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set forth in § 14R-9.107-6 may be used only in contracts calling for basic or applied research work with nonprofit or educational institutions, or in certain consultant contracts as set forth in paragraph (a)(5) of this section.
(2) The Patent rights clause of f 14R-9.107-5(a) and $ 14R-9.107-6 provide that the Government shall acquire title to inventions made (i.e. conceived or first actually reduced to practice) in the course of or under the contract. However, the contractor shall retain a nonexclusive, revocable license, and subject to OWRT requirements and regulations, may request the right to file and retain title in any foreign country in which the Government does not elect to secure patent rights. The contractor or the inventor may also retain greater rights than these after an invention has been identified and reported to OWRT if the Secretary or his designee determines that the interests of the United States and the general public will best be served by a waiver of such rights, utilizing the considerations set forth in § 14R-9.109-6.
(3) The primary missions of OWRT may require that certain rights in the contractor's privately developed background patents be acquired for the Government's future production, research, development, and demonstration projects. Similar rights may also be required to enable private parties to utilize the technology developed or demonstrated with Government assistance in the field of technology specifically contemplated in the contract effort. To this end, subject to specified exceptions and negotiations, the Patent Rights clause in OWRT contracts shall normally include provisions obtaining rights of the type specified in 14R-9.107-5 to such background patents, except that for contracts up to $50,000, a determination may be made by the Solicitor to omit such provisions upon the contractor's request therefor to OWRT. This determination will be particularly concerned with the implications of the contract's potential for technological advances to any intentions or plans which the Government may have to additionally fund research and development for such advances. It is recog
nized that the precise rights to be acquired under the provisions will depend upon the facts of each situation and are a matter for determination by OWRT and for negotiation with the contractor. General guidelines for use by Contracting Officers and contract negotiators are provided in § 14R-9.107-5(b).
(4) The short form Patent Rights clause in § 14R-9.107-6 may be used in contracts calling for basic or applied research where the contractor is a nonprofit or educational institution, and in special situations such as consultant contracts. However, this clause will not be used in contracts calling for the operation of Government-owned facilities, contracts in which an advance waiver or greater rights has been granted, in certain consultant contracts as explained in § 14R-9.1076, or in other special contracts.
(5) Solicitations and proposed contracts shall provide offerors and prospective contractors with notice of and the right to request, in advance of or within 30 days after the effective date of contracting, a waiver of all or any part of the rights of the United States with respect to subject inventions. In no event will the fact that an offeror has requested such a waiver be a consideration in the evaluation of his offer or the determination of his acceptability. If an advance waiver is granted, the Patent Rights clause of § 14R-9.107-5(a) shall be utilized and appropriately modified in accordance with the terms of such waiver. To provide adequate notice to prospective contractors or offerors, the following provision will be inserted in all solicitations which may result in contracts calling for research, development, or demonstration:
Offerors and prospective contractors in accordance with applicable statutes and OWRT Regulations (41 CFR 14R-9.109-6) have the right to request in advance of or within 30 days after the effective date of contracting a waiver of all or any part of the rights of the United States in subject inventions.
(b) License for the Government, States and domestic municipal governments. When a waiver is granted or foreign rights are retained by either the contractor or the inventor, the Government shall retain for the United States, and domestic municipal governments at least a paid-up, nonexclusive, irrevocable license in all applicable inventions unless the Secretary or his designee determines that it would not be in the public interest to acquire such rights for the States and domestic municipal governments. Requests by contractors for such determinations, together with a justifica
a justifica. tion therefor shall be submitted to the Contracting Officer. The Contracting Officer shall refer such requests, along with appropriate comments and recommendations, to the Solicitor to serve as a basis for a determination by the Secretary or his designee.
(c) Right to sublicense foreign governments. The Patent Rights clause does not provide the Government with the right to grant sublicenses to a foreign government pursuant to any treaty or agreement in subject inventions to which the contractor has been granted greater or foreign rights. The Secretary or his designee may determine at the time of contracting that it would be in the national interest to acquire this right, or he may reserve the right to make this determination after the invention is identified. When such a determination is made or such right is reserved, the Patent Rights clause should be amended as set forth in $ 14R-9.107-5(d).
(d) License rights (upon request) to the contractor. Paragraph (c) of the Patent Rights (long form) clause of 8 14R-9.107-5(a) specifies the license rights retained by the contractor in inventions made in the course of or under the contract. In appropriate circumstances, such as in contracts for the operation of Government-owned facilities or special long term, cost reimbursement Government-funded research, development, or demonstration work, this provision shall be modified to provide a revocable, nonexclusive, royalty-free license in inventions only upon request by the contractor for reservation of such license. In such situations, the paragraph set forth in $ 14R-9.107-5(e) shall be substituted for paragraph (c)(1) of the Patent Rights (long form) clause.
(e) License rights to contractor (Irrevocable). Paragraph (c)(1) of the Patent Rights clauses specifies that the license rights retained by the contractor in such inventions are revocable. In special circumstances, the license may be irrevocable, in which case the paragraph (c)(1) set forth in $ 14R-9.107-5(f) shall be substituted for paragraph (c)(1), (c)(2), and (c)(3) of the Patent Rights (long form) clause. Since granting irrevocable licenses may interfere with OWRT's licensing program, which is intended to promote the commercial utilization of inventions resulting from its research, development, or demonstration programs, contractors desiring irrevocable licenses shall submit a written request with a justification to the Contracting Officer. The Contracting Officer shall refer such requests, along with appropriate comments and recommendations, to the Solicitor to serve as a basis for approval by the Secretary or his designee.
(f) Contractor sublicensing. The right of a contractor having a license as set forth in paragraphs (d) and (e) of this section to grant a revocable license to one or more sublicensees may be considered appropriate by the Secretary or his designee in certain circumstances, such as, for example, where the contractor is cost sharing; where the contractor's control or involvement in the technology which is the subject of the contract is substantial; where the reservation of licensing rights in the contractor would best promote commercialization or utilization of the technology, or where substantial segments of the user population already have licenses or would otherwise be licensed. In such situations. the paragraph in 14R-9.1075(g)(1) may be substituted for paragraph (c)(1) of § 14R-9.107-5(a), or the paragraphs in § 14R-9.107-5(g)(2) may be substituted for paragraphs (c)(1), (c)(2), and (c)(3) of § 14R-9.107-5(a), as appropriate.
(g) Facilities license. Whenever a contract has as a purpose the design, construction, or operation of a Government-owned research, development, demonstration, or production facility, it is necessary that the Government be accorded certain rights
with respect to further use of the fa cility by or on behalf of the Govern ment upon termination of the contract, including the right to make, use, transfer, or otherwise dispose of all articles, materials, products, or processes embodying inventions or discoveries used or embodied in the facility regardless of whether or not conceived or actually reduced to practice under or in the course of such a contract. Accordingly, the paragraph of $ 14R9.107-5(h) shall be used in all such contracts in addition to the provision of the “long form” Patent Rights clause.
(h) Subcontracts. (1) The policy expressed in § 14R-9.107-3 is applicable to prime contracts and to subcontracts regardless of tier. The Patent Rights clause of $ 14R-9.107-5(a) or $ 14R9.107-6 shall be included in all subcontracts having as a purpose the conduct of research, development, or demonstration work. However, the Patent Rights clause contained in the prime contract is not to be deemed automatically appropriate for subcontracts. For example, it would not be appropriate to the extent that waivers have been granted the prime contractor at the time of contracting. A separate waiver, if any, must be obtained by subcontractors. Further, the withholding of payment provision of the prime contract will normally not be included in a subcontract except that upon request of the Contracting Officer in special contracting situations the withholding of payment provision may be flowed down to subcontractor. When ever either the prime contractor or a proposed subcontractor considers the inclusion of the Patent Rights clause of § 14R-9.107-5(a) or $ 14R-9.107-6 to be inappropriate, or the subcontractor refuses to accept such a clause in its subcontract, the matter shall be referred prior to award of the subcontract to the Contracting Officer for resolution in accordance with $ 14R9.107-4(k). Upon such referral, the same considerations and procedures followed in selecting the appropriate Patent Rights clause included in the prime contract shall be used in selecting the subcontract clause.
(2) Contractors shall not use their ability to award subcontracts as eco
nomic leverage to acquire rights for themselves in the inventions resulting from subcontracts, and a waiver granted to a prime contractor is not normally applicable to inventions of subcontractors. However, in appropriate cir. cumstances, the prime contractor's waiver may be made applicable to the inventions of any or all subcontractors, such as, for example, where there are pre-existing special research and development arrangements between the prime contractor and subcontractor, or where the prime contractor and subcontractor, are partners in a cooperative effort. In addition, in such circumstances the prime contractor may be permitted to acquire nonexclusive licenses in the subcontractor's inventions when a waiver for subcontractor inventions is not applicable.
(i) Record of decisions. The Solicitor shall record the basis for the following actions: (1) Waivers at the time of contracting; (2) waivers granted on identified inventions; (3) determinations that no license need be obtained for States or municipal governments; (4) determinations that the right to sublicense foreign governments should be obtained; and (5) the grant of irrevocable licenses.
(j) Publication of invention disclosures. The Patent Rights clauses specify that the Government may duplicate and disclose invention disclosures reported under the contract, although it is not OWRT's practice to publish invention disclosures. Since public disclosure before the filing of a U.S. patent application may create a bar to filing certain foreign applications, the clauses also require that patent approval for release or publication of information relating to the contract work be secured from the Solicitor prior to any such release or publication. When the contractor has requested or obtained a waiver, or has advised of its interest in obtaining certain foreign filing rights, provision is made for OWRT to use its best efforts to withhold release or publication of such information for a specified time period in accordance with paragraph (d)(1) or the clause in § 14R-9.107-5(a) to permit the timely filing of a U.S. patent application by the contractor.
(k) Negotiations and deviations. Contracting Officers shall contact the Solicitor for assistance in selecting, negotiating, or approving appropriate patent, copyright, and data clauses. Any intended departures or deviations from the policy, procedures, or the clauses specified in this part shall be referred to the Solicitor for review and concurrence.
§ 14R-9.107–5 Clause for contracts (long
form). (a) Patent Rights clause. When the Contracting Officer has determined that a contract falls within § 14R9.107-4(a)(1), except where the clause of $ 14R-9.107-6 is applicable, the following clause shall be included in the contract.
PATENT RIGHTS (a) Definitions. (1) "Subject Invention". means any invention or discovery of the Contractor conceived or first actually reduced to practice in the course of or under this contract, and includes any art, method, process, machine, manufacture, design, or composition of matter, or any new and useful improvement thereof, or any variety of plants, whether patented or unpatented under the Patent Laws of the United States of America or any foreign country.
(2) “Contract" means any contract, grant, agreement, understanding, or other arrangement, which includes research, development, or demonstration work, and includes any assignment, or substitution of parties.
(3) “States and domestic municipal governments” means the States of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, the Trust Territory of the Pacific Islands, and any political subdivision and agencies thereof.
(4) "Government agency” includes an executive department, independent commission, board, office, agency, administration, authority, Government corporation, or other Government establishment of the Executive Branch of the Government of the United States of America.
(5) "To the point of practical application" means to manufacture in the case of a composition or product, to practice in the case of a process, or to operate in the case of a machine and under such conditions as to establish reasonably accessible to the public.
(6) "Solicitor" means the Solicitor of the U.S. Department of the Interior or his authorized representative.
(7) "OWRT” means Office of Water Research and Technology in the U.S. Department of the Interior.
(8) "Contractor" means any individual, partnership, public or private corporation, association, institution or other entity which is a party to the contract and includes entities controlled by the Contractor. The term "controlled” means the direct or indirect ownership of more than 50 percent of the outstanding stock entitled to vote for the election of directors, or a directing influence over such stock: Provided, however, that foreign entities not wholly owned by the Contractor shall not be considered as “controlled" for purposes of this patent clause. For the purposes of the patent clause, grantees are deemed Contractors.
(9) "Secretary” means the Secretary of the Interior or his authorized representative.
(b) Allocation of principal rights—(1) Assignment to the Government. The Contractor agrees to assign to the Government the entire right, title, and interest throughout the world in and to each Subject Invention, except to the extent that rights are retained by the Contractor under paragraphs (b)(2) and (c) of this clause.
(2) Greater rights determinations. The Contractor or the employee-inventor with authorization of the Contractor may request greater rights than the nonexclusive license and the right to request foreign patent rights provided in paragraph (c) of this clause on identified inventions in accordance with 41 CFR 14R-9.109-6. Such requests must be submitted to the Contracting Officer at the time of the first disclosure pursuant to paragraph (e)(2) of this clause, or not later than 6 months after conception or first actual reduction to practice, whichever occurs first, or such longer period as may be authorized by the Contracting Officer for good cause shown in writing by the Contractor.
(c) Minimum rights to the contractor-(1) Contractor license. The Contractor reserves a revocable, nonexclusive, paid-up license in each patent application filed in any country on a Subject Invention and any resulting patent in which the Government acquires title. The license shall extend to the Contractor's domestic subsidiaries and affiliates, if any, within the corporate structure of which the Contractor is a part and shall include the right to grant sublicenses of the same scope, to the extent the Contractor was legally obligated to do so at the time the contract was awarded. The license shall be transferable only with aproval of the Solicitor except when transferred to the successor of that part of the Contractor's business to which the invention pertains.
(2) Revocation limitations. The Contractor's nonexclusive license retained pursuant to paragraph (c)(1) of this clause and sublicenses granted thereunder may be revoked or modified by the Solicitor, either in whole or in part, only to extent necessary to achieve expenditious practical application of the Subject Invention under the published Federal Property Management Licensing Regulations (41 CFR 101-4.1), and only to the extent an exclusive license is actually granted. This license shall not be revoked in that field of use and/or the geographical areas in which the Contractor, or its sublicensee, has brought the invention to the point of practical application and continues to make the benefits of the invention reasonably accessible to the public, or is expected to do so within a reasonable time.
(3) Revocation procedures. Before modification or revocation of the license or sublicense, pursuant to paragraph (c)(2) of this clause, the Solicitor shall furnish the Contractor a written notice of its intention to modify or revoke the license and any sublicense thereunder, and the Contractor shall be allowed 30 days, or such longer period as may be authorized by the Solicitor for good cause shown in writing by the Contractor, after such notice to show cause why the license or any sublicense should not be modi. fied or revoked. The conclusion of the Solicitor thereafter shall be final unless, within thirty (30) days from the date such conclusion is rendered, the Contractor submits to the Secretary a written appeal therefrom. The Contractor, upon a request therefor in writing, will be afforded an opportunity to be heard and to offer evidence in support of the appeal. The decision of the Secretary or his duly authorized representative for a determination of such appeal, shall be final and conclusive.
(4) Foreign patent rights. Upon written request to the Contracting Officer, in accordance with paragraph (e)(2)(i) of this clause, the Contracting Officer, with the authorization of the Solicitor may reserve to the Contractor, or the employee-inventor, with authorization of the Contractor, the patent rights to a Subject Invention in any foreign country where the Government has elected not to secure such rights provided:
(i) The recipient of such rights, when specifically requested by the Solicitor and three years after issuance of a foreign patent disclosing such Subject Invention, shall furnish the Solicitor a report setting forth:
(A) The commercial use that is being made, or is intended to be made, or said in vention, and
(B) The steps taken to bring the invention to the point of practical application or to make the invention available for licensing.
(ii) The Government shall retain at least a nonexclusive, irrevocable, paid-up license to make, use, and sell the invention throughout the world by or on behalf of the Gov
ernment (including any Government agency) and States and domestic municipal governments, unless the Secretary or his designee determines that it would not be in the public interest to acquire the license for the State and domestic municipal governments.
(iii) Subject to the rights granted in (c)(1), (2), and (3) of this clause, the Secretary or his designee shall have the right to termi. nate the foreign patent rights granted in this paragraph (c)(4) in whole or in part unless the recipient of such rights demonstrates to the satisfaction of the Secretary or his designee that effective steps necessary to accomplish substantial utilization of the invention have been taken or within a reasonable time will be taken.
(iv) Subject to the rights granted in (c)(1), (2), and (3) of this clause, the Secretary or his designee shall have the right, commencing four years after foreign patent rights are accorded under this paragraph (c)(4) to require the granting of a nonexclusive or partially exclusive license to a responsible applicant or applicants, upon terms reasonable under the circumstances and in appropriate circumstances to terminate said foreign patent rights in whole or in part, fol. lowing a hearing upon notice thereof to the public, upon a petition by an interested person justifying such hearing:
(A) If the Secretary or his designee determines, upon review of such material as he deems relevant, and after the recipient of such rights, or other interested person, has had the opportunity to provide such relevant and material information as the Secretary or his designee may require that such foreign patent rights have ended substantially to lessen competition or to result in undue market concentration in any section of the United States in any line of commerce to which the technology relates; or
(B) Unless the recipient of such rights demonstrates to the satisfaction of the Secretary or his designee at such hearing that the recipient has taken effective steps, or within a reasonable time thereafter is ex. pected to take such steps, necessary to accomplish substantial utilization of the invention.
(d) Filing of patent applications. (1) With respect to each Subject Invention in which the Contractor or the inventor requests for. eign patent rights in accordance with paragraph (c)(4) of this clause, a request may also be made for the right to file and prosecute the U.S. application on behalf of the U.S. Government. If such request is granted, the Contractor or inventor shall file & domestic patent application on the invention within 6 months after the request for foreign patent rights is granted, or such longer period of time as may be approved by the Solicitor for good cause shown in writ