

Russell Senate Office Building
Washington, D.C. 20510

Dear Gerry:

It was a real pleasure to see you again on Saturday evening. I particularly enjoyed talking with you about Institutional Patent Agreements. As I told you sometime ago, we received from NIH a sampling of university patent licensing programs which we were asked to assess in terms of their value to society. We had considerable difficulty arriving at a mechanism for assessing "social value", nevertheless we thought the exercise might have some merit. Accordingly, on April 25, 1978, we sent out the attached list of patents to approximately 20 of our constitutents who might be reasonably knowledgeable in the areas covered. Enclosed is a copy of the memorandum which was sent to these scientists of whom approximately 15 responded. Most of the scientists were unfamiliar with many of the patents; however, we were able to get some rating of almost all of the patents on our list. We used a four interval scale with 0 being "no value" and 3, "great value".

The results have now been tabulated and may be interesting to you. If you would be interested I can summarize this information in some form that might be useful to you or the Committee. In summary, however, it appears that most of the patents which have been reduced to successful application are of "moderate" value regardless of how much money has been invested in their development.

I am also enclosing a copy of our recent Supreme Court Amicus Curiae brief in the case of Chrysler vs. Brown. Joe Keyes thought it might be of interest to you because it deals with the confidentiality issue and specifically with exemption B (4) of the Freedom of Information Act. Also, at John Sherman's urging, I am enclosing a copy of a recent AAMC staff position paper on the problems facing the peer review system at NIH. You will note that the Privacy Act may have apparently added the "final overload to the system", in that investigators are using the Privacy Act to obtain confidential reviews ("pink sheets") prior to completion of action on their grant request.

John, Joe and I would be pleased to talk with you further about this or related issues and will follow with interest the progress of your IPA hearings.

Sincerely,

Thomas E. Morgan, M.D.
Director, Division of
Biomedical Research

Suite 200/One Dupont Circle, N.W./Washington, D.C. 20036/(202) 466-5100

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