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limiting its use for specific purposes. This (c) Section 183 of title 35, United States liability shall apply whether or not the in- Code, is amended by striking out from the formation was supplied or obtained pursuant sixth sentence thereof the following: “in the to contract. Provided, however, that the Court of Claims or in the District Court of United States shall not be liable under this the United States for the district in which section if such information has at any time such claimant is a resident” and by striking been released by the owner thereof to others out from the seventh sentence thereof the folon a non-confidential basis or if such infor- lowing: “in the Court of Claims”. mation is otherwise known to the public (d) Subsection (b) of section 2273 of title or the Government.”

10, United States Code, is repealed; and sub(b) The analysis of chapter 91 of title 28, section (a) of said section 2273 is amended by United States Code, is amended by adding the striking out “(a)”. following:

(e) Section 7210 of title 10, United States "1508. Misuse of Information."

Code, is repealed; and the analysis to chapter

631 of title 10, United States Code, is amended SEC. 6. Every agency of the United States by striking out the following: Government, including corporations owned or

“7210. Purchase of patents, patent applicontrolled by the United States Government,

cations, and licenses." is hereby authorized in the performance of functions vested in the agency to acquire any

(f) Section 606 of the Act of September 4, of the following described property or any

1961 (P. L. 87–195; 75 Stat. 440) is amended license or interest therein-copyrights, pat- by deleting subsections (a) and (b) thereof ents, applications for patents, and information and by striking out the following: “(c)”. and data in any form.

(g) Section 2 of the Act of August 20, 1937

(50 Stat. 733; as amended) is amended by SEC. 7. Before an action against the United

striking out the following: “, including patStates has been instituted under subsection

ent rights,”.? (a) or (b) of section 1498 of title 28, United States Code, or under section 1508 of title 28,

(h) Section 2 of the Act of May 18, 1938 United States Code, the head of an agency

(52 Stat. 404) is amended by striking out the of the United States, including corporations

following: ", including patent rights,”.3 owned or controlled by the United States Gov (i) Section 6 of the Act of July 7, 1960 ernment, may settle or compromise, out of (P. L. 86–599; 74 Stat. 337) is repealed.* available funds, any claim that might be (1) Paragraph (3) of subsection (b) of sec. brought under said sections.

tion 203 of the National Aeronautics and Space SEC. 8. (a) Section 2386 of title 10, United

bation 2296 of title 10. United Act of 1958 (P. L. 85–568; 72 Stat. 429, as States Code, is repealed; and the analysis of amended by the Act of May 13, 1959 (P. L. chapter 141 of said title is amended by strik 86–20; 72 Stat. 21)) is amended by striking ing out the following: “2386. Copyrights, pat- out the following : “(including patents)”.5 ents, designs, etc.; acquisition.”

(k) Section 19 of the Tennessee Valley (b) The last paragraph of section 1491 of Authority Act of 1933 (48 Stat. 68) is amendtitle 28, United States Code, is amended to readed to read as follows: as follows:

“The Corporation, as an instrumentality "Except as regards actions brought under and agency of the Government of the United section 1498 of this title, nothing herein States for the purpose of executing its conshall be construed to give the Court of stitutional powers, shall have access to the Claims jurisdiction in suits against, or Patent Office of the United States for the founded on actions of, the Tennessee Valley purpose of studying, ascertaining, and copyAuthority, nor to amend or modify the pro

1 Amends 22 U.S.C. 2356. visions of the Tennessee Valley Authority

? Amends 16 U.S.C. 832a (d). Act of 1933, as amended, with respect to

* Amends 16 U.S.C. 833a (d).

* Repeals 30 U.S.C. 666. suits by or against the Authority.”

* Amends 42 U.S.C. 2473(b) (3).

ing (not including access to pending applications for patents) necessary to enable the Corporation to use and employ the most efficacious and economical process for the production of fixed nitrogen, or any essential ingredient of fertilizer, or any method of

improving and cheapening the production of hydroelectric power. The Commissioner of Patents shall furnish to the Corporation, at its request and without payment of fees, copies of documents on file in his office.” 6

Amends 16 U.S.C. 831 (r).

Sectional Analysis of the Draft Bill

Section 1

authorization and consent would not result in anticompetitive effects and might be considered the best course of action by the Government officials involved.

Section 1 amends 28 U.S.C. 1498 (a) to allow suits to be brought under it both in the

Court of Claims and in the district courts in 1 cases under $10,000. This has been accom

plished by deleting the reference to the Court of Claims in that portion of the section stating that the patent owner's “exclusive remedy" shall be in the Court of Claims. The deletion of this language would still leave the Court of Claims with jurisdiction under 28 U.S.C. 1491 which grants it jurisdiction in connection with claims “founded ... upon any Act of Congress ..." Likewise, the district courts would have concurrent jurisdiction in cases under $10,000 pursuant to 28 U.S.C. 1346 (a) (2).

Section 3

Section 3 deals with the copyright portion of 28 U.S.C. 1498. Its only effect is to delete provisions authorizing the settlement of copyright claims by Government agencies prior to the initiation of suit under 28 U.S.C. 1498. This authority is substantially reenacted in section 7 of this Act, which section also authorizes for the first time, on a Governmentwide basis, the settlement of claims for the unauthorized use of patents by the Government. Section 7 also provides for settlement of claims for misuse of information. This aspect of the statute is explained more fully below. As a matter of technique it was felt desirable to place these related settlement authorities in one section. Accordingly, section 3 makes appropriate amendments to 28 U.S.C. 1498 (b).

Section 3 also amends 28 U.S.C. 1498 (b) to give the district courts concurrent jurisdiction with the Court of Claims in copyright cases of under $10,000. The same considerations that went into the similar change in 28 U.S.C. 1498(a) apply here.

Section 2

Section 2 amends 28 U.S.C. 1498 so that the authorization and consent of the Government is automatically granted except where it is specifically withheld. This is to make it clear injunctions will not lie except where an agency has specifically withheld authorization and consent as to a specific patent.

Since another section of this Act makes it clear that the Government agencies may acquire patents or licenses in patents, it is very unlikely that this authority will be used except in rare cases. Presumably, the Government would normally attempt to negotiate a license rather than withhold authorization and consent as to a specific patent. But there might be a few cases where it is clear that use of the patent would be required, that the patent is valid, and that the owner is willing to and has licensed the patent to others on reasonable terms. In such cases, withholding

Section 4

Section 4 merely amends 28 U.S.C. 1498(d) to give the district courts concurrent jurisdiction in cases under $10,000. 28 U.S.C. 1498 (d) deals with certificates of plant variety. This amendment does no more than to conform this subsection to the amendments made to subsections (a) and (b) in this regard.

Section 5

arguably such authority is inherent, it is the purpose of this section to eliminate any doubt on this point.

Section 7

Section 5 creates a remedy against the Government for misuse of information. The United States would be subject to liability for damages to the owner of information for the misuse of such information where it was submitted to or obtained by the Government in confidence and under conditions limiting its use for specific purposes. The remedy is a broad one and is not limited to information submitted pursuant to contract. Indeed, in such cases there probably is an adequate remedy for breach of contract. The United States would not be liable, however, if the information had at any time been released by the owner to others on a nonconfidential basis or if such information is otherwise known to the public or the Government. These latter qualifications are intended to conform this section to the general common law rules of trade secrets.

Section 7 authorizes agencies to settle, prior to the initiation of formal legal action by the patent owner (at which time the Department of Justice would take control), claims that could be brought under 28 U.S.C. 1498(a) and (b) and under the new section 28 U.S.C. 1508 created by section 5 of this Act. As indicated earlier, the settlement of copyright claims under 28 U.S.C. 1498(b) is already authorized, and this section merely combines it with the other authorities that are being established. The authority to settle patent claims under 28 U.S.C. 1498(a) is new. At present only a few agencies have such authority, but it is considered desirable to extend such authority to all agencies.

Section 6

Section 8

Section 6 makes clear that all agencies are authorized to acquire patents, applications for patents, copyrights, information, and interests therein. At present only a few agencies have a clear statement of such authority. While

Section 8 contains a series of technical repealers of legislation which is either inconsistent with the principles of the proposed act or which would be redundant thereto.

APPENDIX C

Memorandum and Statement of Government Patent Policy Issued by President Nixon on August 23, 1971 (Published in the Federal Register, Vol. 36, No. 166, August 26, 1971)

MEMORANDUM FOR
HEADS OF EXECUTIVE DEPARTMENTS
AND AGENCIES

On October 10, 1963, President Kennedy forwarded to the Heads of the Executive Departments and Agencies a Memorandum and Statement of Government Patent Policy for their guidance in determining the disposition of rights to inventions made under Government-sponsored grants and contracts. On the basis of the knowledge and experience then available, this Statement first established Government-wide objectives and criteria, within existing legislative constraints, for the allocation of rights to inventions between the Government and its contractors.

It was recognized that actual experience under the Policy could indicate the need for revision or modification. Accordingly, a Patent Advisory Panel was established under the Federal Council for Science and Technology for the purpose of assisting the agencies in implementing the Policy, acquiring data on the agencies' operations under the Policy, and making recommendations regarding the utilization of Government-owned patents. In December 1965, the Federal Council established the Committee on Government Patent Policy to assess how this Policy was working in practice, and to acquire and analyze additional information that could contribute to the reaffirmation or modification of the Policy.

The efforts of both the Committee and Panel have provided increased knowledge of the effects of Government patent policy on the public interest. More specifically, the studies and experience over the past seven years have indicated that:

(a) A single presumption of ownership of patent rights to Government-sponsored inventions either in the Government or in its contractors is not a satisfactory basis for Government patent policy, and that a Aexible, Government-wide policy best serves the public interest;

(b) The commercial utilization of Government-sponsored inventions, the participation of industry in Government research and development programs, and commercial competition can be influenced by the following factors: the mission of the contracting agency; the purpose and nature of the contract; the commercial applicability and market potential of the invention; the extent to which the invention is developed by the contracting agency; the promotional activities of the contracting agency; the commercial orientation of the contractor and the extent of his privately financed research in the related technology; and the size, nature and research orientation of the pertinent industry;

(c) In general, the above factors are reflected in the basic principles of the 1963 Presidential Policy Statement.

Based on the results of the studies and experience gained under the 1963 Policy Statement certain improvements in the Policy have been recommended which would provide (1) agency heads with additional authority to permit contractors to obtain greater rights to inventions where necessary to achieve utilization or where equitable circumstances would justify such allocation of rights, (2) additional guidance to the agencies in promoting the utilization of Government-sponsored inventions, (3) clarification of the rights of States and municipal governments in inventions in which the Federal Government acquires a license, and (4) a more definitive data base for evaluating the administration and effectiveness of the Policy and the feasibility and desirability of further refinement or modification of the Policy.

I have approved the above recommendations and have attached a revised Statement of Government Patent Policy for your guidance. As with the 1963 Policy Statement, the Federal Council shall make a continuing effort to record, monitor and evaluate the effects of this Policy Statement. A Committee on Government Patent Policy, operating under the aegis of the Federal Council for Science and Technology, shall assist the Federal Council in these matters.

This memorandum and statement of policy shall be published in the Federal Register.

RICHARD M. NIXON

the equities of the contractor, and serve the public interest.

D. The public interest in a dynamic and efficient 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.

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Basic Considerations

A. The Government expends large sums for the conduct of research and development which results in a considerable number of inventions and discoveries.

B. The inventions in scientific and technological fields resulting from work performed under Government contracts constitute a valuable national resource.

C. The use and practice of these inventions and discoveries should stimulate inventors, meet the needs of the Government, recognize

SEC. 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 statutes 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, 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

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