such sum as the Contracting Officer determines to be necessary to protect the Government against loss because of outstanding liens or claims of former lien holders. (e) If, after notice of termination of this contract under the provisions of this clause, it is determined for any reason that the Contractor was not in default under the provisions of this clause, or that the default was excusable under the provisions of this clause, the rights and obligations of the parties shall, if the contract contains a clause providing for termination for convenience of the Government, be the same as if the notice of termination has been issued pursuant to such clause. (f) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. (b) In contracts which do not contain a clause providing for termination for convenience of the Government, add the following sentence to subparagraph (e) of the clause set forth in paragraph (a) of this section: If, after notice of termination of this contract under the provisions of this clause, it is determined for any reason that the Contractor was not in default under the provisions of this clause, and if this contract does not contain a clause providing for termination for convenience of the Government, the contract shall be equitably adjusted to compensate for such termination and the contract modified accordingly; failure to agree to any such adjustment shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes." [27 F.R. 8873, Sept. 6, 1962] Prior Amendments DD Form 544—Inventory Schedule C-Work in Process and DD Form 544c-Inventory Schedule B-Continuation Sheet. See F-200.544 and F-200.544c. [28 F.R. 4890, May 16, 1963] DD Form 547-Settlement Proposal for Cost-Reimbursement Type Contracts. DD Form 547 is to be used by prime contractors submitting termination claims on cost-reimbursement type contracts. It is also suitable for use in connection with terminated cost-reimbursement type subcontracts. See F200.547. [28 F.R. 4891, May 16, 1963] Sec. 9.102 Subpart A-Patents [Re Authorization and consent. vised] 9.102-1 Authorization and consent in contracts for supplies. [Revised] 9.102-2 Authorization and consent in contracts for research or development. [Revised] 9.104 Notice and assistance. [Amended] 9.107-3 Patent rights-foreign contracts. [Amended] 9.107-4 Contracts relating to atomic energy. [Amended] 9.107-5 Contracts relating to civil defense. [Revised] 9.107-6 Patent license rights under product improvement programs or independent research programs. [Revised] 9.107-8 Contracts relating to space. Subpart C-Foreign License and Technical Assistance Agreements § 9.102 Authorization and consent. (a) Under 28 U.S.C. 1498, any suit for infringement of a United States patent based on the manufacture or use by or for the United States of an invention described in and covered by a patent of the United States by a contractor or by a subcontractor (including lower tier subcontractors) can be maintained only against the Government in the Court of Claims, and not against the contractor or subcontractor, in those cases where the Government has authorized or consented to the manufacture or use of the patented invention. Accordingly, in order that work by a contractor or subcontractor under a Government contract may not be enjoined by reason of patent infringement, authorization and consent may be given as herein provided. The liability of the Government for damages in any such suit against it may, however, ultimately be borne by the contractor or subcontractor in accordance with the terms of any patent indemnity clause also included in the contract, and an authorization and consent clause does not detract from any patent indemnification commitment by the contractor or subcontractor. Therefore, both a patent indemnity clause and an authorization and consent clause may be included in the same contract. (b) An authorization and consent clause shall not be used in contracts where both complete performance and delivery are to be outside the United States, its possessions, or Puerto Rico. [26 F.R. 2612, Mar. 28, 1961] § 9.102-1 Authorization and consent in contracts for supplies. The contract clause set forth may be included in all contracts for supplies (b) In contracts exclusively for experimental, developmental, or research work which are subject to the provisions of § 9.102-2. AUTHORIZATION AND CONSENT (JAN. 1961) The Government hereby gives its author!zation and consent (without prejudice to its rights of indemnification, if such rights are provided for in this contract) for all use and manufacture, in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lower tier subcontract), of any invention described in and covered by a patent of the United States (1) embodied in the structure or composition of any article the delivery of which is accepted by the Government under this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the Contractor or the using subcontractor with (a) specifications or written provisions now or hereafter forming a part of this contract, or (b) specific written instructions given by the Contracting Officer directing the manner of performance. The Contractor's entire liability to the Government for infringement of a patent of the United States shall be determined solely by the provisions of the indemnity clause, if any, included in the contract and the Government assumes liability for all other infringement to the extent of the authorization and consent hereinabove granted. [26 F.R. 2612, Mar. 28, 1961] § 9.102-2 Authorization and consent in contracts for research or develop Greater latitude in the use of patented inventions is to be allowed in a contract for experimental, developmental, or research work than in a contract for supplies. Unless prohibited by § 9.102(b), the clause set forth below shall be included in all contracts calling exclusively for experimental, developmental, or research work, and may be included in contracts calling for both supplies and experimental, developmental, or research work. If the clause set forth below is included in a contract, the clause in § 9.102-1 shall not be included. AUTHORIZATION AND CONSENT (JAN. 1961) The Government hereby gives its authorization and consent for all use and manufacture of any invention described in and covered by a patent of the United States in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lowertier subcontract). [26 F.R. 2613, Mar. 28, 1961] § 9.104 Notice and assistance. The Government should be notified by the contractor of all claims of infringement in connection with the performance of a Government contract which come to the contractor's attention. The contractor should also assist the Government to the extent of evidence and information in the possession of the contractor, in connection with any suit against the Government, or any claim against the Government made before suit has been instituted, on account of any alleged patent or copyright infringement arising out of or resulting from the performance of the contract. Accordingly, the clause set forth below shall be included in all contracts in excess of $10,000 for supplies, construction, or experimental, developmental, or research work; except where Standard Form 32 is prescribed for use (in which case the clause may in the discretion of the contracting officer be used in lieu of that included in Standard Form 32); provided, that the clause set forth below shall not be included in contracts: NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (FEB. 1962) The provisions of this clause shall be applicable only if the amount of this contract exceeds $10,000. (a) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each notice of claim of patent or copyright infringement based on the performance of this contract of which the Contractor has knowledge. (b) In the event of any suit against the Government, or any claim against the Government made before suit has been instituted, on account of any alleged patent or copyright infringement arising out of the performance of this contract or out of the use of any supplies furnished or work or services performed hereunder, the Contractor shall furnish to the Government, upon request, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of the Government except in those cases in which the Contractor has agreed to indemnify the Government against the claim being asserted. CODIFICATION: In § 9.104, the introductory text and the contract clause were amended, 27 F.R. 3452, Apr. 11, 1962. (a) The license policy. In framing a policy on the division of property rights in inventions and discoveries resulting from research work performed under contract for the Department of Defense, the Department recognizes that the American patent system was established as an incentive to invention, disclosure, and commercial exploitation of new ideas. In order to take advantage of the incentives implicit in the patent system and to secure American industry's unreserved participation in military research and development under both contracts and subcontracts, while acquiring the rights necessary for the Government freely to carry out its programs, the Department of Defense generally obtains on behalf of the Government a comprehensive license of free use but does not require that full title to the new inventions be assigned to the Government. (b) The comprehensive license. The comprehensive license, which is irrevocable, nonexclusive, nontransferable, and worldwide in scope, permits, royalty-free, any use of the inventions by the Government by itself, any use by a Government contractor or subcontractor in connection with the performance of a Government contract, and any use by anyone in connection with projects funded by the Government, including the Military Assistance Program. The inventions covered are those which are conceived, or first actually reduced to practice, in the course of performing any contract or modification thereof, having experimental, developmental, or research work as one of its purposes, or in the course of performing such work on the understanding in writing that a contract would be awarded. (c) Government-acquisition of title. While it is the general policy not to acquire more than the comprehensive license described above, the Department of Defense recognizes that there may be some situations in which it will be desirable in the public interest to obtain full title to the inventions made under the contracts. In a new technological field, for example, where there is no significant nongovernmental experience to build upon, and inventions which may be made under the contract would be likely to dominate the field or be of critical significance in it, it may be desirable for the Government to hold title to such inventions. Again, where the services of the contractor are largely those of coordinating and directing the work of others, the Government may wish to acquire title to prevent the possibility or appearance of private advantage as to the ideas of others. Likewise, the Government may obtain title in recognition of the overriding public interest in inventions in fields directly relating to the health or safety of the public, if their availability for public use will not depend on patent incentives. (d) Contracting officer's duties. (1) When a contract or modification thereof having experimental, developmental, or research work as one of its purposes is proposed, the contracting officer, in consultation with his technical and patent advisors, shall consider whether the contemplated project should entail Government acquisition of title in keeping with paragraph (c) of this section or similar considerations. If in his opinion it should, he shall refer the matter, with supporting information (including identification of any inventions on which patent applications are on file and which are expected to be actually reduced to practice under the proposed project), to higher authority, in accordance with the deviation procedures of § 1.109 of this chapter. If a deviation is authorized, the contracting officer shall insert in the contract the clause specified in § 9.107-2(c). (2) In all cases not involving the acquisition of title in keeping with paragraph (c) of this section, the contracting officer shall include in the contract the clause specified in § 9.107-2(b), except as provided in § 9.107-3, concerning foreign contracts (unless the clause specified in § 9.107-2(c) has been authorized); § 9.107-4, concerning contracts relating to Atomic Energy; § 9.107-5, concerning contracts relating to Civil Defense; § 9.107-7, concerning contracts placed for the National Aeronautics and Space Administration; and § 9.107-8, concerning contracts relating to Space. In cases falling within these exceptions, the contracting officer shall follow the instructions stated in the applicable paragraph. or (e) Other procurement patent rights. Except as provided in §§ 9.107— 9.107-7, patent rights shall not be requested in the negotiation of contracts other than contracts where the primary item of procurement is a license under, or an assignment of, a patent. Such procurements are made to carry out the policy of the Department of Defense to pay a reasonable compensation for the use of a valid patent enforceable against the Government. The questions of infringement, validity, and enforceability of the patent shall be determined by personnel having cognizance of patent matters for the Department concerned. CODIFICATION: § 9.107-1 was revised, 26 F.R. 2613, Mar. 28, 1961, and subsequently amended in the following respects: 1. In paragraph (b), the reference "Mutual Security Program" was changed to "Military Assistance Program", 27 F.R. 8874, Sept. 6, 1962. 2. Paragraph (d) was amended, 27 F.R. 6135, June 29, 1962. (b) Contract clause (license). The clause set forth below shall be included in every contract having as one of its purposes experimental, developmental, or research work which is to be performed within the United States, its possessions, or Puerto Rico, unless the clause set forth in paragraph (c) of this section has been authorized in accordance with § 9.107-1 (d), or except as provided in § 9.107-7 with respect to contracts on behalf of the National Aeronautics and Space Administration. See § 16.809 of this chapter for an approved form for optional use by contractors in reporting information required by paragraphs (c) (ii), (c) (iii), and (h) of the clause. In the administration of paragraph (e) of the clause, a request for conveyance of foreign rights to the Government is not required when the contractor does not file an application for patent in a foreign country under the conditions provided in that paragraph, unless the Government intends to apply for such patent. PATENT RIGHTS (LICENSE) (APR. 1962) (b) (1) The Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive, and royalty-free license to practice, and cause to be practiced by or for the United States Government, throughout the world, each Subject Invention in the manufacture, use, and disposition according to law, of any article or material, and in the use of any method. Such license (1) shall be nontransferable, except that the Government shall have the right to grant sublicenses to any foreign government or international organization specifically for use in progress established by International Agreements for research, development or production of weapons or equipment for mutual defense, and (11) shall include the practice of Subject Invention in the manufacture, use, and disposition of any article or material, in the use of any method, or in the performance of any service acquired by or for the Government or with funds derived through the Military Assistance Program of the Government or otherwise through the Government. (g) The Contractor shall, unless otherwise authorized by the Contracting Officer as hereafter provided, include a patent rights clause containing all the provisions of this Patent Rights Clause except provision (f) in any subcontract hereunder of three thousand dollars ($3,000) or more having experimental, development, or research work as one of its purposes. In the event of refusal by a subcontractor to accept such a patent rights clause, the Contractor (1) shall promptly submit a written report to the Contracting Officer setting forth the subcontractor's reasons for such refusal and other pertinent information which may expedite disposition of the matter, and (11) shall not proceed with the subcontract without the written authorization of the Contracting Officer. Reports, instruments, and other information required to be furnished by a subcontractor to the Contracting Officer under the provisions of such patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor and the subcontractor (or by direction of the Contracting Officer) be furnished to the Contractor for transmission to the Contracting Officer. (h) The Contractor shall, at the earliest practicable date, notify the Contracting officer in writing of any subcontract containing one or more patent rights clauses; furnish the Contracting Officer a copy of each of such clauses; and notify the Contracting Officer when such subcontract is completed. It is understood that with respect to any subcontract clause granting rights to the Government in Subject Inventions, the Government is a third party beneficiary; and the Contractor hereby assigns to the Government all the rights that the Contractor would have to enforce the subcontractor's obligations for the benefit of the Government with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a negative report is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder relating to the obligations of the subcontractor to the Government in regard to Subject Inventions. (1) The Contractor recognizes that the Government, or a foreign government with funds derived through the Military Assistance Program or otherwise through the United States Government, may contract for property or services with respect to which the vendor may be liable to the Contractor for royalties for the use of a Subject Invention on account of such a contract. The |