If the termination of the contract is he convenience of the Government: There shall be included for direct labor s (as defined in the Schedule of the con) an amount which shall be determined ultiplying the number of direct labor s expended prior and up to the effective of termination by the hourly rate or I set forth in the Schedule less any hourly payments theretofore made to the ractor.

.) There shall be included therein all ; of material reimbursable in accordance this contract, not previously paid to the tractor for the performance of this cont prior to the effective date of the Notice 'ermination.

ii) There shall be included therein the onable costs of settlement, including aciting, legal, clerical, and other expenses onably necessary for the preparation of lement claims and supporting data with ect to the terminated portion of the cont and for the termination and settlement subcontracts thereunder, together with sonable storage, transportation, and other is incurred in connection with the proion or disposition of termination inven7.

2) If the termination of the contract is the default of the Contractor:

1) There shall be included for all direct or hours (as defined in the Schedule of contract) an amount which shall be demined by multiplying the number of direct or hours expended prior and up to the Ective date of termination by the hourly e or rates set forth in the Schedule less profit factor contained therein as indied in the Schedule and less any hourly e payments theretofore made.

ii) There shall be included therein such ts as are set forth in subparagraphs (1) ) and (iii) of this paragraph (e): Provided, wever, That there shall not be included y amounts for the preparation of the ConEctor's Settlement Proposal.

(3) If the amount determined under subragraphs (1) and (2), above, is less than total payments theretofore made to the ntractor, the Contractor shall repay the cess amount to the Government.

f) The Contractor shall have the right of peal, under the clause of this contract enled "Disputes," from any determination de by the Contracting Officer under paraaphs (c) or (e) above, except that if the ntractor has failed to submit its claim thin the time provided in paragraph (c) ove, and has failed to request extension of ch time, it shall have no such right of peal. In any case where the Contracting icer has made a determination of the mount due under paragraph (c) or (e) ove, the Government shall pay to the Conactor the following: (1) if there is no right appeal hereunder or if no timely appeal as been taken, the amount so determined by

(g) In arriving at the amount due to the Contractor under this clause there shall be deducted (1) all unliquidated advance or other unliquidated payments theretofore made to the Contractor, (2) any claim which the Government may have against the Contractor in connection with this contract, and (3) the agreed price for, or the proceeds of sale of any materials, supplies, or other things acquired by the Contractor or sold pursuant to the provisions of this clause and not otherwise recovered by or credited to the Government.

(h) In the event of a partial termination, the portion of the contract relating to hourly rates which are payable with respect to the work under the continued portion of the contract shall be equitably adjusted by agreement between the Contractor and the Contracting Officer, and such adjustment shall be evidenced by an amendment to this contract.

(1) The Government may from time to time, under such terms and conditions as it may prescribe, make partial payments and payments on account against costs incurred by the Contractor in connection with the terminated portion of the contract whenever in the opinion of the Contracting Officer the aggregate of such payments shall be within the amount to which the Contractor will be entitled hereunder. If the total of such payments is in excess of the amount finally determined to be due under this clause, such excess shall be payable by the Contractor to the Government upon demand, together with interest computed at the rate of 6 percent per annum, for the period from the date such excess payment is received by the Contractor to the date on which such excess is repaid to the Government; Provided, however, That no interest shall be charged with respect to any such excess payment attributable to a reduction in the Contractor's claim by reason of retention or other disposition of termination inventory until 10 days after the date of such retention or disposition.

(1) Unless otherwise provided for in this contract, or by applicable statute, the Contractor from the effective date of termination and for a period of 6 years after final settlement under this contract shall preserve and make available to the Government at all reasonable times at the office of the Contractor, but without direct charge to the Government, all its books, records, documents, and other evidence bearing on the cost and expenses of the Contractor under this contract and relating to the work terminated hereunder, or, to the extent approved by the Contracting Officer, photographs, microphotographs, or other authentic reproductions thereof.

Responsibility of the office a ministering the contract. 1009.1106 Responsibility of AFSC or AF procurement staff judge ad

cate.

1009.1107 Responsibility of accounting a finance office.

1009.1108 Responsibility of the comma staff judge advocate.

AUTHORITY: The provisions of this P 1009 issued under sec. 8012, 70A Stat. 48 10 U.S.C. 8012. Interpret or apply secs. 230 2314, 70A Stat. 127-133; 10 U.S.C. 2301-231 Definitions. § 1009.050

For the purpose of this part:

(a) The "Chief, Patents Division" the Chief, Patents Division, Office of T Judge Advocate General, USAF, I USAF.

(b) The "Procurement Staff Jud Advocate" is the staff judge advocate the activity that wrote the contract the staff judge advocate of the activi to which procurement responsibility h been transferred.

[29 F.R. 1682, Feb. 4, 1964]

Subpart A-Patents

SOURCE: The provisions of this Subpart appear at 29 F.R. 1682, Feb. 4, 1964, exce as otherwise noted.

§ 1009.102 Authorization and consen (a) No request of a contractor in negotiated supply contract, for a prov sion whereby the Government express agrees to indemnify the contracto against liability for patent infringemen should be granted. Instead of Govern ment patent indemnification of the con tractor, such requests can be partiall satisfied by omitting a Patent Indemnit Clause which indemnifies the Govern ment against patent infringement lia bility (see § 9.103-3 of this title) and in serting the appropriate Authorization

Consent clause (see §§ 9.102-1 and 2-2). This procedure should not be 1 as a matter of course, but only in ances where, all factors of the proement having been considered, the tracting officer having obtained the ice and recommendations of his patadvisor, concludes that the request of contractor is appropriate.

b) Since 28 U.S.C. 1498 (see § 9.102 of this title) has no effect with rect to infringement of foreign patents, procedure in paragraph (a) of this tion is not appropriate in relation to ! use or manufacture of inventions the extent they are covered by foreign cents.

009.102-1

Authorization and consent

in contracts for supplies.

In contracts calling for both supplies d experimental, developmental, or rerch work, the use of the contract use in § 9.102-1 of this title is pre'red to the clause in § 9.102-2 of this le.

1009.103-3 Patent indemnification in negotiated contracts.

No patent indemnity clause is required contracts with educational instituns, including such contracts which call r the furnishing of facilities as an indent to the performance of research or velopment work. (See §§ 1013.402-50 d 1007.2703-30 of this subchapter for cilities contracts.)

1009.103-4 Waiver of indemnity by the Government.

When it is determined to be in the terest of the Government, specific patts may be excluded from the indemty with the approval of the Deputy hief of Staff, S&L, Hq USAF.

1009.104 Notice and assistance.

For proper action to be taken by the ntracting officer with respect to reOrts of notices or claims of patent iningement received by him under the ovisions of § 9.104 of this title, see 1009.105.

1009.105 Processing of infringement claims.

This section sets forth the procedure r referring the following: (a) All proosed contracts where the primary item procurement is a license under or an signment of an invention or a patent; ») all reports of notices or claims of

patent infringement received by contracting officers from contractors under the provisions of § 9.104 of this title; and (c) all communications received in any AF activity in which a claim is made that the manufacture, use, or disposition of any article, material, or process by or for that activity or by or for any other AF activity, involves or will involve the unauthorized use of any invention or design, whether patented or unpatented.

(1) All such proposed contracts, reports, or communications arising within AFSC, and OAR, will be forwarded to Hq AFSC (SCJP), who will acknowledge receipt thereof and forward, together with a statement of pertinent facts to the Chief, Patents Division.

(2) All such proposed contracts, reports, or communications arising within AFLC will be forwarded to Hq AFLC (MCJP) who will acknowledge receipt thereof and forward, together with the statement of all pertinent facts to the Chief, Patents Division.

(3) All such proposed contracts, reports, or communications arising in AF activities other than AFLC, OAR, and AFSC, will be forwarded, along with a statement of all pertinent facts, directly to the Chief, Patents Division.

§ 1009.106 Classified contracts.

See 8 1009.1104 (a) (3) and 1009.1105 (a)(2).

(2), (3), and (4) of this title. Where the contractor claims, in justification of a request for exclusion, that the practicability of the invention has been established by engineering design or otherwise, the opinion of the project engineer, or other cognizant technical personnel, will be obtained as to whether such practicability has in fact been established. Where the invention is identified only by a patent application serial number, a copy of such application and the filing date will be obtained from the contractor. For the purpose of obtaining advice and recommendations, the contracting officer will then forward the contractor's request for exclusion, together with copies of all pertinent material and a full statement of facts, within:

(1) AFSC and OAR to AFSC (SCJP). (2) AFLC to AFLC (MCJCO). (3) AF activities other than OAR, AFSC, and AFLC to the Chief, Patents Division.

expenditures with

With respect to the provisions of § 9.1072(a)(1) of this title, in comparing the contractor's the amount of the proposed contract or such portion of the proposed contract amount as can be allocated in advance for the development of such an invention, prior government expenditures on the development of such invention and the government contribution to the general research work of the contractor related to the subject matter of the contract will be taken into consideration. Upon granting a request for exclusion of inventions pursuant to § 9.107-2(a) of this title and this paragraph (a), the AFSC or AFLC Command Staff Judge Advocate will forward a report thereof, along with a statement of all pertinent facts, to the Chief, Patents Division.

(b) Contract clause (license). The following subparagraphs relate to material required to be furnished by contractors under the provisions of paragraphs (c), (d), (e), and (h) of the Patent Rights clause of § 9.107-5 (b) of this title.

(1) All such material will be processed according to the procedure in Subpart K of this part. BOB Approval No. 22R160 authorizes submission of DD Form 882, Reports of Inventions and Subcontracts, by contractors (see §§ 9.107-5(b) and 16.809 of this title). This approval also includes authority for obtaining "Invention Disclosure Reports" from contractors pursuant to requirements of

paragraph (c) (i) of the clause § 9.107-5(b) of this title and paragraph (b) (i) of the clause of § 9.107-5(c) of this title.

(2) If in complying with paragraph (c) and (d) of the Patent Rights clause of § 9.107-5(b) of this title, the contrac tor has had a patentability search made or has otherwise determined that a invention reasonably appears to b patentable, but the contractor decide not to file a patent application thereof and if the costs of such search or deter mination are allowed as an item of cost under a government contract, or such search report or determination will be furnished without specific charge, the contractor will transmit to the contract ing officer a copy of such patentability search report or documents supporting such determination when the contractor notifies the contracting officer that the contractor will not file such application The report or documents will include a copy of all applicable references.

(c) Contract clause (title). All ma terial required to be furnished by the contractors under the provisions of paragraph (b) of the Patent Rights (Title) clause will be processed according to the procedures in Subpart K of this part When the title clause of § 9.107-5(c) of this title is used, paragraph (g) is op tional and may be used according to the instructions of § 9.107-5(c) of this title Requests for approval to use the said optional paragraph (g) shall be referred together with all pertinent facts and correspondence in the case of AFSC and OAR contracts, to AFSC (SCJP), in the of AFLC contracts to AFLO (MCJCO), and in the case of contracts from other commands, to Chief, Patents Division.

case

009.107-4 Contracts relating to atomic energy.

ll contractor furnished information h respect to "Subject Inventions" reng to atomic energy received by concting officers under the provisions of 107-7 of this title and all requests for iations which are to be forwarded to - Atomic Energy Commission to deterne whether the deviation may be anted, will be forwarded in the same nner as prescribed for the submisn of material in § 1009.105. The cogant patent officer or staff judge adcate will forward it with his recomendations to Chief, Patents Division. F.R. 1682, Feb. 4, 1964, as amended at F.R. 15259, Nov. 13, 1964]

009.107-6 Patent license rights under product improvement programs or independent research programs.

(a) No implementation.

(b) When a product improvement prosal has been approved by the approiate authority, the Procurement Comittee (MCPC), Hq AFLC, or the Prorement Committee (SCK-3), Hq FSC, as appropriate, will recommend hether any patent rights should be obined and, if the recommendation is firmative, the Chief, Patents and Royties Division (MCJP), Hq AFLC, or hief, Patents Division (SCJP), Hq FSC, as appropriate, will recommend e Patents Rights clauses to be included ■ procurement contracts under which e product improvement proposal will e carried out. The matter will then be Orwarded for approval to the Director of rocurement and Production, or the Deputy Director of Procurement, Hq FLC, or the Director or Deputy Director f Procurement, Hq AFSC, as approriate.

(c) When a specific project within a ontractor's independent research proram has been approved by the conracting officer, the Procurement Comnittee (MCPC), Hq AFLC, or the Prourement Committee (SCK-3), Hq AFSC, ■s appropriate, will recommend whether ny patent rights should be obtained and, if the recommendation is affirmaCive, the matter will then be forwarded For approval to the Director of Procurement and Production or the Deputy Director of Procurement, Hq AFLC, or the Director or Deputy Director of Procurement, Hq AFSC, as appropriate. When it has been determined to obtain for

the Government patent license rights under a specific project within a contractor's independent research program, which specific project is not included in the Statement of Work, paragraph (c) will be added following paragraph (a) (i) (B) of the Patent Rights clause of § 9.107-5(b) of this title as follows:

(d) When it is determined to provide substantial financial support to a contractor's specific product improvement program, this will be accomplished by appropriate description of such program in the schedule of the contract. When it is determined to provide substantial financial support to specific projects in a contractor's independent research program, this will be done in the case of: (1) Firm fixed price contracts, in the negotiation of the price; (2) fixed-price contracts providing for price redetermination by appropriate provision in the contract or appropriate reference in the record of contract negotiation that the cost of such projects will be considered for pricing purposes; and (3) cost type contracts by including the following clause:

The cost of specific projects within the Contractor's independent research program will be recognized as an indirect cost under this contract and be reimbursed on an allocable basis to the extent that such projects and the cost thereof have been approved in advance by the Contracting Officer.

(e) In respect to the clauses of paragraphs (c) and (d) of this section, the contracting officer will consult the procurement staff judge advocate for advice, the procurement staff judge advocate may forward all questions relating to Patent Rights clauses, within:

(1) AFSC to AFSC (SCJP).

(2) AFLC to AFLC (MCJCO).

[29 F.R. 1682, Feb. 4, 1964, as amended at 29 F.R. 15259, Nov. 13, 1964]

§ 1009.108 Patent rights under contracts for personal services.

(a) Applicable AF policy and procedures for implementing Executive Order 10096, January 23, 1950, are set forth in Section B, AFR 110-8, which may be consulted for background information.

(b) All disclosures or certifications received by contracting officers pursuant to paragraph (b) of the clause in § 9.108 of this title will be referred in the same manner as prescribed for submitting material in § 1009.105. The office to