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the Government and the contractor, or anticipated Government needs, would require that rights be obtained for either the Government or for the public greater than those set forth in paragraph (k). For example, where (i) the contribution of the Government towards the development and/or commercialization of the Background Patent is substantially greater than that of the contractor, (ii) it is expected that the agency may be involved in special long-term projects, or (iii) the Government may require substantial production or procurement for purposes outside of research, development, or demonstration, it may be necessary to obtain greater rights. In such situations, consideration should be given to extending the Government's rights beyond research, development, and demonstration work, or to adjust royalties that may be due by the Government to reflect the Government's contribution. Such adjustment could take the form of (i) credit to be given the Government based upon its contribution through the contract, or (ii) a royalty based upon the relative contributions of the contractor and the Government. Consideration could also be given to utilizing the relative contributions in determining reasonable royalties to be charged to others.

(7) Similarly, it may be necessary to obtain greater rights for the public in the contractor's background patents where, for example, the contractor's background patents cover the basic technology intended to be developed under the contract effort, rather than subcomponents or products or processes which are ancillary to the contract effort, or where the future market for the contract results will be very large and there are presently only a few suppliers available.

(8) It may also be appropriate to modify the rights acquired by paragraph (k) where the contractor's background patent rights were of primary importance in granting the contractor a waiver. For example, if the contractor was permitted to retain exclusive rights to Subject Inventions based upon the consideration that both foreground and background inventions would be licensed at reasonable royalties, then paragraph (k) should be

modified. In such cases, the definition of "Background Patent" should be broadened to include all patents useful in the practice of the contract results in additional fields of technology or other aspects of the contract.

(9) The application of paragraph (k) is extended to the practice of any specific process, method, or machine, manufacture, or composition of matter which is a subject of the research, development, demonstration work performed under the contract, otherwise referred to as “Specified Work Object," and normally intended to provide the rights covered in paragraph (k) limited to the same fields of use or intended uses of the contract results as generally contemplated by the program involved. During negotiations, when the subject matter of the contract and the intended uses of the results thereof are known, a more specific statement of the field of technology intended to be covered may be substituted for the expression “the field of technology where the work of the contract falls.” For example, the application of paragraph (k) may be limited to specified fields of use which cover the anticipated use of the technology being developed under the contract.

(10) The considerations and statements in the foregoing paragraphs (b)(1) through (9) of this section also apply to the negotiation, application, and inclusion of background patent rights provisions in subcontracts.

(c) License for the States and domestic municipal governments. When the Secretary or his designee determines at the time of contracting that it would not be in the public interest to acquire a paid-up license in Subject Inventions for States and domestic municipal

governments, paragraph (c)(4)(ii) of the Patent Rights clause in § 14R-9.107-5(a) shall be replaced with the following paragraph (c)(4)(ii):

(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 Government of the United States (including any Government agency).

(d) Right to sublicense foreign governments. (1) When the Secretary or

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his designee determines at the time of contracting that it would be in the national interest to acquire the right to sublicense foreign governments pursu. ant to any treaty or agreement, a sentence shall be added to the end of paragraph (c)(4)(ii) of the Patent Rights clause in $ 14R-9.107-5(a) as follows: This license shall include the right of the Government to sublicense foreign governments pursuant to any treaty or agreement with such foreign governments.

(2) When the Secretary or his designee wishes to reserve the right to make the determination to sublicense foreign governments pursuant to any treaty or agreement until after the invention has been identified, a sentence shall be added to the end of paragraph (c)(4)(ii) of the Patent Rights clause in § 14R-9.107-5(a) as follows: This license shall include the right of the Government to sublicense foreign governments pursuant to any treaty or agreement if the Secretary or his designee determines after the invention has been indentified that it would be in the national interest to acquire this right.

(e) License rights (upon request) to contractor (revocable). When the Solicitor or his designee determines that the contractor may reserve a revocable, nonexclusive, paid-up license in Subject Inventions, only upon a request by the contractor for the retention of such a license, paragraph (c)(1) of the clause in § 14R-9.107-5(a) shall be replaced with the following paragraph (c)(1):

(c)(1) The Contractor may reserve upon request 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 the 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 and revocable under the same terms and conditions as set forth herein. The license shall be assignable only with approval of OWRT except to the successor of the part of the Contractor's business to which the invention pertains.

(f) License rights to contractor (ir. revocable). When the Solicitor or his designee determines that the contractor may reserve a nonexclusive, irrevocable, paid-up license in the inventions resulting from the contract, paragraph (c)(1) of the Patent Rights clause of $ 14R-9.107-5(a) shall be replaced with the following paragraph (c)(1) and paragraphs (c)(2) and (c)(3) and references thereto shall be cancelled:

(c)(1) The contractor reserves a nonexclusive, irrevocable, paid-up license in each patent application filed in any country on a Subject Invention and any resulting patent in which the Government acquires the 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 i awarded. The license shall be transferable only with the approval of OWRT except when transferred to the successor of the part of the Contractor's business to which the invention pertains.

(g) Contractor sublicense (revoca. ble). (1) When the Secretary or his designee determines at the time of contracting that, as indicated in $ 14R-9.107-4(f), it would be in the interests of the Government to permit a contractor having the right to retain a revocable, nonexclusive license in a Subject Invention to have the further right to grant to one or more sublicensees a revocable license of the same scope, the following paragraph may be substituted for paragraph (c)(1) of the Patent Rights clause in § 14R-9.1075(a):

(c)(1) 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 the 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 revocable, nonexclusive sublicenses of the same scope. The license shall be transferable only with the approval of OWRT except when transferred to the successor of the part of the Contractor's business to which the invention pertains.

(2) Where the contractor has been granted the right to retain a nonexclu

sive, irrevocable, license in a Subject Invention, and it is determined as in (g)(1) of this section to leave in the contractor the right to grant one or more revocable sublicenses thereunder, the following three paragraphs will be substituted for paragraphs (c) (1), (2), and (3) of the Patent Rights clause in § 14R-9.107-5(a):

(c)(1) Contractor license. The Contractor reserves a nonexclusive, irrevocable, paid-up license in each patent application filed in any country on a Subject Invention and any resulting patent in which the Government acquires the 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 revocable, nonexclusive sublicenses which are revocable under the same terms and conditions as set forth in paragraphs (c)(2) and (3) of this clause. The license shall be transferable only with the approval of OWRT except when trasferred to the successor of the part of the Contractor's business to which the invention pertains.

(2) Revocation limitations. Any sublicense granted by the Contractor may be revoked or modified by OWRT, either in whole or in part, only to the extent necessary to achieve expeditious practical application of the Subject Invention, and only to the extent an exclusive license is actually granted by the Government. This sublicense shall not be revoked in that field of use and/or the geographical areas in which the Contractor, or its sublicense, 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 any sublicense pursuant to paragraph (c)(2) of this clause, OWRT shall furnish the Contractor and the sublicensee written notice of its intention to modify or revoke the sublicense, and the Contractor and the sublicensee shall be allowed 30 days, or such longer period as may be allowed by the Solicitor for good cause shown in writing by the Contractor or the sublicensee, after such notice to show cause why the sublicense should not be modified or revoked by a determination of the Solicitor or his authorized representative. The Contractor or the sublicensee shall have the right to appeal to the Secretary or his designee any decision concerning the modification or revocation of the sublicense.

(h) Facilities license. The following paragraph will be included as paragraph (1) of the Patent Rights (long form) clause in each contract having

as a purpose the design, construction, or operation of a Government-owned research, development, demonstration, or production facility. The scope of the license in the following paragraph may, in appropriate situations, be expanded to cover similar facilities.

(1) Facilities license. In addition to the rights of the parties with respect to inven. tions or discoveries conceived or first actually reduced to practice in the course of or under this contract, the Contractor agrees to and does hereby grant to the Government a nonexclusive, irrevocable, paid-up license in and to any inventions or discoveries regardless of when conceived or actually reduced to practice or acquired by the Contractor, which are owned or controlled by the Contractor at any time through completion of this contract and which are incorporated or embodied in the construction of the facility or which are utilized in the operation of the facility or which cover articles, materials, or products manufactured at the facility (1) to practice or to have practiced by or for the Government at the facility, and (2) to transfer such license with the transfer of that facility. The acceptance or exercise by the Government of the aforesaid rights and license shall not prevent the Government at any time from contesting the enforceability, validity or scope of, or title to, any rights or patents herein licensed.

8 14R-9.107-6 Clause for contracts (short

form). The following clause may be used instead of the clause of $ 14R-9.107-5(a) in contracts for basic or applied research where the contractor is a nonprofit or educational institution, except in contracts calling for the operation of Government-owned facilities, or contract in which an advance waiver has been granted, or other special contracts such as those for the conduct of major long-term continuing programs or basic overall agreements providing for the assignment of new tasks from time to time by mutual agreement.

PATENTS RIGHTS (SHORT FORM) (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) "Solicitor" means the Solicitor of the U.S. Department of the Interior.

(b) Invention disclosures and reports. (1) The Contractor shall furnish the Contracting Officer:

(i) A written report (on Form DI-1217 or an equivalent) containing full and complete technical information concerning each Subject Invention within 6 months after conception or first actual reduction to practice, whichever occurs first, in the course of or under this contract, but in any event prior to any on sale, public use, or public disclosure of such invention known to the Contractor. The report shall identify the contract and inventor and shall be sufficiently complete in technical detail and appropriately illustrated by sketch or diagram to convey to one skilled in the art to which the invention pertains a clear understanding of the nature, purpose, operation, and to the extent known, the physical, chemical, biological, or electrical characteristics of the invention.

(ii) Upon request, but not more than annually, interim reports (on Form DI-1216 or an equivalent) listing Subject Inventions for that period and certifying that all Subject Inventions have been disclosed or that there were no such inventions; and

(iii) A final report (on Form DI-1216 or equivalent) within 3 months after completion of the contract work listing all Subject Inventions and certifying that all Subject Inventions have been disclosed or that there were no such inventions.

(2) The Contractor agrees that the Government may duplicate and disclose Subject Invention disclosures and all other reports and papers furnished or required to be furnished pursuant to the contract.

(c) 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 paragraph (c)(2) and (d) 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 (d) of this clause on identified inventions in accordance with the procedure and criteria of 41 CFR 14R-9.109-6. A request for a determination of whether the Contractor or the employee-inventor is entitled to retain such greater rights must be submitted to the Contracting Officer at the time of the first disclosure of the invention pursuant to paragraph (b)(1) 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. The information to be submitted for a greater rights determination is specified in 41 CFR 14R-9.109-6(e).

(d) Minimum rights to the Contractor. 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. Revocation shall be in accordance with the procedures of paragraphs (c) (2) and (3) of the clause in 41 CFR 14R-9.107-5(a). The Contractor also has the right to request foreign rights in ac. cordance with the procedures of paragraph (c)(4) of the clause in 41 CFR 14R-9.1075(a).

(e) Employee and Subcontractor agreements. Unless otherwise authorized in writ. ing by the Contracting Officer, the Contractor shall:

(1) Obtain patent agreements to effectuate the provisions of the Patent Rights clause from all persons in its employ who perform any part of the work under this contract except nontechnical personnel, such as clerical employees and manual laborers;

(2) Unless otherwise authorized or directed by the Contracting Officer, the Contractor shall include the Patent Rights clause of 41 CFR 14R-9.107-5(a) or 14R-9.107-6, as appropriate, modified to identify the parties in any subcontract hereunder having as a purpose the conduct of research, development, or demonstration work; and

(3) Promptly notify the Contracting Officer in writing upon the award of any subcontract containing a Patent Rights clause by identifying the subcontractor, the work to be performed under the subcontract, and the dates of award and estimated completion. Upon the request of the Contracting Officer, the Contractor shall furnish a copy of the subcontract to such requester.

(f) Publication. In order that information concerning scientific or technical developments conceived or first actually reduced to practice in the course of or under the contract is not prematurely published so as to adversely affect patent interest of the parties to the contract, the Contractor agrees to submit to the Solicitor for patent review a copy of each paper 60 days prior to its intended publication date. The Contractor may publish such information after expiration of a 60-day period following such submission, or prior thereto if specifically approved by the Solicitor, unless the Contractor is informed that in order to protect patentable subject matter, publication must be further delayed.

(g) Dominating Background Patents. (1) Definitions.

(i) “Background Patents” means a foreign or domestic patent (regardless of its date of issue relative to the date of this contract).

(A) Which the Contractor, but not the Government, has the right to license to others; and

(B) Infringement of which cannot be avoided upon the practice of a Subject Invention or Specified Work Object.

(ii) “Commercial Item" means:

(A) Any machine, manufacture, or composition of matter which, at the time of a request for a license pursuant to this section, is offered for sale or otherwise made available commercially to the public in the regular course of business, at terms reasonable in the circumstances; and

(B) Any process which, at the time of a request for a license, is in commercial use, or is offered for commercial use, so the results of the process or the products produced thereby are or will be accessible to the public at terms reasonable in the circumstances.

(iii) To "practice an invention or patent" means the right of a licensee on his own behalf to make or have made, use or have used, sell or have sold, or otherwise dispose of according to law, any machine, design, manufacture, or composition of matter physically embodying the invention, or to use or have used the process or method comprising the invention.

(iv) "Specified Work Object" means the specific process, method, machine, manufacture, or composition of matter (including relatively minor modifications thereof) which is the subject of the experimental, developmental, or research work performed under this contract.

(2) Contractor agrees that he will make the Background Patent available for use in conjunction with (A) any Subject Invention and (B) any Specified Work Object which is in the field of technology where the work of the contract falls. This may be done:

(i) By making available an embodiment of the Subject Invention or Specified Work Object, which incorporates the invention covered by the Background Patent, as a Commerical Item of reasonable quality, in sufficient quantity, and at reasonable prices to satisfy market needs; or

(ii) By the sale of an embodiment of the Background Patent as a Commercial Item in a form which can be employed in the practice of the Subject Invention or the Specified Work Object or can be so employed with relatively minor modifications or demonstrating to the satisfaction of the Solicitor that a competitive alternative to such an embodiment is offered for sale, or otherwise made available commercially to the public, which is of reasonable quality, in sufficient

quantity, and at reasonable prices to satisfy market needs; or

(iii) By the licensing of the domestic Background Patent at reasonable terms, including reasonable royalties to responsible applicants on their request.

(3)(i) When a license to practice a domestic Background Patent in conjunction with any Subject Invention or any Specified Work Object for the technology where the work of the contract falls is requested, in writing, by a responsible applicant, and such Background Patent is not available as set forth in subparagraphs (g)(2)(i) or (ii) of this clause, the Contractor shall have six (6) months from the date of his receipt of such request to decide whether to make such Background Patent so available. The Contractor shall promptly notify the Contracting Officer, in writing within the said six months, of any such request for a license to practice a Background Patent in conjunction with a Subject Invention or specified Work Object, which the Contractor or his licensee wishes to attempt to make available as set forth in subparagraphs (g)(2)(i) or (ii) of this clause. The Secretary shall then designate the reasonable time within which the Contractor must make such Background Patent available in reasonable quantity and quality, and at a reasonable price. If the Contractor or his licensee decides not to make such Background Patent so available, or fails to make it available within the time designated by the Secretary or his designee, the Background Patent shall be licensed to a responsible applicant at reasonable terms, including a reasonable royalty, in conjunction with (A) the Specified Work Object, or (B) the Subject Invention; and may be limited by the licensor for practice in the field of technology where the work of the contract falls.

(ii) The Contractor agrees to grant or have granted to a designated applicant, upon the written request of the Government, a nonexclusive license at reasonable terms, including reasonable royalties, under any foreign Background Patent in furtherance of any treaty or agreement between the Government of the United States and a foreign government for the governmental purpose of such foreign government if an embodiment of the Background Patent is not commercially available in that country. Such license may be limited by the licensor to the practice of such Background Patent in conjunction with the Subject Inventions or Specified Work Objects in the field of technology where the work of the contract falls.

(iii) The Contractor agrees it will not seek injunctive relief or other prohibition of the use of the invention in enforcing its rights against any responsible applicant for such license and that it will not join with others

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