than as provided above or by operation of law. (c) Nothing contained herein shall limit any rights which the Government may have obtained by virtue by prior contracts or by operation of law or otherwise. (b) License term. One of the following clauses may be used as appropriate. (ALTERNATE A) LICENSE TERM The license hereby granted shall remain in full force and effect for the full term of each of the patents referred to in the "License Grant" clause of this contract and any and all patents hereafter issued on applications for patent referred to in such "License Grant" clause. (ALTERNATE B) LICENSE TERM The license hereby granted shall terminate on the day of 19------; Provided, however, That said termination shall be without prejudice to the completion of any contract entered into by the Government prior to said date of termination or to the use or disposition thereafter of any articles or materials manufactured by or for the Government under this license. § 9.409-4 Additional clauses-contracts providing for payment of a running royalty. The clauses set forth below are examples which may be used in patent release and settlement agreements, and license agreements, when it is desired to cover the subject matter thereof and the contract provides for payment of a running royalty. (a) License grant. No Military Department shall be obligated to pay royalties unless the contract is signed on Accordbehalf of such Department. ingly, the following License Grant clause should be limited to the practice of the invention by or for the signatory Department or Departments: of LICENSE GRANT (a) The Contractor hereby grants to the Government, as represented by the Secretary -, an irrevocable, nonexclusive, nontransferable license under the following patents, applications for patent, and any patents granted on such applications, and under any patents which may issue as the result of any reissue, division, or continuation thereunder to practice by, or cause to be practiced for the Department of throughout the world, any and all of the inventions thereunder in the manufacture and use of any article or material, in the use of any method Date together with corresponding foreign patents and foreign applications for patent, insofar as the Contractor has the right to grant licenses thereunder without incurring an obligation to pay royalties or other compensation to others solely on account of such grant. (b) No rights are granted or implied by the agreement under any other patents other than as provided above or by operation of law. (c) Nothing contained herein shall limit any rights which the Government may have obtained by virtue of prior contracts or by operation of law or otherwise. (b) License term. The following clause is a sample form for expressing the license term. LICENSE TERM The license hereby granted shall remain in full force and effect for the full term of each of the patents referred to in the "License Grant" clause of this contract and any and all patents hereafter issued on applications for patent referred to above unless sooner terminated as elsewhere herein provided. (c) Computation of royalties. The following clause, providing for the computation of royalties, may be of varying scope depending upon the nature of the royalty bearing article, the volume of procurement, and the type of contract pursuant to which the procurement is to be accomplished. COMPUTATION OF ROYALTIES Subject to the conditions hereinafter stated, royalties shall accrue to the Contractor under this agreement on all articles or materials embodying, or manufactured by the use of, any or all inventions claimed under any unexpired U.S. patent licensed herein, upon acceptance thereof by the Department of at the rate of [------ percent of the net selling price of such articles or materials] [(amount) per (name of item)] whether manufactured by the Government or procured under a fixed price contract, and at the rate of (amount) per (name of item) acquired or manufactured by a Contractor performing under a cost-reimbursement contract. With respect to such articles or materials made by the Department of "net selling price," as used in this paragraph, means the actual cost of direct labor and materials without allowance for overhead and supervision. & Use bracketed matter as appropriate. (d) Reporting and payment of royalties. (1) The contract should contain a provision specifying the office designated within the specific Department involved to make any necessary reports to the contractor of the extent of use of the licensed subject matter by the entire Department, and such office shall be charged with the responsibility of obtaining from all procuring offices of that Department the information necessary to make the required reports and corresponding vouchers necessary to make the required payments. The following clause is a sample for expressing reporting and payment of royalties requirements: REPORTING AND PAYMENT OF ROYALTIES (a) The (procuring office) shall, on or before the sixtieth (60th) day next following the end of each yearly period ending during which royalties have accrued under this license, deliver to the Contractor, subject to military security regulations, a report in writing furnishing necessary information relative to royalties which have accrued under this contract. (b) Royalties which have accrued under this contract during the yearly 10 period ending shall be paid to the Contractor (if appropriations therefor are available or become available) within sixty (60) days next following the receipt of a voucher from the Contractor submitted in accordance with the report referred to in (a) of this clause: Provided, That the Government shall not be obligated to pay, in respect of any such yearly period, on account of the combined royalties accruing under this contract directly and under any separate licenses granted pursuant to the "License to Other Government Agencies" clause (if any) of this contract, an amount greater than ($- -‒‒‒‒‒‒‒‒) dollars; and if such combined royalties exceed the said maximum yearly obligation, each department or agency shall pay a pro rata share of the said maximum yearly obligation as determined by the proportion its accrued royalties bear to the combined total of accrued royalties. (2) Where more than one Department or Government Agency is licensed and there is a ceiling on the royalties payable in any reporting period, the licensing Departments or Agencies shall coordi The frequency, date, and length of reporting periods should be selected as appropriate to the particular circumstances of the contract. 10 The frequency, date, and length of reporting periods should be selected as appropriate to the particular circumstances of the contract. nate with respect to the pro rata share of royalties to be paid by each. (e) License to other Government agencies. When it is intended that a license on the same terms and conditions be available to other departments and agencies of the Government, the following clause is an example which may be used: LICENSE TO OTHER GOVERNMENT AGENCIES The Contractor hereby agrees to grant a separate license under the patents, applications for patents, and improvements referred to in the "License Grant" clause of this contract, on the same terms and conditions as appear in this license contract, to any other department or agency of the Government at any time on receipt of a written request for such a license from such department or agency: Provided, however, That as to royalties which accrue under such separate licenses, reports and payments shall be made directly to the Contractor by each such other department or agency pursuant to the terms of such separate licenses. The Contractor shall notify the Licensee hereunder promptly upon receipt of any request for license hereunder. The Contractor hereby conveys to the Government, as represented by the Secretary of the entire right, title, and interest in and to the following patents (and applications for patent), in and to the inventions thereof, and in and to all claims and demands whatsoever for infringement thereof heretofore accrued, the same to be held and enjoyed by the Government through its duly appointed representatives to the full end of the term of said patents (and to the full end of the terms of all patents which may be granted upon said applications for patent, or upon any division, continuation-in-part or continuation thereof): U.S. Patent No. U.S. Application Serial No. Date Name of Inventor together with corresponding foreign patents and applications for patent insofar as the Contractor has the right to assign the same. (b) To facilitate proof of contracts of assignments, the acknowledgement of the contractor should be executed before Even though no infringement has occurred or been alleged, it is the policy of the Department of Defense to procure rights under patents and patent applications whenever it is in the Government's interest to do so and the desired rights can be obtained at a fair price. The required and suggested clauses in §§ 9.409 and 9.410 shall be required and suggested clauses, respectively, for license agreements and assignments made under this section. The instructions in §§ 9.409 and 9.410 concerning the applicability and use of those clauses shall be followed insofar as they are pertinent. § 9.412 Contract format. The following format, appropriately modified where necessary, may be used for contracts of release, license, or assignment: Whereas, Contractor warrants that he has the right to grant the within license and release, and the Government desires to procure the same, and Whereas, this contract is authorized by law, including 10 U.S.C. 2386, Now therefore, in consideration of the grant, release and agreements hereinafter recited, the parties have agreed as follows: Article 1. License Grant."1 (Insert the clause in 9-409.3 (a) for a paid up license, or the clause in 9-409.4(a) for a license on a running royalty basis.) Article 2. License Term.11 The Contractor shall be paid the sum of Dollars ($----------) in full compensation for the rights herein granted and agreed to be granted. (For a license on a running royalty basis, insert the clause in 9-409.4 (c) in accordance with the instructions therein, and also the clause as specified in 9-409.2(b) and 9–409.4 (d) and (e).) Article 6. Officials Not to Benefit. (Insert the clause in 7-103.20.) (Insert the clause in 7-103.12.) Article 11. Successors and Assignees. This Agreement shall be binding upon the Contractor, his successors 12 and assignees, but nothing contained in this Article shall authorize an assignment of any claim against the Government otherwise than as permitted by law. In witness whereof, the parties hereto have executed this contract. Sec. 10.101 10.101-1 10.101-2 10.101-3 10.101-4 Bid guarantee. (Insert the appropriate alternative clause in 9-409.3(b) for a paid up license, or the clause in 9-409.4 (b) for a license on a run 10.101-5 10.101-6 Construction contract or subcon tract. Fidelity bond. Forgery bond or policy. Patent infringement bönd. 10.101-11 Penal sum or amount. 12 When the contractor is an individual, change "successors" to "heirs"; if a partnership, modify appropriately. 129 F.R. 9761, July 21, 1964. § 10.101-2 Annual bid bond. "Annual bid bond” means a single bond (in lieu of separate bid bonds), without limitation as to penal amount, which secures all bids (on other than construction contracts) requiring bonds submitted by a contractor during a specific fiscal year of the Government in response to formal advertising. [29 F.R. 6933, May 27, 1964] § 10.101-3 Annual performance bond. "Annual performance bond" means a single bond (in lieu of separate performance bonds for each contract) which secures the performance of contracts (other than construction contracts) which require bonds and are entered into by a contractor during a specific fiscal year of the Government. [29 F.R. 6933, May 27, 1964] § 10.101-4 Bid guarantee. "Bid guarantee" means a form of security accompanying a bid or proposal as assurance that the bidder (a) will not withdraw his bid within the period specified therein for acceptance, and (b) will execute a written contract and furnish such bonds as may be required within the period specified in the bid (unless a longer period is allowed) after receipt of the specified forms. [29 F.R. 6933, May 27, 1964] § 10.101-5 Consent of surety. "Consent of surety" means an acknowledgment by a surety that its bond given in connection with a contract continues to apply to the contract as modified. [29 F.R. 6933, May 27, 1964] § 10.101-6 Construction contract or sub contract. "Construction contract or subcontract" means any contract or subcontract for the construction as defined in § 18.101-1. [30 F.R. 12005, Sept. 21, 1965] § 10.101-7 Fidelity bond. "Fidelity bond" means a bond which secures an employer up to an amount stated in the bond for losses caused by dishonesty on the part of an employee. A blanket fidelity bond covers all employees, except those except expressly excluded by written endorsement on the bond. [30 F.R. 12005, Sept. 21, 1965] § 10.101-8 Forgery bond or policy. "Forgery bond or policy" (depositors form) means a bond or policy which secures the person or persons named therein up to the amount stated for losses caused by the forging or altering of a check, draft, or similar instrument issued by or purporting to have been issued by any of the insureds, and for losses resulting from a check or draft having been obtained from the insureds through impersonation. [30 F.R. 12005, Sept. 21, 1965] § 10.101-9 Patent infringement bond. "Patent infringement bond" means a bond which secures the performance and fulfillment of the undertakings contained in a patent clause. [30 F.R. 12005, Sept. 21, 1965] § 10.101-10 Payment bond. "Payment bond" means a bond which is executed in connection with a contract and which secures the payment of all persons supplying labor and material in the prosecution of the work provided for in the contract. [30 F.R. 12005, Sept. 21, 1965] § 10.101-11 Penal sum or amount. "Penal sum or amount" means the dollar amount shown in a bond and represents the maximum payment for which the surety is obligated. [30 F.R. 12005, Sept. 21, 1965] § 10.101-12 Performance bond. "Performance bond" means a bond which is executed in connection with a contract and which secures the performance and fulfillment of all the undertakings, covenants, terms, conditions, and agreements contained in the contract. [30 F.R. 12005, Sept. 21, 1965] Sections 10.102-10.102-5 apply to both negotiated and formally advertised procurements. Where appropriate, term "bid" includes "proposal". [29 F.R. 6933, May 27, 1964] § 10.102-2 Limitations. the Bid guarantees shall not be required unless the solicitation specifies that the contract must be supported by a performance bond or performance and pay |