require that either title or a license to inventions made in the course of the research work be conveyed to the corporation.

Sincerely,

W. P. GWINN, President.

WESTINGHOUSE ELECTRIC CORP.,
Pittsburgh, Pa., January 7, 1960.

Mr. PHILIP LEBOUTILLIER, Jr.,

Deputy Assistant Secretary of Defense

(Supply and Logistics),

Washington, D.C.

DEAR MR. LEBOUTILLIER: Your letter of December 22 to our president, Mr. Mark W. Cresap, Jr., requesting information relative to our policy of acquiring patent rights under research, development and experimental contracts has been referred to the patent department for reply.

Our policy is as follows:

1. We do not acquire title to subcontractors' inventions under defense contracts. We operate under the patent rights clause 9-107.2 of ASPR and with respect to subcontractors, we follow the provisions of paragraph (g) of this clause.

2. We do not acquire licenses from subcontractors under their inventions made during the performance of defense contracts. As stated above, paragraph (g) of 9-107.2 covers the procedure which we follow which is for the benefit of the Government.

3. With respect to the matter of acquiring title to contractors' inventions under our own nondefense contracts, it is our policy not to acquire title for the very good reason that most contractors like ourselves refuse to accept a contract of this kind on this basis. We have, in the past, entered into very few development contracts for the reason that Westinghouse is a research and development company and prefers to do this kind of work for itself. As you know, most contractors are quite reluctant to enter into a contract which provides for transfering of titles to inventions which it makes, particularly where these inventions may relate to its own general line of activity.

In some few instances, we may enter into a joint development agreement, but, in this type of agreement, each party retains title to its own inventions. Sometimes, not always, each party grants the other a free nonexclusive license under patents acquired covering inventions made during the performance of the contract. If joint inventions are made, each party acquires an undivided onehalf interest, which is the usual procedure with respect to joint inventions.

4. As explained in paragraph 3 above, we may acquire a nonexclusive license, particularly if the invention made by the other party relates to our own product activity. In some instances, there is no exchange of licenses. We have only a few of these joint development agreements.

I believe that this covers the four categories of information you requested, but, if not, we shall be glad to give you any additional information you may require.

Sincerely yours,

G. M. CRAWFORD, General Patent Attorney.

NORTH AMERICAN AVIATION, INC.,
Los Angeles, Calif., January 11, 1960.

Hon. PHILIP LEBOUTILLIER, Jr.,

Deputy Assistant Secretary of Defense (Supply and Logistics),
Washington, D.C.

DEAR MR. LEBOUTILLIER: Reference is made to your letter dated December 22, 1959, which I acknowledged by my letter of December 29, 1959.

I am pleased to furnish the following in response to the four items of inquiry contained in your letter:

1. We have not acquired title to any patent covering an invention made by a subcontractor under our Department of Defense contracts. It is our general policy not to acquire title to inventions under these circumstances. To protect the interest of all parties concerned, our subcontracts often contain provisions

whereby title may be acquired in the event the subcontractor elects not to file patent applications. We also engage consultants from time to time to assist with specific problems. Our form of consultant agreement provides for our taking title to inventions which the consultant may make in the performance of the services which he renders. If any consultant desires to take title to such inventions, the form of agreement may be amended to permit him to do so provided he files patent applications and otherwise protects the rights of the parties, including the Government. The nature of the consultant's services usually does not involve the making of inventions and to date title has not been acquired to any invention made by a consultant.

2. It is our policy not to acquire any licenses under inventions made by our subcontractors under Department of Defense contracts where the articles being developed are outside of our product line. Where the development is within the product line of the company, often the aid and assistance given to the subcontractor is such as to warrant acquiring a nonexclusive, royalty-free license and an effort is made under these circumstances to negotiate such a license. The acquisition of such a license, however, is a minor part of the negotiation, and if it develops that we are not equitably entitled to a license or if the subcontractor is the one best qualified to perform the work and refuses to grant the license, we do not acquire any such rights.

3 and 4. With respect to research, developmental, or experimental contracts which do not come under our Government contracts, it is our policy to negotiate for title to inventions where the work to be performed is specifically to improve our products. Otherwise, a nonexclusive royalty-free license is obtained.

It is hoped that the foregoing information will be of assistance to you. In the event you have further questions, we shall endeavor to discuss them. Sincerely yours,

J. L. ATWOOD, President.

RAYTHEON CO.,

Mr. PHILIP LEBOUTILLIER, Jr.,

Waltham, Mass., January 13, 1960.

Deputy Assistant Secretary of Defense (Supply and Logistics),
Department of Defense, Washington, D.C.

DEAR MR. LEBOUTILLIER: This is in answer to your letter of December 22, 1959, in which you asked for information concerning Raytheon's policies in respect to obtaining invention rights under Defense Department research, developmental, or experimental contracts.

1. It is the company's policy not to seek to obtain title to subcontractors' inventions under such contracts.

2. It is the company's policy to request the grant of a nonexclusive royaltyfree license for commercial purposes for such inventions only where the subcontractor has no objection to such a grant. Since most of our subcontractors are interested in preserving their commercial rights, in practically every instance such a license has not been obtained. As a result, during the last several years, probably less than one-half dozen inventions have been reported to the company by subcontractors with respect to which the company has obtained such a license.

3. The company's policy is to retain title to those inventions which it makes under its prime defense research, developmental, or experimental contracts and which appear to have sufficient commercial value to justify the expense of seeking to obtain patents covering them. During 1958 and 1959 the company reported to the Government a total of about 137 inventions as being made under such contracts. The company elected not to obtain title under about 77 percent of such inventions and filed patent applications in its own name on the remaining 23 percent.

4. With respect to the inventions made under such Defense contracts upon which the company elects not to file patent applications, the company automatically obtains the license provided in the patent rights contract clause set forth in the "Armed Services Procurement Regulation," section 9-107(b).

Sincerely yours,

C. F. ADAMS.

APPENDIX XV (A)

COPY OF LETTER ADDRESSED TO 20 LARGE PRIME CONTRACTORS BY THE ASSISTANT SECRETARY OF DEFENSE, AT THE REQUEST OF SENATOR LONG

ASSISTANT SECRETARY OF DEFENSE,

SUPPLY AND LOGISTICS, Washington, D.C., December 22, 1959.

Mr. E. D. JOHNSON,

President, General Dynamics Corp.,
New York, N.Y.

DEAR MR. JOHNSON: At a hearing on December 10, 1959, before the Subcommittee on Monopoly of the Select Committee on Small Business, U.S. Senate, the chairman, Senator Russell Long, asked the Department of Defense to provide the subcommittee with certain information relating to the patent policies of the Department's 20 largest prime contractors. Since the Department does not possess the information desired, your help is requested to make our answer to the subcommittee as responsive as possible.

It was explained at the hearing that the Department of Defense pursues a policy of acquiring only a royalty-free license to inventions made or first actually reduced to practice under a contract having research, development, or experimental work as one of its purposes. It was further explained that

under the standard patents clause, ASPR 9-107.2) the prime contractor is to exert all reasonable effort to include similar provisions in pertinent subcontracts or to obtain a waiver from the contracting officer in the event of a refusal by the subcontractor before proceeding with the subcontract. The clause expressly provides that the prime contractor is not precluded from negotiating separately with the subcontractor to acquire on its own behalf rights in the subcontractor's inventions, but that any costs applicable to this separate transaction will not be paid in any way by the Government.

On the latter point, the subcommittee wants to know whether Defense prime contractors follow a policy of acquiring licenses or titles to subcontractors' inventions under Government contracts calling for research, development, or experimentation and whether they acquire licenses or titles to their contractors' inventions under their own non-Defense contracts of these types.

The Department of Defense would appreciate information for the purpose of responding to the subcommittee on the policy of your corporation under research, developmental, or experimental contracts with respect to

(1) acquiring title to subcontractors' inventions under Defense contracts; (2) acquiring license to such inventions;

(3) acquiring title to contractors' inventions under your own contracts; (4) acquiring license to such inventions.

If it is your policy to determine these issues on a case-by-case basis, it would be helpful to have the approximate percentage of titles, licenses, and no rights acquired over a representative 2-year period.

The Department of Defense will appreciate your cooperation.

Sincerely yours,

PHILIP LEBOUTILLIER, Jr., Deputy Assistant Secretary of Defense (Supply and Logistics).

Same letter to

Mr. W. M. Allen, president, Boeing Airplane Co., 7755 East Marginal Way, Seattle, Wash.

Mr. J. L. Atwood, president, North American Aviation, Inc., Los Angeles International Airport, Los Angeles, Calif.

Mr. Robert Paxton, president, General Electric Co., 1 River Road, Schenectady, N.Y.

Mr. C. S. Gross, president, Lockheed Aircraft Corp., Postoffice Box 551, Burbank, Calif.

Mr. D. W. Douglas, Jr., president, Douglas Aircraft Co., 3000 Ocean Park Boulevard, Santa Monica, Calif.

Mr. W. P. Gwinn, president, United Aircraft Corp., 400 Main Street, East Hartford, Conn.

Mr. W. H. Bergen, president, Martin Co., Baltimore, Md.

Mr. Howard R. Hughes, president, Hughes Aircraft Co., Florence Avenue and Teale Street, Culver City, Calif.

Mr. F. R. Kappel, president, American Telephone & Telegraph Co., 195 Broadway, New York, N.Y.

Mr. J. S. McDonnell, Jr., chairman and president, McDonnell Aircraft Corp., Box 516, St. Louis, Mo.

Mr. H. F. Vickers, president, Sperry-Rand Corp., 30 Rockefeller Plaza, New York, N.Y.

Mr. C. F. Adams, president, Raytheon Manufacturing Co., Willow Street, Waltham, Mass.

Mr. L. L. Colbert, president, Chrysler Corp., 341 Massachusetts Avenue, Detroit, Mich.

Mr. L. A. Swirbul, president, Grumman Aircraft Engineering Corp., Bethpage, Long Island, N.Y.

Mr. M. I. Peale, president, Republic Aviation Corp., Farmingdale, Long Island, N.Y.

Mr. Thomas J. Watson, Jr., president, International Business Machines Corp., 590 Madison Avenue, New York, N.Y.

Mr. M. P. Ferguson, president, Bendix Aviation Corp., Fisher Building, Detroit, Mich.

Mr. M. W. Cresap, president, Westinghouse Electric Corp., 3 Gateway Center, Pittsburgh, Pa.

Mr. J. F. Gordon, president, General Motors Corp., 3044 West Grand Boulevard, Detroit, Mich.

APPENDIX XVI

(Referred to on p. 285)

REPORTING OF RESEARCH AND DEVELOPMENT DATA TO THE DEPARTMENT OF DEFENSE BY CONTRACTORS

(Information subsequently supplied by the Department of the Air Force and submitted to the Senate Small Business Committee by G. C. Bannerman, Director for Procurement Policy, Department of Defense)

The terms of research and development contracts state what data is required and when it must be delivered. Such contracts usually provide that monthly progress reports will be furnished. At the time the contract is made, a project officer with scientific and technical competence in the field involved is assigned to each contract. It is his responsibility to work with the contractor and review the periodic reports to make certain that the data to be furnished complies strictly with the contract terms. To be specific about when data is delivered would require knowledge of the terms of a particular contract, but, in general, the data, as a completed entity, is furnished upon completion of a research and development contract; however, the periodic reports may contain data in various stages of completeness, depending upon the requirements of the particular contract. In addition to the project officer whose responsibility is scientific and technical, there is an administrative contracting officer who handles the normal operational aspects of a contract. Air Force Procurement Instruction 9-202.1(4) (B) and (C) provides:

"(B) Contracts which require delivery of data, regardless of whether a specific price is quoted therefor, and regardless of whether the contract stipulates 'No charge for data' or 'Data price included in the costs of end item(s),' will not be deemed to be fulfilled until delivery and acceptance of the data.

"(C) Under any contract which requires the delivery of data, the accounting and finance office will be advised by the contracting officer to withold final payment until DD Form 250, 'Materiel Inspection and Receiving Report (Domestic),' is obtained through regular channels indicating that data has been delivered and accepted."