the Contractor or the Contractor's commercial licensees in the licensed fields.

"(2) With respect to:

"(i) any Subject Invention made by other than Technical Personnel;

"(ii) any Subject Invention conceived prior to, but first actually reduced to practice in the course of, any of the experimental, developmental, or research work specified in (a)(i) above; and

"(iii) the practice of any Subject Invention in foreign countries; the obligation of the Contractor to grant a license as provided in (b)(1) above, to convey title as provided in (d) (ii) (B) or (d)(iv) below, and to convey foreign rights as provided in (e) below, shall be limited to the extent of the Contractor's right to grant the same. without incurring any obligation to pay royalties or other compensation to others solely on account of said grant. Nothing. contained in this Patent Rights clause shall be deemed to grant any license under any invention other than a Subject Invention. "(c) The Contractor shall furnish to the Contracting Officer the following information and reports concerning Subject Inventions which reasonably appear to be patentable:

‘(i) a written disclosure promptly after conception or first actual reduction to practice of each such Invention together with a written statement specifying whether or not a United States. patent application claiming the Invention has been or will be filed by or on behalf of the Contractor;

"(ii) interim reports, at least every twelve months, commencing with the date of this contract, each listing all such Inventions. conceived or first actually reduced to practice more than three months prior to the date of the report, and not listed on a priorinterim report, or certifying that there are no such unreported Inventions; and

"(iii) prior to final settlement of this contract, a final report listing all such Inventions including all those previously listed in interim reports.

"(d) In connection with each Subject Invention referred to in (c)(i) above, the Contractor shall do the following:

"(i) if the Contractor specifies that a United States patent ap-. plication claiming such Invention will be filed, the Contractor shall file or cause to be filed such application in due form and time; however, if the Contractor, after having specified that such, an application would be filed, decides not to file or cause to be filed said application, the Contractor shall so notify the Contracting Officer at the earliest practicable date and in any event not later than eight months after first publication, public use or sale. "(ii) if the Contractor specifies that a United States patent ap-. plication claiming such Invention has not been filed and will not be filed (or having specified that such an application will be filed thereafter notifies the Contracting Officer to the contrary), the Contractor shall:

"(A) inform the Contracting Officer in writing at the earliest practicable date of any publication of such Invention made by or known to the Contractor or, where applicable,. of any contemplated publication by the Contractor, stating

the date and identity of such publication or contemplated publication; and

"(B) convey to the Government the Contractor's entire right, title, and interest in such Invention by delivering to the Contracting Officer upon written request such duly executed instruments (prepared by the Government) of assignment and application, and such other papers as are deemed necessary to vest in the Government the Contractor's right, title, and interest aforesaid, and the right to apply for and prosecute patent applications covering such Invention throughout the world, subject, however, to the right of the Contractor specified in (e) below to file foreign applications, and subject further to the reservation of a nonexclusive and royalty-free license to the Contractor (and to its existing and future associated and affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable to the successor of that part of the Contractor's business to which such Invention pertains;

"(iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of attorney to inspect and make copies of each United States patent application filed by or on behalf of the Contractor covering any such Invention; "(iv) in the event the Contractor, or those other than the Government deriving rights from the Contractor, elects not to continue prosecution of any such United States patent application filed by or on behalf of the Contractor, the Contractor shall so notify the Contracting Officer not less than sixty days before the expiration of the response period and, upon written request, deliver to the Contracting Officer such duly executed instruments (prepared by the Government) as are deemed necessary to vest in the Government the Contractor's entire right, title, and interest in such invention and the application, subject to the reservation as specified in (d) (ii) above; and

"(v) the Contractor shall deliver to the Contracting Officer duly executed instruments fully confirmatory of any license rights herein agreed to be granted to the Government.

"(e) The Contractor, or those other than the Government deriving rights from the Contractor, shall have the exclusive rights to file applications on Subject Inventions in each foreign country within:

"(i) nine months from the date a corresponding United States application is filed;

66

(ii) six months from the date permission is granted to file foreign applications where such filing had been prohibited for security reasons;

"(iii) such longer period as may be approved by the Contracting Officer. The Contractor shall, upon written request of the Contracting Officer, convey to the Government the Contractor's entire right, title, and interest in each Subject Invention in each foreign country in which an application has not been filed within the time above specified, subject to the reservation of a nonexclusive and royalty-free license to the Contractor together with the right of the Contractor to grant sublicenses, which license and

right shall be assignable to the successor of that part of the Contractor's business to which the Subject Invention pertains. "(f) If the Contractor fails to deliver to the Contracting Officer the interim reports required by (c) (ii) above, or fails to furnish the written disclosures for all Subject Inventions required by (c) (i) above shown to be due in accordance with any interim report delivered under (c)(ii) or otherwise known to be unreported, there shall be withheld from payment until the Contractor shall have corrected such failures either ten percent (10%) of the amount of this contract, as from time to time amended, or five thousand dollars ($5,000), whichever is less. After payment of eighty percent (80%) of the amount of this contract, as from time to time amended, payment shall be withheld until a reserve of either ten percent (10%) of such amount, or five thousand dollars ($5,000), whichever is less, shall have been set aside, such reserve or balance thereof to be retained until the Contractor shall have furnished to the Contracting Officer:

"(i) the final report required by (c)(iii) above;

"(ii) written disclosures for all Subject Inventions required by (c) (i) above which are shown to be due in accordance with interim reports delivered under (c) (ii) above or in accordance with such final reports or are otherwise known to be unreported; and

"(iii) the information as to any subcontractor required by (h) below. The maximum amount which may be withheld under this paragraph (f) shall not exceed ten percent (10%) of the amount of this contract or five thousand dollars ($5,000), whichever is less, and no amount shall be withheld under this paragraph (f) when the amount specified by this paragraph (f) is being withheld under other provisions of this contract. The withholding of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. This paragraph (f) shall not be construed as requiring the Contractor to withhold any amounts from a subcontractor to enforce compliance with the patent provisions of a subcontract.

"(g) The Contractor shall exert all reasonable effort in negotiating for the inclusion of this Patent Rights clause in any subcontract hereunder of three thousand dollars ($3,000) or more having experimental, developmental, or research work as one of its purposes. In the event of refusal by a subcontractor to accept the Patent Rights clause, the Contractor shall not proceed with the subcontract without written authorization of the Contracting Officer, and upon obtaining such authorization, shall cooperate with the Government in the negotiation with such subcontractor of an acceptable patent rights clause; provided, however, that the Contractor shall in any event require the subcontractor to grant to the Government patent rights under Subject Inventions of no less scope and on no less favorable terms than those which the Contractor has under such subcontracts, except that in no event shall the subcontractor be required to grant to the Government patent rights in excess of those herein agreed to be granted to the Government by the Contractor.

"(h) The Contractor shall, at the earliest practicable date, notify the Contracting Officer in writing of any subcontract containing a patent rights clause, furnish the Contracting Officer a copy of such clause, and notify the Contracting Officer when such subcontract is

fox the 1 Hit on the GroveInnent With Fespect to Subger“ Inventions, The Contia ton shall not he obligated to enforce the a trements of

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vill (or above a suitabık patuni în his claire froin a qualified

lad. The Contractat itself does not have available facilities of qualiPound The Contractors delivery dates shall be extended for a

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payment of compensation to others, the right to repa discloss, for pozimentul purposes, including the relat foreign pukumments for ther use as the national mater United States may demand, all or any part of the report. di blueprmis, data, and technical information specified to be dea by the Contractor to the Government under this contra f, however, that nothing contained in this paragraph shall be dece directly or by implication, to grant any license under any paccia of hercaiter issued or to grant any right to reproduce anything called for by this contract,"

f

Add the following Clause 40 entitled "Priorities, Allocatiche and

༤་་་་་་་།།V

"PRIORITIES, ALLOCATIONS AND ALLOTMENTS

"The Contractor agrees in the procurement and use of materials required for the performance of this contract, to comply with the provmons of all applicable rules and regulations of the Business and Deleme Services Administration, including Defense Materials System

regulations."

ADDITIONAL ALTERATIONS IN CONTRACT (10--57)

(General Provisions---NavExos-3302 (6-54) and Alterations in Continct (556)- Cost-Reimbursement Type Contract for Experimental, Developmental or Research Work)

The following additional alterations have been made in the provisions of this contract: