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clauses with respect to inventions made, conceived, or utilized in cne course of or under any contracts, grants, agreements, understandings or other arrangements entered into with or for the benefit of ERDA. One of ERDA'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, ERDA'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, ERDA 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 ERDA with an array of incentives to secure the adoption of the new technology developed for ERDA. An important incentive in commercializing technology is that provided by the patent system. As set forth in these regulations, patent incentives, including ERDA'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 ERDA's activities widely available to the public. In addition to considering the waiver of patent rights at the time of contracting, ERDA 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 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 ERDA to protect the public interest.
Another major ERDA 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 ERDA'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 ERDA programs.
$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.
(b) 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 night 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.
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.
AUTHORIZATION AND CONSENT
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 hereunder (including any lower-tier subcontract), of any invention described in and covered 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 contract 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 (i) specifications or written provisions now or hereafter forming a part of this contract, or (ii) specific written instructions given by the contracting officer directing 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 provisions of the indemnity clauses, if any, included in this contract or any subcontract hereunder (including all lower-tier subcontracts), and the Government assumes liability for all other infringement to the extent of the authorization and consent hereinabove granted.
$9-9.102-2 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 that in a contract for supplies. Unless prohibited by $9-9.102(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 $9-9.102-1 shall be used. If the following clause is included in a contract, the clause in 89-9.102-1 shall not be included.
AUTHORIZATION AND CONSENT
The Government hereby gives its authorization and consent for all use and manufacture 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).
$9-9.103 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
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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 $9-9.102-2 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 thereunder, the Patent Indemnity clause of 89-9.103-1 or 9-9.103–3(b) shall be used as appropriate.
(b) When the contract is for supplies which clearly are not, or have not been, sold or offered for sale to the public in the commercial open market;
(c) When both performance and delivery are to be outside the United States, its possessions, or Puerto Rico, unless the contract indicates that the supplies are ultimately to be shipped into the United States, its possessions or Puerto Rico, in which case the instructions of $9-9.103-1 or $9-9.103-3 are applicable; or
(d) When the contract is for an amount of $10,000 or less (as a matter of administrative convenience, however, the clause need not be deleted where it is a part of a standard form being used for such contracts, since it is self-deleting).
$9-9.103-1 Patent indemnification in formally advertised
contracts--commercial status predetermined.
Except as prohibited by 89-9.103, the following clause is appropriate in formally advertised construction contracts and shall be included in formally advertised contracts for supplies when it has been determined in advance of issuing the invitation for bids that the supplies (or such supplies apart from relatively minor modifications to be made thereto) normally are or have been sold or offered for sale by any supplier to the public in the commercial open market.
If the amount of this contract is in excess of $10,000 the contractor shall indemnify the Government and its officers, agents, and employees against liability, including costs, for infringement of any United States letters patent (except U.S. letters patent issued upon an appplication which is now or may hereafter be kept secret or otherwise withheld from issue by
order of the Government) arising out of the manufacture or delivery of supplies or out of construction, alteration, modification, or repair of real property (hereinabove referred to as "construction work") under this contract, or out of the use or disposal by or for the account of the Government of such supplies or construction work. The foregoing indemnity shall not apply unless the contractor shall have been informed as soon as practicable by the Government of the suit or action alleging such infringement, and shall have been given such opportunity as is afforded by applicable laws, rules, or regulations to participate in the defense thereof; and further, such indemnity shall not apply to: (a) an infringement resulting from compliance with specific written instructions of the contracting officer directing a change in the supplies to be delivered or in the materials or equipment to be used, or directing a manner of performance of the contract not normally used by the contractor; (b) an infringement resulting from addition to or change in, such supplies or components furnished or construction work performed which addition or change was made subsequent to delivery or performance by the contractor; or (c) a claimed infringement which is settled without the consent of the contractor, unless required by final decree of a court of competent jurisdiction.
89-9.103-3 Patent indemnification in negotiated contracts.
The fact that a contract is negotiated does not preclude inclusion of a Patent Indemnity clause in such a contract, and such clause may be included in negotiated construction contracts and in contracts for supplies when such supplies normally are or have been sold or offered for sale to the public in the commercial open market, or are such supplies with relatively minor modifications made thereto, or in contracts for supplying standard parts or components.
(a) Subject to the foregoing and to the prohibitions in 899.103, the clause in 89-9.103-1 is approved for use in negotiated contracts for construction work or supplies.
(b) Except as prohibited by $9-9.103, the following clause is appropriate in research, development, or demonstration contracts when it has been determined by ERDA in any particular contracting situation that the contract will require standard supplies sold or offered for sale to the public on the commercial open market or use the contractor's practices or methods which normally are or have been used in providing goods and services on the commercial open market.