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For the purposes of this paragraph, the exemption extends only to contracts unterm “United States", when used in a der which the price is a fixed or degeographical sense, includes the Terri- terminable amount at the time the contories and possessions of the United tract is entered into, and does not apply States, the Commonwealth of Puerto to any contract under which the price, Rico, and the Canal Zone; and the term at the time the contract is entered into, "domestic corporation" means a corpo- is contingent upon a subsequent event or ration organized under the laws of the is thereafter to be determined by referUnited States or of any State, any Ter- ence to a variable element.) (See 32 ritory or possession of the United States, CFR 1455.3(b) (3).) the District of Columbia, the Common- (4) Prime contracts and subcontracts wealth of Puerto Rico, or the Canal Zone. for perishable subsistence supplies. (See (See 32 CFR 1455.2(c), (0-1).)

32 CFR 1455.3(b) (4).) (b) Individual prime contracts or sub- (5) Prime contracts where the aggrecontracts, or the prime contracts or sub- gate amount does not exceed $1,000 and contracts related to a particular au- the period of performance is not in exthorized procurement program, when cess of 30 days. (See 32 CFR 1455.3(b) such prime contracts or subcontracts are (5).) to be performed outside the territorial (6) Subcontracts for architectural, limits of the continental United States or design, or engineering services are proin Alaska, and when it is established to vided in the Renegotiation Board's Reguthe satisfaction of the Board that (1) lations $ 1455.3(b) (6). the prime contracts or subcontracts in- (7) Contracts entered into with a volved in the request are to be placed non-profit-making agency for the blind with foreign nationals or foreign corpo- pursuant to the program for the purchase rations whom it is not practicable to of blind-made products. (See 32 CFR subject to renegotiation; (2) the pro- 1455.3(b) (7).) visions of the prime contracts or subcon

§ 5–53.805–2. Contracts exempt subject tracts are otherwise sufficient to prevent

to prescribed conditions. excessive profits; (3) the program is of direct and immediate concern to the de- The following contracts or subconfense of the United States and refusal tracts may be exempted on an individual to grant the exemption would jeopardize contract basis on application to the Rethe success of the program; or (4) the negotiation Board by GSA: contract or group of contracts should be (a) Contracts or subcontracts where exempted for any combination of the the profits thereunder can be determined foregoing reasons or for any other rea- with reasonable certainty when the conson. (See 32 CFR 1455.2(d).)

tract price is established. (See 32 CFR (c) Contracts or subcontracts under

1455.3(c).)

(b) Contracts or subcontracts where which, in the opinion of the Board, the profits can be determined with reason

the contract provisions are otherwise

adequate to prevent excessive profits. able certainty when the contract price is

(See 32 CFR 1455.4(c).) established. On this basis, the Board

(c) Contracts or subcontracts the rehas exempted the following: (1) All prime contracts with natural

negotiation of which would jeopardize

secrecy required in the public interest. persons (not partnerships, joint ventures,

(See 32 CFR 1455.5(b).) or corporations) which call for performance of personal or professional § 5–53.805–3 Subcontracts exempted services by the individual contractor in by the Renegotiation Board. person under the supervision of the Gov

(a) Stock item exemption. Amounts ernment, and which are paid for on a

received or accrued prior to January 1, time basis. (See 32 CFR 1455.3(b) (1).)

.1964 on subcontracts and groups of sub(2) Prime contracts for the sale or contracts subject to the Act for materials rental of any interest in existing real .(including maintenance, repair, and opestate. (See 32 CFR 1455.3(b) (2).) erating supplies) customarily purchased

(3) Prime contracts and subcontracts for stock in the normal course of the purfor the sale or exchange of tangible prop- chaser's business, except when such maerty used in the trade or business of the terials are specially purchased for use in vendor with respect to which deprecia- performing one or more prime contracts tion is allowable under section 167 of the or higher tier subcontracts subject to Internal Revenue Code of 1954. (This the Act. (See 32 CFR 1455.6.)

(b) Subcontracts related to exempt prime contracts and subcontracts except those performed outside the United States (see $ 5–53.805–1(a)) and other subcontracts, when the Board, in exempting prime contracts or subcontracts, determines that the exemption will not extend to some or all of the subcontracts related to such prime contracts or subcontracts. (See 32 CFR 1455.7.)

PART 5-54-PATENTS AND

COPYRIGHTS Sec. 5-54.000 Scope of part.

Subpart 5-54.1-Patents 5-54.101 General 5-54.102 Protection of the rights of the

Government. 5-54.103 Patent indemnification of the

Government by the contractor. 5-54.104 Notice and assistance regarding

patent infringement.

Subpart 5-54.2—Copyrights 5-54.201 General. 5–54.202 Use and publication by the Gov

ernment of copyrighted material. 5-54.203 Contracts for use of copyrightable

material, 5–54.204 Copyright clause.

AUTHORITY: The provisions of this part 5-54 issued under sec. 205(C), 63 Stat. 390; 40 U.S.C. 486(c).

SOURCE: The provisions of this part 5-54 appear at 27 F.R. 7876, Aug. 9, 1962.

$ 5–54.000 Scope of part.

This part prescribes policy and procedures to be followed on patents and related matters, and on copyrights and copyrighted materials; prescribes contract clauses to be used; and provides for assistance in developing clauses when it is not feasible to use prescribed clauses. its officers, agents, and employees against liaSubpart 5–54.1- Patents

bility, including costs, for infringement of $ 5–54.101 General.

any United States letters patent (except let

ters patent issued upon an application which Patents are granted for any new and is now or may hereafter be kept secret or useful process, machine, manufacture or otherwise withheld from issue by order of composition of matter, or any improve- the Government) arising out of the perment thereof, and any new, original and

formance under this contract, or out of the ornamental design for an article of man

use or disposal by or for the account of the

Government of such supplies or services. The ufacture. Infringement consists of the

foregoing indemnity shall not apply unless unauthorized making, using, or selling

the Contractor shall have been informed as of any patented invention.

soon as practicable by the Government of $ 5–54.102 Protection of the rights of

the suit or action alleging such infringement, the Government.

and shall have been given such opportunity

as is afforded by applicable laws, rules, or The contracting officer shall observe regulations to participate in the defense the following, with respect to patents,

thereof; and further, such indemnity shall in connection with contracting :

not apply if: (a) The infringement results (a) Protection of the Government

from compliance with specific written in

structions of the Contracting Officer directing against patent risks in contracts.

a change in the supplies to be delivered or (b) Securing to the Government the

services to be performed, or in the materials patent rights to which it is entitled, or equipment to be used, or directing a manparticularly under contracts for experi- ner of performance of the contract not mental, research, or developmental

normally used by the Contractor; or (b) the work.

infringement results from the addition to, or (c) Assuring that the Government

change in, the supplies furnished or services

performed, which addition or change was does not make royalty payments where

made subsequent to delivery or performance the Government has acquired a royalty- by the Contractor; or (c) the claimed infree license or other patent rights which fringement is settled without the consent of make such payments unnecessary.

the Contractor, unless required by final de

cree of a court of competent jurisdiction. $ 5–54.103 Patent indemnification of $ 5–54.104 Notice and assistance regard. the Government by the contractor.

ing patent infringement. In order to protect the Government

Each contract in an amount in excess from patent risks, each contract for sup

of $5,000 shall contain a clause to assure plies and services (other than construc

that the Government will be notified of tion) in an amount in excess of $5,000

claims of infringement asserted against shall contain the clause prescribed in this a contractor and any of his subcon$ 5–54.103. (For construction contracts, tractors in connection with the performStandard Form 23A, General Provisions ance of Government contracts, and that (Construction Contract), contains an ap

the Government may obtain necessary propriate Patent Indemnity clause.) assistance from a contractor in the event

of patent infringement litigation. The PATENT INDEMNITY

contract clause required is set forth in If the amount of this contract for supplies

$ 1-7.101-13 and as article 13 of Standor services is in excess of $5,000, the Con- ard Form 32, General Provisions (Supply tractor shall indemnify the Government and Contract).

Subpart 5–54.2_Copyrights $ 5–54.201 General,

A copyright is the exclusive right to the publication, production, or sale of the rights to a literary, dramatic, musical, or artistic work, or to the use of a manufacturing or merchandising label, granted by law for a definite period of years to an author, composer, artist, distributor, etc. $ 5–54.202 Use and publication by the

Government of copyrighted material. It is general Government policy that copyrighted matter will not knowingly be incorporated in publications prepared by or for the Government except with the written consent of the copyright

in the name of the author and assigned to the Government, and except in connection with contracts for motion pictures or the production of motion pictures and affiliated activities (e.g., preparation of scripts, translations, adaptations, etc.), it shall be the policy to acquire only such license right in any copyrightable material leaving the contractor free to take out a copyright in his own name, if he so desires. In the event the contractor should incorporate copyrighted or copyrightable material already owned by it or others in the material furnished to the Government, the license should contain a provision whereby the Government is also granted a royalty-free license with respect to such material if the contractor may grant such a license without becoming liable to pay compensation because of such grant. The foregoing generally applies whether the material subject to copyright is the main item of a contract or is merely incidental.

owner.

$ 5–54.203 Contracts for use of copy

rightable material. In any contract under which material subject to copyright is to be furnished, the Government should receive at least a royalty-free, nonexclusive and irrevocable license with respect to such material first produced or composed under the contract. Except in those instances where it is desirable that copyrightable material produced under contract for the Government shall either be placed in the public domain or a copyright established

$ 5–54.204 Copyright clause.

Whenever an occasion arises which requires the use of such clauses, request should be made of appropriate counsel for the drafting of a suitable clause. Complete information should accompany the request.

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