tives of their missions under differing contractual circumstances, and

within the differing mission constraints of the federal agencies, promotes consistent application of patent policies and practices in similar contracting situations.

In view of the se conclusions, the Committee recommends the continuation of a flexible, government-wide patent policy following the basic principles and criteria of the October 1963 Presidential Policy Statement. Specifically, the Committee recommends the continuation of such a policy either by making minor modifications to the Presidential Policy (which would be subject to present statutory requirements), or by proposing legislation based on similar principles and criteria which would be applicable to all agencies.

Part I

Background

A. Establishment of the Committee on Government Patent Policy

The Presidential Memorandum and Statement of Government Patent
Policy (Appendix 1) was formulated carefully after eighteen
months of interagency discussions and consultations, and
brought together the experience and views of twenty federal
departments and agencies on the issues involved in allocating
rights to inventions between the Government and its research
and development contractors. Although this Presidential
Policy was not viewed as the ultimate answer to this long dis-
cussed question of national policy, it was viewed, on the
basis of the knowledge and experience then available, as the
first attempt to establish a central rationale, within
existing legislative constraints, for the allocations of
such rights in a manner deemed best to serve the public
interest. Recognizing that actual experience under, and
additional study of, the Policy could indicate the need for
modification or further implementation, the memorandum
accompanying the Policy Statement provided for a continuing
evaluation and for a review of the Policy after a reasonable
period of trial, and in the light of the facts and experience
accumulated.

In light of continued Congressional and public concern over the patent policy issue, the Federal Council decided that a concentrated effort should be made to study in greater depth the principles underlying the Presidential Policy. To perform this function, the Federal Council established in December of 1965 the Committee on Government Patent Policy. Specifically, the Committee was requested to assess how the Presidential Policy had worked in practice, and to acquire and analyze additional information that would contribute to the reaffirmation or modification of the policy and to proposing principles underlying sound legislation.

In fulfilling its assignment, the Committee first identified
three questions which the members believed to be basic to
the government patent policy issue, and to which answers
would be desirable in analyzing government patent policy.
These three basic questions centered on the effect that

(1) achieving expeditious development and civilian utilization of government financed inventions;

(2) obtaining the cooperation of industry in assisting the Government in its research and development efforts; and

After considering various approaches to obtaining information and data necessary to shed light on the se basic questions, the Committee decided to contract for a study effort for the collection and analysis of data which would increase the base of knowledge of the effects of government patent policy on the public interest. In the belief that prior studies, published articles, and Congressional hearings more than adequately identified the philosophy, opinions and positions of all segments of Government and industry, the Committee decided to direct the contract study as much as possible toward the accumulation and analysis of factual information. Accordingly, it was decided to begin the study by concentrating, at least initially, on issued patents resulting from government-sponsored research. Afterwards, the study effort could work back from this known information source to determine what additional information could be collected that might assist in evaluating government patent policy in general, and the Presidential Policy in particular. The Committee believed that the results of such a study effort, together with the many years of operating experience of the federal departments and agencies under various patent policies established by the agencies, by statute, and more recently by the Presidential Policy, would provide the information base needed to make recommendations to the Federal Council. After deciding on this study approach, the Committee selected Harbridge House, Inc. of Boston, Massachusetts to conduct this study effort.

C. Description of the Study Contract

The contract effort was divided into two basic phases. First was the collection and analysis of all available information and data regarding the circumstances surrounding the commercial utilization, or failure to utilize, patented inventions derived from government-contracted research and development. And second, the contract provided for conducting in-depth studies on selected cases involving the effect of government

patent policy.

The second phase was primarily for the purpose of obtaining a better understanding, and for assessing the accuracy of the data to be gathered under the first phase.

In order to conduct the first phase of the study, two years were selected, 1957 and 1962, and the government register of the U. S. Patent Office was consulted to identify every U. S. patent which issued in these two years which resulted from work performed by contractors under government financing. These patents formed the sample of government-sponsored inventions which was the data base for the first phase. The patents issuing in two years, spaced apart by several years, were selected to obtain a more representative sample than might be obtained from a single year. The two specific years of 1957 and 1962 were selected to permit a reasonable length of time for the patents to have been commercially used and to have had any identifiable effect on their relevant commercial markets. Although the Presidential Policy was not in effect during either of the selected years, the agencies' patent policies then in force were sufficiently diverse to permit a full range of conditions between the license and title policies.

Approximately 3600 patents issuing in these two years were
identified as resulting from government-contracted research
and development efforts of approximately 450 different
organizations, including industrial firms, nonprofit organi-
zations and universities. However, in view of the fact that
relatively few of these patents were from agencies other
than the Department of Defense and the Atomic Energy Commis-
sion, it was decided to increase the patent sample for the
public-oriented agencies.
patent policy point of
view, the research results of the se public-oriented agencies
were more important than the small number of patents would
indicate. Accordingly, the patents for these agencies were
increased by including all contractor-developed patents

1/ Harbridge House classified the federal agencies into three categories: (a) public-service or public-oriented agencies which conduct R&D programs to benefit the public directly, as Agriculture, TVA, Interior and HEW; (b) missionoriented agencies which conduct R&D programs for the agency's own internal use, as DOD; and (c) agencies with mixed R&D