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contractor or inventor failed to render a prompt disclosure of such invention to the Government agency; or (ii) in any suit, action, or proceeding brought before a properly constituted authority authorized to hear such matters, there was a final determination that the patent covering such invention has been used in violation of the antitrust laws; or (iii) any information or reports furnished by the contractor or inventor under this Act or under regulations issued in implementation thereof contained a material false representation or omission; or (iv) the statement furnished pursuant to section 11 of this Act was false.

SEC. 9. (a) Except as provided in (c) below, proceedings of the Board pursuant to section 7(c) and section 8 shall be subject to the provisions of subchapter II of chapter 5 of title 5, United States Code, and chapter 7 of title 5, United States Code. Any order, decision, or determination of the Board pursuant to sections 7(c) and 8 shall be determined on the record after an opportunity for a hearing; Provided, however, that a hearing on the record is not required with respect to the agency applications respecting proposed contractors referred to in section 7(c) (1). Any action commenced for the judicial review of a Board decision under said subsections shall be brought within sixty days after notification of such decision.

(b) Determinations or decisions made as to whether a contract falls within the provisions of subsection (a) of section 7 shall be final and are not subject to chapter 7 of title 5, United States Code, or to subchapter II of chapter 5 of title 5, United States Code.

(c) Determinations of the Board on agency applications concerning proposed contractors as provided for in section 7(c)(1) shall be final and are not subject to chapter 7 of title 5, United States Code, or to subchapter II of chapter 5 of title 5, United States Code.

be required to submit a statement to the Commissioner of Patents under rules promulgated by him declaring whether or not the invention was made under a contract with any Government agency or in the course of employment with the United States.

SEC. 12. (a) Each agency head, with the aid of the Attorney General when necessary, is authorized to take all suitable and necessary steps to protect and enforce the rights of the United States in any invention.

(b) Government-owned inventions shall be made available and their utilization fostered through dedication to the public, publication, or licensing on an exclusive or nonexclusive basis as appropriate. A Government-owned invention shall not be construed to include any invention in which a contractor or inventor has obtained principal rights pursuant to this Act. Exclusive or nonexclusive licenses for use of an invention either domestically or in foreign countries may be granted under such terms as the agency head may determine to be in the public interest, and may be granted for the unexpired term of the patent or for a more limited period of time and may be granted with or without payment of royalties to the United States.

(c) The grantee of any exclusive rights in any invention covered by a United States patent owned by the United States shall have the right to bring suit for patent infringement in the United States courts to enforce such rights without joining the United States as a party in such suit.

SEC. 13. If any provision of this Act, or the application of such provision to any person or circumstance, is held invalid, the remainder of this Act or the application of such provisions to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.

SEC. 14. (a) Section 10(a) of the Act of June 29, 1935, as added by title 1 of the Act of August 14, 1946 (60 Stat. 1085) is amended by striking out the following: “Any contracts made pursuant to this authority shall contain requirements making the results of research and investigations available to the public through dedication, assignment to the Govern

SEC. 10. Each agency head may delegate any authority conferred upon him by this Act to any officer, official, or other employee of the agency.

SEC. 11. Before any United States patent, not assigned to the United States, is issued on any invention, the applicant therefor shall

ment, or such other means as the Secretary shall determine.” 1

(b) Section 205(a) of the Act of August 14, 1946 (60 Stat. 1090, as amended) is amended by striking out the following language: “Any contract made pursuant to this section shall contain requirements making the result of such research and investigations available to the public by such means as the Secretary of Agriculture shall determine.” 2

(c) Section 501(c) of the Federal Coal Mine Health and Safety Act of 1969 (P. L. 91–173; 83 Stat. 742) is amended by striking out the following language thereof: "No research, demonstrations, or experiments shall be carried out, contracted for, sponsored, cosponsored, or authorized under authority of this Act, unless all information, uses, products, processes, patents, and other developments resulting from such research, demonstrations, or experiments will (with such exception and limitation, if any, as the Secretary or the Secretary of Health, Education, and Welfare may find to be necessary in the public interest) be available to the general public." 3

(d) Section 106(c) of the National Traffic and Motor Vehicle Safety Act of 1966 (P. L. 89–563; 80 Stat. 721) is repealed.

(e) Section 12 of the National Science Foundation Act of 1950 (P. L. 90–407; 82 Stat. 360) is repealed."

(f) Section 152 of the Atomic Energy Act of 1954 (P. L. 83–703; 68 Stat. 943) is repealed.

(g) The National Aeronautics and Space Act of 1958 (P. L. 85–568; 72 Stat. 426; as amended) is amended by—

(1) repealing section 305 thereof; Provided, however, that subsections (c), (d), and (e) of said section 305 shall continue to be effective with respect to any application for patents in which the written statement referred to in subsection (c) of said section 305 has been filed or requested to be filed by the Commissioner of Patents prior to the effective date of this Act: 7

(2) striking out the following language in subsection 306(a) thereof: (A) "(as defined by section 305)” and (B) “the Inventions and Contributions Board, established under section 305 of this Act” and inserting in lieu thereof the following language: "an Inventions and Contributions Board which shall be established by the Administrator within the Administration”;

(3) inserting at the end of section 203 thereof the following new subsection: “(c) For the purposes of chapter 17 of title 35 of the United States Code the Administration shall be considered a defense agency of the United States." ! and

(4) striking out the following from section 203 thereof: “(including patents and rights thereunder)”. 10

(h) Section 6 of the Coal Research and Development Act of 1960 (P. L. 86–599; 74 Stat. 337) is repealed.11

(i) Section 4 of Helium Act Amendments of 1960 (P. L. 86–777; 74 Stat. 920) is amended by striking out the following language thereof: “Provided, however, that all research contracted for, sponsored, cosponsored, or authorized under authority of this Act shall be provided for in such a manner that all information, uses, products, processes, patents, and other developments resulting from such research developed by Government expenditure will (with such exceptions and limitations, if any, as the Secretary may find to be necessary in the interest of national defense) be available to the general public: And provided further, that nothing contained herein shall be construed as to deprive the owner of any background patent relating thereto to such rights as he may have thereunder.” 12

(j) Subsection (b) of section 4 of the Saline Water Conversion Act of 1961 (P. L. 87–295; 75 Stat. 628) is repealed.13

(k) Section 32 of the Arms Control and Disarmament Act of 1961 (P. L. 87–297; 75 Stat. 634) is repealed. 14

* Amends 7 U.S.C. 742i (a).

Amends 7 U.S.C. 1624 (a). : Amends 30 U.S.C. 951 (c). * Amends 15 U.S.C. 1395 (c).

Amends 42 U.S.C. 1871(a). * Amends 42 U.S.C. 2182. * Amends 42 U.S.C. 2457.

$ Amends 42 U.S.C. 2458. 9 Amends 42 U.S.C. 2473. 10 Amends 42 U.S.C. 2473. 11 Amends 30 U.S.C. 666. 12 Amends 50 U.S.C. 167b. 13 Amends 42 U.S.C. 1954 (b). 14 Amends 22 U.S.C. 2572.

(0) Section 216 of title 38, United States Code, is amended by deleting subsection (a) (2) thereof and by redesignating subsection (a) (3) thereof as “(a)(2)”.18

(1) Section 303 of the Water Resources Act of 1964 (P. L. 88–379; 78 Stat. 332) is repealed.15

(m) Subsection (e) of section 302 of the Appalachian Regional Development Act of 1965 (P. L. 89–4; 79 Stat. 5; as amended) is repealed. 16

(n) Subsection (c) of section 204 of the Solid Waste Disposal Act (P. L. 89-272; 79 Stat. 997) is repealed.17

SEC. 15. This Act shall take effect on the first day of the seventh month beginning after the date of enactment of this Act, except that section 4 shall take effect immediately and reg. ulations implementing this Act may be issued prior to such day.

15 Amends 42 U.S.C. 1961c-3. 16 Amends 40 U.S.C. App. 302 (e). 17 Amends 42 U.S.C. 3253 (c).

19 Amends 38 U.S.C. 216 (a) (2).

Sectional Analysis of the Draft Bill

Section 1

Section 1 provides that the Act may be known as the “Government Sponsored Inventions Act of 197 .

Section 2

Section 2 states the objectives of and policies behind this legislation—promoting maximum utilization of patents made under Government contracts, ensuring that such patents are not used in an anti-competitive manner, encouraging maximum participation in the research and development efforts of the Federal Government, and minimizing administrative cost.

Secretary of Defense is to be considered the head of the military departments.

Section 3(c) defines the term “contract" in such a way as to include grants. For the purposes of this Act, it is not believed there is a rational basis for distinguishing between the two. Inventions made under Federal funding are to be treated in the same manner whatever the nature or label given to the instrument providing the funds for the work leading to the invention.

It is also to be noted that the term “contract” as used in this draft legislation is limited to contracts where a purpose of the contract is the conduct of experimental, developmental, or research work.

Section 3(d) defines the term "contractor" to include persons and corporations, partnerships, firms, associations, institutions, and other entities that are parties to a contract.

Section 3(e) defines the term "invention" to include any invention, discovery, innovation, or improvement, without regard to the patentability thereof, which falls within the classes of patentable subject matter defined in title 35 of the United States Code. This definition requires the contractor to report those items which appear to be within the general classes of patentable subject matter, without regard to the fact that the item may not be patentable for technical legal reasons.

Section 3(f) defines the term "inventor" as

Section 3

Section 3 contains the definitional provisions applicable to the Act.

Section 3(a) defines the term “Government agency” in a broad manner to include, by reference to 5 U.S.C. 105, the executive departments, Government corporations, and independent establishments, and the military departments.

Section 3(b) defines the term “agency head" to mean the head of any Government agency or, in the case of independent establishments such as commissions, the body controlling the agency. However, for purposes of this Act, the

or inventor, as the case may be, under section 6 of the Act.

Section 3(k) defines the term “contracting activities” to mean entering into contracts. This term, when combined with the definition of “contracts”, serves to limit the agencies required to issue implementing regulations under section 5(b) of the Act.

Section 3(1) defines the term “Board” to mean the Government Patent Review Board which is established by section 4 of the Act.

Section 4

a person, other than a contractor, who has made an invention under a Government contract but who has not agreed to assign his rights in such invention to the contractor. This definition combined with other provisions in the Act is designed to make it clear that this legislation is not intended to upset the relative rights of contractors and their employees. While in most cases contractor employees do, as part of their employment contract, assign rights in inventions made as part of their work, there are some cases where this may not be true. This Act is designed to ensure that such situations would be recognized and not disturbed. Accordingly, in many places throughout the Act a reference is made to the "contractor or inventor.” Also section 6(b) of the Act provides that an inventor shall be bound by contract terms implementing this Act even though he is not a party to the contract.

Section 3(g) defines the term “disclosure" to require a written statement sufficiently complete to convey to one skilled in the art to which the invention pertains a clear understanding of the nature, purpose, operation, and characteristics of the invention.

Section 3(h) defines the terms "made under the contract” or “made under a contract” to mean inventions conceived or first actually reduced to practice in the course of any work under a contract. The precise definitions of “conceived" or "first actually reduced to practice” are left to the courts and the implementing regulations and clauses. This definition does not make background inventions subject to this Act.

Section 3(i) defines the term “practical application” to mean the manufacture, practice, or operation of an invention, as the case may be, under such conditions as to establish that the invention is being worked. Moreover, even if an invention is being worked it will not be considered as having "practical application” unless its benefits are available to the public either on reasonable terms or through reasonable licensing arrangements.

Section 3(j) defines the term “principal rights” when used in relation to any invention to mean all rights to and interest in such invention with the exception of rights reserved either to the Government or to the contractor

Section 4(a) establishes the Government Patent Review Board as an independent establishment within the executive branch. Section 4(b) provides that the Board shall be composed of three members appointed by the President with the advice and consent of the Senate. By section 4(c) they are to have six year terms, and are to be paid, in accordance with section 4(d), at the rate specified for Level V positions in the Executive Schedule. Section 4(e) authorizes the appointment of personnel by the Board, and section 4(f) authorizes the Board to make necessary expenditures and contracts. Section 4(g) authorizes the Board to have an official seal. Section 4(h) authorizes the Board to delegate its functions to individual members, hearing examiners, or members of its staff, subject to the right of any individual Board member to bring any action before the Board for review. Section 4(i) is another general authorizing provision allowing the Board to perform such acts, make such rules and regulations, and issue such orders, not inconsistent with the Act, as may be necessary in the execution of the Board's functions. Section 4(j) authorizes the Board to issue subpoenas and to apply to the courts for the enforcement of the same. Section 4(k) requires the Board to submit an annual report of its activities to Congress. Section 4(1) authorizes other agencies to provide services to the Board on a reimbursable or nonreimbursable basis as may be agreed. Section 4(m) authorizes the Board to perform such functions as may be delegated to it by the President. This is included to ensure that the Board may take over functions that may be assigned to it in patent areas not strictly falling under this Act. For example, it is possible that at some future date certain functions with respect to employee inventions might be assigned to the Board. Section 4(n) authorizes appropriations for the Board.

Section 5

Section 5 requires that those agencies that engage in research and development contracting issue regulations to implement this Act. Moreover, the President is to issue such regulations as he considers necessary or desirable to effectuate the policies and provisions of this Act. The agency regulations would have to conform to any Presidential regulations.

It is contemplated that the agency regulations would be included as a part of the normal procurement regulations of the agencies; although to the extent this Act also covers grant situations, implementation in procurement regulations alone may not always be sufficient. It is expected that the Presidential regulations would require or encourage uniformity in the implementing regulations and contractual language of the agencies. For instance, the President might order that the basic implementing regulations be included in the ASPR and the FPR and that all agencies conform to one or the other of these as is applicable.

In addition, it is expected that the President would delegate primary responsibility to the Government Patent Review Board for the development of rules and regulations to implement this Act.

cation of all rights in the invention pursuant to section 8. The purpose of this is to discourage contractors from trying to avoid disclosure so as to make use of the inventions either as a trade secret or by attempting to obtain patent rights on it without acknowledging the fact that it was made under Gorernment contract. Section 10 of the Act also requires that a statement be made in connection with any patent application whether or not the invention was made under the Government contract. Section 6(a) (8) also requires a clause compelling similar action.

Section 6(a)(4) provides that the United States will receive at a minimum an irrevocable, nonexclusive, nontransferable, royaltyfree license for the practice of each invention made under a Government contract throughout the world, by or on behalf of the United States, for Federal Government purposes. Agency heads are given authority, however, to expand the license to include State and local governmental practice of the invention.

Sections 6(a)(6) and (7) allow the Government or the contractor, as the case may be, to file for patent rights in foreign countries if the other party does not desire to do so. This follows the recent amendment of the Presidential Statement of Government Patent Policy. It is intended to provide for a disposition of foreign rights where the owner of the principal rights does not elect to protect the invention in foreign countries.

Section 6(a)(8) requires contractor patent applications to include a statement as to whether the invention is subject to this Act. This is intended to ensure that inventions made under Government contracts are readily identifiable. It supplements other provisions in this Act designed to accomplish similar ends.

Section 6(a)(10) is designed to ensure that the contract will contain provisions adequate to require reporting and other information by the contractor necessary to effectuate this Act. Section 8 of the Act provides that the submission of any false material statement could lead to the revoking of the contractor's rights in the patent.

Section 6(a)

Section 6(a) requires that all contracts of the type covered by this Act include provisions necessary to effectuate the provisions of the Act. Many of the required provisions would have as their purpose the precise establishment of rights as set forth in sections 7 and 8 of the Act. Certain paragraphs of section 6(a), however, are independent of sections 7 and 8. These

se are discussed below.

Section 6(a)(1) requires that a clause be included requiring prompt disclosure of any invention made under the contract. Failure to make a prompt disclosure can lead to a revo

Section 6(b)

As discussed previously, section 6(b) provides that an inventor, even though not a

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