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LETTER OF TRANSMITTAL

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SCIENCE AND TECHNOLOGY,

Washington, D.C., August 28, 1976.
Hon. OLIN E. TEAGUE,
Chairman, Committee on Science and Technology, House of Representatives,

Washington, D.C. DEAR MR. CHAIRMAN: I am transmitting herewith a set of selected readings intended to provide our Subcommittee members with an understanding of present government policies concerning patent rights to inventions developed when the primary source for research and development funding is the Federal Government. This Committee print is entitled, “Background Materials on Government Patent Policies—The Ownership of Inventions Resulting From FederallyFunded Research and Development.

Over the years, the Federal Government has developed patent policies on an Agency-by-Agency basis. During several previous hearings held by this Subcommittee, the impact of these policies for patenting and licensing federally-funded R. & D. results have been suggested as a timely subject for review.

I believe that the materials in this report will provide a wellrounded background for our forthcoming hearings. They include the relevant government documents as well as other readings. I commend them to you and the members of the Committee on Science and Technology. Sincerely yours,

RAY THORNTON, Chairman,
Subcommittee on Domestic and International

Scientific Planning and Analysis.

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CONTENTS

VOLUME I

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INTRODUCTION

During the current legislative session the Science and Technology's Subcommittee on Domestic and International Scientific Planning and Analysis has undertaken to fulfill its responsibility of Special Oversight for all non-military funded Research and Development. In the course of this effort a broad range of subjects have been analyzed in Committee Prints, Hearings, and Reports. The Subcommittee has addressed internal R. & D. coordination and issues of international significance. It is informative that during hearings ranging from International Cooperation in Energy Research and Development to hearings on Federal Research and Development Expenditures and the National Economy a common theme has emerged-the significance of the Government's patent policies in the development of new technologies invented as a result of federally funded research and development.

This is not a new interest for the Committee on Science and Technology. In 1965, the Hon. Emilio Q. Daddario, then a Representative in Congress from the First Congressional District of the State of Connecticut and a Subcommittee Chairman of this Committee reviewed the government patent policies applicable to our national space program. Following the extensive hearings on this subject, Mr. Daddario testified before the Committee on the Judiciary of the United States Senate. He outlined the efforts of the special subcommittee which he chaired and summarized the concerns which are still germane today:

... it is very clear ... that where federally financed research and development is concerned both Government and the contractor have logical and justifiable equities in the ownership of such patents as may arise in the course of the contract.

It is idle to pretend that the Government, at least in its role of representing the public, has no reason for nor interest in the title to such patents. Without the use of the taxpayers' funds the patent might not evolve in the first place-and the fact that the United States always has a free and irrevocable license to use the patent item or to have it produced by any party it chooses for governmental purposes is not always sufficient to protect the public interest. By the same token, it is equally unrealistic to assert that the contractor, who may have contributed as much or more than the Government in terms of know how and the expenditure of its own money toward the development of the patent, has no claim to ownership nor the exclusive right to utilize the patent for commercial purposes. To take the latter position may be unfair to the large contractor and, in addition, downright disastrous to the small contractor, to whom a patent portfolio is an important asset, both because of the financial support it offers and the protection it gives. This is because, in most cases, doing research for the Federal Government does not of itself assure the contractor of anything like a substantial profit. Our studies showed that in research contracts the profits tend to be 142 up to 272 percent. The profit tends to lie with the procurement and/or commercial marketing.

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