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is granted and within one of the following periods:

(i) Eight months from the date of filing a corresponding United States application, or if such an application is not filed, six months from the date the request was granted.

(ii) Six months from the date :: license is granted by the Commissioner of Patents and Trademarks to file the foreign patent application, where such filing has been prohibited by security reasons; or

(iii) Such longer periods as may be approved by the Patent Counsel for good cause shown in writing by the contractor or inventor.

(4) Subject to the license specified in paragraphs (c)(1), (2) and (3) of this clause, the contractor or inventor agrees to convey to the Government, upon request, the entire right, title, and interest in any foreign country in which the contractor or inventor fails to have a patent application filed in accordance with paragraph (dX(3) of this clause, or decides not to continue prosecution or to pay any maintenance fees covering the invention. To avoid forfeiture of the patent application or patent, the contractor or inventor shall, not less than 60 days before the expiration period for any action required by any patent office, notify the Patent Counsel of such failure or decision, and deliver to the Patent Counsel, the executed instruments necessary for the conveyance specified in this paragraph.

(e) Invention identification, disclosures, and reports.

(1) The contractor shall establish and maintain active and effective procedures to ensure that subject inventions are promptly identified and timely disclosed. These procedures shall include the maintenance of laboratory notebooks or equivalent records and other records that are reasonably necessary to document the conception and/or the first actual reduction to practice of subject inventions, and records which show that the procedures for identifying and disclosing the inventions are followed. Upon request, the contractor shall furnish the Contracting Officer a description of these procedures so that he may evaluate and determine their effectiveness.

(2) The contractor shall furnish the Patent Counsel (with notification by Patent Counsel to the Contracting Officer) on a DOE-approved form:

(i) A written report containing full and complete technical information concerning each subject invention within 6 months after conception or first actual reduction to practice, whichever occurs first in the course of or under this contract, but in any event, prior to any sale, public use, or public disclosure of such invention known to the contractor. The report shall identify the contract and inventor and shall be sufficiently complete in technical detail and appropriately illustrated by sketch or diagram to convey to one skilled in the art to which the invention pertains, a clear understanding of the nature, purpose, operation, and to the extent known, the physical, chemical, biological, or electrical characteristics of the invention. The report should also include any request for foreign patent rights under paragraph (c) (4) of this clause and any request to file a domestic patent application made within the period set forth in paragraph (b)(2) of this clause. When an invention is reported under this paragraph (eX2X11, it shall be presumed to have been conceived or first actually reduced to practice in the course of or under the contract, unless the contractor contends it was not so made, in accordance with paragraph (8)(2)(ii) or this clause.

(ii) Upon request, but not more than annually, interim reports on a DOE-approved form listing subject inventions and subcontracts award(s) containing a Patent Rights clause aur that period and certifying that:

(A) The contractor's procedures for identifying and disclosing subject inventions as required by this paragraph (e) have been followed throughout the reporting period;

(B) All subjet inventions have been disclosed or that there are no such inventions; and

(C) All suburntracts containing a Patent Rights clause have been reported or that no such suhontracts have been awarded;

(iii) A final report on a DOE-approved form within three months after completion of the contract with listing all subject invenies and all ubicontracts awarded containing a Paler: NJI! clause and certifying that

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(A) All subject inventions have been disclosed or that there were no such inventions; and

(B) All subcontracts containing a Patent Rights clause h reported or that no such subcontracts have been awarded.

(3) The contractor shall obtain patent agreements to effectuate the provisions of this clause from all persons in its employ who periocin any part of the work under 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. If the contractor is to file a foreign patent application on a subject invention, the Government agrees, upon written request, to use its best efforts to withhold publication of such invention disclosures until the expiration of the time period specified in paragraph (d)(1) of this clause, but in no event shall the Government or its employees be liable for any publication thereof.

(0) Publication

It is recognized that during the course of the work under this contract, the contractor or its employees may from time to time desire to release or publish information regarding scientific or technical developments conceived or first actually reduced to practice in the course of or under this contract. In order that public disclosure of such information will not adversely affect the patent interests of DOE or the contractor, patent approval for release or publication shall be secured from Patent Counsel prior to any such release or publication.

(8) Forfeiture of rights in unreported subject inventions.

(1) The contractor shall forfeit to the Government, at the request of the Head of the Agency or designee, all rights in any subject invention which the contractor fails to report to Patent Counsel (with notification by Patent Counsel to the Contracting Officer) within 6 months after the time the contractor:

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

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

(2) However, the contractor shall not forfeit rights in a subject invention if, within the time specified, in (1X(i) or (1)(ii) of this paragraph (g), the contractor:

(i) prepares 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 and delivers the same to Patent Counsel (with notification by Patent Counsel to the Contracting Officer); or

(ii) contending that the invention is not a subject invention, the contractor nevertheless discloses the invention and all facts pertinent to this contention to the Patent Counsel (with notification by Patent Counsel to the Contracting Officer);

or

(iii) establishes that the failure to disclose did not result from the con-
tractor's fault or negligence.

(3) Pending written assignment of the patent application and patents on
a subject invention determined by the Head of the Agency or designee to be forfeited
(such determination to be a final decision under the Disputes clause of this contract),
the contractor shall be deemed to hold the invention and the patent applications
and patents pertaining thereto in trust for the Government. The forfeiture provision
of this paragraph (8) shall be in addition to and shall not supersede other rights and
remedies which the Government may have with respect to subject inventions.
(h) Examination of records relating to inventions.

The Contracting Officer or his authorized representative, until the ex-
piration of 3 years after final payment under this contract, shall have the right to
examine any books (including laboratory notebooks), records, documents, and other
supporting data of the contractor which the Contracting Officer or his authorized
representative reasonably deem pertinent to the discovery or identification of sub-
ject inventions or to determine compliance with the requirements of this clause.

(2) The Contracting Officer or juthorized representative shall have die right to examine all books (including litoraiory noteboch). 1.11. chements of the contractor relating to the concepuon or tirst actual l'euucliun lu placuice un

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inventions in the same field of technology as the work under this contract to deter-
mine whether any such inventions are subject inventions, if the contractor refuses
or fails to:.

(1) Establish the procedures of paragraph (eX(1) of this clause; or
(ii) maintain and follow such procedures; or

(iii) correct or eliminate any material deficiency in the procedures with-
in thirty days after the Contracting Officer notifies the contractor of such a deficien-
cy.

(i) Withholding of payment (not applicable to subcontracts).

(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 (XS) of this clause; or

(v) convey to the Government, using a DOE-approved form, the title and/or rights of the Government in each subject invention as required by this clause.

(2) The reserve or balance shall be withheld 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.

(3) Final payment under this contract shall not be made by the Contracting Officer before the contractor delivers to Patent Counsel all disclosures of subject inventions and other information required by (e)(2)(i) of this clause, the final report required by (e)(2)(iii) of this clause, and Patent Counsel has issued a patent clearance certification to the Contracting Officer.

(4) The Contracting Officer may, in his discretion, decrease or increase the sums withheld up to the maximum authorized above. If the contractor is a nonprofit organization, the maximum amount that may be withheld under this paragraph shall not exceed $50,000 or 1 percent of the amount of this contract, whichever is less. 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 subsequent payment thereof shall not be construed as a waiver of any rights accruing to the Government under this contract.

() 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) Unless otherwise authorized or directed by the Contracting Officer, the contractor shall include the Patent Rights clause of 41 CFR 89-9.107-5(a) or 41 CFR 89-9.107-6 as appropriate, modified to identify the parties in any subcontract hereunder having as a purpose the conduct of research, development, or demonstration work. In the event of a refusal by a subcontractor to accept this clause, or if in the opinion of the contractor this clause is inconsistent with DOE's patent policies, the contractor:

(i) shall promptly submit written notice to the Contracting Officer setting
forth reasons for the subcontractor refusal and other pertinent information which
may expedite disposition of the matter; and

. (ii) shall not proceed with the subcontract without the written authoriza-
tion of the Contracting Officer.

(3) Except as may be otherwise provided in this clause, the contractor
shall not, in any subcontract by using a subcontract is consideration therefor, ac-
quire any rights in is subcontractors succulrntion to the contractor', unnuse
(as distinguished from such rights as may be required solely to fulfill the contractor's

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contract obligations to the Government in the performance of this contract).

(4) All invention disclosures, reports, instruments, and other information required to be furnished by the subcontractor to DOE, under the provisions of a Patent Rights clause in any subcontract hereunder may, in the discretion of the Conracting Officer, be furnished to the contractor for transmission to DOE

(5) The contractor shall promptly notify the Contracting Officer in writing upon the award of any subcontract containing a Patent Rights clause by identifying the subcontractor, the work to be performed under the subcontract, and the dates of award and estimated completion. Upon the request of the Contracting Officer, the contractor shall furnish a copy of the subcontract.

(6) The contractor shall identify all subject inventions of the subcontrac-
tor of which it acquires knowledge in the performance of this contract and shall
notify the Patent Counsel (with notification by Patent Counsel to the Contracting
Officer) promptly upon the identification of the inventions.

(7) It is understood that the Government is 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 tha
have to enforce the subcontractor's obligations for the benefit of the

spect to subject inventions. The contractor shall not be obligated to enforce
the agreements of any subcontractor hereunder relating to the obligations of the sub-
contractor to the Government regarding subject inventions.

(k) Background Patents.

(1) "Background Patent" means a domestic patent covering an invention or discovery which is not a subject invention and which is owned or controlled by the contractor at any time through the completion of this contract:

(i) Which the contractor, but not the Government, has the right to license to others without obligation to pay royalties thereon, and

(ii) Infringement of which cannot reasonably be avoided upon the practice of any specific process, method, machine, manufacture or composition of matter (including relatively minor modificatons thereof) which is a subject of the research, development, or demonstration work performed under this contract.

(2) The contractor agrees to and does hereby grant to the Government a royalty-free, nonexclusive, license under any background patent for purposes of practicing a subject of this contract by or for the Government in research, development, and demonstration work only.

(3) The contractor also agrees that upon written application by DOE, it will grant to responsible parties for purposes of practicing a subject of this contract, nonexclusive licenses under any background patent on terms that are reasonable under the circumstances. If, however, the contractor believes that exclusive or partially exclusive rights are necessary to achieve expeditious commercial development or utilization, then a request may be made to DOE for DOE approval of such licens. ing by the contractor.

(4) Nothwithstanding the foregoing paragraph (kX(3), the contractor shall not be obligated to license any background patent if the contractor demonstrates to the satisfaction of the Head of the Agency or designee that:

(i) a competitive alternative to the subject matter covered by said back-
ground patent is commercially. available or readily introducible from one or more
other sources; or

(ii) the contractor or its licensees are supplying the subject matter cov.
ered by said background patent in sufficient quantity and at reasonable prices to satis-
fy market needs, or have taken effective steps or within a reasonable
expected to take effective steps to so supply the subject matter.

(1) Atomic energy.

(1) No claim for pecuniary award or compensation under the provisions of the Atomic Energy Act of 1954, as amended, shall be asserted by the contractor or its employees with respect to any invention or discovery made or conceived in the course of or under this contract.

(2) Except as otherwise authorized in writing by the Contracting Officer, the contractor will obtain patent agreements to cffectuate the provisions of para

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graph (1)(1) who perform any part of the work under this contract, except nontechni-
cal personnel, such as clerical employees and manual laborers.

(m) Limitation of rights.

Nothing contained in this patent rights clause shall be deemed to give the Government any rights with respect to any invention other than a subject invention except as set forth in the Patent Rights clause of this contract with respect to back

ground patents and the facilities license. (6) Licenses in contractor background patents.

(1) It will normally be the case that a contractor qualified to perform work under a DOE contract will have developed a degree of expertise in the general field of activity to which the contract relates. Accordingly, it will not be unusual for a prospective contractor to have an established patent position relating to the general field of work to be performed under the contract and to have ongoing research and development programs in that general field which could result in patentable inventions. Because the contractor is obligated to apply its best efforts to accomplishing the objectives of the contract work, it is to be expected that inventions owned or controlled by the contractor at any time during the contract period may be utilized in connection with the work performed under the contract. If such inventions are or become the subject of a patent, such patented inventions may control a subject of the contract.

(2) It is usually the case that at the time the contract is negotiated, such inventions, if any, of the contractor are not known to the Government and may not be known to the contractor either. Use by the contractor of such inventions in connection with the contract work does not necessarily result in a need for rights in those inventions by the Government or others. However, failure of DOE to obtain limited rights on behalf of the Government and/or third parties in a narrow class of those inventions, defined as "background patents," could frustrate the objectives of DOE to promptly make the benefits of its programs widely available to the public and to promote the commercial utilization of the technology developed or demonstrated under DOE programs. Therefore, it is DOE's policy to obtain limited license rights in background patents on a basis that is reasonable under the circumstances of the particular contract and takes into account the relative equities of the contractor, the Government and the general public.

(3) Paragraph (k) of the Patent Rights clause of 89-9.107-5 (a) sets out the background patent provisions that will be appropriate for many DOE contracting situations by balancing the needs of DOE programs with the equities of the contractor. This clause obtains a paid-up, nonexclusive license for the Government for research, development, and demonstration work only and thus includes any use of the background patents under DOE programs where research, development, or demonstration work is being conducted. The clause also requires the contractor to license responsible parties on reasonable terms at the request of DOE in the field of technology specifically contemplated in the contract effort. The background patent provisions, however, are only applicable insofar as infringement of the patents cannot reasonably be avoided in order to utilize the results of the contract work for these purposes. Additionally, the clause is not effective if the contractor can demonstrate to the satisfaction of the Head of the Agency or designee that commercial alternatives are available or readily introducible from one or more sources, or that the contractor or its licensees are supplying the market in sufficient quantities and at reasonable prices or have taken effective steps, or within a reasonable time are expected to take effective steps, to so supply the market. In determining whether to request such licensing, DOE will recognize the need, where appropriate, to limit licensing to preserve the commercialization incentives provided by the patent, and also to meet the needs of the public for early availability of the technology.

(4) Subparagraph (k)(1) defines those inventions which will fall within the definition of what constitutes a background patent, while subparagraphs (k)(2) and (k)(3) define the scope or field of use of any license granted. Although DOE, as stated in paragraph (3), controls the requesting of licenses to responsible parties, the final resolution of questions regarding the scope

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