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, public safety, 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 (i) 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 nonexclusive 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 head of the department or agency determines that the acquisition of such greater rights is consistent with the intent of this Section 1(a) and is either a necessary incentive to call forth private risk capital and expense to bring the invention to the point of practical application or that the Government's contribution to the invention is small compared to that of the contractor. Where an identified invention made in the course of or under the contract is not a primary object of the contract, greater rights may also be acquired by the contractor under the criteria of Section 1(c). (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 knowhow, experience, and patent position) directly related to an area in which the contractor has an established nongovernmental commercial position, the contractor shall normally acquire the principal or exclusive rights throughout the world in and to any resulting inventions. (c) Where the commercial interests of the contractor 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 nonexclusive license. (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 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 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 nonexclusive or exclusive license to a responsible applicant(s) on terms that are reasonable under the circumstances. (g) Where the principal or exclusive rights to an invention are acquired by the contractor, the Government shall have the right to require the granting of a nonexclusive or exclusive license to a responsible applicant(s) on terms that are reasonable in the circumstances (i) to the extent that the invention is required for public use by governmental regulations, or (ii) as may be necessary to fulfill health or safety needs, or (iii) for other public purposes stipulated in the contract. (h) Whenever the principal or exclusive rights in an invention remain in the contractor, the Government shall normally acquire, in addition to the rights set forth in Sections 1(e), 1(f), and 1(g), (1) at least a nonexclusive, nontransferable, paid-up license to make, use, and sell the invention throughout the world by or on behalf of the Government of the United States (including any Government agency) and States and domestic municipal governments, unless the agency head determines that it would not be in the public interest to acquire the license for the States and domestic municipal governments; and (2) the right to sublicense any foreign government pursuant to any existing or future treaty or agreement if the agency head determines it would be in the national interest to acquire this right; and (3) the principal or exclusive rights to the invention in any country in which the contractor does not elect to secure a patent. (i) Whenever the principal or exclusive rights in an invention are acquired by the Government, there may be reserved to the contractor a revocable or irrevocable nonexclusive royalty-free license for the practice of the invention throughout the world; an agency may reserve the right to revoke such license so that it might grant an exclusive license when it determines that some degree of exclusivity may be necessary to encourage further development and commercialization of the invention. Where the Government has a right to acquire the principal or exclusive rights to an invention and does not elect to secure a patent in a foreign country, the Government may permit the contractor to acquire such rights in any foreign country in which he elects to secure a patent, subject to the Government's right set forth in Section 1 (h). SEC. 2. Under regulations prescribed by the Administrator of General Services, 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, either exclusive or nonexclusive, and shall be listed in official Government publications or otherwise. SEC. 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. The Federal Council for Science and Technology shall continue to (a) develop by mutual consultation and coordination with the agencies common guidelines for implementation of this policy, consistent with existing statutes, and to provide overall guidance as to disposition of inventions and patents in which the Government has any right or interest; and (b) acquire data from from the the Government agencies on the disposition of patent rights to inventions resulting from Federally-financed research and development and on the use and practice of such inventions to serve as bases for policy review and development; and (c) make recommendations for advancing the use and exploitation of Government-owned domestic and foreign patents. Each agency shall record the basis for its actions with respect to inventions and appropriate contracts under this statement. SEC. 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, sociation, institution, or other entity which is a party to the contract. (e) Contract-means any actual or proposed contract, agreement, grant, or other arrangement, or subcontract entered into with or for the benefit of the Government where a purpose of the contract is the conduct of experimental, development, or research work. (f) 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. (g) To the point of practical applicationmeans 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 acessible to the public. APPENDIX D Methodology The recommendations in this report, though differing in some instances from those of our Study Group 6-Pre-Contract Planning, are based on the work and study performed by that Group during the study phase of our efforts. That Study Group established a special task subgroup on Patents and Proprietary Data, with Mr. Leonard Rawicz, Assistant General Counsel for Patent Matters, National Aeronautics and Space Administration, serving as coordinator. The subgroup, in turn, was further divided into three task forces-Task Force #1 on the allocation of rights to inventions made in the performance of Government research and development contracts, Task Force #2 on private patent rights in Government procurement, and Task Force #3 on data. The membership of these task forces was as follows: 1 TASK FORCE #1 James L. Whittaker (Chairman) Senior Patent Counsel Radio Corporation of America William O. Quesenberry Norman J. Latker Chief, Patent Branch, BAL Office of the General Counsel Department of Health, Education, and Welfare John C. Green Research Staff PTC Research Institute James E. Denny Director, Office of Government Inventions and Patents United States Patent Office 1 The employment shown for each member is as of the date his task force submitted its report. John N. Hazelwood Patent Counsel The Garrett Corporation Edwin C. Mulcahy Assistant General Counsel Pharmaceutical Manufacturers Association TASK FORCE #3 Lawrence Glassman (Chairman) Chief, Patents Opinions Branch Patent Division Office of the General Counsel U.S. Army Materiel Command Wilson A. Gebhardt The Bendix Corporation Derek Lawrence Patent Counsel Aircraft Engine Group Patent Liaison Department of the Navy Charles Haughey Hughes Aircraft Company Harold P. Deeley Patent Attorney Office of General Counsel Federal Aviation Administration Department of Transportation Walter J. Jason Patent Counsel McDonnell Douglas Corp. Marvin F. Matthews Patent Counsel NASA Manned Spacecraft Center These task forces studied, met, debated, and ultimately submitted reports to Study Group 6 with their findings and recommendations. On the basis of these reports and a two-day public meeting held in Washington, D.C., on July 29-30, 1971, at which presentations were made by representatives of industry, the university community, Government agencies, professional societies, and publishing houses, Study Group 6 prepared and submitted recommendations in the patents and data areas to the Commission as part of its final report. An oral presentation of these was also made to the Commission. After this presentation, the Study Group's recommendations were further considered by the Commission at several meetings. Thus our final conclusions and recommendations emerged. Though we have not adopted certain of the Study Group's recommendations, to varying degrees most of their recommendations are incorporated in ours. |