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four of these objectives might not be obtainable, i.e., in some situations participation might be more important than fostering competition, while in others the reverse might be true. Congress did expect, however, that over the long run all four of these objectives must be attained.

Sections 9(d) and 90) set forth twelve specific factors which the Secretary should consider in making waiver determinations at the time of contracting. These factors were obtained from experience under the AEC and NASA legislation and from other Federal agencies under the Presidential Patent Policy statement. They concern considerations of:

The willingness of a contractor to participate;
The contractor's background and commercial position;

The contribution that contractor has made or will make to commercialization of contract results;

The contribution that the Government has made or will make to commercialization of the contract results;

The effect of the waiver on public health, safety and welfare, and its effect on competition; and

The extent to which universities have a technology transfer capability and the small business status of the contractor

Section 9(e) sets forth similar waiver considerations that must be taken into account in waiving individual inventions identified under DOE contracts. Accordingly, with both Sections 9(d) and (e), DOE has the authority to make both advance and identified waivers.

Section 9(h) of the Nonnuclear Energy Act provides for the minimum rights DOE must retain under each waiver which cannot be waived. These include a free Government license plus the following so-called “march-in" rights:

The right to require the contractor to license others at reasonable royalties if the invention is required for use by Government regulations or is necessary to fulfill health, safety, or energy needs;

The right to terminate the waiver in whole or in part if the contractor is not taking effective steps necessary to commercialize the invention, or will not take such steps within a reasonable time; and

The right to require licensing at reasonable royalties, or to terminate the waiver in whole or in part if it is shown at a public hearing held four years after the grant of a waiver that-the waiver has tended to violate the antitrust laws, or the contractor has not taken, and is not expected to take, effective steps to commercialize the invention.



$9-9.000 Scope of part.

(a) This part sets forth policies, instructions, and contract clauses pertaining to patents, data, and copyrights in connection with the procurement of supplies and services.

(b) It is noted that 89-9.107-4(d) entitled “License rights (upon request) to the contractor" pertains to contracts for the operation of Government-owned facilities or special long term, cost-reimbursement Government-funded research, development, or demonstration work. It provides that in such contracts, the paragraph set forth in 89-9.107–5(e) shall be substituted for paragraph (c)(1) of the Patent Rights (long form) clause of 89-9.107-5(a) to provide a revocable, nonexclusive, royalty-free license in inventions only upon request by the contractor for reservation of such license.

(c) Also, 89-9.107-4(g) entitled “Facilities license" covers a contract which has, as a purpose, the design, construction, or operation of a Government-owned research, development, demonstration, or production facility. It states that the paragraph of 89-9.107-5(h) shall be used in all such contracts, in addition to the provisions of the Patent Rights (long form) clause, since it is necessary that the Government be accorded certain rights with respect to further use of the facility by or on behalf of the Government upon termination of the contract, including the right to make, use, transfer, or otherwise dispose of all articles, materials, products, or processes embodying inventions or discoveries used or embodied in the facility, regardless of whether or not conceived or actually reduced to practice under or in the course of such contracts. Further, $9-9.107-4(h) entitled “Subcontracts” states that the withholding of payment provision of the prime contract will not normally be included in a subcontract except upon request of the Contracting Officer except for subcontracts awarded by contractors who operate Government-owned facilities and for other special contracting situations, in which cases the withholding of payment provision may be flowed down to the first-tier subcontractor only.

(d) With respect to technical data and copyrights, 89-9.202-4 applies to contracts for the operation of Government-owned, contractor-operated research or production facilities. This section sets forth the Rights in Technical Data-Facility clause which shall normally be included in such contracts.

Subpart 9-9.1 Patents

89-9.100 Scope of subpart.

(a) This subpart sets forth policies, procedures, and contract clauses with respect to inventions made, conceived, or utilized in the course of or under any contracts, grants, agreements, understandings or other arrangements entered into with or for the benefit of the DOE. One of DOE's primary missions requires the use of its procurement process to insure the conduct of research, development, and demonstration leading to the ultimate commercial utilization of all efficient sources of energy. Accordingly, DOE's mission is not oriented toward procurement for Government use, except where procurements are involved with special classified programs or the construction or improvement of Government-owned facilities. To accomplish its mission, DOE must work in cooperation with industry in the development of new energy sources and in achieving the ultimate goal of widespread commercial use. To this end, Congress has provided DOE with an array of incentives to secure the adoption of the new technology developed for DOE. An important incentive in commercializing technology is that provided by the


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patent system. As set forth in these regulations, patent incentives, including DOE's authority to waive the Government's patent rights to the extent provided for by statute, will be utilized in appropriate situations at the time of contracting to encourage industrial participation, foster commercial utilization and competition, and make the benefits of DOE's activities widely available to the public. In addition to considering the waiver of patent rights at the time of contracting, DOE will also consider the incentive of a waiver of patent rights upon the reporting of an identified invention when requested by the contractor or the employee-inventor with the permission of the contractor. These requests can be made whether or not a waiver request was made at the time of contracting. Waivers for identified inventions will be provided where it is determined that the patent waiver will be a real incentive to achieving the development and ultimate commercial utilization of inventions. Where a waiver of the Government's patent rights is granted, either at the time of contracting or upon request or after an invention is made, certain safeguards will be required by DOE to protect the public interest.

(b) Another major DOE mission is to manage the nation's uranium enrichment and other classified programs, where R&D procurements are directed toward processes and equipment not available to the public. To accomplish DOE's programs for bringing private industry into these and other special programs to the maximum extent permitted by national security and policy considerations, it is desirable that the technology developed in these programs be made available on a selected basis for use in the particular fields of interest and under controlled conditions by properly cleared industrial and scientific research institutions. To insure such availability and control, the grant of waivers in these programs may necessarily be more limited than in other DOE programs.

89-9.101 (Reserved).

$9-9.102 Authorization and consent.

(a) Under 28 USC 1498, any suit for unauthorized use of a United States patent based on the manufacture or use by or for the United States of an invention described in and covered by a patent of the United States by a contractor or by a subcontractor (at any tier) can be maintained only against the Government in the Court of Claims, and not against the contractor or subcontractor, in those cases where the Government has authorized or consented to the manufacture or use of the patented invention. Accordingly, to insure that work by a contractor or subcontractor under a Government contract may not be enjoined by reason of patent infringement, authorization and consent shall be given in the prime contract and shall apply to all subcontracts thereunder as provided below. The liability of the Government for damages in such suit against it may, however, ultimately be borne by a contractor or subcontractor in accordance with the terms of any Patent Indemnity clause also included in the contract or subcontract, and an Authorization and Consent clause may be included in the same contract or subcontract.

(6) In certain contracting situations, such as those involving demonstration projects, consideration should be given to the impact of third party-owned patents covering technology that may be incorporated in the project which may ultimately affect widespread commercial use of the project results. In such situations, Patent Counsel should be consulted to determine what modifications, if any, should be made to the utilization of the Authorization and Consent and Patent Indemnity provisions or what other action might be deemed appropriate.

(c) An Authorization and Consent clause shall not be used in contracts where both complete performance and delivery are to be outside the United States, its possessions or Puerto Rico.

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89-9.102-1 Authorization and consent in contracts for supplies or services.

The following contract clause shall be included in all contracts for supplies or services except when prohibited by 89-9.102(c) or in contracts for research, development, or demonstration work and in subcontracts thereunder in which the clause in 89-9.102-2 is required.


The Government hereby gives its authorization and consent (without prejudice to
any rights of indemnification) for all use and manufacture, in the performance of
this contract or any part hereof or any amendment hereto or any subcontract hereun-
der (including any lower-tier subcontract), of any invention described in and cov.
ered by a patent of the United States (a) embodied in the structure or composition
of any article the delivery of which is accepted by the Government under this con-
tract or (b) utilized in the machinery, tools or methods, the use of which necessarily
results from compliance by the contractor or the using subcontractor with
(1) specifications or written provisions now or hereafter forming a part of this con-
tract, or (ii) specific written instructions given by the Contracting Officer direct-
ing the manner of performance. The entire liability to the Government for
infringement of a patent of the United States shall be determined solely by the provi.
sions of the indemnity clauses, if any, included in this contract or any subcontract
hereunder (including all lower-tier subcontracts), and the Government assumes lia-
bility for all other infringement to the extent of the authorization and consent herein-
above granted.

89-9.102-2 Authorization and consent in contracts for research, development, or demonstration.

Greater latitude in the use of patented inventions may be necessary in a contract for research, development, or demonstration work than in a contract for supplies. Unless prohibited by 999.102(c), the following clause shall be included in all contracts calling for research, development, or demonstration work and shall be included in contracts calling for both supplies and research, development, or demonstration work where the latter work is a primary purpose of the contract. In all other contracts for both supplies and research, development, or demonstration work, the Authorization and Consent clause in 89-9.102-1 shall be used. If the following clause is included in a contract, the clause in 89-9.102-1 shall not be included.


The Government hereby gives its authorization and consent for all use and manufac-
ture of any invention described in and covered by a patent of the United States in
the performance of this contract or any part hereof or any amendment hereto or
any subcontract hereunder (including all lower-tier subcontracts).

89-9.103 Patent indemnification of Government by contractors.

In order that the Government may be reimbursed for liability for patent infringement arising out of or resulting from the performance of construction contracts or contracts for supplies, including standard parts and components which normally are or have been sold or offered for sale to the public in the commercial open market, or which are the same as such supplies with a relatively minor modification thereof, a clause providing for indemnification of the Government shall be included in such contracts as well as in subcontracts, as appropriate, in accordance with the instructions set forth below. However, a Patent Indemnity clause normally shall not be used in contracts or subcontracts:

(a) When the Authorization and Consent clause in 89-9.102-2 applicable to research, development, or demonstration contracts is authorized, except that in contracts calling also for supplies of the kind described above, or for supplying standard parts or components, the Patent Indemnity clause in 89–9.103–3(b) may be used with respect to such supplies; in subcontracts

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