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THE UNITED STATES OF AMERICA, tion to the Patent Office in accordance
By --

with applicable procedures such as are
(Signature and title of designee)

set forth in the Department of Defense By

Industrial Security Manual for Safe(Signature and title)

guarding Classified Security Informa(CORPORATE SEAL)

tion. Two witnesses:

(b) In the case of all applications filed

under the provisions of $$ 9.106 and
(Address)

9.106–1 of this title, the contracting of-
ficer or his representative has the fur-

ther duty of securing the application
(Address)

serial number and filing date from the The foregoing contract is hereby approved

Contractor and submitting such infor-
on behalf of the Secretary of the Army.

mation to a proper Department of the
Army representative promptly after fil-

ing of the application in order that nec-
Chief, Purchases Branch,

essary steps may be taken to place the Office of the Deputy Chief

application under a Secrecy Order purof Staj for Logistics.

suant to 35 U. S. C. 181, if such action
Dated:

appears to be advisable.
(f) Gratuitous grants. For a sug-
gested unilateral contract form for use

§ 598.106-1 Classified contracts to be
where a patent owner voluntarily grants

performed outside the United States. a royalty-free license, assignment or

Delay in answering a request for the aprelease to the Government, see $ 598.

proval referred to in $ 9.106–1 of this 1509.

title may result in the loss of valuable

patent rights of the contractor. AC$ 598.106 Classified contracts.

(a)

cordingly, such requests shall be consid-
Upon receipt from the Contractor of a ered and acted upon promptly.
patent application not yet filed which
has been submitted by the Contractor in

$ 598.107 Patent rights under con-
compliance with § 9.106 (a) of this title,

tracts involving research and develop-
the contracting officer shall immediately

ment.
refer the application to the competent $ 598.107-1 License rights-(a) Ap-
authority within his activity for assist-

propriate contracts. The policy stated
ance in determining, within the 30-day in $ 9.107–1 (a) of this title shall apply
period referred to in § 9.106 (a) of this

to any Army contract or modification title, the proper security classification of thereof having experimental, developthe patent application. Upon such a mental or research work as one of its determination, the contracting officer or

purposes, irrespective of the contract his representative shall inform the con

designation or the source. of funds intractor of any instructions deemed nec

volved ($ 598.112). essary or advisable relating to transmit

(b) Inventions first actually reduced tal of the application to the United

to practice under contracts. Whenever States Patent Office. In determining the

practical, the contracting officer should necessity or advisability of such instruc

obtain the advice of cognizant Governtions, the contracting officer or his rep

ment patent counsel prior to excluding resentative shall consider the following:

any inventions from license grant in ac(1) If the patent application is classi

cordance with $ 9.107–1 (b) of this title. fied Top Secret, the contractor shall be

Any questions of interpretation of notified immediately, and advised that

$ 9.107–1 (b) of this title may be referred transmittal shall be handled in accord

through channels to the Chief, Patents
ance with applicable procedures such as

Division.
are set forth in Department of Defense
Industrial Security Manual for Safe-

(c) Foreign rights. (Revoked, 21 F. R.
guarding Classified Security Informa-

10013, Dec. 18, 1956] tion.

$ 598.107-2 Contracts relating to (2) If the patent application receives

atomic energy.

(a) Any provision to be a classification lower than Top Secret or incorporated into the Patent Rights is determined to be unclassified, the con- clause which authorizes the contractor tractor may be advised acordingly so as to retain license rights, or authorizes to facilitate transmittal of the applica- any deviation from the Patent Rights

do ti

won

1

&

SOURCE: 88 598.000 to 598.1509 appear at 20 F. R. 4017, June 9, 1955, except as otherwise noted.

$ 598.000 Scope of part. . This part sets forth administrative requirements, procedures, and other pertinent information in connection with (a) clauses in various types of contracts securing to the United States Government appropriate patent rights and adequate protection against patent infringement risks: (b) use of copyright and technical data clauses in Army contracts; (c) security requirements covering patent applications containing classified subject matter filed by Contractors; (d) adjustment of royalties payable by Army Contractors; (e) claims arising out of the use by the Army or Army Contractors of adversely owned inventions and the settlement or other disposition of such claims; and (f) procurement by the Army of invention rights other than as an incident to the settlement of claims.

$ 598.050 Definitions. As used in this section the following terms have the meanings assigned:

(a) Chief, Patent Division. The term “Chief, Patents Division" means the Chief, Patents Division, Office of The Judge Advocate General, Department of the Army, Washington 25, D. C.

(b) Designee. The term "Designee" means any office, board, or person delegated, or designated to exercise, powers and authorities under any of the "applicable statutes" listed in $ 598.105.

(c) Such claim. The terms "such claim" and "such a claim" mean a claim against the United States which in fact has been asserted or a claim (based upon actual past procurement and not contemplated procurement)

which may reasonably be anticipated, under any of the "applicable statutes" listed in $ 598.105.

SUBPART A-PATENTS 8 598.102 Authorization and consent.

$ 598.102–1 Authorization and consent in contracts for supplies. The use of the Authorization and Consent clause ($ 9.102–1 of this title) is optional in supply contracts of $5,000 and less, including purchase orders, but shall be included in supply contracts over $5,000, including construction work, except as provided in $ $ 9.102 (b) and 9.102-2 of this title and $ 598.102–2. [28 F. R. 6105, Aug. 9, 1958]

Prior Amendments 1956: 21 F. R. 4287, June 19.

$ 598.102–2 Authorization and consent in contracts for research or development. The Authorization and Consent Clause (§ 9.102–2 of this title) shall be included in all contracts calling exclusively for research or development work, and may be otherwise included only in those contracts for both supplies and research or development work where the résearch or development work is the primary purpose of the contract. In al: other contracts for both supplies and research or development work, the Authorization and Consent Clause ($ 9.102–1 of this title) shall be used in accordance with the provisions of $ 598.102–1. (23 F. R. 6105, Aug. 9, 1958]

$ 598.103 Patent indemnification by Contractor.

§ 598.103–1 Patent indemnification in formally advertised contracts, commercial status predetermined. (a) In supply contracts of $5,000 or more to be awarded as a result of formal advertising, the contracting officer shall make a determination prior to issuance of the invitation for bids whether the supplies to be procured (or such supplies apart from relatively minor modification to be made thereto) normally are, or have been sold or offered for sale by any supplier to the public in the commercial open market. If it is determined that the supplies are, or have been, sold or offered for sale, except as prohibited by § 9.103 of this title, the contract shall include the clause set forth in § 9.103-1 of this title.

(b) Any items to be excluded in accordance with $ 9.103-1 (b) of this title shall be listed in detail rather than in general terms. (23 F. R. 6105, Aug. 9, 1958)

$ 598.103-2 Patent indemnification in formally advertised contracts-commercial status not predetermined. The clause set forth in $ 9.103--2 of this title shall not be included in an Army contract without prior approval of the Chief, Contracts Branch, Office of the Deputy Chief of Staff for Logistics.

$ 598.103-4 Waiver of indemnity by the Government. Special patents may be excluded in acoordance with $ 9.103-4 of this title only with prior approval of the Chief, Contracts Branch, Office of the Deputy Chief of Staff for Logistics.

see

8 598.103–50 Indemnification of Contractor by the Government. No provision whereby the Government expressly agrees to indemnify the Contractor against liability for patent infringement shall be included in any contract. Ordinarily, any demands of a Contractor in this respect can be satisfied by the modification or elimination of the patent indemnity clause (when authorized by $ 9.103 of this title and $ 598.103) and insertion of the authorization and consent clause (§ 9.102–1 or $ 9.102–2 of this title).

$ 598.104 Notice and assistance, For proper action to be taken by contracting Officers or others with respect to reports, received by them, of claims of patent infringement asserted against a Contractor or a subcontractor, $ 598.105-53.

$ 598.105 Processing of infringement claims. The policy of the Department of the Army, applicable statutes, administrative requirements, procedures, and other pertinent information in connection with investigation and disposition of "such claims" as defined in $ 598.050 (c), and contracts or agreements in settlement of such claims, including suggested contract forms and mandatory and suggested articles to be used in such contracts are set forth below. The following are applicable statutes:

(a) Mutual Security Act. Section 506 of the Mutual Security Act of 1954 (22 U. S. C. 1758) provides that whenever in the furnishing of any assistance under the act (1) use within the United States, without authorization of the owner, is made of a patented invention, or (2) damage to the owner results from disclosure of "information" as defined in section 506 by reason of acts of the United States, the exclusive remedy shall be by suit against the United States for reasonable and entire compensation for unauthorized use of disclosure. The head of the furnishing agency is authorized before suit is instituted to enter into agreements settling claims brought under this section.

(b) Invention Secrecy Act. Title 35, U. S. Code, sections 181-188 (sometimes referred to as the Invention Secrecy Act), provide for the withholding of the grant of a patent through the issuance cf a secrecy order, for such time as the national interest requires, in those cases where the patent application discloses an invention the publication of which would

be detrimental to the national security of the United States. Section 183 authorizes the Department which caused the issuance of the order to enter into an agreement with the owner of an application, which except for the secrecy order would issue as a patent, in full settlement for the damage caused by the secrecy order and/or the use of the invention by the Government, resulting from his disclosure. If full settlement cannot be effected, the head of the Department concerned may award and pay a sum not exceeding 75 percent of the sum considered to be just compensation for the damage and/or use. Section 183 also provides for suit by the owner of the application for an amount which when added to the award would constitute just compensation for the damage and/or use. The act further provides that a patent owner who does not apply administratively for compensation is given the right to sue in the Court of Claims for just compensation for the damage caused by reason of the secrecy order and/or use by the Government of the invention resulting from his disclosure.

(c) Title 10, U. S. Code, section 2386. Title 10 U.S. Code, Section 2386, provides that:

Funds appropriated for a military department available for making or procuring supplies may be used to acquire any of the following if the acquisition relates to supplies or processes produced or used by or for, or useful to, that department:

(1) Copyrights, patents, and applications for patents.

(2) Licenses under copyrights, patents and applications for patents.

(3) Designs, processes, and manufacturing data.

(4) Releases, before suit is brought. Por past infringement of patents. In connection with acquistion of releases for past infringement of patents mentioned in the quoted language, the basic statutory provision dealing with infringement by or for the Government is Title 28, U. S. Code, Section 1498. This section provides that whenever an invention described in and covered by a patent of the United States is, without license or other right, used or manufactured by the United States, or by any person, firm, or corporation for the United States and with its authorization or consent, the patent owner's remedy shall be by suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use or manufacture. The statute also provides that a Government employee shall have the right to bring such a suit against the Government except where he was in a position to order, infuence, or induce use of the invention by the Government. The statute also provides that it shall not confer a right of action on any patentee or his assignee with respect to any invention discovered or invented by a person while in the employment or service of the United States, where the invention was related to the official functions of the employee, in cases in which such functions included research and development, or in the making of which Government time, materials, or facilities were used. (Paragraph (c) amended, 22 F. R. 3175, May 4, 1957)

$ 598.105-50 General policy. In order to maintain the good will of United States industry, to encourage invention and the development of scientific arts related to national defense, to dispose of past and avoid future infringement of privately owned rights in inventions and under United States letters patent, and to avoid litigation and attendant nonproductive time, it is the policy of the Department of the Army to settle claims for compensation for past infringement of such rights, and also to obtain necessary rights with respect to such inventions in view of contemplated Department procurement, where it is in the Government's interest to do so and when such rights can be obtained at not more than fair value. To this end, an investigation of each such claim shall be made in accordance with the instructions and procedures set forth in $$ 598.105–53 thru 598.105–57. If any patent upon which such a claim is based is found to be infringed, valid, and enforceable, and it is deemed advisable by the Designee, efforts to settle such claim, before suit against the United States has been instituted, shall be made in accordance with $ $ 598.105-58 thru 598.105-62. Coordination with the Departments of the Navy and Air Force in the processing and final disposition of each such claim shall be effected by the Chief, Patents Division.

$ 598.105–51 Authority—(a) Acquisition of releases of past infringement and licenses. By virtue of 10 U. S. C. 2386 (text set forth in $ 598.105 (c)), the Department of the Army is authorized to acquire certain patents and other rights. The following are hereby authorized to

make acquisitions in accordance with 10 U. S. C. 2386:

(1) Deputy Chief of Staff for Logistics.

(2) Chief, Procurement Division, Office of the Deputy Chief of Staff for Logistics.

(3) Chief, Contracts Branch, Office of the Deputy Chief of Staff for Logistics.

(4) Chiefs of technical services.
(5) Designees of any of the foregoing.

(b) Claims under Mutual Security Acts. The chiefs of the technical services and others have been delegated authority to enter into agreements in settlement of claims asserted under section 517 of the Mutual Security Act of 1951, and section 506 of the Mutual Security Act of 1954. (22 F. R. 3175, May 4, 1957)

Prior Amendments 1956: 21 F. R. 4287, June 9.

$ 598.105–52 Duties of designees—(a) Duties. Each Designee is charged with the duty of taking appropriate action, on behalf of the Department of the Army, with respect to each such claim pertaining to the procurement responsibility of his service promptly after knowledge of the claim is brought to his attention. Such action includes the following:

(1) Acknowledging in writing receipt of the communication in which such claim is asserted. An authorized form of acknowledgment is set forth in $ 598.105-54.

(2) Requiring the representative of the claimant to file in duplicate a Notice of Appearance in the form prescribed by $ 583.1 (b) of this chapter.

(3) Requesting clearance within 30 days from the Chief, Patents Division, to investigate and settle each such claim pursuant to $ 598.105-55, inclosing a copy of the communication in which such claim was asserted or reported. (Subparagraph (3) amended, 21 F. R. 10013, Dec. 18, 1956)

(4) Investigating each such claim upon clearance from the Chief, Patents Division, and, if deemed appropriate, settling the same pursuant to 88 598.10558 thru 598.105-62.

(5) Making the required distribution of each contract of settlement or partial settlement of such claim pursuant to § 598.105-62.

(1) The names and addresses of Ucensees,

if any.

(6) Preparing and transmitting to the Chief, Patents Division, a final report with respect to each such claim in which no settlement is effected, pursuant to $ 598.105–56.

(b) Action by representative. The action indicated in paragraph (a) of this section, and wherever referred to in § 598.105, may be performed by an authorized representative of the Designee, except for the execution of contracts pursuant to paragraph (a) (4) of this section.

$ 598.105-53 Reporting of claims. Any officer, or employee of a technical service shall submit promptly to the chief legal or patent officer in his service (a) any communication received by him asserting such a claim, and (b) any report of such a claim received by him from a Contractor in accordance with $ 9.104 of this title. (Notice and Assistance.) All communications asserting such claims received by others shall be sent to the Chief, Patents Division.

$ 598.105–54 Correspondence with claimant. No Designee shall concede in writing, addressed to any claimant, potential claimant, or the representative of either, the merit or value of such claim, except so far as such concession may be embodied in an agreement executed in settlement of such claim in accordance with this subpart. (See Part 518 of this chapter and 8 598.105-63). Upon receipt of a notice of infringement, the Designee shall acknowledge such receipt. The following form letter is authorized for this purpose: (Letterhead of Designee)

(Date) JOHN DOE, Title Guarantee Building,

Miami, Florida. DEAR SIR: Your letter to

dated 19_-, stating that United States Letters Patent No.

granted (date of patent), to (patentee's full name), of (city and State), for “(title of invention)," Is (are) infringed by (item or process) allegedly being used by the Department of the Army, has been referred to this office for necessary action and direct reply.

The matter presented in your letter will be carefully investigated and you will be Informed of the Department of the Army's conclusions upon completion of the investigation.

To aid in the investigation, it is requested that you furnish this office as promptly as possible the following:

(2) Copies of license agreements.

(3) Brief statement of any itigation in which the patent(s) have been or are now involved.

(4) List of all notices of infringement which you have sent to alleged Infringers of the patent (except the alleged Infringers included in your statement of Utigation), including but not limited to any other departments and agencies of the Government.

|(5) Two executed copies of the inclosed Notice of Appearances, required of any person appearing in a representative capacity before the Department of the Army in a matter involving a claim against the United States.) 1

((6) An identification of the equipment or operation alleged to constitute infringement.)

Sincerely yours, (Signature of Designee or representative)

CODIFICATION: In $ 598.105-54 the letter and footnotes thereto were amended to read as set forth above, 21 F. R. 10013, Dec. 18, 1956.

$ 598.105-55 Clearance to investigate. (a) Within 30 days after receipt of a notice or report of such a claim the Designee shall request in writing from the Chief, Patents Division, clearance to investigate and settle the claim. So far as practicable, one Designee shall represent the Department of the Army in the investigation and settlement of each such claim. The Chief, Patents Division, may grant clearance to a Designee to investigate and settle claims, even though notice and request for clearance was not originated by such Designee. (Paragraph (a) amended, 21 F. R. 10013, Dec. 18, 1956)

(b) Each request for clearance shall be submitted in quadruplicate and shall include the following:

(1) The name and address of each claimant or prospective claimant.

(2) The name and address of each Contractor and subcontractor who is believed, to the extent disclosed by a cursory search in the headquarters of the Designee, to have performed the alleged infringing acts.

(3) The number and date of each patent, and the serial number and filing date of each patent application involved.

(4) Description of the alleged infringing subject matter in sufficient detail to

1 For use where claim Is asserted by a representative of the claimant.

* For use where this information has not previously been furnished.

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