For the purposes of this paragraph, the term "United States", when used in a geographical sense, includes the Territories and possessions of the United States, the Commonwealth of Puerto Rico, and the Canal Zone; and the term "domestic corporation" means a corporation organized under the laws of the United States or of any State, any Territory or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or the Canal Zone. (See 32 CFR 1455.2(c), (c-1).)

(b) Individual prime contracts or subcontracts, or the prime contracts or subcontracts related to a particular authorized procurement program, when such prime contracts or subcontracts are to be performed outside the territorial limits of the continental United States or in Alaska, and when it is established to the satisfaction of the Board that (1) the prime contracts or subcontracts involved in the request are to be placed with foreign nationals or foreign corporations whom it is not practicable to subject to renegotiation; (2) the provisions of the prime contracts or subcontracts are otherwise sufficient to prevent excessive profits; (3) the program is of direct and immediate concern to the defense of the United States and refusal to grant the exemption would jeopardize the success of the program; or (4) the contract or group of contracts should be exempted for any combination of the foregoing reasons or for any other reason. (See 32 CFR 1455.2(d).)

(c) Contracts or subcontracts under which, in the opinion of the Board, the profits can be determined with reasonable certainty when the contract price is established. On this basis, the Board has exempted the following:

(1) All prime contracts with natural persons (not partnerships, joint ventures, or corporations) which call for performance of personal or professional services by the individual contractor in person under the supervision of the Government, and which are paid for on a time basis. (See 32 CFR 1455.3 (b) (1).)

(2) Prime contracts for the sale or rental of any interest in existing real estate. (See 32 CFR 1455.3 (b) (2).)

(3) Prime contracts and subcontracts for the sale or exchange of tangible property used in the trade or business of the vendor with respect to which depreciation is allowable under section 167 of the Internal Revenue Code of 1954. (This

exemption extends only to contracts under which the price is a fixed or determinable amount at the time the contract is entered into, and does not apply to any contract under which the price, at the time the contract is entered into, is contingent upon a subsequent event or is thereafter to be determined by reference to a variable element.) (See 32 CFR 1455.3 (b) (3).)

(4) Prime contracts and subcontracts for perishable subsistence supplies. (See 32 CFR 1455.3(b) (4).)

(5) Prime contracts where the aggregate amount does not exceed $1,000 and the period of performance is not in excess of 30 days. (See 32 CFR 1455.3(b) (5).)

(6) Subcontracts for architectural, design, or engineering services are provided in the Renegotiation Board's Regulations 1455.3(b) (6).

(7) Contracts entered into with a non-profit-making agency for the blind pursuant to the program for the purchase of blind-made products. (See 32 CFR 1455.3(b) (7).)

§ 5-53.805-2

Contracts exempt subject to prescribed conditions.

The following contracts or subcontracts may be exempted on an individual contract basis on application to the Renegotiation Board by GSA:

(a) Contracts or subcontracts where the profits thereunder can be determined with reasonable certainty when the contract price is established. (See 32 CFR 1455.3(c).)

(b) Contracts or subcontracts where the contract provisions are otherwise adequate to prevent excessive profits. (See 32 CFR 1455.4 (c).)

(c) Contracts or subcontracts the renegotiation of which would jeopardize secrecy required in the public interest. (See 32 CFR 1455.5(b).)

Subpart 5-54.1-Patents

§ 5-54.101 General.

Patents are granted for any new and useful process, machine, manufacture or composition of matter, or any improvement thereof, and any new, original and ornamental design for an article of manufacture. Infringement consists of the unauthorized making, using, or selling of any patented invention.

§ 5-54.102 Protection of the rights of the Government.

The contracting officer shall observe the following, with respect to patents, in connection with contracting:

(a) Protection of the Government against patent risks in contracts.

(b) Securing to the Government the patent rights to which it is entitled, particularly under contracts for experimental, research, or developmental work.

(c) Assuring that the Government does not make royalty payments where the Government has acquired a royaltyfree license or other patent rights which make such payments unnecessary.

its officers, agents, and employees against liability, including costs, for infringement of any United States letters patent (except letters patent issued upon an application which is now or may hereafter be kept secret or otherwise withheld from issue by order of the Government) arising out of the performance under this contract, or out of the use or disposal by or for the account of the Government of such supplies or services. The foregoing indemnity shall not apply unless the Contractor shall have been informed as soon as practicable by the Government of the suit or action alleging such infringement, and shall have been given such opportunity as is afforded by applicable laws, rules, or regulations to participate in the defense thereof; and further, such indemnity shall not apply if: (a) The infringement results from compliance with specific written instructions of the Contracting Officer directing a change in the supplies to be delivered or services to be performed, or in the materials or equipment to be used, or directing a manner of performance of the contract not normally used by the Contractor; or (b) the infringement results from the addition to, or change in, the supplies furnished or services performed, which addition or change was made subsequent to delivery or performance by the Contractor; or (c) the claimed infringement is settled without the consent of the Contractor, unless required by final decree of a court of competent jurisdiction. § 5-54.104 Notice and assistance regard. ing patent infringement.

Each contract in an amount in excess of $5,000 shall contain a clause to assure that the Government will be notified of claims of infringement asserted against a contractor and any of his subcontractors in connection with the performance of Government contracts, and that the Government may obtain necessary assistance from a contractor in the event of patent infringement litigation. The contract clause required is set forth in § 1-7.101-13 and as article 13 of Standard Form 32, General Provisions (Supply Contract).

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 owner.

§ 5-54.203 Contracts for use of copyrightable 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

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.

§ 5-54.204 Copyright clause.

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