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this contract except nontechnical personnel, such as clerical employees and manual laborers.

(4) The Contractor agrees that the Government may duplicate and disclose Subject Invention disclosures and all other reports and papers furnished or required to be furnished pursuant to this clause.

(f) Forfeiture of rights in unreported subject inventions. (1) Unless excused by the Foundation, the Contractor shall forfeit to the Government all rights on any Subject Invention which he fails to report to the Contracting Officer at or prior to the time he:

(i) Files or causes to be filed a United States or foreign application thereon; or

(ii) Submits the final report required by paragraph (e)(2)(iii) of this clause, whichever is later.

(2) However, the Contractor shall not forfeit rights in a Subject Invention if, within the time specified in (1)(i) or (ii) of this clause, the Contractor:

(i) Prepared a written decision based upon a review of the record that the invention was neither conceived nor first actually reduced to practice in the course of or under the contract; or

(ii) Contending that the invention is not a Subject Invention, he nevertheless discloses the invention and all facts pertinent to his contention to the Contracting Officer; or

(iii) Establishes that the failure to disclose did not result from his fault or negligence.

(3) Pending written assignment of the patent applications and patents on a Subject Invention determined by the Contracting Officer to be forfeited (such determination to be a final decision under the Disputes Clause), the Contractor shall be deemed to hold the intention and the patent applications and patents pertaining thereto in trust for the Government. The forfeiture provision of this paragraph (f) shall be in addition to and shall not supersede other rights and remedies which the Government may have with respect to Subject Inventions.

(g) Examination of records relating to inrentions. (1) The Contracting Officer or his authorized representative shall, until the expiration of 3 years after final payment under this contract, have the right to examine any books, records, documents, and other supporting data of the Contractor which the Contracting Officer reasonably deems pertinent to the discovery of identific cation of Subject Inventions or to determine compliance with the requirements of this clause.

(2) The Contracting Officer shall have the right to review all records and documents of the Contractor relating to the conception or first actual reduction to practice of inventions in the same field of technology as the

work under this contract to determine whether any such inventions are Subject Inventions if the Contractor refuses or fails to:

(i) Establish the procedures of paragraph (e)(1) of this clause; or

(ii) Maintain and follow such procedures, 01;

(iii) Correct or eliminate any material deficiency in the procedures within thirty (30) days after the Contracting Officer notifies the Contractor of such a deficiency.

(h) Withholding of payments. (1) Any time before final payment of the amount of this contract, the Contracting Officer may, if he deems such action warranted, withhold payment until a reserve not exceeding $50,000 or 5 percent of the amount of this contract, whichever is less, shall have been set aside if in his opinion the Contractor fails to:

(i) Establish, maintain, and follow effective procedures for identifying and disclosing Subject Inventions pursuant to paragraph (e)(1) of this clause; or

(ii) Disclose any Subject Invention pursuant to paragraph (e)(2)(i) of this clause; or

(iii) Deliver the interim reports pursuant to paragraph (e)(2)(ii) of this clause; or

(iv) Provide the information regarding subcontracts pursuant to paragraph (i)(5) of this clause.

The reserve or balance shall be retained until the Contracting Officer has determined that the Contractor has rectified whatever deficiencies exist and has delivered all reports, disclosures and other information required by this clause.

(2) Final payment under this contract shall not be made before the Contractor delivers to the Contracting Officer all disclosures of Subject Inventions required by paragraph (e)(2)(i) of this clause and the final report required by (e)(2)(iii) of this clause.

(3) The Contracting Officer may, in his discretion, decrease or increase the sums withheld up to the maximum authorized above. No amount shall be withheld under this paragraph while the amount specified by this paragraph is being withheld under other provisions of the contract. The withholding of any amount or subsequer.t payment thereof shall not be construed as a waiver of any rights acruing to the Government under this contract.

(i) Subcontracts. (1) For the purpose of this paragraph the term “Contractor" means the party awarding a subcontract and the term “Subcontractor" means the party being awarded a subcontract, regardless of tier.

(2) The Contractor shall, unless otherwise authorized or directed by the Government Contracting Officer, include this Patent Rights clause, modified to identify the parties in any subcontract hereunder, if a purpose of the subcontract is for the conduct of experimental, developmental or research work. In the event of refusal by a Subcontractor to accept this clause, or if in the opinion of the Contractor this clause is inconsistent with the policy set forth in the President's Policy, the Contractor:

(i) Shall promptly submit written notice to the Government Contracting Officer setting forth reasons for the Subcontractor's refusal and other pertinent information which may expedite disposition of the matter; and

(ii) Shall not proceed with the subcontract without the written authorization of the Government Contracting Officer.

(3) The Contractor shall not, in any subcontract or by using a subcontract as consideration therefor, acquire any rights in his Subcontractor's Subject Invention for his own use (as distinguished from such rights as may be required solely to fulfill his contract obligations to the Government in the performance of his contract).

(4) All invention disclosures, reports, instruments, and other information required to be furnished by the Subcontractor to the Government Contracting Officer under the provisions of a Patent Rights clause in any subcontract hereunder may, in the discre. tion of the Government Contracting Officer, be furnished to the Contractor for transmission to the Government Contracting Officer.

(5) The Contractor shall identify all Subject Inventions of the Subcontractor of which he acquires knowledge in the performance of this contract and shall notify the Government Contracting Officer promptly upon the identification of the inventions.

(6) It is understood that the Government is a third party beneficiary of any subcontract clause granting rights to the Government in Subject Inventions, and the Contractor hereby assigns to the Government all rights that he would have to enforce the Subcontractor's obligations for the benefit of the Government with respect to Subject Inventions. The Contractor shall not be obiigated to enforce the agreements of any Subcontractor hereunder relating to the obligations of the Subcontractor to the Government in regard to Subject Inventions.

(b) Except (1) when paragraph (c) of this section applies, or (2) where th contract will be subject to an Institutional Patent Agreement pursuant to 45 CFR 650.8, all contracts which are with nonprofit or not-for-profit organizations (including educational institutions) shall contain the clause at 45 CFR 650.4(b). However, in the case of such contracts for the operation of

National Research Centers or similar facilities other provisions may be negotiated with the approval of the General Counsel; provided that such provisions shall be consistent with section 1(a)(4) of the President's Policy.

(c)(1) At the request of a prospective contractor, special provisions other than those provided in paragraphs (a) and (b) of this section may be negotiated where the award falls within section 1(b) of the President's Policy or where exceptional circumstances as set forth in section 1(a) of the President's Policy exist. In accordance with section 1(c) of the President's Policy, such provisions may also be negotiated at the time of award with educational or other non-profit or not-for-profit institutions having a demonstrated capability for effective patent management; provided that in such cases the provisions shall normally include the features described in 45 CFR 650.8(c).

(2) In negotiating such special provisions, Section 12(a) of the National Science Foundation Act, as amended, and the President's Policy will be followed.

(3) In the case of negotiations involving contracts falling within section 1(b) of the President's Policy, the clause at paragraph (a) of this section shall be used, except that the name of the clause shall be changed to PATENT RIGHTS_OPTION

IN THE CONTRACTOR,” paragraph (b) of that clause shall be replaced by the following paragraph (b), and the fol. lowing paragraphs (j) and (k) shall be added:

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(b) Disposition of principal rights. (1) The Contractor may retain the entire right, title, and interest throughout the world or in any country thereof in and to each Subject Invention disclosed pursuant to paragraph (e)(2)(i) of this clause, subject to the rights obtained by the Government in paragraph (c) of this clause. The Contractor shall include with each Subject Invention disclosure an election as to whether he will retain the entire right, title, and interest in the invention throughout the world or any country thereof.

(2) Subject to the license specified in paragraph (d) of this clause, the Contractor agrees to convey to the Government, upon request, the entire domestic right, title, and

interest in any Subject Invention when the vention disclosure if the patent application Contractor:

previously had been filed, deliver to the (i) Does not elect under paragraph (b)(1) Contracting Officer a copy of the applicaof this clause to retain such rights; or

tion as filed including the filing date and (ii) Fails to have a United States patent serial number; application filed on the invention in accord- (ii) Include the following statement, apance with paragraph (j) of this clause, or de- propriately completed, in the second paracides not to continue prosecution of such graph of the specification of the application application; or

and any patents issued on a Subject Inven(iii) At any time, no longer desires to tion. “The Government has rights in this inretain title.

vention pursuant to Contract No. (or (3) Subject to the license specified in para- Grant No. --) awarded by the National graph (d) of this clause, the Contractor Science Foundation." agrees to convey to the Government, upon (iii) Within 6 months after filing the aprequest, the entire right, title, and interest plication or within 6 months after submisin any Subject Invention in any foreign sion of the invention disclosure if the appli. country if the Contractor:

cation has been filed previously, deliver to (i) Does not elect under paragraph (b)(1) the Contracting Officer a duly executed and of this clause to retain such rights in the approved instrument on a form specified by country; or

the Government fully confirmatory of all (ii) Fails to have a patent application filed rights to which the Government is entitled, in the country on the invention in accord- and provide the agency an irrevocable ance with paragraph (k) of this clause, or power to inspect and make copies of the decides not to continue prosecution or to patent application filed; pay any maintenance fees covering the in- (iv) Provide the Contracting Officer with vention. To avoid forefeiture of the patent a copy of the patent within 2 months after a application or patent, the Contractor shall patent issues on the application, and notify the Contracting Officer not less than (v) Not less than 30 days before the expisixty (60) days before the expiration period ration of the response period for any action for any action required by the foreign required by the Patent Office, notify the patent office.

Foundation of any decision not to continue (4) A conveyance requested pursuant to prosecution of the application and deliver to paragraph (b)(2) or (3) of this clause shall the Foundation executed instruments grantbe made by delivering to the Contracting ing the Government a power of attorney. Officer duly executed instruments (pre- (3) For each Subject Invention in which pared by the Government) and such other the Contractor initially elects not to retain papers as are deemed necessary to vest in principal domestic rights, the Contractor the Government the entire right, title, and shall inform the Contracting Officer interest to enable the Government to apply promptly in writing of the date and identity for and prosecute patent applications cover- of any sale, public use, or publication of ing the invention in this or the foreign such invention which may constitute a statcountry, respectively, or otherwise establish utory bar under 35 U.S.C. 102, which was its ownership in such invention.

authorized by or known to the Contractor, or any contemplated action of this nature.

(k) Filing of foreign patent applications.

(1) With respect to each Subject Inven(j) Filing of domestic patent applications. tion in which the Contractor elects to retain (1) With respect to each Subject Invention rights in a foreign country pursuant to in which the Contractor elects to retain do- paragraph (b)(1) of this clause, the Contracmestic rights pursuant to paragraph (b) of tor shall have a patent application filed on this clause, the Contractor shall have a do- the invention in such country, in accordance mestic patent application filed within 6 with applicable statutes and regulations, months after submission of the invention and within one of the following periods; disclosure pursuant to paragraph (e)(2)(i) of (i) Eight months from the date of a correthis clause, or such longer period as may be sponding United States application filed by approved by the Contracting Officer for or on behalf of the Contractor; or if such an good cause shown in writing by the Contrac- application is not filed, 6 months from the tor. With respect to the invention, the Con- date the invention is submitted in a disclotractor shall promptly notify the Contract- sure pursuant to paragraph (e)(2)(i) of this ing Officer of any decision not to file an ap- clause; plicacion.

(ii) Six months from the date a license is (2) For each Subject Invention on which a granted by the Commissioner of Patents to patent application is filed by or on behalf of file foreign applications where such filing the Contractor, the Contractor shall:

has been prohibited by security reasons; or (i) Within 2 months after such filing, or (iii) Such longer period as may be apwithin 2 months after submission of the in- proved by the Contracting Officer.

(2) The Contractor shall notify the Contracting Officer promptly of each foreign application filed and, upon written request, shall furnish an English version of such foreign application without additional compensation.

(4) In all other cases falling within this paragraph (c), the “PATENT RIGHTS-OPTION IN THE GOV. ERNMENT” clause prescribed at $ 259.103(a) shall be used with appropriate modifications of that clause so as to allow the Contractor to obtain greater rights than a non-exclusive license as to all or specific inventions. These modifications should reflect the requirements of paragraph (c)(1) of this section, if applicable, and, in addition, particularly where the contract would fall within section 1(a)(1)-(4) of the President's Policy, consideration should be given to including provisions to ensure that research results are made available to the public in accordance with the policy set forth in $ 259.106.

(5) The inclusion of special provisions in a contract in accordance with this section, other modifications of the clauses prescribed by this subpart, or the waiver of any of the requirements of the clauses prescribed by this subpart, shall be approved by the General Counsel. In cases where the General Counsel does not grant such approval, interested Foundation staff may refer the matter to the NSF Patent Policy Review Committee.

(i) The contract number, and subcontract number is applicable, under which the invention was made;

(ii) A complete invention disclosure or reference to one that has previously been furnished, including any NSF identifying numbers, if known;

(iii) A description of the relationship of the invention to the main purpose of the contract;

(iv) The contractor's evaluation of the commercial possibilities of the invention both in its original embodiment and in possible adaptations to other uses;

(v) An explanation of why it is believed that rights greater than free public use are needed to bring the invention into use;

(vi) The nature and extent of the rights desired;

(vii) A description of the stage of development of the invention, and an es. timate of the cost of development, cap. ital and time required to bring the invention to the point of practical application as defined in the President's Policy;

(viii) A statement of the contractor's plans and intentions to bring the invention to the point of practical application including:

(A) If further development is to be conducted by the contractor, a description of the facilities, source of funds, personnel, and marketing outlets available for that purpose and the extent to which such development is to be undertaken by the contractor or others on his behalf and/or

(B) If he intends to license the invention, a brief description of his licensing program;

(ix) A statement of any equities in the invention which the contractor believes it has in the invention which would be appropriate for consideration by the Foundation;

(x) If other Government agencies have contributed to the cost of making the invention, the identification of such agencies and the grant or contract involved, and the approximate share of each;

(xi) A listing of other countries in which the contractor would be interested in filing applications for patents;

$ 25-9.104 Greater rights determination.

(a)(1) Contractors desiring to retain rights in inventions made under or during the course of contracts containing provisions that condition the retention of principal rights in such inventions by the contractor on the determination of the Foundation, such as those prescribed at $ 25-9.103(a), should address their request to the General Counsel who has been delegated authority to make such determinations. In all such cases the General Counsel shall seek the recommendations and advice of the Patent Policy Review Committee.

(2) Such requests should contain the following information:

(2) In addition to the requirements of paragraph (c)(1) of this section, any determination under this section shall reserve to the Government the rights set forth in $ 25-9.105. In addition, if he has not already done so, the contractor shall be required to have a domestic patent application filed on the invention within 6 months from the date of the determination, or such longer period as may be authorized by the Foundation for good cause shown by the contractor. Each determination shall also include appropriate provisions concerning foreign rights. The determination may also include such other provisions as are considered appropriate.

(3) When neither the grantee, the employee-inventor, nor any other Goyernment agency notified of the invention by the Foundation wishes to take principal rights in an invention, it shall normally be dedicated to the public through publication.

(xii) If publication of the substance of this invention has occurred or is planned or there has been a use or sale such as might possibly create a future statutory bar to the patenting of the invention, the name of the journal, the date or probable date of publication, a reprint of the article if it has been published or a copy of the draft as submitted for publication, and/or details regarding the use or sale of the invention;

(xiii) An identification and indication of the ownership of any patents, patent applications, or invention disclosures known to the contractor which would affect the practice of the invention.

(b) Determinations under this section shall be made on the basis of the zuidelines set forth in the President's Policy and this subpart. In addition, the relationship of the invention to other technology controlled by the contractor shall be considered as discussed in § 25-9.106.

(c)(1) In cases where principal rights in an invention are left with a contractor which, itself, is not expected to further develop the inventior., the Foundation will require the contractor to make reasonable attempts to license inventions on a nonexclusive basis; provided that an exclusive license may be granted if the contractor determines that an exclusive license is necessary as an incentive for development of the invention or because market conditions are such as to require licensing on an exclusive basis in order to bring the invention into use. This determination shall be in writing and supplied to the Foundation at or before the time an exclusive license is granted. Any such exclusive license granted under a domestic patent or patent application will normally be limited to a period of three years from first commercial sale or eight years from the inception of the license agreement, whichever occurs first. Thereafter, unless the original exclusive license period is extended with the approval of the Foundation, additional licenses will be made available on a nonexclusive basis at a royalty not greater than that charged to the exclusive licensee.

$ 25-9.105 Minimum government rights.

In all cases where the contractor or any other person or entity has been allowed to retain or obtain principal rights in an invention, or possible future inventions, whether at the time of award or after an invention has been identified, the Foundation shall reserve the following minimum rights, if not otherwise required by or inconsistent with any other provision of this subpart.

(a) 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 Director determines that it would not be in the public interest to acquire the license for the States and domestic municipal governments.

(b) The right to sublicense any foreign government pursuant to any existing or future treaty or agreement, but only if the Director determines it would be in the national interest to acquire this right.

(c) The principal or exclusive rights to the invention (or the right to acquire the same) in any countty in

30-110 0-78-10

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