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Background

Definition
Why the Government needs data
Contractors' interest in protecting technical data
Legislative background-
Agency policies and practices -----
National Aeronautics and Space Administra-

tion ----------------------
Department of Defense --
Atomic Energy Commission
Department of Transportation
Department of Interior-Office of Saline

Water ----
Problems in acquisition and use of data

Need for greater uniformity
Subcontractor data -----

Authority to acquire technical data-
Data Submitted with Proposals and/or in Confidence

Need for greater uniformity ...
Remedies

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CHAPTER 1

Introduction and Summary of Recommendations

Government policies concerning the treatment of patents, technical data, and copyrights in the procurement process have a significant impact on contractors, private innovators, and the general public. Thousands of inventions are made each year by contractors and subcontractors performing under Federal research and development contracts. The disposition of patent rights in these inventions can have important effects on the likelihood they will be perfected and marketed and on the maintenance of competitive markets. Many Government contracts may require the contractor or subcontractor to use inventions covered by private patents. The manner in which the Government uses these patents affects the quality of its programs and the equities of the private patent owner.

Government contractors are frequently required to prepare and supply various forms of documentation, such as drawings and other detailed data concerning the products, processes, and elements thereof that they are supplying or developing. This data may involve information concerning products or processes previously developed by a contractor at his own expense and maintained as a “trade secret.” The contractual rights established in technical data can be of critical importance to both the Government and the competitive posture of the contractor. Similar considerations prevail when data is submitted to the Government as part of a proposal for a contract.

Government contracts may involve the use or development of material particularly susceptible to publication and wide dissemination. This is especially true in areas of social science research. In such cases the Government's attitude toward publication and copyrights may be of major concern.

Agency policies in these areas, despite their importance, lack uniformity. Legislative coverage is generally limited in scope and varies from agency to agency. Indeed, most agencies lack any statutory guidelines. This varied and incomplete legislative framework has created ambiguities concerning the authority of a number of agencies in many important areas. Likewise, there has been little administrative effort to achieve uniformity, except in the area of rights in inventions developed under Government contracts. Agencies have fashioned data and copyright policies, as well as many aspects of patent policy, without any central guidance or overall coordination. This has resulted in many different approaches and contractual clauses, even where agency goals and needs may be similar.

This report examines Government contractual policies concerning intellectual property, with separate chapters devoted to patents, technical data, and copyrights. Based on our findings and conclusions, we recommend a number of changes, many of which require legislation. Hence, we have included draft legislation as appendixes to this report.

Our recommendations are designed to achieve a number of goals which we believe either are not being achieved or are being only partly achieved under present law, policies, and practices. These goals and some of our primary recommendations to achieve them are summarized next.

We believe that the Government's policy should encourage the maximum utilization of inventions made under Government contracts, prevent unjust enrichment of contractors, and foster the reasonable availability of such inventions to the public. The recently revised Presidential Statement of Government Patent Policy is designed to meet these goals, and we believe that policy should be promptly and uniformly implemented so that its effectiveness can be more fully evaluated. In particular the impact of the new exclusive licensing program and liberalization of the granting of contractor rights in identified inventions must be measured. To enhance the chances of the Presidential policy succeeding, we recommend the granting of clear-cut statutory authority to agencies to issue exclusive licenses. An alternate system developed during our studies is presented. The alternate system calls for Government-wide legislation allowing, as a general rule, the developing contractor or inventor commercial rights in inventions subject to a strengthened system of “march-in” rights under the administration of a central board.

In connection with the use by the Government or its contractors of privately-owned patents, we have found that the bar to injunctions in existing law (28 U.S.C. § 1498) should be retained and expanded to eliminate uncertainty in borderline cases. On the other hand, we believe that greater flexibility is needed by the agencies to waive the bar against injunctions in particular cases as regards specific patents. To achieve these aims, we recommend legislation amending 28 U.S.C. § 1498. We feel it only fair, however, that a patent

owner, having lost the possibility of injunctive relief, should be better assured of obtaining monetary relief. To this end we recommend legislation authorizing all agencies to acquire interests in patents and to settle patent claims and legislation allowing patent suits against the Government in the district courts as well as in the Court of Claims.

In the technical data and copyright areas our basic conclusion is that greater, but not necessarily complete, uniformity among agency policies and regulations is needed. To this end, we recommend interagency effort to formulate statements of Government-wide policies along the lines of those in the patents area. To facilitate this effort, we recommend the repeal of certain legislation which we feel hampers the flexibility of some agencies and thus inhibits the development of truly Government-wide policies.

We also make one other major recommendation in the technical data area. We believe that persons who submit valuable information and data to the Government, such as information submitted with proposals, should have a remedy against the Government for damages suffered because of the misuse of such information by the Government. Thus we recommend legislation granting such a remedy.

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