that the results of a joint endeavor are made available to the public upon reasonable circumstances. 27. For example, NASA's policy for the use of its installation research facilities by individual researchers is set forth in the NASA Supplement for the Federal Personnel Manual, Chapter B11, issued September 29, 1977, which provides: "Rights to any inventions conceived or first reduced to practice during, and resulting from use of Government facilities should be stated in the agreement." Normally NASA should obtain a royalty free license for the U.S. Government to practice the invention for governmental purposes. 28. This policy is reflected, for example, in the Announcement of Opportunity for Materials Processing Investigations on Space Shuttle Missions (A.O. Ño. OA-77–3, Feb. 8, 1977) seeking investigations comprising applied and basic research projects in branches of materials science where the weightlessness and ultra high vacuum obtainable in orbital flight can be exploited to unique advantage. It is stated, in paragraph V.2.: "For a Cooperative Project, NASA will obtain a royalty free license to practice for U.S. governmental purposes any inventions and patents resulting from the experiment and the right to use and disclose the resulting data for U.S. governmental purposes." 29. Typical arrangements where a significant NASA contribution is its satellite data are: (a) "Agreement Between National Aeronautics and Space Administration and the GEOSAT Committee, Inc." for the purpose of demonstrating improved remote sensing techniques for mineral and petroleum exploration; (b) "Cooperative Agreement Between the California Department of Water Resources and the National Aeronautics and Space Administration for an Application Systems Verification and Transfer (ASVT) Project involving Irrigated Land Assessment For Water Management," to evaluate the utility of LANDSAT as a source of data for use as input to water management models and decisions; (c) "Cooperative Agreement Between The Appalachian Regional Commission and The National Aeronautics and Space Administration For Appalachian Lineament Analysis" to conduct a joint project involving LANDSAT-derived information for certain land use purposes; and (d) "Memorandum of Understanding Between NASA and the Agency [ESA] for LANDSAT ground stations" wherein NASA provided LANDSAT data and ESA established a system for the reception, pre-processing, archiving and dissemination of such data. 30. Thus for example, in a model "Cooperative Endeavor Agreement" under which NASA made certain of its scientific and technical data available under specified conditions and the recipient provided NASA with reports of the result of applying such data to commercial aircraft, the following patent provision was included: "5. PATENTS (a) NASA, acting on behalf of the U.S. Government, has filed application for Letters Patent in the United States and certain foreign countries on an invention made by Richard T. Whitcomb and entitled, Airfoil Shape for Flight at Subsonic Speeds. The supercritical aerodynamic technology furnished by NASA to Lear Avia under this Agreement is based, in large part, upon the novel concepts, theories, formulae, and technology encompassed by this invention. In recognition of these contributions offered by the Government, Lear Avia agrees that should its application of such technology to commercial aircraft, as contemplated under this Agreement, result in patentable modifications or improvements to the supercritical aerodynamic technology, Lear Avia will provide NASA with the disclosure of such inventions and grant to the U.S. Government a nonexclusive, irrevocable, royalty-free license to practice such inventions throughout the world for government purposes. Such agreements have been entered into with Lear Avia, Cessna, Beech, and Gates Lear Jet. 31. Agreement of November 24, 1976, between McDonnell Douglas Corporation and NASA concerning the design, manufacture, test and delivery of a spin stabilized payload assist module for launching spacecraft. 32. Supra, note 31. Article IX-Termination for Default 33. Examples of arrangements of this type are: (a) "Memorandum of Understanding Between The Federal Minister for Scientific Research of The Federal Republic of Germany and The United States National Aeronautics and Space Administration" for Project HELIOS, having the general objective to provide new understanding of fundamental solar processes and solar terrestrial relationships by the study of phenomena such as solar wind, magnetic and electric fields, cosmic rays, and cosmic dust. (b) "Memorandum of Understanding Between The United States National Aeronautics and Space Administration and The Netherlands Agency for Aerospace Programs" for the Infrared Astronomical Satellite to perform an all-sky survey of extraplanetary, galactic and extragalactic infrared sources. (c) "Memorandum of Understanding_Between The United States National Aeronautics and Space Administration and The European Space Agency for The International Solar Polar/Out-Of-Ecliptic Mission" to conduct coordinated observations of the interplanetary medium and the Sun simultaneously in the northern and southern hemispheres of the solar system. (d) Letter agreement between NASA and The Centre National d'Etudes Spartrales, France, selecting a proposal entitled "Multipurpose French Cooperative Environment Tests to be Conducted on NASA LDEF," for participation in the NASA Long Duration Exposure Facility (LDEF) Mission. The proposal was submitted in response to the NASA Announcement of Opportunity AO-OAST-76-1, and has as a scientific objective the investigation of the effect of long term space exposure on thin metal film and evaporated cathodes, optical coatings, holographic gratings, thermal coatings, structural materials, and fiber optics. (e) Letter agreement between NASA and the University of Sydney, Australia, selecting a proposal entitled "Aggregation of Human Red Blood Cells," in response to NASA Announcement of Opportunity AO-OA-77-3 (see note 28). The scientific objective of the proposed experiment is to observe the aggregation of human red blood cells under conditions approaching zero.gravity. No patent provisions were included in examples (a)-(c), but examples (d) and (e) included the following: "It is further understood that should any inventions and patents result from this project, NASA is granted a royalty-free license to practice such inventions and patents for U.S. Government purposes.' 34. Representative examples of joint endeavors involving contributions of major hardware are: (a) "Memorandum of Understanding Between The National Aeronautics and Space Administration and The European Space Research Organization for a Cooperative Programme Concerning Development, Procurement and Use of a Space Laboratory In Conjunction With the Space Shuttle," wherein ESA and its members developed the Spacelab (some of the subcontract research and development work performed by US companies) to be utilized with the NASA developed orbiter; (b) "Memorandum of Understanding_Between The National Aeronautics and Space Administration and The National Research Council of Canada For a Cooperative Program Concerning the Development and Procurement of a Space Shuttle Attached Remote Manipulator System (RMS)," wherein Canada developed the RMS to be employed on the NASA developed orbiter; (c) "Memorandum of Understanding Between The European Space Agency and The United States National Aeronautics and Space Administration," under which ESA is to develop major hardware to be incorporated into the NASA developed telescope; and (d) "Memorandum of Understanding Between The Department of Communications of Canada and The Centre National D'Etudes Spartrales of France and The National Aeronuatics and Space Administration of The United States of America," wherein Canada is to develop significant hardware (some to be produced in the U.S. under subcontract) to be used in and with a U.S. developed satellite. No patent provisions were included in examples (a)–(d), above. 35. Supra, note 23. Senator SCHMITT. Am I correct in my understanding that if NASA is merely providing a transportation capability or a capability to work in space, that section 305 of the Space Act would not apply. Mr. MOSSINGHOFF. That's right, as long as there is a clear delineation on either side of the line on what we will provide and what the contractor will provide. And if that cooperator or contractor funds its own research and development that goes into the effort, we have concluded that technically section 305 does not apply. So we have a little more flexibility in fashioning a patent clause under the agreement that gets done what we want to get done. Senator SCHMITT. Mr. Denny, you are the chairman of the Federal Coordinating Council Subcommittee on Intellectual Property which has been discussing this issue in a broad way for a couple of years, and have been trying to reach a concensus among the interested agencies. Senator Stevenson and I would like to know if you have reached any agreement. Mr. DENNY. The answer is either "No" or "Yes," several times. It is a difficult issue, and it is debated hotly and continuously. Senator SCHMITT. Red Skelton would say, "a flock of them flew over that time." Mr. DENNY. Right now it is my understanding that the committee representatives, the White House, and the agency are looking at that policy, and they hope to come up with an administration position in the near future, but they do not have one at this time. Senator SCHMITT. Do you know if the administration, prior to announcing that policy, plans to consult with the Congress on such policy? Mr. DENNY. No, sir, I do not. Senator SCHMITT. What options do the major R. & D. agencies support? Mr. DENNY. I don't know. I can tell you the Department of Energy's position, which is also variable. We think in large measure we have the best patent policy Congress has ever produced. It has more guidance and more specialized authority than has been enacted before. We cherish it, unless something better comes along, and we look with interest on the attempts toward a more uniform—a less burdensome-particularly myself, a less burdensome type of patent policy, along the lines of S. 1215. Senator SCHMITT. Has the Justice Department expressed a view that you can give this committee? Or should we ask them? Mr. DENNY. I think you better ask them, sir. Senator SCHMITT. Your executive branch committee is reporting specifically to whom at the next level up? Mr. DENNY. I am chairman of the Subcommittee on Intellectual Property-that reports to the Committee on Intellectual Property and Information that is chaired by Dr. Jordan Baruch, the Assistant Secretary of Commerce for Science and Technology. Senator SCHMITT. And eventually the options or the recommendations you develop will be transmitted to whom? Mr. DENNY. From there, they will either go to the Federal Coordinating Council, or directly to the White House. I think to the President's Science Adviser, who chairs the Federal Coordinating Council, to that office, I believe. Senator SCHMITT. When do you expect to have options or recommendations presented to the White House? Is there any schedule you are working toward? Mr. DENNY. The only thing that I have been informed, Senator, is that the options are under consideration and there is hoped to be a solution later this year. Senator SCHMITT. IS S. 1215 compatible with the options being discussed? Mr. DENNY. Yes; certainly within the range. Senator SCHMITT. Mr. Mossinghoff, NASA has participated in these subcommittee efforts, I believe. Does NASA have any specific option that they favor at this time? I am not necessarily looking for an endorsement of S. 1215. Mr. MOSSINGHOFF. The most recent time NASA took a position on the efforts of the Committee on Intellectual Property and Information was our participation in the drafting of the bill which was published in the 1978 report of the Federal Coordinating Council on Science, Engineering, and Technology. We would still support that approach as being consistent with the data that I have discussed in terms of getting inventions utilized. We recognize there are some strong views within the administration that also need to be accommodated and are certainly willing to work with any of those-with any of those counterproposals or alternative proposals. I would characterize your bill, S. 1215, as being midway between the status quo for most agencies-which is the President's policy— and the bill that appears in the report of the Federal Coordinating Council for Science, Engineering, and Technology. But we have not taken a specific position on your bill, as Mr. Denny pointed out. Senator SCHMITT. Mr. Denny, in the modern jargon of this issue, there is a so-called "ERDA/reverse ERDA/Bayh-Dole option." Can you describe, in 25,000 words or less, what is meant by "ERDA/ reverse ERDA/Bayh-Dole option?" Mr. DENNY. Yes. Senator SCHMITT. Hopefully, less. Mr. DENNY. It basically-the concept is to adopt ERDA patent policy where the results of the research program are intended to be used by the general public. That policy is a presumption in favor of the Government taking title with a waiver option. In any research program where the purpose is to develop research for use by the Government, as opposed to the public, it reverses that presumption. That is, the presumption is that the contractor will take title unless situations are found where they should not, very much as in S. 1215. Hence, a "reverse ERDA❞ policy. The "Bayh-Dole" concept to the option is added by a presumption across the board in favor of title to small business and nonprofitsa waiver would be assumed in all situations whether the research was intended for use by the public or by the Government. Senator SCHMITT. And the "Bayh-Dole" bill which relates to universities and small business, is consistent with that policy? Is that correct? Mr. DENNY. Yes, sir. I think there is one exception, though. I think the "Bayh-Dole" approach in the "ERDA/reverse ERDA/ Bayh-Dole" approach has a requirement for technology transfer programs to be approved, as it is I believe in your bill. And I do not think that is a limitation in the "Bayh-Dole" bill. Senator SCHMITT. Mr. Denny, are you aware of any specific instances where a potential Government contractor has refused to contract with an agency because of its patent policy? Mr. DENNY. Yes, sir, I am. Senator SCHMITT. You mentioned that in your testimony. Mr. DENNY. It is an extremely difficult thing to document, but from my own experience it has happened. It happens with compa nies. I have seen it happen with divisions of companies, and I have seen it happen with basically entire industries. Senator SCHMITT. We have available a General Accounting Office report which I am sure you have seen prepared at the request of Senators Bayh and Dole, related to Department of Energy patent policies and procedures. This report documents some of the delays that are brought on by the problems that you mentioned in your testimony. One of the more extreme cases was the Texas Instruments, Inc., invention of a material for solar absorption surface panels. It apparently took 41 months to get a waiver from the time it was requested. Do you think that the policy articulated in S. 1215 would improve this situation? Mr. DENNY. Without question, Senator. Senator SCHMITT. Would that affect participation in Government contract? Mr. DENNY. You can't tell. There probably would be an effect in in those cases where the company is lukewarm for Government support in the first place. You have to understand that DOE is-is dealing with private industry in fields, where they have been operating in many cases without Government support for years, and they have millions of dollars worth of investments. These companies may not deal with the Government under a title policy. In other cases, the technology to be commercialized is going to take substantial sums, and in those situations I feel quite certain Government moneys are a desirable addition and a title policy may be acceptable. In other cases, they would rather not do business with us. So I am sure your question seems to address a gray area—that I mentioned there are cases where they say it is just not worth the trouble. [The material referred to follows:] Hon. BIRCH BAYH, COMPTROLLER GENERAL OF THE UNITED STATES, DEAR SENATOR BAYH: On September 15, 1978, you and Senator Dole wrote that you had introduced a bill to establish a uniform Federal patent procedure for small business and nonprofit organizations and intended to hold hearings in the 96th Congress. You asked that we provide testimony, including a discussion of the procedures of the Departments of Energy and Health, Education, and Welfare for determining the patent rights for inventions arising from Government supported research and development. The procedures of these departments were to be contrasted with those of other Federal agencies. As a result of discussions with representatives of your office and Senator Dole's and your letter of January 8, 1979, we also obtained information on the patent policies and procedures of the Department of Defense and the National Aeronautics and Space Administration. We gave testimony before the Senate Judiciary Committee on May 16. A background paper on Government patent policy and detailed comments on the bill were submitted for the record. Answers to your questions were furnished for the record on June 21. A summary of the patent policies and practices of the four agencies are included as enclosures to this letter. We obtained this information by working with patent officals of the respective agencies, but we did not ask the agencies for formal review or comment. The material is also being furnished to Senator Dole. This completes |