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or foreign nationals. In determining whether a contractor has an established nongovernmental commercial position, the contracting officer will consider and evaluate each known factor which relates to the contractor's ability and willingness to move inventions into the stream of commerce. Factors which typically should be considered as appropriate are:

(1) Whether the contractor is known in the trade as a manufacturer or source of products or services in the area involved; and

(ii) Whether the contractor either (a) is regularly engaged in the sale or licensing, whether domestic or foreign, of such products or services to the general public (including business concerns), foreign governments, multinational organizations or foreign nationals; or (b) has a record of developing nongovernmental commercial markets for inventions in the area involved.

(iii) Have a record of developing nongovernmental commercial markets for inventions in the area involved. A nongovernmental commercial position shall be deemed to include sales of military items to foreign governments or multinational organizations or licensing programs with respect thereto, as well as the export of nonmilitary items to foreign governments or foreign nationals or foreign licensing programs in connection therewith.

(2) The following are the special situations where the public interest in the availability of inventions would best be served by permitting the contractor to acquire greater rights than a nonexclusive license at the time the contract is entered into:

(i) An educational or nonprofit institution has a definite, established policy, approved and promulgated by its governing body, of retaining title to inventions made by its employees or of requiring its employees to assign title to such inven tions to a patent holding entity for the benefit of the institution, and which patent policy has been approved by the Department of Defense;

(ii) A newly-formed research and development contractor or a new independent, research and development divi. sion or subsidiary of an older contractor has a definite program for establishing a nongovernmental commercial position which is dependent on the protection afforded by title in inventions which may be made in the course of or under the

contract (a contractor or division established more than five years shall not be considered “newly-formed”); Provided, however, That, in either case the procurement involved does not fall within Category I.

(d) Category III. Where the contracting officer determines that proposed experimental, developmental, or research work falls within Category III (set forth in $ 9.107-3(c)) because it is not covered by the instructions in paragraphs (b) and (c) of this section, the Patent Rights (Deferred) clause in $ 9.107-5(c) shall be included. However, in the case of prospective contractors organized for profit only considered under paragraph (c) of this section, the contracting officer shall affirmatively determine that the proposed contractor does not have a qualifying commercial position before the Deferred Clause is used, thereby settling as many questions as possible at the time of contracting. Many educational institutions or nonprofit organizations do not wish to acquire patents or do not have an approved patent policy; in such cases, the contract may include either the Patent Rights (Title) clause in $ 9.1075(a) or the Patent Rights (Deferred) clause in $ 9.107-5(c), as appropriate. In the event an educational or nonprofit institution files an application for approval of its patent policy (see paragraph (c) (2) (i) of this section) the above procedure shall be followed pending such approval, and in such cases the contract may provide for substitution of the Patent Rights (License) clause in $ 9.107-5 (b), in lieu of the patents rights clause used at the time of contracting, if such approval is obtained, except in procurements where the contemplated work under contract falls within the provisions of $ 9.107–3(a).

(e) Where a contractor has acquired the title to an invention under a contract, the contracting officer may, in accordance with § 9.107–5, request written reports from the contractor as to:

(1) The commercial use that is being made or is intended to be made of such invention; and

(2) The steps taken by the contractor to bring the invention to the point of practical application, or to make the invention available for licensing.

(f) In the special cases covered by the sections listed below, the contracting officer shall follow the instructions and

include the clauses required in such sections:

(1) Section 9.107-6, concerning foreign contracts;

(2) Section 9.1077, concerning contracts relating to atomic energy;

(3) Section 9.107-8, concerning contracts placed for the National Aeronautics and Space Administration;

(4) Section 9.107-9, concerning contracts relating to space; and

(5) Section 9.108, concerning contracts for personal services.

(g) By definition, the term "contract" includes subcontracts; hence, the policy in $$ 9.107-2 and 9.107-3 applies where a purpose of a subcontract is experimental, developmental, or research work. So that the policy is carried out at all con

tract and subcontract levels, subcontracts generally shall include the same patent rights provision (Title or License) contained in the prime contract. However, there may be exceptions to this general rule, as for example where the prime contract comes within subparagraphs (3) or (4) in $ 9.107–3(a), but the subcontract is not subject to the same considerations. Another exception, though less likely, may occur where the prime contract is subject to the provisions of Category II, but the nongovernmental commercial position of the subcontractor is not suficiently established and, consequently, the subcontract falls within the provisions of Category III.

(h) Preaward patent rights documentation checklist.

(Authorized for local reproduction)
PREAWARD PATENT RIGHTS DOCUMENTATION CHECKLIST

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Procurement Identification:---
Purpose of Proposed Procurement:.-----
1. Is a principal purpose of the proposed contract, either by itself or as one

of a series of directly related contracts, to create, develop or improve an
end item intended for use in the civilian economy? 1 (See ASPR 9-107.3
(a) (1) and 9-107.4(b) (1).) ----------------

I “Yes,” identify the end item and briefly describe its intended use in the civilian economy. 2. Is a principal purpose of the proposed contract, either by itself, or as one of

a series of directly related contracts to create, develop or improve an end item which will be required for use by the general public by a Government regulation.--

I "Yes,” identify the end Item and ate applicable regulation. (See ASPR 9-107.3(a) (1) and 9–107.4(b) (1).) 8. Is a principal purpose of the contract exploration into a field directly

concerned with public health or public welfare (as distinguished from items predominantly of military concern)? (See ASPR 9-107.3(a) (11) and 9–107.4(b) (2).) -----

If "Yes," identify such principal purpose of the contract and briefly describe its relationship to the public health or public welfare. 4. Is the contract for procurement in a field of science or technology in which

there has been little significant experience outside of work funded by the Government?? (See ASPR 9–107.3(a) (111) and 9–107.4(b) (3).) -------

I “Yes," briefly describe such field. 5. Is the contract for procurement in a field of science or technology in which

the Government has been the principal developer of the field ? ? (See ASPR 9-107.3(a) (111) and 9–107.4(b) (3).)-

If “Yes,” briefly describe such field. 6. If the answer to either 4 or 5 is “Yes," would the contractor be likely to

get a preferred or dominant commercial position in that field if he were permitted to acquire title to inventions made under the contract? (See ASPR 9–107.3(a) (01) and 9–107.4(b) (3).) -----

---------Explain the answer. 7. Does the contract require that the contractor both (1) provide services for

operation of a Government-owned research or production facility and (11) perform experimental, developmental or research work at that facil

ity? (See ASPR 9–107.3(a) (iv) (A) and 9-107.4(b) (4).)--------------Footnotes at end of checklist.

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8. Does the contract require contractor to coordinate and direct the work

of others (as distinguished from the normal contractor-subcontractor relationship) which might result in a potential organizational conflict of interest? (See ASPR 1-113.2, Appendix G, and 9–107.3(a) (iv) (B), 9-107.4(b) (4).) -----

If "Yes,” explain briefly why such a potential conflict of interest is considered to exist.

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(Typed name, ofice, and signature of

person completing this form) The Patents Rights (Title) Clause, ASPR 9-107.5(a), will ---- will not ---- be used in the solicitation. (Give reasons for determination.)

(Typed name and signature of con.

tracting officer or representative) 1 The contract or series of contracts need not necessarily require delivery of the end item. The end item may be a product, a process or data.

2 The mere fact that the Government has been or is the principal funder or developer funder or developer in a field of science or technology which encompasses the piece of hardware. (29 F.R. 9756, July 21, 1964, as amended at 30 F.R. 12005, Sept. 21, 1965; 32 F.R. 523, Jan. 18, 1967; 33 F.R. 15391, Oct. 17, 1968; 35 F.R. 8437, May 29, 1970)

& 9.107-5 Clauses for domestic con.

tracts. (a) Patent Rights (Title) Clause. If the contracting officer has determined that the contract comes within $ 9.1074 (b) or (d), he shall include the following clause in the contract. This clause provides for the Government to acquire title in “Subject Inventions,” subject to the contractor's retaining a royalty-free license in such inventions; however, the Government may permit the contractor, under certain circumstances, to acquire greater rights than the license. PATENT RIGHTS (TITLE) (DECEMBER 1969)

(a) Definitions used in this clause. (1) "Subject Invention" means any invention or discovery, whether or not patentable, conceived, or first actually reduced to practice in the course of or under this contract. The term "Subject Invention" includes, but is not limited to, any art, method, process, machine, manufacture, design, or composicion of matter, or any new and useful improvement thereof, or any variety of plant, which is or may be patentable under the patent laws of the United States of America or any foreign country.

(2) "Governmental purpose" means the right of the Government of the United States (including any agency thereof, State or domestic municipal government) to practice and have practiced (make or have made, use or have used, sell or have sold) any Subject Invention throughout the world by or on be half of the Government of the United States.

(3) "Contract” means any contract, agreement, grant, or other arrangement, or subcontract entered into with or for the benefit of the Government where a purpose of the contract is the conduct of experimental, developmental, or research work.

(4) "Subcontract and subcontractor means any subcontract or subcontractor of the Contractor, any lower-tier subcontract or subcontractor under this contract.

(5) “To bring to the point of practical application" means to manufacture in the case of a composition or product, to practice in the case of a process, or to operate in the case of a machine or system and, in each case, under such conditions as to establish that the invention is being worked and that its benefits are reasonably accessible to the public.

(b) Rights granted to the Government. Except as provided in (e) and (b) of this clause, the Contractor agrees to grant the Government all right, title, and interest in and to each Subject Invention (made by the Contractor), subject to the reservation of a nonexclusive and royalty-free license to the Contractor. The license shall extend to existing and future associated and affiliated companies, if any, within the corporate structure of which the Contractor is a part and shall be assignable to the successor of that part of the Contractor's business to which such Invention pertains. Nothing contained in this Patent Rights clause shall be deemed to grant any rights with respect to any invention other than a Subject Invention.

(c) Invention disclosures and reports. (1) With respect to Subject Inventions (made by the Contractor), except those which are obviously unpatent

atent laws of the United States, the Contractor shall furnish to the Contracting Officer:

(1) A written disclosure of each invention within six (6) months after conception or first actual reduction to practice, whichever occurs first under this contract, suficiently complete in technical detail 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, or elec

trical characteristics of the Invention; when unable to submit a complete disclosure, the Contractor shall within said six (6) month period submit a disclosure which includes all such technical detail then known to him and shall, unless the Contracting Officer authorizes a different period, submit all other technical detail necessary to complete the disclosure within three (3) months of the expiration of said six (6) month period.

(ii) Interim reports at least every twelve (12) months, the initial period of which shall commence with the date of this contract, each report listing all such Inventions conceived or first actually reduced to practice more than six (6) months prior to the date of the report and not listed on a prior interim report, or certifying that there are no such unreported Inventions;

(iii) Prior to final settlement of this contract, a final report listing all such Inventions including all those previously listed in interim reports, or certifying that there are no such unreported Inventions (This Final Report and any Interim Report under (11) above shall be submitted on DD Form 882 or other format acceptable to the Contracting Officer.);

(iv) Information in writing, as soon as practicable, of the date and identity of any public use, sale, or publication of such Invention made by or known to the Contractor or of any contemplated publication by the Contractor;

(v) Upon request, such duly executed instruments and other papers (prepared by the Government) as are deemed necessary to vest in the Government the rights granted it under this clause and to enable the Government to apply for and prosecute any patent application, in any country, covering such Invention where the Government has the right under this clause to file such application; and

(vi) Upon request, an irrevocable power of attorney to inspect and make copies of each U.S. patent application filed by, or on behalf of, the Contractor covering any such Invention.

(2) with respect to each Subject Inven. tion in which the Contractor has been granted greater rights under paragraph (h) of this clause, the Contractor agrees to provide written reports at reasonable intervals, when requested by the Government as to:

(1) The commercial use that is being made or is intended to be made of such Invention;

(ii) The steps taken by the Contractor to bring the Invention to the point of practical application, or to make the Invention avail. able for licensing.

(d) Subcontracts. (1) The Contractor shall, unless otherwise authorized or directed by the Contracting Officer, include a patent rights clause containing all the provisions of this Patent Rights clause except provision (g) in any subcontract hereunder where a purpose of the subcontract is the conduct of experimental, developmental, or research work. In the event of refusal by a subcon

tractor to accept this Patent Rights clause, or if in the opinion of the Contractor this Patent Rights clause is inconsistent with the policy set forth in ASPR 9-107.2 and 9-107.3, the Contractor:

(1) Shall promptly submit a written report to the Contracting Officer setting forth the subcontractor's reasons for such refusal or the reasons Contractor is of the opinion that the inclusion of this clause would be so inconsistent, and other pertinent information which may expedite disposition of the matter; and

(ii) Shall not proceed with the subcontract without the written authorization of the Contracting Officer. The Contractor shall not, in any subcontract or by using such a subcontract as consideration therefor, acquire any rights to Subject Inventions for his own use (as distinguished from such rights as may be required solely to fulfill his contract obligations to the Government in the performance of this contract). Reports, instruments, and other information required to be furnished by a subcontractor to the Contracting Officer under the provisions of such a patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor and the subcontractor (or by direction of the Contracting Omcer) be furnished to the Contractor for transmission to the Contracting Officer.

(2) The Contractor, at the earliest practicable date, shall also notify the Contracting Officer in writing of any subcontract containing a patent rights clause, furnish to the Contracting Officer a copy of such subcontract, and notiy him when such subcontract is completed. It is understood that the Government is a third party beneficiary of any subcontract clause granting rights to the Government in Subject Inventions, and the Contractor hereby assigns to the Government all the rights that the Contractor would have to enforce the subcontractor's obligations for the benefit of the Government with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a negative report is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder relating to the obligations of the subcontractor to the Government in regard to Subject Inventions.

(e) Domestic filing of patent applications by contractor (1) If greater rights are granted in and to a Subject Invention pursuant to paragraph (h) of this clause, the Contractor shall file in due form and within six (6) months of the granting of such greater rights a U.S. Patent application claiming the Invention referred to in said paragraph, and shall furnish, as soon as practicable, the serial number and filing date of each such application and the patent number of any resulting patent. As to each Invention in which the Contractor has been given greater rights, the Contractor shall notify the Contracting Officer at the end of the six (6) month period if he has failed to file or caused to be filed a patent application covering such invention. If the Contractor has filed or caused to be filed such an application within the six (6) month period, but elects not to continue prosecution of such application, he shall notify the Contracting Officer not less than sixty (60) days before the expiration of the response period. In either of the situations covered by the two immediately preceding sentences, the Government shall be entitled to all rights, title, and interest in such Invention subject to the reservation to the contractor of a license as specified in paragraph (b).

(2) The following statement shall be included within the first paragraph of any patent application filed and any patent issued on an Invention which was made under Government contract or subcontract thereunder: “The Invention herein described was made in the course of or under a contract or subcontract thereunder (or grant) with (here state the Department or Agency).

(f) Foreign filing of patent applications. (1) If the Contractor acquires greater rights in a Subject Invention pursuant to paragraph (h) of this clause and has filed a U.S. patent application claiming the Invention, the Contractor, or those other than the Government deriving rights from the Contractor, shall as between the parties hereto, have the exclusive right, subject to the rights of the Government under paragraph (i) of this clause, to file applications on the Inventions in each foreign country within:

(1) Nine (9) months from the date a corresponding U.S. patent application is filed;

(ii) Six (6) months from the date permission is granted to file foreign applications where such filing has been prohibited for security reasons: or

(111) Such longer period as may be approved by the Contracting Officer. The Contractor shall notify the Contracting Oficer of each foreign application filed and, upon written request of the Contracting Oficer, furnish an English translation of such application, and, convey to the Government the entire right, title, and interest in the Invention in each foreign country in which an application has not been filed within the time specified above, subject to the reservation of a royalty-free license as specified in paragraph (b).

(2) If the Contratcor does not acquire greater rights pursuant to paragraph (h) of this clause and the Government determines not to file a patent application on any Subject Invention (made by the Contractor) in any particular foreign country, the Contracting Officer, upon request of the Contractor, may authorize the Contractor to file à patent application on such Invention in such foreign country and retain ownership thereof, subject to an irrevocable, nonexclusive and royalty-free license to practice and have practiced such Subject Invention throughout the world for Governmental purposes, including the practice of each such

Subject Invention (i) in the manufacture, use, and disposition of any article or material, (ii) in the use of any method, or (iii) in the performance of any service, acquired by or for the Government or with funds derived through the Military Assistance Program of the Government or funds otherwise derived through the Government.

(g) Withholding of payment. (1) Final payment under this contract shall not be made before the Contractor delivers to the Contracting Officer the final report required by (c) (1) (iii), all written invention disclosures required by (c) (1) (i), and all information as to subcontracts required by (d) (ii).

(2) If at any time before final payment under this contract the Contractor fails to deliver an interim report required by (c) (1) (ii), or a written invention disclosure required by (c) (1) (i), the Contracting Officer shall withhold from payment $50,000 or five percent (5%), of the amount of this contract whichever is less (or whatever lesser sum is available if payments have exceeded ninetyfive percent (95%) of the amount of this contract) until the Contractor corrects all such failures.

(3) After payments total eighty percent (80%) of the amount of this contract, and if no amount is required to be withheld under (2) above, the Contracting Officer may, if he deems such action warranted because of the Contractor's performance under the Patent Rights clause of this contract or other known Government contracts, withhold from payment such sum as he considers appropriate, not exceeding $50,000 or five percent (5%), of the amount of this contract whichever is less, to be held as a reserve until the Contractor delivers all the reports, disclosures, and information specified in (1) above. Subject to the five percent (5%) or $50,000 limitation, the sum withheld under this subparagraph (3) may be increased or decreased from time to time at the discretion of the Contracting Officer.

(4) No amount shall be withheld under this paragraph (g) while the amount specified by this paragraph is being withheld under other provisions of this contract. The total amount withheld under (1), (2), and (3) above shall not exceed $50,000 or five percent (5%) of the amount of this contract whichever is less. The withholding of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. This paragraph shall not be construed as requiring the Contractor to withhold any amounts from a subcontractor to enforce compliance with the patent provision of a subcontract. As used in this paragraph (g), “this contract" means “this contract as from time to time amended." In cost-type contracts, "amount of this contract” means "estimated cost of this contract."

(h) Contractor's request for greater rights. The Contractor at the time of first disclosing a Subject Invention pursuant to paragraph

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