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file or caused to be filed a patent application Subject Invention (i) in the manufacture, covering such invention. If the Contractor use, and disposition of any article or mahas filed or caused to be filed such an terial, (ii) in the use of any method, or application within the six (6) month period, (ili) in the performance of any service, acbut elects not to continue prosecution of such quired by or for the Government or with application, he shall notify the Contracting funds derived through the Military AssistOfficer not less than sixty (60) days before ance Program of the Government or funds the expiration of the response period. In otherwise derived through the Government. either of the situations covered by the two (g) Withholding of payment. (1) Final immediately preceding sentences, the Gov

payment under this contract shall not be ernment shall be entitled to all rights, title, made before the Contractor delivers to the and interest in such Invention subject to Contracting Officer the final report required the reservation to the Contractor of a license by (c) (1) (iii), all written invention discloas specified in paragraph (b).

sures required by (c) (1) (1), and all informa(2) The following statement shall be tion as to subcontracts required by (d) (ii). included within the first paragraph of any (2) If at any time before final payment patent application filed and any patent under this contract the Contractor fails to issued on an Invention which was made

deliver an interim report required by (c) (1) under Government contract or subcontract

(ii), or a written invention disclosure rethereunder: “The Invention herein described

quired by (c) (1) (i), the Contracting Officer was made in the course of or under a contract

shall withhold from payment $50,000 or five or subcontra thereun (or grant) with

percent (5%), of the amount of this contract (here state the Department or Agency)."

whichever is less (or whatever lesser sum is (1) Foreign filing of patent applications.

available if payments have exceeded ninety(1) If the Contractor acquires greater five percent (95%) of the amount of this rights in a Subject Invention pursuant to contract) until the Contractor corrects all paragraph (h) of this clause and has filed

such failures. a U.S. patent application claiming the

(3) After payments total eighty percent Invention, the Contractor, or those other

(80%) of the amount of this contract, and than the Government deriving rights from

if no amount is required to be withheld the Contractor, shall as between the parties

under (2) above, the Contracting Officer hereto, have the exclusive right, subject to

may, if he deems such action warranted bethe rights of the Government under

cause of the Contractor's performance under paragraph (i) of this clause, to file applications on the Inventions in each foreign

the Patent Rights clause of this contract or

other known Government contracts, withhold country within:

from payment such sum as he considers ap(i) Nine (9) months from the date a corresponding U.S. patent application is filed;

propriate, not exceeding $50,000 or five per

cent (5%), of the amount of this contract (ii) Six (6) months from the date

whichever is less, to be held as a reserve until permission is granted to file foreign applications where such filing has

the Contractor delivers all the reports, dis

beep prohibited for security reasons: or

closures, and information specified in (1)

above. Subject to the five percent (5%) or (iii) Such longer period as may be ap

$50,000 limitation, the sum withheld under proved by the Contracting Officer.

this subparagraph (3) may be increased or The Contractor shall notify the Contracting decreased from time to time at the discretion Officer of each foreign application filed and, of the Contracting Officer. upon written request of the Contracting (4) No amount shall be withheld under Oficer, furnish an English translation of this paragraph (g) while the amount specsuch application, and, convey to the Gov- ified by this paragraph is being withheld ernment the entire right, title, and interest under other provisions of this contract. The in the Invention in each foreign country in total amount withheld under (1), (2), and which an application has not been filed (3) above shall not exceed $50,000 or five within the time specified above, subject to percent (5%) of the amount of this contract the reservation of a royalty-free license as

whichever is less. The withholding of any specified in paragraph (b).

amount or subsequent payment thereof to (2) If the Contratcor does not acquire the Contractor shall not be construed as a greater rights pursuant to paragraph (h) waiver of any rights accruing to the Governof this clause and the Government deter- ment under this contract. This paragraph mines not to file a patent application on any shall not be construed as requiring the ConSubject Invention (made by the Contractor) tractor to withhold any amounts from a subin any particular foreign country, the Con- contractor to enforce compliance with the tracting Officer, upon request of the Con- patent provision of a subcontract. As used tractor, may authorize the Contractor to file in this paragraph (g), “this contract" means a patent application on such Invention in “this contract as

from time to time such foreign country and retain ownership amended." In cost-type contracts, "amount thereof, subject to an irrevocable, nonex- of this contract" means "estimated cost of clusive and royalty-free license to practice

this contract." and have practiced such Subject Invention (h) Contractor's request for greater rights. throughout the world for Governmental The Contractor at the time of first disclosing purposes, including the practice of each such a Subject Invention pursuant to paragraph

(c) (1) (1) of this clause, but not later than three (3) months thereafter, may submit in writing to the Contracting Oficer, in accordance with applicable regulations, a request for greater rights than the license reserved to the Contractor in paragraph (b) of this clause if :

(1) The Invention is not the primary object of this contract; and

(il) The acquisition of such greater rights is consistent with the intent of ASPR 9-107.3 (a) and is necessary to call forth private risks capital and expense to bring the Invention to the point of practical application. The Contracting Officer will review the Contractor's request for greater rights and will notify the Contractor whether such request is granted in whole or in part. Any rights granted to the contractor shall be subject to, but not necessarily limited to, the provisions of paragraph (1) of this clause.

(1) Reservation of Rights to the Government. (1) In the event greater rights in any Subject Invention are vested in or granted to the Contractor pursuant to paragraph (h) above, such greater rights shall, as a minimum, be subject to an irrevocable, nonexclusive and royalty-free license to practice and have practiced each such Subject Invention (made by the Contractor) throughout the world for Governmental purposes, and including the practice of each such Subject Invention (1) in the manufacture, use, and disposition of any article or material, (11) in the use of any method, or (iil) 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.

(2) In the event greater rights are vested in the Contractor, the Contractor further agrees to and does hereby grant to the Government the right to require the granting of a license to an applicant under any such Invention:

(1) On a nonexclusive, royalty-free basis. unless the Contractor, his licensee or his assignee demonstrates to the Government, at its request, that effective steps have been taken within three (3) years after a patent Issues on such Invention to bring the Invention to the point of practical application or that the Invention has been made available for licensing royalty-free or on terms that are reasonable in the circumstances, or can show cause why the title should be retained for a further period of time; or

(11) Royalty-free or on terms that are reasonable in the circumstances to the extent that the Invention is required for public use by Governmental regulations or as may be necessary to fulfill health needs, or for other public purposes stipulated in the Schedule of this contract.

(1) Right to disclose subject inventions The Government may duplicate and disclose reports and disclosures of Subject Inventions required to be furnished by the Contractor pursuant to this Patent Rights clause.

(k) Forfeiture of rights in unreported subject inventions. The Contractor shall forfeit to the Government all rights in any Subject Invention which he fails to report to the Contracting Officer at or prior to the time he (1) files or causes to be filed a United States or foreign application thereon, or (11) submits the final report required by (c) (ul) of this clause, whichever is later: Provided, That the Contractor shall not forfeit rights in a Subject Invention if (A) contending that the invention is not a Subject Invention, he nevertheless reports the invention and all the facts pertinent to his contention to the Contracting Officer within the time specified in (1) or (ii) above, or (B) he establishes that the failure to report was due entirely to causes beyond his control and without his fault or negligence. The Contractor shall be deemed to hold any such forfeited Subject Invention, and the patent applications and patents pertaining thereto, in trust for the Government pending written assignment of the Invention. The rights accruing to the Government under this paragraph shall be in addition to and shall not supersede any other rights which the Government may have in relation to unreported Subject Inventions. Nothing contained herein shall be construed to require the Contractor to report any invention which is not in fact a Subject Invention.

(1) Examination of records relating to inventions. The Contracting Officer, or his authorized representative shall, until the expiration of three (3) years after final payment under this contract, have the right to examine any books, records, documents, and other supporting data of the Contractor which the Contracting Officer or his authorized representative shall reasonably deem directly pertinent to the discovery or identification of Subject Inventions or to compliance by the Contractor with the requirements of this clause.

(b) Patent rights (license) clause. Where the contracting officer has determined that the proposed contract comes within $ 9.104-4(c) and not within $ 9.107-4(b), he shall include the following clause in the contract. This clause provides for the contractor to retain title to "Subject Inventions" and for the Government to acquire a royalty-free license and the additional right to grant sublicenses. PATENT RIGHTS (LICENSE) (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 composition of matter, or any new and useful improvement thereof, or any variety of plant,

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which is or may be patentable under the Nothing contained in this Patent Rights patent laws of the United States of America clause shall be deemed to grant any rights or any foreign country.

with respect to any invention other than a (2) "Government purpose" means the Subject Invention. right of the Government of the United (C) Invention disclosures and reports. States (including any agency thereof, state With respect to Subject Inventions (made or domestic municipal government) to prac- by the Contractor), except those which are tice and have practiced (make or have made, obviously unpatentable under the patent use or have used, sell or have sold) and laws of the United States, the Contractor Subject Invention throughout the world by shall furnish to the Contracting Officer: or on behalf of the Government of the (1) A written disclosure of each such United States.

Invention within six (6) months after con(3) "Contract” means any contract, agree- ception or first actual reduction to practice, ment, grant, or other arrangement, or sub- whichever occurs first under this contract, contract entered into with or for the benefit sufficiently complete in technical detail to of the Government where a purpose of the convey to one skilled in the art to which the contract is the conduct of experimental, de- Invention pertains a clear understanding of velopmental, or research work.

the nature, purpose, operation, and to the (4) "Subcontract and subcontractor" extent known, the physical, chemical, or mean any subcontract or subcontractor of electrical characteristics of the Invention, the Contractor, any lower-tier subcontract together with a written statement making or subcontractor under this contract.

an election as to whether a United States (5) "To bring to the point of practical patent application claiming the Invention application" means to manufacture in the

will be filed by or on behalf of the Contraccase of a composition or product, to practice tor; provided, where the Contractor elects in the case of a process, or to operate in the to file but is unable to submit a complete case of a machine or system and, in each disclosure, the Contractor shall within said case, under such conditions as to establish six (6) months period submit a disclosure that the Invention is being worked and that which includes all such technical detail then its benefits are reasonably accessible to the known to him and shall, within six (6) public.

months after his election to file (or such (b) Rights granted to the Government.

longer period as may be authorized by the (1) The Contractor agrees to and does here- Contracting Officer under (d) (1) below), by grant to the Government an irrevocable, submit all other technical detall necessary nonexclusive, and royalty-free license to

to complete the disclosure or a copy of the practice and have practiced each Subject patent application; Invention (made

the Contractor) (ii) Interim reports at least every twelve throughout the world for Government pur- (12) months, the initial period of which shall poses, and including the practice of each commence with the date of this contract, such Subject Invention (1) in the manufac- each report listing all such Inventions conture, use, and disposition of any article or ceived or first actually reduced to practice material, (ii) in the use of any method, or more than six (6) months prior to the date (111) in the performance of any service, ac- of the report and not listed on a prior inquired by or for the Government or with

terim report, or certifying that there are no funds derived through the Military Assist- such unreported Inventions; ance Program of the Government or funds

(111) Prior to final settlement of this conotherwise derived through the Government.

tract, a final report listing all such Inven(2) The Contractor further agrees to

tions including all those previously listed in grant, upon the request of the Government,

interim reports, or certifying that there are a license under any Subject Invention (made

no such unreported Inventions (This Final by the Contractor) to:

Report and any Interim Report under (11) (1) Any applicant on a nonexclusive, royal- above shall be submitted on DD Form 882 ty-free basis, unless the Contractor, his

or other format acceptable to the Contractlicensee, or his assignee demonstrates to the

ing Officer.); and Government, at its request, that effective

(iv) Written reports at reasonable intersteps have been taken within three years

vals, prior to and after final settlement, when after a patent issues on such Invention to

requested by the Government as to bring the Invention to the point of practical

(A) The commercial use that is being application or that the Invention has been

made or is intended to be made of such made available for licensing royalty-free or

Invention; on terms that are reasonable in the circumstances, or can show cause why the principal

(B) The steps taken by the Contractor to or exclusive rights should be retained for a

bring the Invention to the point of practical further period of time;

application, or to make the Invention avail

able for licensing. (ii) Any applicant royalty-free or on terms that are reasonable in the circumstances to

(d) Domestic Filing. In connection with the extent that the Invention is required

each Subject Invention referred to in (c) (1) for public use by governmental regulations

above: as may be necessary to fulfill health (1) If the Contractor has elected to file a needs, or for other public purposes stipulated United States patent application claiming in the Schedule of this contract.

such Invention, the Contractor shall, within

by

or

six (6) months after the election (or such longer period, not to exceed one (1) year after such election, as may be authorized by the Contracting Officer), file or cause to be filed such application in due form, shall notify the Contracting Officer of such filing, and shall deliver to the Contracting Officer, within two (2) months after such filing or within two (2) months of the first written disclosure of such invention if a patent application previously has been filed, a duly executed license, in triplicate, fully confirmatory of all rights to which the Government is entitled under this clause; if the Contractor does not file or cause to be filed such application, he shall so notify the Contracting Officer within the six (6) month period or such longer period as may be authorized above.

(ii) The following statement shall be included within the first paragraph of the specification of any patent application filed and any patent issued on an invention which was made under a 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).”

(iii) If the Contractor has elected not to ile or cause to be filed a United States patent application claiming such Invention, or has made the contrary election but has not filed or cause to be filed such application within six (6) months after the election, or such longer period as may be authorized above, the Contractor shall:

(A) Inform the Contracting Officer in writing, as soon as practicable, of the date and identity of any public use, or publication of such Invention made by or known to the Contractor or of any contemplated publication by the Contractor;

(B) Upon written request, convey to the Government the Contractor's entire right, title and interest in such Invention by delivering to the Contracting Officer such duly executed instruments (prepared by the Government) of assignment and application, and such other papers as are deemed necessary to vest in the Government the entire right, title, and interest aforesaid, and the right to apply for and prosecute patent applications covering such Invention throughout the world, subject to the reservation of a nonexclusive and royalty-free license to the Contractor (and to his existing and future associated and affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable to the successor of that part of the Contractor's business to which such Invention pertains;

(iv) The Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of attorney to inspect and make copies of each United States patent application filed by or on behalf of the Contractor covering any such Invention; and

(v) In the event the Contractor, or those other than the Government deriving rights from the Contractor, elects not to continue prosecution of any such United States patent application filed by or on behalf of the Contractor, the Contractor shall so notify the Contracting Officer not less than sixty (60) days before the expiration of the response period and, upon written request, deliver to the Contracting Officer such duly executed instruments (prepared by the Government) as are deemed necessary to vest in the Government the entire right, title, and interest in such Invention and the application, subject to the reservation as specified in paragraph (d) (iii) (B) of this clause;

(e) Foreign filing. 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 (b) of this clause, to file applications on Subject Inventions (made by the Contractor) in each foreign country within:

(i) Nine (9) months from the date & corresponding United States application is filed, or nine (9) months from the date the Contractor discloses à Subject Invention under paragraph (c) (1) above with an election not to file a United States application;

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

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

(f) 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) (iii), all written Invention disclosures required by (c) (1), all confirmatory licenses required by (d) (i), and all information as to subcontracts required by (g).

(2) If at any time before final payment under this contract the contractor fails to deliver an interim report required by (c) (11), a written invention disclosure required by (c) (i), or a confirmatory license required by (d) (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 ninety-five 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, licenses, 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 (f) 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 (f) “this contract” means “this contract from time to time amended." In cost-type contracts, "amount of this contract” means "estimated cost of this contract."

(g) Subcontracts. (1) The Contractor shall, unless otherwise authorized or directed by the Contracting Officer, include a patent rights clause containing all of the provisions of this Patent Rights clause except provision (f) in any subcontract hereunder where & purpose of the subcontract is the conduct of experimental, developmental, or research work. In the event of refusal by a subcontractor 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 Oficer setting forth the subcontractor's reason for such refusal or the reasons the 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

(11) 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 subcontract as consideration therefor, acquire any rights to Subject Inventions for his own use (as distin

guished 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 Officer) be furnished to the contractor for transmission to the Contracting Oficer.

(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 notify 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 he 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 Gov. ernment in regard to Subject Inventions.

(h) Licenses granted by contractor to others subject to Government's rights. The Contractor recognizes that the Government, or a foreign government with funds derived through the Military Assistance Program or otherwise through the U.S. Government, may contract for property or services with respect to which the vendor may be liable to the Contractor for royalties for the use of a i Subject Invention on account of such a contract. The Contractor further recognizes that it is the policy of the Government not to pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds derived through the Mill- 18 tary Assistance Program or otherwise through the U.S. Government, charges for use of ! patents in which the Government holds a 'c royalty-free license. In recognition of this

D policy, the Contractor agrees to participate in and make appropriate arrangements for the exclusion of such charges from such contracts or for the refund of amounts received

0 by the Contractor with respect to any such charges not so excluded.

2 (1) Rights to disclose subject inventions. The Government may duplicate and disclose reports and disclosures of Subject Inventions required to be furnished by the Contractor or a subcontractor pursuant to this Patent Rights clause.

(1) Forfeiture of rights in unreported subject inventions. The Contractor shall forfeit to the Government all rights in any Subject Invention which he fails to report to the Contracting Officer at or prior to the time he

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