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Sec.

establish that the invention is being 25-9.106 Availability of inventions to the worked and that its benefits are reapublic.

sonably accessible to the public; 25-9.107 Delegations.

(g) The term “President's Policy" AUTHORITY: Secs. 11(e) and 12(a) of the means the President's Statement of National Science Foundation Act, as amend Government Patent Policy issued ed (42 USC 1870(e) and 1871(a)).

August 23, 1971 (36 FR 16887, August SOURCE: 39 FR 41977, Dec. 4, 1974, unless 26, 1971); and otherwise noted.

(h) The term “Patent Policy Review

Committee" refers to a committee Subpart 25-9.1—Patents

made up of Foundation personnel and

established by the Director to adminis§ 25-9.100 Scope of Subpart.

ter certain aspects of Foundation This subpart sets forth policies, pro

patent policy. cedures, and clauses with respect to

$ 25–9.102 Source of authority. rights in inventions made in the s course of or under contracts subject to (a) Section 12(a) of the National SciTitle III of the Federal Property and ence Foundation Act of 1950, as Administrative Services Act of 1949, as amended (42 U.S.C. 1871(a)), provides amended, entered into by the National as follows: Science Foundation Policies, proce

Each contract or other arrangement exdures, and clauses with respect to

ecuted pursuant to this Act which relates to rights in inventions under awards

scientific research shall contain provisions other than the above are set forth in

governing the disposition of inventions pro45 CFR Part 650.

duced thereunder in a manner calculated to

protect the public interest and the equities $ 25–9.101 Definitions.

of the individual or organization with which As used in this subpart

the contract or other arrangement is ex(a) The term “contract” includes

ecuted; Provided, however, That nothing in contracts entered into by the Founda

this Act shall be construed to authorize the

Foundation to enter into any contractual or tion which are made for the purpose

other arrangement inconsistent with any of conducting experimental, develop

provisions of law affecting the issuance or mental, or research work or which

use of patents. contain a significant amount of such work.

(b) Section 11(e) of the same Act (b) The term “Director” means the provides as follows: Director of the Foundation;

The Foundation shall have the authority, (c) The term “Foundation" means

within the limits of available approprithe National Science Foundation;

ations, to do all things necessary to carry (d) The term “contractor" means out the provisions of this Act, including, but the recipient of a contract, and may, without being limited thereto, the authorias the contract requires, include subcontractors of a contractor at any tier; (e) to acquire by purchase, lease, loan, (e) The term "invention” includes

gift, or condemnation, and to hold and disany art, method, process, machine,

pose of by grant, sale, lease, or loan, real manufacture, design, or composition

and personal property of all kinds necessary of matter, or any new and useful im

for, or resulting from, the exercise of au

thority granted by this Act. provement thereof, or any variety of plant, which is or may be patentable The President's Policy provides guidunder the Patent Laws of the United ance as to basic policies to be followed States of America or any foreign coun by executive agencies with respect to try;

inventions or discoveries made in the (f) The term “to the point of practic course of their awards. The provisions cal application" means to manufacture set forth in this subpart are intended in the case of a composition or prod- to implement the National Science uct, to practice in the case of a proc- Foundation Act in accordance with ess, or to operate in the case of a ma- the basic guidelines and philosophy of chine and under such conditions as to the President's Policy.

895_9 102 Procedure for selection of con. $ 25–9.103 Procedures for selection of con.

tract clauses. (a) Except as provided in paragraphs (b) and (c) of this section, all Foundation contracts shall contain the following clause: PATENT RIGHTS-OPTION IN THE GOVERNMENT

(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 plant, which is or may be patentable under the Patent Laws of the United States of America, or any foreign country.

(2) “Contract" means any contract, agreement, grant, or other arrangement, or subcontract entered into with or for the benefit of the Government where a purpose of the contract is the conduct of experimental, developmental, or research work.

(3) “States and domestic municipal gov. ernments" 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 that the invention is being worked and that its benefits are reasonably accessible to the public.

(6) "Foundation" means the National Sci. ence Foundation.

(b) Disposition of principal rights(1) Assignment to the Government. The Contractor agrees to assign to the Government when requested, the entire right, title, and interest throughout the world in and to each Subject Invention, except to the

nt that rights are retained by the Contractor under paragraphs (b)(2) and (d) of this clause.

(2) Greater Rights Determinations. The Contractor, or the employee-inventor with authorization of the Contractor, may retain greater rights than the nonexclusive license provided in paragraph (d) of this clause in accordance with the procedure and criteria

of 41 CFR 25-9.104. A request for a determi. 01 nation as to whether the Contractor or the employee-inventor is entitled to retain such greater rights must be submitted to the Foundation at the time of the first disclosure of the invention pursuant to paragraph (e)(2)(i) of this clause, or not later than 3 months thereafter or such longer period as may be authorized by the Foundation for good cause shown in writing by the Contractor. The information to be submitted for a greater rights determination is specified in 41 CFR 25-9.104. Each determination of greater rights under this contract normally shall be subject to paragraph (c) of this clause and to such reservations and conditions as may be deemed to be appropriate by the Foundation.

(c) Minimum rights granted to the Government. With respect to each Subject Invention to which the Contractor retains principal or exclusive rights, the Contractor:

(1) Hereby grants to the Government a nonexclusive, nontransferable, paid-up license to make, use, and sell each Subject Invention throughout the world by or on behalf of the Government of the United States (including any Government agency), States and domestic municipal governments, unless the Director of the Foundation determines after the invention has been identi. fied that it would not be in the public interest to acquire the license for States and domestic municipal governments;

(2) Agrees to grant, upon request of the Government, a license on terms that are reasonable under the circumstances to responsible applicants;

(i) Unless the Contractor, his licensee, or his assignee demonstrates to the Government that effective steps have been taken within 3 years after a patent issued on such invention to bring the invention to the point of practical application or that the invention has been made available for licensing royalty-free or on terms that are reasonable in the circumstances, or can show cause why the principal or exclusive rights should be retained for a further period of time; or

(ii) To the extent that the invention is required for public use by governmental regulations or as may be necessary to fulfill public health or safety needs, or for other public purposes stipulated in this contract;

(3) Shall submit written reports at reasonable intervals, upon request of the Government, during the term of the patent on the Subject Invention regarding

(i) The commercial use that is being made or is intended to be made of such invention; and

(ii) The steps taken by the Contractor or his transferee to bring the invention to the point of practical application or to make the invention available for licensing;

(4) Agrees to refund any amounts received Contractor shall be allowed 30 days (or such as royalty charges on any Subject Invention longer period as may be authorized by the in procurements for or on behalf of the Foundation for good cause shown in writing Government and to provide for that refund by the Contractor) after such notice to in any instrument transferring rights to any show cause why the license should not be party in the invention; and

modified or revoked. (5) Agrees (i) to provide for the Govern (e) Invention identification, disclosure ment's paid-up license pursuant to para- and reports. (1) The Contractor shall estabgraph (c)(1) of this clause in any instrument lish and maintain active and effective procetransferring rights in a Subject Invention dures to assure that Subject Inventions are and (ii) to provide for the granting of li. promptly identified and timely disclosed. censes as required by (c)(2) of this clause These procedures shall include the mainteand for the reporting of utilization informa- nance of laboratory notebooks or equivalent tion as required by paragraph (c)(3) of this records and other records as are reasonably clause whenever the instrument transfers necessary to document the conception and/ principal or executive rights in any Subject or the first actual reduction to practice of Invention.

Subject Inventions and records which show (d) Minimum rights to the Contractor. (1) that the procedures for identifying and disThe Contractor reserves a revocable, nonex closing the inventions are followed. Upon clusive, paid-up license in each patent appli- request, the Contractor shall furnish to the cation, filed in any country on a Subject In Contracting Officer a description of such vention and any resulting patent in which procedures so that he may evaluate and dethe Government acquires title. The license termine their effectiveness. shall extend to the Contractor's domestic (2) The Contractor shall furnish to the subsidiaries and affiliates, if any, within the Contracting Officer: corporate structure of which the Contractor (i) A complete disclosure of each Subject is a part and shall include the right to grant Invention, within 6 months after conception sublicenses of the same scope to the extent or first actual reduction to practice, whichthe Contractor was legally obligated to do ever occurs first in the course of or under so at the time the contract was awarded. the contract, but in any event prior to any The license shall be transferable only with sale, public use, or publication of such inapproval of the Foundation except when vention known to the Contractor. The distransferred to the successor of that part of closure shall identify the contract and inthe Contractor's business to which the in ventor and be sufficiently complete in tech"rention pertains.

nical detail and appropriately illustrated by (2) The Contractor's nonexclusive domes sketch or diagram to convey to one skilled tic license retained pursuant to paragraph in the art to which the invention pertains a (d)(1) of this clause may be revoked or clear understanding of the nature, purpose, modified by the Foundation, either in whole operation, and, to the extent known, the or in part, as to the United States, its terri- physical, chemical, biological, or electrical tories and possessions, Puerto Rico, and the characteristics of the invention; District of Columbia to the extent necessary (ii) Interim reports at least every 12 to achieve expeditious practical application months from the date of the contract listing of the Subject Invention under 41 CFR 101 Subject Inventions for that period and certi4.103-3 pursuant to an application for exclu- fying that; sive license submitted in accordance with 41 (A) The Contractor's procedures for idenCFR Parts 101-4-104-3. This license shall tifying and disclosing Subject Inventions as not be revoked in that field of use and or required by this paragraph (e) have been the geographical areas in which the Con followed throughout the reporting period; tractor has brought the invention to the and point of practical application and continues (B) All Subject Inventions have been disto make the benefits of the invention rea- closed or that there are no such inventions; sonably accessible to the public. The Con- and tractor's nonexclusive license in any foreign (iii) An acceptable final report, within 3 country reserved pursuant to paragraph months after completion of the contract (d)(1) of this clause may be revoked or work, listing all Subject Inventions or certimodified, either in whole or in part, in the fying that there were no such inventions. discretion of the Foundation to the extent. (3) The Contractor shall obtain patent the Contractor or his domestic subsidiaries agreements to effectuate the provisions of or affiliates have failed to achieve the prac this clause from all persons in his employ tical application of the invention in that who perform any part of the work under foreign country.

this contract except nontechnical personnel, (3) Before modification or revocation of such as clerical employees and manual lathe license, pursuant to paragraph (d)(2) of borers. this clause, the Foundation shall furnish to (4) The Contractor agrees that the Govthe Contractor a written notice of its inten- ernment may duplicate and disclose Subject tion to modify or revoke the license and the Invention disclosures and all other reports

and papers furnished or required to be furnished pursuant to this clause.

(f) Forfeiture of rights in unreported subject inventions. (1) Unless excused by the Foundation, the Contractor shall forfeit to the Government all rights on any Subject Invention which he fails to report to the Contracting Officer at or prior to the time he:

(i) Files or causes to be filed a United States or foreign application thereon; or

(ii) Submits the final report required by paragraph (e)(2)(iii) of this clause, whichever is later.

(2) However, the Contractor shall not for. feit rights in a Subject Invention if, within the time specified in (1)(i) or (ii) of this clause, the Contractor:

(i) Prepared a written decision based upon a review of the record that the invention was neither conceived nor first actually reduced to practice in the course of or under the contract; or

(ii) Contending that the invention is not a Subject Invention, he nevertheless discloses the invention and all facts pertinent to his contention to the Contracting Officer; or

(iii) Establishes that the failure to disclose did not result from his fault or negligence.

(3) Pending written assignment of the patent applications and patents on a Subject Invention determined by the Contracting Officer to be forfeited (such determination to be a final decision under the Disputes Clause), the Contractor shall be deemed to hold the intention and the patent applications and patents pertaining thereto in trust for the Government. The forfeiture provision of this paragraph (f) shall be in addition to and shall not supersede other rights and remedies which the Government may have with respect to Subject Inventions.

(g) Eramination of records relating to in ventions. (1) The Contracting Officer or his authorized representative shall, until the expiration of 3 years after final payment under this contract, have the right to examine any books, records, documents, and other supporting data of the Contractor which the Contracting Officer reasonably deems pertinent to the discovery of identifi. cation of Subject Inventions or to determine compliance with the requirements of this clause.

(2) The Contracting Officer shall have the right to review all records and documents of the Contractor relating to the conception or first actual reduction to practice of inventions in the same field of technology as the work under this contract to determine whether any such inventions are subject Inventions if the Contractor refuses or fails to:

(i) Establish the procedures of paragraph (e)(1) of this clause; or

(1) Maintain and follow such procedures, or;

(iii) Correct or eliminate any material deficiency in the procedures within thirty (30) days after the Contracting Officer not the Contractor of such a deficiency.

(h) Withholding of payments. (1) Any time before final payment of the amount of this contract, the Contracting Officer may, if he deems such action warranted, withhold payment until a reserve not exceeding $50,000 or 5 percent of the amount of this contract, whichever is less, shall have been set aside if in his opinion the Contractor fails to:

(i) Establish, maintain, and follow effective procedures for identifying and disclosing Subject Inventions pursuant to paragraph (e)(1) of this clause; or

(ii) Disclose any Subject Invention pursuant to paragraph (e)(2)(i) of this clause; or

(iii) Deliver the interim reports pursuant to paragraph (e)(2)(ii) of this clause; or

(iv) Provide the information regarding subcontracts pursuant to paragraph (i)(5) of this clause.

The reserve or balance shall be retained until the Contracting Officer has determined that the Contractor has rectified whatever deficiencies exist and has delivered all reports, disclosures and other information required by this clause.

(2) Final payment under this contract shall not be made before the Contractor delivers to the Contracting Officer all disclosures of Subject Inventions required by paragraph (e)(2)(i) of this clause and the final report required by (e)(2)(iii) of this clause.

(3) The Contracting Officer may, in his discretion, decrease or increase the sums withheld up to the maximum authorized above. No amount shall be withheld under this paragraph while the amount specified by this paragraph is being withheld under other provisions of the contract. The withholding of any amount or subsequent payment thereof shall not be construed as a waiver of any rights acruing to the Government under this contract.

(i) Subcontracts. (1) For the purpose of this paragraph the term “Contractor" means the party awarding a subcontract and the term "Subcontractor" means the party being awarded a subcontract, regardless of tier.

(2) The Contractor shall, unless otherwise authorized or directed by the Government Contracting Officer, include this Patent Rights clause, modified to identify the parties in any subcontract hereunder, if a purpose of the subcontract is for the conduct of experimental, developmental or research work. In the event of refusal by a Subcontractor to accept this clause, or if in the opinion of the Contractor this clause is inconsistent with the policy set forth in the President's Policy, the Contractor:

(i) Shall promptly submit written notice to the Government Contracting Officer setting forth reasons for the Subcontractor's refusal and other pertinent information which may expedite disposition of the matter; and

(ii) Shall not proceed with the subcontract without the written authorization of the Government Contracting Officer.

(3) The Contractor shall not, in any subcontract or by using a subcontract as consid. eration therefor, acquire any rights in his Subcontractor's Subject Invention for his own use (as distinguished from such rights as may be required solely to fulfill his contract obligations to the Government in the performance of his contract).

(4) All invention disclosures, reports, instruments, and other information required to be furnished by the Subcontractor to the Government Contracting Officer under the provisions of a Patent Rights clause in any subcontract hereunder may, in the discre. tion of the Government Contracting Officer, be furnished to the Contractor for transmission to the Government Contracting Officer.

(5) The Contractor shall identify all Subject Inventions of the Subcontractor of which he acquires knowledge in the performance of this contract and shall notify the Government Contracting Officer promptly upon the identification of the inventions.

(6) It is understood that the Government is a third party beneficiary of any subcon: tract clause granting rights to the Government in Subject Inventions, and the Contractor hereby assigns to the Government all rights that he would have to enforce the Subcontractor's obligations for the benefit of the Government with respect to Subject Inventions. The Contractor shall not be obligated to enforce the agreements of any Subcontractor hereunder relating to the obligations of the Subcontractor to the Government in regard to Subject Inventions.

(b) Except (1) when paragraph (c) of this section applies, or (2) where the contract will be subject to an Institutional Patent Agreement pursuant to 45 CFR 650.8, all contracts which are with nonprofit or not-for-profit organizations (including educational institutions) shall contain the clause at 45 CFR 650.4(b). However, in the case of such contracts for the operation of National Research Centers or similar facilities other provisions may be negotiated with the approval of the General Counsel; provided that such provisions shall be consistent with section 1(a)(4) of the President's Policy.

(c)(1) At the request of a prospective contractor, special provisions other than those provided in paragraphs (a) and (b) of this section may be negoti. ated where the award falls within sec. tion 1(b) of the President's Policy or where exceptional circumstances as set forth in section 1(a) of the President's Policy exist. In accordance with Section 1(c) of the President's Policy, such provisions may also be negotiated at the time of award with educational or other non-profit or not-for-profit institutions having a demonstrated capability for effective patent management; provided that in such cases the provisions shall normally include the features described in 45 CFR 650.8(c).

(2) In negotiating such special provisions, Section 12(a) of the National Science Foundation Act, as amended, and the President's Policy will be followed.

(3) In the case of negotiations involving contracts falling within section 1(b) of the President's Policy, the clause at paragraph (a) of this section shall be used, except that the name of the clause shall be changed to “PATENT RIGHTS-OPTION IN THE CONTRACTOR,” paragraph (b) of that clause shall be replaced by the following paragraph (b), and the following paragraphs (j) and (k) shall be added:

(b) Disposition of principal rights. (1) The Contractor may retain the entire right, title, and interest throughout the world or in any country thereof in and to each Subject Invention disclosed pursuant to paragraph (e)(2)(i) of this clause, subject to the rights obtained by the Government in paragraph (c) of this clause. The Contractor shall include with each Subject Invention disclosure an election as to whether he will retain the entire right, title, and interest in the invention throughout the world or any country thereof.

(2) Subject to the license specified in paragraph (d) of this clause, the Contractor agrees to convey to the Government, upon request, the entire domestic right, title, and interest in any Subject Invention when the Contractor:

(i) Does not elect under paragraph (b)(1) of this clause to retain such rights; or

(ii) Fails to have a United States patent application filed on the invention in accordance with paragraph (j) of this clause, or de

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