Page images
[merged small][ocr errors]

recognized that these contracts by their nature cannot always be subject to one set of prescribed contract provisions which will always apply. Accordingly, the Rights in Technical Data - Facility clause set forth in paragraph (c)(2) below is to be used as a basic or minimal clause which may be modified or expanded with the concurrence of Patent Counsel to meet particular contract situations.

(b) Subcontracting.

Unless otherwise directed by the Contracting Officer, the contractor shall follow the policy and procedures of 89-9.202-1, 2 and 3 above and shall employ the provisions of the Additional Technical Data Requirements clause of 89-9.202-3(c) and the Rights in Technical Data clause of 89-9.202-3(e)(2) where appropriate, except in subcontracts for the design of special production plants or facilities or specially designed equipment for such facilities or plants, in which instances contractors shall include the provisions of the Rights in Technical Data - Facility clause of 89-9.202-4(c)(2).

(c) Rights in technical data – facility.

(1) Whenever a contract has as a purpose the operation of a Government-owned research or production facility, the clause set forth in (2) below shall normally be included in the contract. Inasmuch as this clause secures to the Government ownership, access to, and, if requested, delivery of all technical data first produced in the performance of the contract and access to and delivery of technical data which are specifically used in the performance of the contract, there is no need to include the Additional Technical Data Requirements clause of 89-9.202-3(c).

(2) Rights in Technical Data clause – facility


(1) "Technical data" means recorded information, regardless of form or characteristic, of a scientific or technical nature. It may, for example, document research, experimental, developmental, or demonstration, or engineering work or be usable or used to define a design or process or to procure, produce, support, ma tain, or operate material. The data may be graphic or pictorial delineations in media such as drawings or photographs, text in specifications or related performance or design type documents, or computer software (including computer programs, computer software data bases and computer software documentation). Examples of technical data include research and engineering data, engineering drawings and associated lists, specifications, standards, process sheets, manuals, technical reports, catalog item identification, and related information. Technical data as used herein does not include financial reports, cost analyses, and other information incidental to contract administration.

(2) “Proprietary data" means technical data which embody trade secrets developed at private expense, such as design procedures or techniques, chemical composition of materials, or manufacturing methods, processes, or treatments, including minor modifications thereof, provided that such data:

(i) Are not generally known or available from other sources without obligation concerning their confidentiality;

(i) Have not been made available by the owner to others without obligation concerning their confidentiality; and

(ii) Are not already available to the Government without obligation concerning their confidentiality.

(3) “Unlimited rights" means rights to use, duplicate, or disclose technical
data, in whole or in part, in any manner and for any purpose whatsoever, and to
permit others to do so.

(b) Allocation of rights.
(1) The Government shall have:

(i) Ownership in all technical data first produced in the performance
of the contract;

[ocr errors][ocr errors][merged small]

(ii) The right to inspect technical data first produced or specifically used in the performance of the contract at all reasonable times (for which inspection the proper facilities shall be afforded DOE by the contractor and its subcontractors);

(iii) The right to have all technical data first produced or specifically
used in the performance of the contract delivered to the Government or otherwise
disposed of by the contractor, either as the Contracting Officer may from time to
time direct during the progress of the work or in any event as the Contracting Offi-
cer shall direct upon completion or termination of this contract, provided. that noth-
ing contained in this paragraph shall require the contractor to actually deliver any
technical data, the delivery of which is excused by this Rights in Technical Data

(iv) Unlimited rights in technical data specifically used in the perfor-
mance of this contract, except technical data pertaining to items of standard com-
mercial design; the contractor agrees to leave a copy of such technical dat
facility or plant to which such data relate, and to make available for access or to
deliver to the Government such data upon request by the Contracting Officer; pro-
vided, that if such data are proprietary, the rights of the Government in such data
shall be governed solely by the provisions of optional paragraph (e) hereof— "Limit-
ed Rights in Proprietary Data;"

(v) The right to remove, cancel, correct, or ignore any marking not
authorized by the terms of this contract on any technical data furnished hereunder
if, in response to a written inquiry by DOE concerning the propriety of the
markings, the contractor fails to respond thereto within 60 days or fails to substanti-
ate the propriety of the markings. In either case DOE will notify the contractor
of the action taken.

(2) The contractor shall have:

(i) The right to withhold its proprietary data in accordance with the provisions of this clause; and

(ii) The right to use for its private purposes, subject to patent, security or other provisions of this contract, technical data it first produces in the performance of this contract, provided the data requirements of this contract have been met as of the date of the private use of such data. The contractor agrees that to the extent it receives or is given access to proprietary data or other technical, business or financial data in the form of recorded information from DOE or a DOE contractor or subcontractor, the contractor shall treat such data in accordance with any restrictive legend contained thereon, unless use is specifically authorized by prior written approval of the Contracting Officer.

(3) Nothing contained in this clause shall imply a license to the Government under any patent or be construed as affecting the scope of any licenses or other rights otherwise granted to the Government under any patent.

(c) Copyrighted material.

(1) The contractor shall not, without prior written authorization of the Contracting Officer, establish a claim to statutory copyright in any technical data first produced in the performance of this contract. To the extent such authorization is granted, the Government reserves for itself and others acting on its behalf, a royalty-free, nonexclusive, irrevocable, world-wide license for Governmental purposes to publish, distribute, translate, duplicate, exhibit, and perform any such data copyrighted by the contractor.

(2) The contractor agrees not to include in the technical data delivered under the contract any material copyrighted by the contractor and not to knowingly include any material copyrighted by others without first granting or obtaining at no cost a license therein for the benefit of the Government of the same scope as set forth in paragraph (c)(1) above. If the contractor believes that such copyrighted material for which the license cannot be obtained must be included in the technical data to be delivered, rather than merely incorporated therein by reference, the contractor shall obtain the written authorization of the Contracting Officer to include such material in the technical data prior to its delivery.

(d) Subcontracting.

(1) Unless otherwise directed by the Contracting Officer, the contractor agrees to use in subcontracts having as a purpose the conduct of research, development, and demonstration work or in subcontracts for supplies, the contract clause

[merged small][ocr errors]

provisions in 41 CFR 89-9.202-3(c) and 41 CFR 89-9.202-3(eX(2) in accordance
with the policy and procedures of 41 CFR 89-9.202-1, 2 and 3.

(2) It is the responsibility of the contractor to obtain from its subcontrac-
tors technical data and rights therein, on behalf of the Government, necessary to
fulfill the contractor's obligations to the Government with respect to such data. In
the event of refusal by a subcontractor to accept a clause affording the Government
such rights, the contractor shall:

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

(ii) Not proceed with the subcontract without the written authorization of the Contracting Officer. (d) Optional clause - Limited rights in proprietary data. In contracts where it is determined that delivery of proprietary data is necessary with limited rights in the Government, the Rights in Technical Data clause of this section shall be supplemented by the additional paragraph (e), set forth below. Paragraph (e) provides that technical data may be specified in the contract as being excluded froin the delivery requirements thereof. Alternatively, paragraph (e) may be limited or made applicable to only those classes of proprietary data determined as being necessary for delivery with limited rights. In addition, when furnishing proprietary data with the limited rights legend, subparagraphs (a), (b) and (c) thereunder may be modified as follows. When proprietary data is to be furnished only for evaluation, subparagraph (a) of the limited rights legend shall be used, and subparagraphs (b) and (c), if otherwise inapplicable, may be deleted. When there is a programmatic requirement that proprietary data be disclosed to other DOE contractors only for information or use in connection with work performed under their contracts, subparagraph (b) of the limited rights legend shall be used, and subparagraphs (a) and (c) may be deleted if otherwise inapplicable. In either of the foregoing examples, the contractor may, if he can show the possibility of a conflict of interest because of disclosure of such data to certain contractors or evaluators, exclude contractors or evaluators from subparagraphs (a) or (b). If the data is required solely for emergency repair or overhaul, subparagraph (c) of the limited rights legend shall be retained, and subparagraphs (a) and (b) may, unless otherwise applicable, be deleted. In the event that it is determined that all of the subparagraphs (a), (b) and (c) of the limited rights legend are to be deleted, the word "none" shall be inserted in the legend after the colon (:).

(e) Limited rights in proprietary data.

Except as may be otherwise specified in this contract as technical data which are not subject to this paragraph, the contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive paid-up license and right to use by or for the Government, any proprietary data of the contractor specifically used in the performance of this contract; provided, however, that to the extent that any proprietary data when furnished or delivered is specifically identified by the contractor at the time of initial delivery to the Government or a representative of the Government, such data shall not be used within or outside the Government, except as provided in the "Limited Rights Legend" set forth below. All such proprietary data shall be marked with the following "Limited Rights Legend":


This “proprietary data," furnished under Contract No.

with the U.S. Department of Energy (and purchase order No.

if applicable) may be duplicated and used by the Government with the express limitations that the "proprietary data" may not be disclosed outside of the Government or be used for purposes of manufacture without prior permission of the contractor, except that further disclosure or use may be made solely for the following purposes:

(a) This "proprietary data" may be disclosed for evaluation purposes under the restriction that the “proprietary data" be retained in confidence and not be further disclosed;



ing in the Government's program of which this coatract ba pa t for information
or use in connection with the work performed under their contracts and under the
restriction that the proprietary data" be retained in confidence and not be further
disclosed, or

(c) This proprietary data" may be used by the Gwernment or others on
its behalf for emergency repair or overhaul work under the restriction that the pro-
prietary data“ be retained in confidence and not be further disclosed.

This legend shall be marked on any reproduction of this data in whole or in part.

89-9.202-5 Negotiations and deviations.

Contracting Officers shall contact the field Patent Counsel assisting their procuring activity, or the Assistant General Counsel for Patents, for assistance to the Contracting Officer in selecting, negotiating, or approving appropriate data and copyright clauses in accordance with the procedures as set forth in 89-9.107_4(k). In particular, advice of Patent Counsel should be obtained regarding the appropriateness or modification of optional paragraphs (g) and (h) of the Rights in Technical Data (long form) clause, the exclusion of specific items of proprietary data from paragraph (1) in said clause, and the exclusion of the Additional Technical Data Requirements clause of 89-9.202-3(c).


ADDITIONAL COMMENTS OF JAMES E. DENNY 1. What have been the effects of federal agency patient policies and practices on participation in government research and development contracts, on the development and commercialization of government-sponsored inventions, and on competition in private markets?

The issue of Government patent policy can and does have a substantial effect on the participation of industry in Government R,D&D contract efforts. The effect will differ depending upon the policy alternatives, agency mission, and the type of contractor involved. The 1968 Harbridge House study reviewed this issue in some depth and concluded that at one extreme there are certain corporations, or divisions of corporations, which make a business of performing R,D&D activities for the Government notwithstanding the patent policies involved. At the other extreme are highly patent conscious, commercially oriented companies that will not work with the Government under a title policy. In between these two extremes are a variety of contracting situations and prospective contractors that in certain contracting situations and in certain fields of technology will not cooperate in Government R,D&D efforts.

In DOE's experience, the more commercially oriented the contractor, and the greater the private investment in a previously existing R,D&D effort, the more likely will be the possibility that a contractor will either not approach the Government in response to a request for cooperation, or will not contract with the Government unless resulting inventions are owned by it.

The effect of patent policies on development and commercialization of Government-sponsored inventions likewise varies considerably with the type of technology and invention involved, the Government agency's mission, the stage of development of the invention, the prospective market, and the particular contractor. Here again, the 1968 Harbridge House study indicated that utilization of Government-sponsored inventions was low, but that the utilization rate increased substantially when exclusive rights were left in the hands of a contractor who had a commercial position in the field of technology of the invention. On the other hand, the report concluded that where the Government had the responsibility and funding to carry an invention all the way to the market place, exclusive rights were not necessary to obtain commercialization. Where the Government takes the responsibility for acquiring title to resulting inventions, the Government should likewise take the responsibility for encouraging the commercial utilization of such technology. Otherwise, inventions are probably more efficiently commercialized in the hands of private parties with exclusive rights to the invention.

Regarding the effect of Government patent policy on competition in private markets, the 1968 Harbridge House study searched for, but could not find, substan

tial, if any, anti-competitive results from the policy of allowing contactors to retain rights to Government-sponsored inventions. The more recent Harbridge House study supported by DOE confirms this impression. In the last analysis, an adequate set of “march-in” rights would appear to take care of whatever possibility may exist for substantial anti-competitive effects.

2. Is there justification for maintaining a license policy with respect to military and other research and development results intended for the government's own use and a title-in-government policy with respect to research and development intended for civilian purposes?

Any approach to patent policy will have advantages and disadvantages depending upon the selection of the critical issues that are to be addressed. For example, one policy approach is to have a strictly uniform patient policy that is applicable to all Government agencies, to all contracting situations, and to all types of contractors, without the concept of flexibility. Patent policies that deviate from this approach become more flexible, but also become more burdensome to administer. If uniformity is selected as a major policy criteria, then the end use of the technology may not be considered a sufficient justification for distinguishing policy approaches.

However, where flexibility is a major policy criteria, a legitimate and justifiable distinction can be made to applying different patent policy approaches depending upon the end use of the technology receiving Government support. Here the end use is for the Federal Government itself, as in military research and developmemt, the need for the technology is established by the Government, for use by the Government, to satisfy a Government need. Accordingly, commerical utilization of such technology by the general public may not even exist, and if it does, it will frequently be substantially different from the original use intended by the Government. In such cases, it is likely that substantial modification or additional development work will be necessary to convert the technology from governmental to commercial use, for which patient rights in the hands of the contractor generally would be a desirable stimulus.

On the other hand, where the technology is intended for use by the general public, as in much of DOE research, the need for the technology has been estab lished by the public, and the Government's role should be to either create and/or help commercialize technology which will respond to that need. In this case, a market for the technology should already exist, and exclusive rights in the hands of the contractor will be useful or necessary depending upon the extent to which the Government intends to carry the technology to the marketplace. Where the Government intends to be merely a stimulus, exclusive rights may well be necessary to achieve commercialization. Where the Government intends to fully commercialize such technology, exclusive rights will probably not be necessary.

3. Should large and small firms or non-profit and for-profit institutions be treated differently in allocating right to inventions made under Federal grants and contracts?

Here again, distinctions between small and large firms, or profit-making and nonprofit firms makes sense only to the extent that the patent policy approach under which you are working is intended to be uniform, on the one hand, or responsive to individual types of situations on the other. In the latter case, preference is frequently provided to small firms over large in view of the fact that providing exclusivity to small businesses will less likely add to the concentration of economic power. Additionally, small firms are normally believed to require a greater degree of exclusivity in order to be commerically competitive with large firms. The profit versus nonprofit distinction is simply intended to address to "windfall" issue, whereby if substantial sums were to be made from commercializing the invention, such funds in non-profit organizations are normally utilized in what is regarded as "public policy” or eleemosynary types of uses.

4. Under what circumstances, if any, should the government retain title to an

tor be forced to surrender background patents? In what situations should the government resume title to an invention or require that it be licensed to other companies?

The Government should retain title to inventions made under Federal contracts in any situation where the exclusive rights provided by title to the invention is not needed to either further develop or commercialize the invention, or in those situations where the free availability of the invention to all that desire to utilize it will provide the necessary incentive to commercialization.

The answer is simple. The problem is determining when such situations exist. In my opinion, most of the available evidence tends to suggest that (a) the Government is generally not a good promoter of commerical utilization of inventions, (b) the

« PreviousContinue »