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apply to this Background Patent Rights Clause.

(1) "Background Patent” means a foreign or domestic patent (regardless of its date of issue relative to the date of this contract):

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

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

(2) “Commerical Item" means:

(i) Any machine, manufactured or composition of matter which, at the time of a request for a license pursuant to section (b) of this clause, has been sold, offered for sale, or otherwise made available commercially to the public in the regular course of business at terms reasonable in the circumstances, and

(ii) 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.

(3) "Specified Work Object” means the specific processes, methods, machines, manufacture or compositions of matter (including relatively minor modifications thereof) which are the subject of the experimental, developmental, or research work performed under this contract.

(4) “Contractor,” as applicable to this clause only, means any individual, partnership, public or private corporation, association, institution, or other entity which is a party to this 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.

(5) "Government" means the Federal Government of the United States of America.

(6) To "practice an invention or patent" means the right of a licensee on his own behalf to make, 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.

(7) "Administrator" means the Administrator of the U.S. Environmental Protection Agency or his authorized designee.

(8) "General Counsel" means the General Counsel of the U.S. Environmental Protection Agency or his authorized designee.

(b) Licenses Under Background Patents.

(1) The Contractor agrees that it will make its Background Patent(s) available for use in conjunction with a Subject Invention or Specified Work Object for use in the specific field of technology in which the purpose of this Contract or the work called for or required thereunder falls. This may be done (i) by making available, in quality, quantity, and price, all of which are reasonable in the circumstances, an embodiment of the Subject Invention or Specified Work Object, which incorporates the invention covered by such Background Patent, as a Commercial Item, or (ii) by the sale of an embodiment of such Background Patent as a Commercial Item in a form which can be employed in the practice of a Subject Invention or Specified Work Object or can be so employed with relatively minor modifications, or (iii) by the licensing of the domestic Background Patent(s) at reasonable roy. alty to responsible applicants on their request.

(2) If the Administrator determines after a hearing that the quality, quantity, or price of embodiments of the Subject Invention or specified Work Object sold or otherwise made available commercially as set forth in paragraph (b)(1)(i) is unreasonable in the circumstances, he may require the Contractor to license such domestic Background Patent to a responsible applicant at reasonable terms, including a reasonable royalty, but for use only in the specific field of technology in which the purpose of this contract or the work called for thereunder falls, and for use only in connection with (i) a Specified Work Object, or (ii) a Subject Invention.

(3)(i) When a license to practice a domestic Background Patent in conjunction with a Subject Invention or Specified Work Object is requested, in writing by a responsible applicant, for use in the specific field of technology in which the purpose of this contract or the work called for thereunder falls, and such Background Patent is not available as set forth in paragraph (b)(1)(i) or (ii), 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, of any request for a license to practice a Background Patent in conjunction with a Subject Invention or Specified Work Object; such notification shall indicate if the Contractor or his exclusive licensee will comply with (b)(1)(i)(ii).

(ii) If the Contractor decides to make such domestic Background Patent so available either by himself or by either an exclusive or nonexclusive licensee, he shall so notify the Administrator within the said six (6) months, whereupon the Administrator 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 exclusive licensee decides not to make such Background Patent so available, or fails to make it available within the time designated by the Administrator, the Background Patent shall be licensed to a responsible applicant at reasonable terms, including a reasonable royalty, for practice in conjunction with (A) a Specified Work Object, or (B) a Subject Invention, and shall be limited to a specific field of technology in which the purpose of this Contract or the work called for there. under falls.

(iii) 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 practice by or on the behalf of such foreign government, if an embodiment of the Background Patent is not commercially available in that country, Provided, however, That no such license will be required unless the Administrator determines that issuance of such license is in the national interest. Such license may be limited by the licensor to the practice of such Background Patent in conjunction with a Subiect Invention or a Specified Work Object and for use in only the specific field of technology in which the purpose of this contract or the work called for thereunder falls.

(iv) The Contractor agrees it will not seek injunctive relief or other prohibition of the use of a domestic Background Patent in enforcing its rights against any responsible applicant for such license and that it will not join with others in any such action. It is un derstood and agreed that the foregoing shall not affect the Contractor's right to injunctive relief or other prohibition of the use of Background Patents in areas not connected with the practice of a Subject Inven tion or specified Work Object in the specif. ic field of technology in which the purpose of this contract or the work called for there under falls, or where the Contractor has made available a Commercial Item as set out in paragraph (b)(1)(i) or (ii).

(4) For use in the specific field of technol. ogy in which the purpose of this contract or the work called for thereunder falls, and in conjunction with a Subject Invention or a Specified Work Object, the Contractor agrees to grant to the Government a license under any Background Patent. Such license shall be nonexclusive, nontransferable, roy. alty-free, and worldwide to practice such Patent which is not available as a Commercial Item as specified in paragraph (b)(1)(ii)

for use of the Federal Government in connection with pilot plants, demonstration plants, test beds, and test modules. For all other Government uses, any royalty charged the Government under such license shall be reasonable and shall give due credit and allowance for the Government's contribution, if any, toward the making, commercial development, or enhancement of the invention(s) covered by the Background Patent.

(5) Any license granted under a process Background Patent for use with a Specified Work Object shall be additionally limited to employment of the Background Patent under conditions and parameters reasonably equivalent to those called for or employed under this contract.

(6) It is understood and agreed that the Contractor's obligation to grant licenses under Background Patents shall be limited to the extent of the Contractor's right to grant the same without breaching any unexpired contract it had entered into prior to this contract or prior to the identification of a Background Patent, or without incurring any obligation to another solely on account of said grant. However, where such obligation is the payment of royalties or other compensation, the Contractor's obligation to license his Background Patents shall continue and the reasonable license terms shall include such payments by the applicant as will at least fully compensate the Contractor under said obligation to another.

(7) On the request of the Contracting Officer the Contractor shall identify and describe any license agreement which would limit his right to grant licenses under any Background Patent.

(8) In the event the Contractor has a parent or an affiliated company, which has the right to license a patent which would be a Background Patent if owned by the Contractor, but which is not available as a Commercial Item as specified in paragraph (b)(1) (i) or (ii), and a qualified applicant requests a license under such patent for use in the specific field of technology in which the purpose of this contract or the work called for thereunder falls, and in connection with the use of a Subject Invention or Specified Work Object, the Contractor shall, at the written request of the Government, recommend to his parent company, or affiliated company, as the case may be, the granting of the requested license on reasonable terms, including reasonable royalties, and actively assist and participate with the Government and such applicant, as to technical matters and in liaison functions between the parties, as may reasonably be required in connection with any negotiations for issuance of such license. For the purpose of this paragraph, a parent company is one which owns or controls, through direct or indirect

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ownership of more than 50 percent of the outstanding stock entitled to vote for the election of directors, another company or other entity; and, affiliated companies or companies or other entities owned or controlled by the same parent company.

(c) All subcontractors agree that the Government is a third party beneficiary of any subcontract clause granting rights to the public or the Government in Background Patents.

815-7.350 Clauses to be used when appli

cable. (5 U.S.C. 301) [43 FR 9279, Mar. 7, 1978)

8 15-7.302-54 Gratuities.

Insert the following clause in fixedprice research and development contracts.

GRATUITIES (a) The Govenment may by written notice to the Contractor terminate the right of the Contractor to proceed under this contract if it is found, after notice and hearing, by the Administrator or his duly authorized representative, that gratuities (in the form of entertainment, gifts, or otherwise) were offered or given by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the Government with a view toward securing a contract or securing favorable treatment with respect to the awarding or amending, or making of any determinations with respect to the performing of such contract: Provided, That the existence of the facts upon which the Administrator or his duly authorized representative makes such findings shall be in issue and may be reviewed in any competent court.

(b) In the event this contract is terminated as provided in paragraph (a) hereof, the Government shall be entitled (i) to pursue the same remedies against the Contractor as it could pursue in the event of a breach of the contract by the Contractor.

(c) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any rights and remedies provided by law or under this contract.

$ 15-7.350-1 Treatment of confidential

business information. Insert the following clause in fixedprice research and development contracts when the contracting officer has determined that in the performance of a contract EPA may furnish confidential business information to the contractor that EPA obtained under the Clean Air Act (42 U.S.C. 1857 et seq.), the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. 300f et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136 et seq.), the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), or the Toxic Substances Control Act (15 U.S.C. 2601 et seq.). EPA regulations on confidentiality of business information in 40 CFR Part 2 Subpart B require that the contractor agree to the Clause entitled “Treatment of Confidential Business Information” before any confidential business information may be furnished to the contractor: TREATMENT OF CONFIDENTIAL BUSINESS

INFORMATION (a) The Contracting Officer, after a written determination by the appropriate program office, may disclose confidential business information to the Contractor necessary to carry out the work required under this contract. The Contractor agrees to use the confidential information only under the following conditions:

(1) The Contractor and Contractor's Employees shall: (i) Use the confidential information only for the purposes of carrying out the work required by the contract; (ii) not disclose the information to anyone other than EPA employees without the prior written approval of the Deputy Associate General Counsel for Contracts and General Administration; and (iii) return to the Contracting Officer all copies of the information, and any abstracts or excerpts therefrom, upon request by the Contracting Officer, whenever the information is no

8 15-7.302-55 Authorization and consent.

Insert the following clause in fixedprice research and development contracts:

AUTHORIZATION AND CONSENT The Government hereby gives its authorization and consent for all use and manufacture of any invention described in and covered by a patent of the United States in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lowertier subcontract).

longer required by the Contractor for the performance of the work required by the contract, or upon completion of the contract.

(2) The Contractor shall obtain a written agreement to honor the above limitations from each of the Contractor's Employees who will have access to the information, before the employee is allowed access.

(3) The Contractor agrees that these contract conditions concerning the use and disclosure of confidential information are included for the benefit of, and shall be enforceable by, both EPA and any affected business having a proprietary interest in the information.

(4) The Contractor shall not use any confidential information supplied by EPA or obtained during performance hereunder to compete with any business to which the confidential information relates.

(b) The Contractor agrees to obtain the written consent of the Contracting Officer, after a written determination by the appropriate program office, prior to entering into any subcontract that will involve the disclosure of confidential business information by the Contractor to the subcontractor. The Contractor agrees to include this clause, including this paragraph (b), in all subcontracts awarded pursuant to this contract that require the furnishing of confidential business information to the subcontractor. (5 U.S.C. 301) (43 FR 9279, Mar. 7, 1978]

SCREENING BUSINESS INFORMATION FOR

CLAIMS OF CONFIDENTIALITY (a) Whenever collecting information under this contract, the Contractor agrees to comply with the following requirements:

(1) If the Contractor collects information from public sources, such as books, reports, journals, periodicals, public records, or other sources that are available to the public without restriction, the Contractor shall submit a list of these sources to the appropriate program office at the time the information is initially submitted to EPA. The Contractor shall identify the information according to source.

(2) If the Contractor collects information from a State or local government or from a Federal agency, the Contractor shall submit a list of these sources to the appropriate program office at the time the information is initially submitted to EPA. The Contractor shall identify the information according to source.

(3) If the Contractor collects information directly from a business or from a source that represents a business or businesses, such as a trade association:

(i) Before asking for the information, the Contractor shall identify itself, explain that it is performing contractual work for the U.S. Environmental Protection Agency, identify the information that it is seeking to collect, explain what will be done with the information, and give the following notice:

(A) You may, if you desire, assert a business confidentiality claim covering part or all of the information. If you do assert a claim, the information will be disclosed by EPA only to the extent, and by means of the procedures, set forth in 40 CFR Part 2, Subpart B, 41 FR 36906, September 1, 1976.

(B) If no such claim is made at the time this information is received by (the Contractor), it may be made available to the public by the Environmental Protection Agency without further notice to you.

(ii) Upon receiving the information, the Contractor shall make a written notation that the notice set out above was given to the source, by whom, in what form and on what date.

(iii) At the time the Contractor initially submits the information to the appropriate program office, the Contractor shall submit a list of these sources, identify the information according to source, and indicate whether the source made any confidential. ity claim and the nature and extent of the claim.

(b) The Contractor shall keep all information collected from nonpublic sources confidential in accordance with the clause in this contract entitled “Treatment of Confidential Business Information" as if it had been furnished to the Contractor by EPA.

& 15-7.350-2 Screening business informa

tion for claims of confidentiality. Insert the following clause in fixedprice research and development contracts when the contracting officer has determined that during performance of this contract the contractor may be required to collect information to perform the work required under this contract. Some of the information may consist of trade secrets or commercial or financial information that would be considered as proprietary or confidential by the business that has the right to the information. The following clause enables EPA to resolve any claims of confidentiality concerning the information that the contractor will furnish under a contract. The clause entitled “Treatment of Confidential Business Information” shall also be included in the contract:

8 15-7.402-55 Background patent rights.

Insert the clause set forth in 157.302-53 in accordance with the conditions prescribed therein.

(c) The Contractor agrees to obtain the written consent of the Contracting Officer, after a written determination by the appropriate program office, prior to entering into any subcontract that will require the subcontractor to collect information. The Contractor agrees to include this clause, including this paragraph (c), and the clause entitled “Treatment of Confidential Business Information” in all subcontracts awarded pursuant to this contract that require the subcontractor to collect information. (5 U.S.C. 301) [43 FR 9279, Mar. 7, 1978)

8 15-7.402-56 Insurance.

Insert the following clause in all cost-reimbursement type contracts. When special circumstances exist the clause may be used in fixed-price contracts (see FPR 1-10.401).

Subpart 15-7.4—Cost-Reimbursement

Type Research and Development

Contracts § 15-7.400 Scope of subpart.

This subpart sets forth uniform contract clauses for use in cost-reimbursement type research and development contracts with fixed fee, and for use if the contract is with an educational or other nonprofit institution. For convenience, these clauses are reproduced on EPA Form 1900-17 and EPA Form 1900-28 respectively. § 15-7.402 Required clauses for use in

cost-reimbursement type research and development contracts with fixed fee.

8 15-7.402-50 Printing.

Insert the clause set forth in § 157.302-50.

INSURANCE (a) The Contractor shall procure and maintain such insurance as is required by law or regulation, including that required by Subpart 1-10.5 of the Federal Procurement Regulations as of the date of execution of this contract, and such insurance as the Contracting Officer prescribes by written direction.

(b) At a minimum, the Contractor shall procure and maintain the following types and amounts of insurance:

(1) Workmen's compensation and occupational disease insurance in amounts sufficient to satisfy State law;

(2) Employer's liability insurance, where available;

(3) Public liability insurance, on the comprehensive form of policy, in the amount of $200,000 per claimant and $500,000 per inci. dent:

(4) When aircraft are used in the performance of the contract, aircraft public and passenger liability insurance, in such form, in such amounts, and for such periods of time as the Contracting Officer may require or approve; and

(5) When vessels are used in the performance of the contract, vessel collision liability and protection and indemnity liability in. surance, in such form, in such amounts, and for such periods of time as the Contracting Officer may require or approve.

(c) With respect to any insurance policy all or part of the premiums of which the Contractor proposes to treat as a direct cost under this contract, and with respect to any proposed qualified program of self-insurance, the written approval of the Contracting Officer shall be obtained prior to any claim for payment therefor. The Contractor shall be reimbursed for the portion allocable to this contract.

(d) The terms of any other insurance policy held by the Contractor shall be submitted to the Contracting Officer for review and/or approval upon request of the Contracting Officer.

8 15-7.402-51 Rights in data.

Insert the clause set forth in § 157.302-51.

8 15-7.402-52 Data requirements.

Insert the clause set forth in § 157.302-52.

8 15-7.402-53 Gratuities.

Insert the clause set forth in § 157.302-54.

8 15-7.402-54 Authorization and consent.

Insert the clause set forth in § 157.302-55. (5 U.S.C. 301) (43 FR 9280, Mar. 7, 1978)

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