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thus there was to be no transfer of NASA funds to Comsat. However, to insure against a later amendment of the agreement calling for the performance of work by the corporation for NASA it was decided to include a section 305 patent clause in the agreement as a precautionary measure. To this end, the clause began with the language "If and to the extent that any work is performed for NASA under this agreement. * * *[21] Thus, NASA made the further interpretation that, in addition, inventive type work had to be performed for NASA in order for section 305 to apply.[22]

The interpretation that a launch service agreement does not constitute a contract for the performance of work for NASA, and hence not a contract subject to subsection 305(a), has been consistently followed since 1964.[23] In fact, experience has shown over the years that the standard launch service agreements have never required any work to be performed for NASA, and the above-mentioned precautionary section 305 patent rights clause is no longer used. 4. Joint Endeavors

The above review illustrates a number of instances where NASA has made an official interpretation and adopted administrative practices to support the position that not all contracts are subject to subsection 305(a). Joint endeavors represent yet another instance where NASA has made an interpretation that an agreement or arrangement which literally meets the definition of contract under subsection 305(1)(2) is not a contract in the context of subsection 305(a).

With the development of advance facilities, such as wind tunnels, sensing and communications satellites and a space transportation system, and the creation of high technology, such as supercritical wing and ADP systems, NASA found it to be in its interest, both national and international, to enter into arrangements whereunder NASA would contribute the use of its facilities or technology to other parties in return for the other parties agreeing to furnish their products or services to carry out a program or project of mutual interest. The parties then share the results and benefits of the project. Often these activities are carried out as a joint endeavor, as previously defined.

Joint endeavors may vary as to the number of parties involved, the type and amount of contributions made by the parties, as well as the technical nature of the endeavor undertaken. In general these activities and arrangements differ considerably from a formal NASA contract and somewhat from those activities previously discussed in that they are usually informal in nature, are sometimes bottomed on a best efforts basis, do not involve the reimbursement or exchange of funds between the parties, and are not deemed as requiring employment of one party's employees or contractors by the other party in making the contribution of facilities, equipment or services to the joint activity.

NASA's first interpretation as to whether section 305 applied to a joint endeavor occurred in April, 1959, in response to an inquiry by a private company regarding an arrangement whereby NASA would contribute one of its facilities for the testing of privately developed equipment, and NASA and the owner of the equipment would share the resulting test data.[24] The position was taken that, while such an arrangement had the appearance of a contract with NASA, the fact that the company contributed equipment to the joint endeavor would not mean the company assumed any obligations to perform any work for NASA in the sense of subsection 305(a). Hence the interpretation was made that subsection 305(a) would not be applicable to any inventions made by the company or its employees during the testing of the company's equipment or any activities incident thereto. The interpretation was also made that should any of the company's employees participate in the testing, and should they as a result make an invention, the invention would not be covered by subsection 305(a) because it would not have resulted from the performance of any work for NASA.[25]

Subsequent to this intital interpretation, NASA has had many occasions to determine whether an arrangement or agreement structured as a joint endeavor was to be considered a contract subject to subsection 305(a). The interpretation has been consistent that, under joint endeavors neither party is assuming any obligations to perform inventive type work for the other, and accordingly each party retains rights to any inventions that may be made in the course of carrying out its activities that are contributed to the effort.[26] This interpretation and the resulting practices are illustrated by the examples set forth below.

(a) Use of NASA Facilities. Where NASA's contribution is the use of a ground-based facility, and the other party furnishes equipment or services, NASA does not apply section 305, but acquires license rights to any inventions resulting from such use through negotiated provisions in the agreement.[27]

NASA has a similar policy where the contribution is the use of its orbiter to carry the other party's payload for testing, demonstration, or performing other operations or analysis in space.[28]

(6) Use of Satellite Data and High Technology Other joint endeavors in which NASA has not applied section 305, involve activities wherein NASA's contribution is its satellite data[29] or its high technology such as supercritical wing technology in exchange for results of the analysis thereof. When the resulting activities are not of the inventive nature, no patent provisions are included; when it is anticipated that inventions may be made, a patent provision may be included by negotiation. [30]

(c) Contributions of Technical Interface and Technical Monitoring Assistance NASA also entered into a joint endeavor with the McDonnell Douglas Corporation (and a similar one with the Boeing Company) whereunder McDonnell Douglas developed at its expense a spin stabilized payload assist module (SUSS/PAM) for launching payloads from the orbiter, and NASA provided technical interface and monitoring assistance and services. [31] Subsection 305(a) was not deemed applicable to this joint endeavor, but under negotiated provisions NASA would acquire rights to inventions made by McDonnell Douglas in developing the SUSS/PAM in event of termination for default.[32]

(d) Cooperative Launch Activities In addition, NASA has entered into arrangements whereby NASA launches, at no cost to the other party, spacecraft and/or experiments provided at no cost to NASA by the other party, with the understanding that NASA and the other party are to share in the results, usually by exchange and/or publication of the information and data derived from the resulting activity. Again, section 305 has not been deemed applicable to these arrangements, but a provision may be included, by negotiation, to acquire license rights for governmental purposes if it is determined that the resulting activity is of a inventive nature. Other than such license rights, invention rights reside with the respective parties (or their employees or contractors) of the joint endeavor.[33]

(e) Contribution of Major Hardware Other NASA joint endeavors have involved activities where the various parties have made significant hardware contributions to a common program. As in the previously discussed joint endeavors, subsection 305(a) has not been deemed applicable, and any invention rights involved reside with the party (or its employees or contractors) who contributed the hardware. License rights, for governmental purposes, are acquired if it is determined that the resulting activity is of an inventive nature.[34] 5. Summary and conclusions

It is clear from the foregoing that during its nearly two decade history NASA has entered into numerous actual or proposed contracts, agreements, understandings or other arrangements, all within the literal definition of “contract” of subsection 3056)(2), that were not deemed subject to subsection 305(a). In some instances they were for the procurement of goods and services (supply contracts using appropriate funds); in other instances they were for launch services or the use of NASA facilities on either a reimbursable or joint basis; and in still other instances they involved contributions of hardware on a joint basis. They issue does not turn on whether the arrangement between the parties falls within the literal definition of contract as defined in subsection 305(j)(2). Rather, the common basis for the decision not to consider these types of “contracts” under subsection 305(a) was a determination, consistent with the ligislative history, purpose and intent, that they did not involve the performance of work of an inventive type for the Administration in the context of subsection 305(a).

This determination is equally valid with respect to joint endeavors, wherein each party performs, or has performed, work on its own behalf in order to make contributions to the common project. To the extent that any inventive activity is performed by a party's employees or contractors, it is performed by or for that party for the purpose of enabling that party to make contributions to the joint endeavor. That is, one party is not performing, or not having performed, work for the other party, but rather, for itself. Neither party is empowered to direct, assign or require work of an inventive nature to be performed by the employees or the contractor employees of the other party. Thus, a joint endeavor is no different than the numerous other arrangements NASA has determined not to be subject to subsection 305(a) in that it does not require the performance of work of an inventive type for NASA.

In addition, there is nothing in the legislative history of section 305, nor of NASA's long-standing interpretation and administrative practices relating thereto, to suggest the determination should be any different because the technology involved may find commercial application, as may be the case for joint endeavors under the Materials Processing in Space Program. If it is determined that the activity does not involve the performance of work of an inventive type for NASA, subsection 305(a) is not applicable notwithstanding the nature of the technology involved or its commerical potential.

Because joint endeavors are not contracts under subsection 305(a), any rights to inventions made in the course of a joint endeavor undertaken in the Materials Processing in Space Program must be acquired by negotiation. It is recommended that at a minimum NASA continue the established practice of acquiring a royaltyfree license to practice, for governmental purposes, all inventions made in the course of the resulting activities of a joint endeavor undertaken in the Materials Processing in Space Program. Consideration may be given to acquiring license rights of the same scope to practice any inventions specifically made in the course of any preparatory or background activities, to the extent necessary to practice inventions made in the course of the resulting activities. Beyond this, it will be necessary to consider each proposed joint endeavor case-by-case. However, it is recommended that, consistant with the policy set forth in NMI 8610.8 dealing with reimbursable launches, (35) NASA obtain assurances, by way of directed licensing rights, that the results of any joint endeavor activity which may have a significant impact on the public health, safety or welfare be made available to the public on terms and conditions reasonable under the circumstances.

It is therefore concluded that:

(a) NASA does enter into many types of arrangements falling within the literal definition of contract under subsection 305(j)(2) that are not contracts in the context of subsection 305(a);

(b) a joint endeavor is an example of one type of arrangement that is not a contract in the context of subsection 305(a);

(c) a joint endeavor under the Materials Processing in Space Program is no different regarding the intepretation and application of subsection 305(a) than any other joint endeavor, and therefore is not a contract in the context of subsection 305(a); and

(d) the allocation of property rights in inventions under any joint endeavor is a matter of agreement between the parties that must be specifically set forth in the joint endeavor.

ROBERT F. KEMPF.

NOTES 1. 72 Stat. 426; 42 U.S.C. § 2451 et seq.; particularly 42 U.S.C. § 2457.

PROPERTY RIGHTS IN INVENTIONS SEC. 305(a) Whenever any invention is made in the performance of any work under any contract of the Administration, and the Administrator determines that

(1) the person who made the invention was employed or assigned to perform research, development, or exploration work and the invention is related to the work he was employed or assigned to perform, or that it was within the scope of his employment duties, whether or not it was made during working hours, or with a contribution by the Government of the use of Government facilities, equipment, material, allocated funds, information proprietary to the Government, or services of Government employees during working hours; or

(2) the person who made the invention was not employed or assigned to perform research, development, or exploration work, but the invention is nevertheless related to the contract, or to the work or duties he was employed or assigned to perform, and was made during working hours, or with a contribu

tion from the Government of the sort referred to in clause (1), such invention shall be the exclusive property of the United States, an if such invention is patentable a patent therefor shall be issed to the United States upon application made by the Administrator, unless the Adminstrator waives all or any part of the rights of the United States to such invention in conformity with the provisions of subsection (f) of this section.

(b) Each contract entered into by the Adminstrator with any party for the performance of any work shall contain effective provisions under which such party shall furnish promptly to the Adminstrator a written report containing full and complete technical information concerning any invention, discovery, improvement, or innovation which may be made in the performance of any such work.

(c) No patent may be issued to any applicant other than the Administrator for any invention which appears to the Commissioner of Patents to have significant utility in the conduct of aeronautical and space activities unless the applicant files with the Commissioner, with the application or within thirty days after request therefor by the Commissioner, a written statment executed under oath setting forth the full facts concerning the circumstances under which such invention was made and stating the relationship (if any) of such invention to the performance of any work under any contract of the Administration. Copies of each such statement and the application to which it relates shall be transmitted forthwith by the Commissioner to the Administrator.

(d) Upon any application as to which any such statment has been transmitted to the Administrator, the Commissioner may, if the invention is patentable, issue a patent to the applicant unless the Administrator, within ninety days after receipt of such application and statement, requests that such patent be issued to him on behalf of the United States. If, within such time, the Administrator files such a request with the Commissioner, the Commissioner shall transmit notice thereof to the applicant, and shall issue such patent to the Administrator unless the applicant within thirty days after receipt of such notice requests a hearing before a Board of Patent Interferences on the question whether the Administrator is entitled under this section to receive such patent. The Board may hear and determine, in accordance with rules and procedures established for interference cases, the queston so presented, and its determination shall be subject to appeal by the applicant or by the Administrator to the Court of Customs and Patent Appeals in accordance with procedures governing appeals from decisions of the Board of Patent Interferences in other proceedings.

(e) Whenever any patent has been issued to any applicant in conformity with subsection (d), and the Administrator thereafter has reason to believe that the statement filed by the applicant in connection therewith contained any false representation of any material fact, the Administrator within five years after the date of issuance of such patent may file with the Commissioner a request for the transfer to the Administrator of title to such patent on the records of the Commissioner. Notice of any such request shall be transmitted by the Commissioner to the owner of record of such patent, and title to such patent shall be so transferred to the Administrator unless within thirty days after receipt of such notice such owner of record requests a hearing before a Board of Patent Interferences on the question whether any such false representation was contained in such statement. Such question shall be heard and determined, and determination thereof shall be subject to review, in the manner prescribed by subsection (d) for questions arising thereunder. No request made by the Administrator under this subsection for the transfer of title to any patent, and no prosecution for the violation of any criminal statue, shall be barred by any failure of the Administrator to make a request under subsection (d) for the issuance of such patent to him, or by any notice previously given by the Administrator stating that he had no objection to the issuance of such patent to the applicant therefor.

(f) Under such regulations in conformity with this subsection as the Administrator shall prescribe, he may waive all or any part of the rights of the United States under this section with respect to any invention or class of inventions made or which may be made by any person or class of persons in the performance of any work required by any contract of the Administration if the Administrator determines that the interests of the United States will be served thereby. Any such waiver may be made upon such terms and under such conditions as the Administrator shall determine to be required for the protection of the interests of the United States. Each such waiver made with respect to any invention shall be subject to the reservation by the Administrator of an irrevocable, nonexclusive, nontransferable, royalty-free license for the practice of such invention throughout the world by or on behalf of the United States or any foreign government pursuant to any treaty or agreement with the United States. Each proposal for any waiver under this subsection shall be referred to an Inventions and Contributions Board which shall be established by the Administrator within the Administration. Such Board shall accord to each interested party an opportunity for hearing, and shall transmit to the Adminstrator its findings of fact with respect to such proposal and its recommendations for action to be taken with respect thereto.

(g) The Administrator shall determine, and promulgate regulations specifying the terms and conditions upon which licenses will be granted by the Administration for the practice by any person (other than an agency of the United States) of any invention for which the Administrator holds a patent on behalf of the United States.

(h) The Administrator is authorized to take all suitable and necessary steps to protect any invention or discovery to which he has title, and to require that contractors or persons who retain title to inventions or discoveries under this section protect the inventions or discoveries to which the Administration has or may acquire a license of use.

(i) The Administration shall be considered a defense agency of the United States for the purpose of chapter 17 of title 35 of the United States Code. () As used in this section

(1) the term “person" means any individual, partnership, corporation, association, institution, or other entity.

(2) the term "contract” means any actual or proposed contract, agreement, understanding, or other arrangement, and includes any assignment, substitution of parties, or subcontract executed or entered into thereunder; and

(3) the term “made,” when used in relation to any invention, means the conception or first actual reduction to practice of such invention. 2. The Declaration of Purpose and Policy in section 102 of the Space Act does not address the disposition of rights in inventions covered in section 305. 42 U.S.C. 2451.

3. See, for example, the testimony of John A. Johnson, General Counsel of NASA during Hearings Before a Subcommittee of the Select Committee on Small Business of the United States Senate on The Effect of Federal Patent Policies on Competition, Monopoly, Economic Growth and Small Business, 86th Cong., 1st. Sess., pages 255 and 267; and during Hearings Before the Subcommittee on Patents, Trademarks, and Copyrights, of the Committee of the Judiciary, pursuant to S. Res. 55 on S. 1089 and S. 1176, 87th Cong; 1st Sess., Part 1, page 161.

4. House Rept. No. 2166, 85th Cong., 2nd Sess. (July 15, 1958) at 22-24. an extension discussion of the events that led up to this conference report can be found in Appendix A of An Evaluation of the Patent Policies of the National Aeronautics and Space Administration, Report of the Committee on Science and Astronautics, U.S. House of Representatives, 89th Cong., 2nd Sess. Some key events discussed are:

(a) The introduction of the original House and Senate bills (H.R. 1181 and S. 3609, on April 14, 1958) containing no patent provisions.

(b) The subsequent hearings on S. 3609, during which the Deputy Secretary of Defense recommended that no special patent provisions be included in the legislation, based on the expectation that the policies and procedures of NACA (similar to those of DOD) would be applied by regulation

(c) The reporting of H.R. 12575 (replacing H.R. 1181) out of House committee (May 24, 1958), with a section 107 entitled "Patent Rights,” patterned after similar provisions of the Atomic Energy Act.

(d) The unanimous passing H.R. 12575 (June 2, 1958) with no debate or comment on section 407.

(e) The subsequent expressions of displeasure by industry and the private bar over section 407, primarily because of its similarity with what they considered the restrictive and arbitrary provisions of the Atomic Energy Act.

(f) The reporting out by the Senate Committee (June 11, 1958) of amended S. 3609 with a new Section 303, almost identical to section 407 of H.R. 12575.

(g) The successful floor amendment by Sen. Johnson during debate on amended S. 3609 to have section 303 deleted and the matter referred to conference.

(h) The subsequent appointment, by Rep. McCormack (Chairman of the Select Committee on Astronautics and Space Exploration) of a patent subcommittee (chaired by Rep. Natcher) to review the matter prior to any House-Senate conference. This subcommittee recommended an approach which provided, inter alia, that the Administrator would be entitled to ownership to inventions made under contract only when certain findings (based on the relationship of the invention to the duties of the employee of the contractor making the invention) were made; and as a separate matter would be authorized to waive ownership of inventions to which the Administration was entitled in the national interest. Thus the report of the Natcher subcommittee indicated an intent not to automatically vest ownership in the Administration under all contractual situations (no matter how broadly defined), as under the Atomic Energy Act. This report, unpublished, is entitled "Report of The Patent Subcommittee, House Committee on Astronautics and Space Exploration re Section 407, H.R. 12575.

(i) The adoption of the final version of section 305, coupled with favorable floor comment. While worded and structured differently than section 407 appearing in the report of the Natcher subcommittee, it contained many of the salient features

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