Page images
PDF
EPUB

C. The use and practice of these inventions and discoveries should stimulate inventors, meet the needs of the government, recognize the equities of the contractor, and serve the public interest.

D. The public interest in a dynamic and emcient economy requires that efforts be made to encourage the expeditious development and civilian use of these inventions. Both the need for incentives to draw forth private initiatives to this end, and the need to promote healthy competition in industry must be weighed in the disposition of patent rights under government contracts. Where exclusive rights are acquired by the contractor, he remains subject to the provisions of the antitrust laws.

E. The public interest is also served by sharing of benefits of government-financed research and development with foreign countries to a degree consistent with our international programs and with the objectives of U.S. foreign policy.

F. There is growing importance attaching to the acquisition of foreign patent rights in furtherance of the interests of U.S. industry and the government.

G. The prudent administration of government research and development calls for a government-wide policy on the disposition of inventions made under government contracts reflecting common principles and objectives, to the extent consistent with the missions of the respective agencies. The policy must recognize the need for flexibility to accommodate special situations.

Policy

Section 1. The following basic policy is established for all government agencies with respect to inventions or discoveries made in the course of or under any contract of any government agency, subject to specific sta utes governing the disposition of patent rights of certain government agencies. (a) Where

(1) a principal purpose of the contract is to create, develop or improve products, 14242 processes, or methods which are intended for commercial use (or which are otherwise intended to be made available for use) by the general public at home or abroad, or which will be required for such use by governmental regulations; or

(2) a principal purpose of the contract is for exploration into fields which directly concern the public health or public welfare; or

(3) the contract is in a field of science or technology in which there has been little significant experience outside of work funded by the government, or where the government has been the principal developer of the field, and the acquisition of exclusive rights at the time of contracting might confer on the contractor a preferred or dominant position; or

(4) the services of the contractor are(1) for the operation of a governmentowned research or production facility; or

(ii) for coordinating and directing the work of others,

the government shall normally acquire or reserve the right to acquire the principal or

exclusive rights throughout the world in and to any inventions made in the course of or under the contract. In exceptional circumstances the contractor may acquire greater rights than a non-exclusive license at the time of contracting, where the head of the department or agency certifies that such action will best serve the public interest. Greater rights may also be acquired by the contractor after the invention has been identified, where the invention when made in the course of or under the contract is not a primary object of the contract, provided the acquisition of such greater rights is consistent with the intent of this Section 1(a) and is a necessary incentive to call forth private risk capital and expense to bring the invention to the point of practical application.

(b) In other situations, where the purpose of the contract is to build upon existing knowledge or technology to develop information, products, processes, or methods for use by the government, and the work called for by the contract is in a field of technology in which the contractor has acquired technical competence (demonstrated by factors such as know-how, experience, and patent position) directly related to an area in which the contractor has an established non-governmental commercial position, the contractor shall normally acquire the principal or exclusive rights throughout the world in and to any resulting inventions, subject to the government acquiring at least an irrevocable non-exclusive royalty free 11cense throughout the world for governmental purposes.

(c) Where the commercial interests of the contrtactor are not sufficiently established to be covered by the criteria specified in Section 1(b), above, the determination of rights shall be made by the agency after the invention has been identified, in a manner deemed most likely to serve the public interest as expressed in this policy statement, taking particularly into account the intentions of the contractor to bring the invention to the point of commercial application and the guidelines of Section 1(a) hereof, provided that the agency may prescribe by regulation special situations where the public interest in the availability of the inventions would best be served by permitting the contractor to acquire at the time of contracting greater rights than a non-exclusive license. In any case the government shall acquire at least a non-exclusive royalty free license throughout the world for governmental purposes.

(d) In the situations specified in Sections 1(b) and 1(c), when two or more potential contractors are judged to have presented proposals of equivalent merit, willingness to grant the government principal or exclusive rights in resulting inventions will be an additional factor in the evaluation of the proposals.

(e) Where the principal or exclusive (except as against the government) rights in an invention remain in the contractor, he should agree to provide written reports at reasonable intervals, when requested by the government, on the commercial use that is

being made or is intended to be made of inventions made under government contracts.

(f) Where the principal or exclusive (except as against the government) rights in an invention remain in the contractor, unless the contractor, his licensee, or his assignee has taken effective steps within three years after a patent issues on the invention to bring the invention to the point of practical application or has made the invention available for licensing royalty free or on terms that are reasonable in the circumstances, or can show cause why he should retain the principal or exclusive rights for a further period of time, the government shall have the right to require the granting of a license to an applicant on a non-exclusive royalty free basis.

(g) Where the principal or exclusive (except as against the government) rights to an invention are acquired by the contractor, the government shall have the right to require the granting of a license to an applicant royalty free or on terms that are reasonable in the circumstances to the extent that the invention is required for public use by governmental regulations or as may be necessary to fulfill health needs, or for other public purposes stipulated in the contract.

(h) Where the government may acquire the principal rights and does not elect to secure a patent in a foreign country, the contractor may file and retain the principal or exclusive foreign rights subject to retention by the government of at least a royalty free license for governmental purposes and on behalf of any foreign government pursuant to any existing or future treaty or agreement with the United States.

Section 2. Government-owned patents shall be made available and the technological advances covered thereby brought into being in the shortest time possible through dedication or licensing and shall be listed in omcial government publications or otherwise.

Section 3. The Federal Council for Science and Technology in consultation with the Department of Justice shall prepare at least annually a report concerning the effectiveness of this policy, including recommendations for revision or modification as necessary in light of the practices and determinations of the agencies in the disposition of patent rights under their contracts. A patent advisory panel is to be established under the Federal Council for Science and Technology to

(a) develop by mutual consultation and coordination with the agencies common guidelines for the implementation of this policy, consistent with existing statutes, and to provide over-all guidance as to disposition of inventions and patents in which the government has any right or interest; and

(b) encourage the acquisition of data by government agencies on the disposition of patent rights to inventions resulting from federally-inanced research and development and on the use and practice of such inventions, to serve as basis for policy review and development; and

(c) make recommendations for advancing the use and exploitation of governmentowned domestic and foreign patents.

Section 4. Definitions: As used in this policy statement, the stated terms in singular and plural are defined as follows for the purposes hereof:

(a) Government agency—includes any Executive department, independent commission, board, omce, agency, administration, authority, or other government establishment of the Executive Branch of the Government of the United States of America.

(b) "Invention" or "Invention or discovery" includes any art, 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.

(c) Contractor means any individual, partnership, public or private corporation, association, institution, or other entity which is a party to the contract.

(d) Contract means any actual or proposed contract, agreement, grant, or other arrangement, or sub-contract 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.

(e) "Made" when used in relation to any invention or discovery means the conception or first actual reduction to practice of such invention in the course of or under the contract.

(1) Governmental purpose means the right of the Government of the United States (including any agency thereof, state, or domestic municipal government) to practice and have practiced (made or have made, used or have used, sold or have sold) throughout the world by or on behalf of the Government of the United States.

(g) "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.

OFFICER. The

The PRESIDING question is on agreeing to the amendment of the Senator from Pennsylvania.

Mr. MCCLELLAN. Mr. President, I want to make a very brief statement which is not directed to the merits of the pending amendment.

The Subcommittee on Patents of the Committee on the Judiciary has undertaken to carry out the assurances that I gave the Senate last year when these issues were being considered.

I said then that bills were pending and that we would undertake to process the bills with due deliberation and speed. We have done that.

In that connection, unless one has served on the committee, heard the testimony, and studied the matter, he would most likely not become fully advised and

informed as to the complexities involved in trying to write a patent policy and give the subject matter the attention that we have given it.

The subcommittee reported a bill to the Committee on the Judiciary by a divided vote.

The report of the subcommittee was made on April 11 of this year. The subcommittee was trying to get the bill reported so that it could be considered at this session of Congress.

I believe that the measure was scheduled to come before the full committee on four occasions. As I recall, on two occasions there was not a quorum present. However, there was a quorum on two occasions, the last one being today.

The committee discussed the bill. I had hoped that the bill would be reported today, or that a substitute would be reported for the bill if the committee 14243 should adopt a substitute in order to get the measure on the calendar in order to make sure that we would act on the bill in this session of Congress.

There were members of the Committee on the Judiciary who felt that they would like to have more time in which to study the issue and would like the matter to go over without a vote today. Their wishes were acceded to.

I want the RECORD to show that there was no disposition to use any dilatory tactics and none are being used. We have a very complicated and difficult issue that Congress should resolve.

We are trying to present the issues to the Senate in the nature of a bill reported by the Committee on the Judiciary in accord with the due process procedures of the Senate so that the Senate can definitely work its will and determine what the policy shall be.

That is the status of the matter, and none of us desires to delay it unduly.

Mr. HART. Mr. President, the Senator from Arkansas has reported precisely and accurately the evolution of the patent bill, first in the subcommittee, and in the full committee as of today. I have not been present in the Chamber during all the discussion, but I have not heard any suggestion that the chairman of the Patent Subcommittee is responsible for delaying the action by the Committee on the Judiciary in this area.

As one who has served on the subcommittee, and who finds himself in disagreement with the chairman as to the more prudent way to respond to this basic problem, I should like the RECORD to indicate that the efforts of the Senator from Arkansas throughout have been, first, to develop a record that will

permit the Senate to make a sound judgment, and second, to urge, consistent with prudent consideration, the promptest possible action by the subcommittee and then by the full committee.

The Senator from Michigan this morning offered a substitute for the McClellan bill. If any Senator should believe that the failure of the Committee on the Judiciary this morning to report a patent bill on this basic problem is the fault of any member of the committee, the fault would lie with the Senator from Michigan, not with the Senator from Arkansas.

In committee, I supported the Senator from Louisiana on the amendment in the bill, and I hope that Congress will reject the pending amendment. Until the basic question is resolved as to the wisest method of handling discoveries made in connection with research financed by all the people, I believe it should be made very clear in the bill that such discoveries shall be retained for the benefit of the people. That is the reach of the amendment which the committee has added, and which is now sought to be stricken. I hope that the Senate will not strike the amendment, but that it will be retained.

Mr. LONG of Louisiana. Mr. President, I shall make my statement on the pending amendment now, because other Senators have spoken to a relatively small Senate attendance; and I do not wish to take advantage of the situation by waiting for more Senators to come to the Chamber before I state my views on the subject. I hope that the Senate will be able to vote after the quorum call.

There is great doubt about what Congress will do with regard to the proposal for an overall, one-patent policy. When the executive branch attempted to establish a one-patent policy to apply to all agencies that were not bound by law-I believe the majority of them were bound by law, under their patent policies, to give private patents only in isolated circumstances-nevertheless, the policy that evolved would permit private patents in some cases and not in others.

Those were agencies that were not bound by law. I know of no agency that does not grant private patents because of a law that firmly binds it not to grant patents on Government research, which disagrees with the language of the act under which it is operating, and those acts were all proposed by the committees that brought that legislation before the Senate.

An effort to write general legislation on those matters has resulted in a bill

sponsored by the Senator from Arkansas [Mr. MCCLELLAN] which recognizes that in one area a patent would be appropriate, in another area it would not.

In another area it would ordinarily be appropriate for the Government to take title. But even that could be subject to exception, based on various considerations of economy and equity that might be involved in the particular circumstances.

When this problem is separated from the others, no problem exists, unless someone wishes to read into the bill something that is not there. In other words, in my judgment, the opposition to the committee action and to the judgment of the committee derives from the thought that this might be used as a precedent in some other area.

I inquired of responsible officers of the Ford Motor Co., General Motors Corp., and Chrysler Corp., whether the judgment of the committee in this field causes them any problem. The answer I received was, "No, it does not." They do not oppose what the committee recommends.

Only in instances where the Secretary of Commerce were to employ a contractor to do research in the safety field, where the Government investment would be small compared with that of private industry, or when the Government contribution is not substantial, would it be subject to private patents. That situation would be appropriate for this industry. This industry, perhaps more than any other, does its own private research. When it does that research, each manufacturer makes practically all of his research freely available to the other manufacturers, for use in producing better automobiles. And that will continue to be so.

In preponderant measure, even the private research done by this industry is in effect in the public domain, available to all manufacturers. This makes sense when we consider the Government policy to be that if the Government spends money on something, everyone should be permitted to use it, with no incentive to withhold it.

A parts manufacturer may contemplate manufacturing and charging $100 for a better safety belt that costs $15 to produce. If he wishes to do that, he should do it with his own money. But if the Government wishes to develop something, it should be available for everyone to put on his automobile on a competitive basis.

I asked the Senator from New Hampshire [Mr. COTTON] his opinion about a

situation in which someone uses Government money to develop a fine safety device and then, under his patent rights, denies it entirely to the public or charges an outrageous price for it. The Senator from New Hampshire did not respond to the question.

Frankly, the answer is that under the pending bill without the committee amendment such a result could occur. The committee does not wish to see that happen.

Mr. President, reference has been made to the tabling of two amendments which I have offered to existing patent laws or to laws that do not provide what happens to patents, as the case may be. The Senate has been consistent in this respect: So long as I have been a Member of the Senate, for 17 years, and prior to that time, as far back as I have been able to research the matter, the Senate has accepted the judgment of a committee that has initiated a research program as to what should happen to the fruit of that research. That is the way most Senators have voted consistently through the years, and I hope the Senate will accept the judgment of the committee in this instance. I notice that the distinguished chairman himself has voted that way consistently.

Mr. AIKEN. I would like the Senator from Louisiana to interpret the language of paragraph (c), on page 42, which reads as follows:

(c) Whenever the federal contribution for any research or development activity authorized by this Act encouraging motor vehicle safety is more than minimal, the Secretary shall include in any contract, grant, or other arrangements.

Does the Senator from Louisiana have a definition for "more than minimal"? Mr. LONG of Louisiana. That language was discussed, and it was agreed that the matter should depend on the circumstances. That is an area in which the Secretary would have latitude in determining what he would regard to be a minimal expenditure and what he would regard as substantial.

Actually, I do not recall at this time precisely who suggested the language. Two phrases were discussed. It was suggested that rather than have a straitjacket amendment, some latitude should be left for the Secretary. The chairman felt that there should be latitude in instances where the Federal Government made a small contribution compared with the contribution which private industry makes. So two terms were discussed. One was the word "minimal"; the other was "substantial."

To me, as a lawyer, "minimal" relates to the Latin phrase "de minimis." If 14244 the contribution is minor and of no great consequence, an exception might be made.

So we more or less agreed that we would write into the bill the word "minimal," and would say in the committee report that by "minimal" we meant "not substantial."

That could be perhaps 10 percent or more than 10 percent of the overall investment.

Mr. AIKEN.

Or less than 10 percent. Mr. LONG of Louisiana. That would be discretionary with the Secretary. I wish to say to the Senator that without that the Secretary would be permitted simply to grant the private patent rights in all cases. But he would have this discretion, and I believe that the committee has spelled out what we meant.

The Government expenditure relative to that of industry might go as high as 20 percent, but that is in the judgment of the Secretary.

Mr. AIKEN. The Secretary of Commerce?

Mr. LONG of Louisiana. The Senator is correct.

Mr. AIKEN. I am sure it is the purpose of the amendment that if the Federal Government contributes a very substantial part of the cost, any result therefrom should be made available to the general public.

However, if the Federal Government contributes, for instance, 10 percent of the cost, and the owner of the research establishment contributes the other 90 percent of the cost, I would think

Mr. LONG of Louisiana. The Secretary could enforce patent rights.

Mr. AIKEN. Whoever contributes the majority of the cost.

Mr. LONG of Louisiana. The Senator is familiar with the problem.

If

The Secretary can deny making a contract with anybody for any reason. he is going to make a contract I would be willing to concede now that it would be in his discretion, on a 10-percent contribution, as to whether or not it is substantial.

If he wanted to go beyond that on the circumstances of the case, that would be in his discretion. I believe that is the reason the chairman of the committee did not want us to spell out any particular percentage, but rather permit it to vary. He could, perhaps, negotiate, but the Senator realizes that the contractor must pay for most of the research himself.

The words "minimal" and "substantial" are used in the bill and the report and

protect a research organization from inadvertency where someone is using Federal facilities to some extent, although he intended to have patent rights himself and the Federal Government had thereby made an indirect contribution.

Mr. AIKEN. I believe that the discussion of the Senator from Louisiana is very helpful. I understand if this legislation is adopted, including paragraph (c), then in the future arrangements depend on the judgment and integrity of the Secretary.

Mr. LONG of Louisiana. To a very considerable extent.

I am sure the Senator realizes that he could not enter into a contract granting private patent rights where the Government is going to pay 50 percent or even 40 percent of the overall cost and waive the Government's interest in the matter.

Mr. AIKEN. I think it is helpful to mention 40 percent or 10 percent, or whatever the Senator mentioned. He mentioned those various percentages.

Mr. LONG of Louisiana. The Secretary is not bound by that. But this legislative history, I think, will give him some idea as to his general area of discretion.

Mr. AIKEN. If he were to go too far, he would be subject to censure.

Mr. LONG of Louisiana. The Senator is correct.

Mr. COTTON. Mr. President, will the Senator yield?

Mr. LONG of Louisiana. I yield.

Mr. COTTON. The Senator indicated that the response by the Senator from New Hampshire to a question he asked was not responsive.

I wish to make it clear that in the contingency to which the Senator refers and I must say in view of the cross licensing by the automobile companies it is rather remote-the contingency of having someone overcharged for safety devices, we rely on competition to prevent that.

The Senator from New Hampshire thought one of the most discouraging pieces of testimony that the committee heard was when an automobile company executive testified that safety could not be sold to the public; that you could sell speed; that you could sell power; that you could sell style, but that you could not sell safety.

In the first place, I do not agree with that and I hope that that will not prove to be the case. I hope that the splendid work which has been done by the chairman of the committee and the committee and the Congress will make the public safety minded.

« PreviousContinue »