invention in the Government employee, subject to law.

a

(d) In any case wherein the Government neither (1) obtains the entire domestic right, title and interest in and to an invention pursuant to the provisions of paragraph (a) of this section, nor (2) reserves nonexclusive, irrevocable, royalty-free license in the invention, with power to grant licenses for all governmental purposes, pursuant to the provisions of paragraph (b) of this section, the Government shall leave the entire right, title and interest in and to the invention in the Government employee, subject to law.

[27 F.R. 7986, Aug. 10, 1962, as amended at 31 F.R. 12842, Nov. 1, 1966]

§ 7.4 Option to acquire foreign rights.

In any case where it is determined that all domestic rights should be assigned to the Government, it shall further be determined, pursuant to Executive Order 9865 and Government-wide regulations issued thereunder, that the Government shall reserve an option to require the assignment of such rights in all or in any specified foreign countries. In case where the inventor is not required to assign the patent rights in any foreign country or countries to the Government or the Government fails to exercise its option within such period of time as may be provided by regulations issued by the Commissioner of Patents, any application for a patent which may be filed in such country or countries by the inventor or his assignee shall nevertheless be subject to a nonexclusive, irrevocable, royalty-free license to the Government for all governmental purposes, including the power to issue sublicenses for use in behalf of the Government and/or in furtherance of the foreign policies of the Government.

§ 7.7 Notice to employee of determination.

The employee-inventor shall be notified in writing of the Department's determination of the rights to his invention and of his right of appeal, if any. Notice need not be given if the employee stated in writing that he would agree to the determination of ownership which was in fact made.

[31 F.R. 12842, Oct. 1, 1966]

An employee who is aggrieved by a determination of the Department may appeal to the Commissioner of Patents, pursuant to section 4(d) of Executive Order 10096, as amended by Executive Order 10930, and regulations issued thereunder, by filing a written appeal with the Commissioner, in duplicate, and a copy of the appeal with the Assistant Secretary (Health and Scientific Affairs), within 30 days (or such longer period as the Commissioner may, for good cause, fix in any case) after receiving written notice of such determination.

[27 F.R. 7986, Aug. 10, 1962, as amended at 31 F.R. 12842, Oct. 1, 1966]

(b) The Department, as a matter of policy, takes the position that the results of research supported by grants of public moneys should be utilized in the manner which would best serve the public interest. It is believed that the public interest will in general be best served if inventive advances resulting therefrom are made freely available to the Government, to science, to industry, and to the general public.

(c) On the other hand, in some cases it may be advisable to permit a utilization of the patent process in order to foster an adequate commercial development to make a new invention widely available. Moreover, it is recognized that inventions frequently arise in the course of research activities which also receive substantial support from other sources, as well as from the Federal grant. It would not be consistent with the cooperative nature of such activities to attribute a particular invention primarily to support received from any one source. In all these cases the Department has a responsibility to see that the public use of the fruits of the research I will not be unduly restricted or denied.

(d) The following conditions have been adopted to govern the treatment of inventions made in these various types of situations. They are designed to afford suitable protection to the public interest while giving appropriate recognition to the legitimate interests of others who have contributed to the invention. § 8.1

Conditions to be included in research grants.

Subject to legislative directives or Executive orders providing otherwise, all grants in aid of research shall provide as a condition that any invention arising out of the activities assisted by the grant shall be promptly and fully reported, and shall provide either

(a) That the ownership and manner of disposition of all rights in and to such invention shall be subject to determination by the Assistant Secretary (Health and Scientific Affairs) or

(b) That the ownership and disposition of all domestic rights shall be left for determination by the grantee institution in accordance with the grantee's established policies and procedures, with such modifications as may be agreed upon and specified in the grant, provided the Assistant Secretary (Health and Scientific Affairs) finds that these are such as to assure that the invention

will be made available without unreasonable restrictions or excessive royalties, and provided the Government shall receive a royalty-free license, with a right to issue sublicenses as provided in § 8.3, under any patent applied for or obtained upon the invention.

(c) Wherever practicable, any arrangement with the grantee pursuant to paragraph (b) of this section shall provide in accordance with Executive Order 9865 that there be reserved to the Government an option, for a period to be prescribed, to file foreign patent applications upon the invention.

[20 F.R. 6749, Sept. 14, 1965, as amended at 31 F.R. 12342, Oct. 1, 1966]

Rights in any invention not subject to disposition by the grantee pursuant to § 8.1(b) are for determination by the Assistant Secretary (Health and Scientific Affairs) as follows:

(a) If he finds that there is adequate assurance that the invention will either be effectively dedicated to the public, or that any patent which may be obtained thereunder will be generally available for royalty-free and nonexclusive licensing, the effectuation of these results may be left to the grantee.

(b) If he finds that the invention will thereby be more adequately and quickly developed for widest use and that there are satisfactory safeguards against unreasonable royalties and repressive practices, the invention may be assigned to a competent organization for development and administration for the term of the patent or such lesser period as may be deemed necessary.

(c) If he finds that the interest of another contributing Government agency is paramount to the interest of the Department of Health, Education, and Welfare, or when otherwise legally required or in the public interest, the invention may be left for disposition by that agency in accordance with its own policy.

(d) In all other cases, he shall require that all domestic rights in the invention shall be assigned to the United States unless he determines that the invention is of such doubtful importance or the Government's equity in the invention is so minor that protective measures, except as provided in § 8.3, are not necessary in the public interest.

[20 F.R. 6749, Sept. 14, 1965, as amended at 31 F.R. 12842, Oct. 1, 1966]

§ 8.3

Licenses to the Government. Any arrangement or determination as to the disposition of rights in inventions pursuant to §§ 8.1, 8.2, 8.5 or 8.6 shall require that there be reserved under any patent application or patent thereon, domestic or foreign, a nonexclusive, irrevocable, royalty-free license to the Government with power to sublicense for all governmental purposes. [22 F.R. 9696, Dec. 4, 1957]

§ 8.4 Option to acquire foreign rights.

In any case where it is determined that all domestic rights should be assigned to the Government, there shall be reserved to the Government, pursuant to Executive Order 9865 (3 CFR, 1943-1948 Comp.) and Government-wide regulations issued thereunder, an option to require the assignment of all rights in the invention in all or in any specified foreign countries. In any case where the inventor is not required to assign the patent rights in any foreign country or countries to the Government, or the Government fails to exercise its option within such period of time as may be provided by regulations issued by the Chairman of the Government Patents Board any application for a patent which may be filed in such country or countries by the inventor or his assignee shall nevertheless be subject to a nonexclusive, irrevocable, royalty-free license to the Government for all governmental purposes, including the power to sublicense for all governmental purposes. § 8.5 Fellowships.

In the discretion of the Assistant Secretary (Health and Scientific Affairs), the award of a fellowship to a person not a Government employee may provide for the reporting of any invention made during the term thereof, and for its disposition in accordance with the provisions of § 8.1 (a) or for its disposition by the institution at which the research was performed in accordance with its established policies, if applicable to such an invention, which meet the requirements of paragraph (b) of such section.

[22 F.R. 9695, Dec. 4, 1957, as amended at 31 F.R. 12842, Oct. 1, 1966]

§ 8.6 Contracts for research.

(a) Contracts for research, with other than nonprofit institutions, shall provide that any invention first conceived or actually reduced to practice in the course

It is the policy of the Department to permit its operating agencies to allow duly qualified individuals, students, and graduates of institutions of learning in the several States, Territories, as well as the District of Columbia, to use the study and research facilities of the Department subject to rules and restrictions set forth in this part and as may be implemented. Nothing in this part shall restrict the existing authority of any operating agency such as section 301(b) of the Public Health Service Act.

§ 9.3 Rules and restrictions.

(a) Prior to the use of this authority each agency head must determine that it would be consistent with the programs of that agency for the agency to participate in this program and that agency facilities should be made available for the use of students and other authorized individuals. Facilities may be made available provided the use of such facilities will be of direct benefit to the educational objectives of students and other authorized individuals with the prospect of fruitful interchange of ideas and information between agency personnel and students, and such use will not interfere with agency programs.

(b) The official in charge of any Department research or study facility will not permit such use of the facility until he determines:

(1) That appropriate space and facilities are available.

(2) That the equipment is on hand and supplies required to carry on the study can be made available.

(3) That the proposed studies or research will not interfere with regular Department functions, nor require the subsequent acquisition of additional equipment, and

(4) That the proposed studies or research will have general value in a field of concern to the Department.

(c) No Department funds will be used to pay for direct support of such studies or research, other than replenishment of supplies and materials and administrative and other costs related to the maintenance and use of the space and facilities.

(d) No Department funds will be used to pay the salary costs of the research or studies or the cost of direct supervision for such studies or research, but the Department shall reserve the right in all instances to control the character and extent of studies and research where safety is involved or the public interest or Department programs are in any way affected.

(e) Operating agencies permitting students and others the use of facilities for the purpose stated in this part shall require each student or other individual to agree that the results of such research and study including any copyrightable material or patentable inventions resulting from the use of or access to the study and research facilities shall be dedicated to the Public and shall become a part of the public domain, except as otherwise authorized in accordance with Department policies and procedures.

(f) Proper safeguards for Government property will be instituted including arrangements for replacement of Government property damaged or lost by a student or other authorized individual.

(g) Each student and other authorized individual will be expected to use the facilities and equipment with customary care and otherwise conduct himself in such manner as to complete his studies within any time limits prescribed.

(h) Each student and other individual authorized to use Government facilities for study purposes may not be authorized to sign requisitions for supplies and equipment.

This part establishes a Departmental Fellowship Review Panel, from which Departmental Fellowship Review Boards will be selected, for the purpose of providing hearings where an opportunity for such hearing is provided for in applicable procedures of a constituent

agency, in cases where such constituent agency has found substantial reason for a belief that a fellowship (or traineeship) award should be denied or discontinued by the constituent agency making the award, on grounds involving, in accordance with applicable criteria, the moral character or loyalty of the applicant for, or holder of, the award. § 10.2

Definitions.

(a) "Departmental Fellowship Review Panel" (also referred to as "Panel") means a panel of 12 members selected by the Secretary, for such terms as may be designated by him, which shall include at least four representatives of the legal discipline and at least four representatives of the field of higher education. At least eight members of the Panel shall be selected from sources outside the Department.

(b) "Panel Chairman" means one of the Panel members designated by the Secretary to serve as Chairman of the Panel for such time as shall be indicated in the designation.

(c) "Departmental Fellowship Review Board" (also referred to as "Board") means not less than three members of the Panel designated by the Panel Chairman for the consideration of one or more cases submitted by a constituent agency. At least two Board members shall be persons other than employees of the Department, and the Board shall include at least one representative of the legal discipline and one from the field of higher education. In no event shall anyone who participated in any previous consideration of a case be eligible to serve on a board in connection with its consideration of that case. The Panel Chairman may designate himself as one of the members of a Board or as the Chairman thereof.

(d) "Board Chairman" means a member of a Departmental Fellowship Review Board who has been designated as Chairman of such Board by the Panel Chairman.

(e) "Constituent agency" means the U.S. Commissioner of Education or the

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Commissioner of Vocational Rehabilita

tion.

(f) "Submission by a constituent agency" means a referral (of an individual's request for a hearing) by the U.S. Commissioner of Education pursuant to § 147.5 of this title or by the Commissioner of Vocational Rehabilitation pursuant to § 401.88a of this title, or similar provisions contained in manual or other issuances of a constituent agency.

(g) "Preliminary decision" means the recommended decision, including findings of fact and conclusions reached in the light of the applicable criteria, prepared by a Hearing Officer and submitted to the Board.

(h) "Initial decision" means the recommended decision of the Board, which shall include (1) findings of fact and conclusions reached in the light of the applicable criteria and, when applicable, (2) the reasons for any changes or modifications made by the Board in a preliminary decision.

(i) The words "Department" and "Departmental" refer to the U.S. Department of Health, Education, and Welfare.

(j) "Secretary" means the Secretary of Health, Education, and Welfare.

(k) "Applicable criteria" means those set forth in § 147.4 of this title in the case of a submission by the Commissioner of Education; or in § 401.88a (a) and (b) of this title in the case of a submission by the Commissioner of Vocational Rehabilitation; or in manual or other issuances of a constituent agency pertaining to denial or discontinuance of fellowship (or traineeship) awards on grounds involving moral character or loyalty.

§ 10.3

Departmental Fellowship Review Panel; Departmental Fellowship Review Board; in general.

Upon receipt of a submission from a constituent agency, the Chairman of the Departmental Fellowship Review Panel shall refer the case to a Departmental Fellowship Review Board, constituted as provided in § 10.2(c), for the purpose of recommending to the constituent agency, on the basis of a preponderance of the evidence, after affording to the individual concerned an opportunity for a fair hearing, whether the fellowship (or traineeship) award should be denied or discontinued by the constituent agency making the awards, on grounds involving, in accordance with applicable criteria, the