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States Government within two months of filing any domestic or foreign patent applications.

(6) The grantee or its representative will forward to NSF a copy of any United States patent covering a subject invention within two months after it is issued.

g. Subcontracts

(1) The grantee will include this clause, suitably modified to identify the parties, in all subcontracts, regardless of tier, for experimental, developmental, or research work to be performed by a small business firm or domestic nonprofit organization. The subcontractor will retain all rights provided for the grantee in this clause, and the grantee will not, as part of the consideration for awarding the subcontract, obtain rights in the subcontractor's subject inventions.

(2) The grantee will include in all other subcontracts, regardless of tier, for experimental, developmental, or research work the patent rights clause contained in 45 CFR 650.4(b) and section 751.3(b) of the NSF Grant Policy Manual unless otherwise directed by NSF.

(3) In the case of subcontracts, at any tier, when the prime award by the Foundation was a contract (but not a grant or cooperative agreement), NSF, subcontractor, and contractor agree that the mutual obligations of the parties created by this clause constitute a contract between the subcontractor and the Foundation with respect to those matters covered by this clause.

h. Reporting on Utilization of Subject
Inventions

The grantee agrees to submit on request periodic reports no more frequently than annually on the utilization of a subject invention or on efforts at obtaining such utilization that are being made by the grantee or its licensees or asignees. Such reports shall include information regarding the status of development, date of first commercial sale or use, gross royalties received by the grantee, and such other data and information as NSF may reasonably require. The grantee also agrees to provide additional reports in connection with any march-in proceedings undertaken by NSF in accordance with paragraph j. of this clause. To the extent data or information supplied under this section is considered by the grantee, its licensee or assignee to be privileged and confidential and is so marked, NSF agrees that, to the extent permitted by 35 USC 202(c)(5), it will not disclose such information to persons outside the Government.

i. Preference for United States Industry Notwithstanding any other provision of this clause, the grantee agrees that neither it nor any assignee will grant to any person

the exclusive right to use or sell any subject invention in the United States unless such person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the United States. However, in individual cases, the requirement for such an agreement may be waived by NSF upon a showing by the grantee or its assignee that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.

j. March-in Rights

The grantee agrees that with respect to any subject invention in which it has acquired title, NSF has the right in accordance with procedures in OMB Circular A124 and NSF regulations at 45 CFR 650.13 to require the grantee, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the grantee, assignee, or exclusive licensee refuses such a request, NSF has the right to grant such a license itself if NSF determines that:

(1) Such action is necessary because the grantee or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use;

(2) Such action is necessary to alleviate health or safety needs which are not reasonably satisfied by the grantee, assignee, or their licensees;

(3) Such action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the grantee, assignee, or licensee; or

(4) Such action is necessary because the agreement required by paragraph i. of this clause has not been obtained or waived or because a licensee of the exclusive right to use or sell any subject invention in the United States is in breach of such agreement.

k. Special Provisions For Grants with
Nonprofit Organizations

If the grantee is a nonprofit organization, it agrees that:

(1) Rights to a subject invention in the United States may not be assigned without the approval of NSF, except where such assignment is made to an organization which has as one of its primary functions the man

agement of inventions and which is not, itself, engaged in or does not hold a substantial interest in other organizations engaged in the manufacture or sale of products or the use of processes that might utilize the invention or be in competition with embodiments of the invention (provided that such assignee will be subject to the same provisions as the grantee);

(2) The grantee may not grant exclusive licenses under United States patents or patent applications in subject inventions to persons other than small business firms for a period in excess of the earlier of:

(i) five years from first commercial sale or use of the invention, or

(ii) eight years from the date of the exclusive license excepting that time before regulatory agencies necessary to obtain premarket clearance, unless on a case-by-case basis NSF approves a longer exclusive license. If exclusive field of use licenses are granted, commercial sale or use in one field of use will not be deemed commercial sale or use as to other fields of use, and a first commercial sale or use with respect to a product of the invention will not be deemed to end the exclusive period to different subsequent products covered by the invention;

(3) The grantee will share royalties collected on a subject invention with the inventor; and

(4) The balance of any royalties or income earned by the grantee with respect to subject inventions, after payment of expenses (including payments to inventors) incidental to the administration of subject inventions, will be utilized for the support of scientific research or education.

1. Communications

All disclosures, elections, confirmations of the Government license, copies of patents, and other routine communications should be sent to the NSF Patent Paralegal, Office of the General Counsel, National Science Foundation, 20550. Requests for waivers and other exceptional communications with the Foundation regarding this clause should be addressed to the NSF Intellectual Property Attorney, Office of the General Counsel, National Science Foundation, Washington, D.C. 20550.

(b) The following Patent Rights clause will be used in every grant or cooperative agreement that relates to scientific or engineering research awarded by the Foundation where the awardee is not a small business firm or domestic nonprofit organization unless a special patent clause has been negotiated (see § 650.5). (For contracts with parties other than small business firms or domestic nonprofit organizations, the Foundation will normally

use the deferred determination clause contained in the Federal Procurement Regulations, 41 CFR 1-9.107-5(c).)

PATENT RIGHTS (DEFERRED) (MARCH 1982)

a. The grantee agrees that the Foundation will have the right to determine the disposition of patent rights to any invention conceived or first actually reduced to practice in the performance of work under this grant. In making this determination, the Foundation will consider the public interest and the equities of the grantee.

b. The grantee will disclose any such invention to NSF within two months of learning of its existence. The grantee will secure from its employees any agreements necessary to carry out its responsibilities under this clause. Unless otherwise directed by NSF, the grantee will use the appropriate Patent Rights clause from 45 CFR 650.4 or section 751.3 of the NSF Grant Policy manual in any subcontracts relating to scientific research.

c. Invention disclosures and other routine communications should be sent to the NSF Patent Paralegal, Office of the General Counsel, National Science Foundation 20550. Requests for permission to retain principal patent rights to disclosed inventions may be made as provided in 45 CFR 650.8.

(c) When the above clauses are used in a funding agreement other than a grant, "grant" and "grantee" may be replaced by "contract" and "contractor" or other appropriate terms.

§ 650.5 Special patent provisions.

(a) At the request of the prospective awardee or on recommendation from NSF staff, the NSF Intellectual Property Attorney, with the concurrence of the cognizant Program Manager and Grants or Contracts Officer, may negotiate special patent provisions:

(1) When the NSF Intellectual Property Attorney determines that restriction or elimination of the right of a small business firm or domestic nonprofit organization to retain title to any subject invention will better promote the policy and objectives of Chapter 38 of Title 35 of the United States Code (The NSF Intellectual Property Attorney will prepare the report to the Comptroller General if required by Part 7.b. of OMB Circular A-124.);

(2) When a prospective awardee that is not a small business firm or domestic nonprofit organization shows that

it should be permitted to retain title to subject inventions under the terms of the 1971 Presidential Statement of Government Patent Policy;

(3) When a prospective awardee that is not a small business firm or domestic nonprofit organization has legal obligations that prevent it from accepting the standard clause;

(4) When the research is to be performed outside the United States; or (5) When other exceptional circumstances exist.

§ 650.6 Awards not primarily for research.

(a) Awards not primarily intended to support scientific or engineering research need contain no patent provision. Examples of such awards are travel and conference grants.

(b) NSF fellowships and traineeships are primarily intended to support education or training, not particular research, and the Foundation claims no rights to inventions made by fellows or trainees. The following provision will be included in each fellowship or traineeship program announcement and made part of the award:

INTELLECTUAL PROPERTY RIGHTS

The National Science Foundation claims no rights to any inventions or writings that might result from its fellowship or traineeship awards. However, fellows and trainees should be aware that the NSF, another Federal agency, or some private party may acquire such rights through other support for particular research. Also, fellows and trainees should note their obligation to include an Acknowledgement and Disclaimer in any publication.

§ 650.7 Awards affected by international agreements.

(a) Some NSF awards are made as part of international cooperative research programs. The agreements or treaties underlying many of these programs require an allocation of patent rights different from that provided by the Patent Rights clause in § 650.4(a). Therefore, as permitted by part 8.d. of OMB Circular A-124, paragraph b. of the standard Patent Rights (Small Business Firms and Nonprofit Organizations) clause in § 650.4(a) has been modified to provide that the Foundation may require the grantee to transfer to a foreign government or re

search performer such rights in any subject invention as are contemplated in the international agreement. The award instrument will identify the applicable agreement or treaty.

(b) After an invention is disclosed to the Patent Paralegal, the recipient of an award subject to an international agreement will be informed as to what rights, if any, it must transfer to foreign participants. Recipients may also ask the Program Manager to provide them with copies of the identified international agreements before or after accepting an award.

§ 650.8 Requests for greater rights.

Recipients of awards containing the deferred determination clause of § 650.4(b) may request that they be allowed to retain the principal patent rights to their subject inventions after those inventions are disclosed to the NSF Patent Paralegal. Such a request should be made as soon as possible after the invention is disclosed and should state that requestor's intention and, to the extent known, plans to commercialize the invention. The NSF Intellectual Property Attorney, with the concurrence of the cognizant Program Manager and Grants or Contracts Officer, will normally allow the inventing organization to retain the principal patent rights, subject to the terms and conditions imposed on small business firms by the Patent Rights clause of § 650.4(a), unless he or she determines that would be inconsistent with the policies of the National Science Foundation Act of 1950, as amended, the 1971 Presidential Statement of Government Patent Policy, or, if applicable, the Bayh-Dole Act.

§ 650.9 Retention of rights by inventor.

If an awardee elects not to retain rights to an invention, the inventor may request the NSF Intellectual Property Attorney for permission to retain principal patent rights. Such requests should be made as soon as possible after the awardee notifies the NSF Patent Paralegal that it does not want to patent the invention. Such requests will normally be granted unless the awardee shows that it would be harmed by that action. As required by

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(a) The Foundation will normally allow any patent rights not wanted by the awardee or inventor to be dedicated to the public through publication. Except as provided in paragraph (b) of this section, the NSF Patent Paralegal will acknowledge a negative election by encouraging the awardee and inventor to promptly publish all the research results.

(b) If the NSF Patent Paralegal or Program Manager believes that another Federal agency is interested in the relevant technology, the Patent Paralegal, after receiving the awardee's election not to patent and after ascertaining that the inventor also does not want to patent, may send a copy of the invention disclosure to that agency to give it an opportunity to review and patent the invention. Unless the agency expresses an interest in the invention within thirty days, the Patent Paralegal will acknowledge the awardee's negative election by encouraging prompt publication of all research results. If the agency does express an interest in patenting the invention, the Patent Paralegal, with the concurrence of the cognizant Program Manager and Grants or Contracts Officer, will transfer to it all rights to the invention.

§ 650.11 Inventions also supported by another Federal Agency. Part 16.c. of OMB Circular A-124 provides that in the event that an invention is made under funding agreements of more than one agency, the agencies involved will, at the request of the grantee or contractor or on their own initiative, designate one agency to be responsible for the administration of the invention. Whenever the NSF Patent Paralegal finds that another Federal agency also supported an NSF subject invention, he or she will consult with the grantee or contractor and the other agency to de

termine if a single agency should be designated to administer the Government's rights in the invention. With the concurrence of the cognizant Program Manager and Grants or Contracts Officer, the Patent Paralegal may transfer to, or accept from, another Federal agency, all rights in a jointly-supported invention.

§ 650.12 Utilization reports.

Until the form for and frequency of the utilization reports required by paragraph h. of the standard Patent Rights clause are established by the Lead Agency overseeing implementation of the Bayh-Dole Act (see part 10.a. of OMB Circular A-124), the Foundation will not normally request such reports. This section will be amended to describe the reporting requirements when they are established. § 650.13 Waivers.

(a) Requests for extension of time to disclose to the NSF Patent Paralegal, make an election to retain title to, or file a patent on a subject invention will be granted unless the NSF Intellectual Property Attorney determines that such an extension would either imperil the securing of valid patent protection or unacceptably restrict the publication of the results of the NSFsupported research.

(b) The restrictions on assignment and exclusive licensing by nonprofit organizations imposed by subparagraphs k(1) and k(2) of the Patent Rights clause in § 650.4(a) will be waived when that appears to serve the policy and objective of the Bayh-Dole Act. The NSF Intellectual Property Attorney may waive the restrictions either at the time of award or for an identified invention. Some circumstances under which the restrictions will normally be waived are described in section (f) of the NSF Patent Policy (§ 650.2).

(c) The preference for United States industry imposed by paragraph i. of the clause in § 650.4(a) may be waived by the NSF Intellectual Property Attorney as provided in that paragraph. (d) The NSF Intellectual Property Attorney may waive on behalf of the Foundation and the Government some

or all of the rights normally reserved in a subject invention if the inventing organization is not a small business firm or nonprofit organization and it demonstrates that the NSF made a very limited contribution to the discovery.

(e) Requests for waiver under this section should be addressed to the NSF Intellectual Property Attorney and should explain why waiver is justified under the stated criteria. The Intellectual Property Attorney will obtain the concurrence of the cognizant Program Manager and Grants or Contracts Officer before taking any action under this section. The requester will be given a written explanation of the reasons for denial of a request covered by this section.

§ 650.14 Exercise of march-in rights.

(a) The procedures established by this section supplement those prescribed by part 13. of OMB Circular A124 and apply to all march-in rights held by the Foundation including those resulting from funding agreements not covered by the OMB Circular.

(b) Petitions requesting that the NSF exercise a march-in right should be addressed to the NSF Intellectual Property Attorney. Such petitions should:

(1) Identify the patent or patent application involved and the relevant fields of use of the invention;

(2) State the grounds for the proposed march-in;

(3) Supply evidence that one or more of the four conditions creating a march-in right (lack of practical application, unsatisfied health or safety needs, unmet requirements for public use, or failure to prefer United States industry) is present; and

(4) Explain what action by the Foundation is necessary to correct that condition.

(c) If evidence received from a petitioner or from the Foundation's administration of the Patent Rights clauses indicates that one or more of the four conditions creating a marchin right might exist, the NSF Intellectual Property Attorney will informally review the matter as provided in part 13.b. of OMB Circular A-124. If that

informal review indicates that one or more of the four conditions creating a march-in right probably exists, the Intellectual Property Attorney will initiate a formal march-in proceeding by issuing a written notice to the patentholder. That notice will provide all the information required by part 13.c. of OMB Circular A-124. The patentholder may submit information and argument in opposition to the proposed march-in in person, in writing, or through a representative.

(d) If the NSF Intellectual Property Attorney determines that a genuine dispute over material facts exists, he or she will identify the disputed facts and notify the NSF General Counsel. The General Counsel will establish a cross- directorate fact-finding panel. The panel will establish its own factfinding procedures, within the requirements of part 13.e. of OMB Circular A-124, based on the dimensions of the particular dispute. The Intellectual Property Attorney will serve as secretary to the panel, but will not take part in its deliberations. Written findings of facts will be submitted to the General Counsel, sent by certified mail to the patentholder, and made available to all other interested parties.

(e) The NSF General Counsel will determine whether and how the Foundation should exercise a march-in right as provided in part 13.g. of OMB Circular A-124.

§ 650.15 Request for conveyance of title to NSF.

(a) The procedures established by this section apply to the exercise of the Foundation's right under paragraph d. of the Patent Rights clause in § 650.4(a) to request conveyance of title to a subject invention if certain conditions exist.

(b) The NSF Intellectual Property Attorney may request the recipient of an NSF award to convey to the Foundation or a designee title in one or more countries to any invention to which the awardee has elected not to retain title. The Intellectual Property Attorney may also request immediate conveyance of title to a subject invention if the awardee fails (1) to submit

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