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set forth in §9-9.107-5(e) shall be substituted for paragraph (c)(1) of the Patent Rights (long form) clause. However, in programs of the type discussed in 59-9.107-4(a)(7), or in certain contracts or subcontracts involving access to Restricted Data, royalty free licenses shall not necessarily be granted with respect to inventions or discoveries resulting from the contractor's or subcontractor's access to Restricted Data.

(e) License rights to contractor (irrevocable).

Paragraph (c)(1) of the Patent Rights (long form) clause specifies that the license rights retained by the contractor in such inventions are revocable. In special circumstances the license may be irrevocable, in which case the paragraph (c)(1) set forth in $9-9.107-5(f) shall be substituted for paragraphs (c)(1), (c)(2) and (c)(3) of the Patent Rights (long form) clause. Because granting irrevocable licenses may interfere with ERDA's licensing program which is intended to promote the commercial utilization of inventions resulting from its research, development, or demonstration programs, contractors desiring irrevocable licenses shall submit a written request with a justification to the contracting officer. The contracting officer shall refer such request to the patent counsel assisting the procuring activity for forwarding the request, along with appropriate comments and recommendations to the Assistant General Counsel for Patents to serve as a basis for approval by the head of the agency or designee.

(f) Contractor sublicensing.

The rights of a contractor having a license as set forth in paragraphs (d) and (e) above to grant a revocable license to one or more sublicenses may be considered appropriate by the head of the agency or designee in certain circumstances, such as, for example, where the contractor is cost sharing; where the contractor's control or involvement in the technology which is the subject of the contract is substantial; where the reservation of licensing rights in the contractor would best promote commercialization or utilization of the technology; or where substantial segments of the user population already have licenses or would othewise be licensed. In such situations, the paragraph in §9-9.107-5(g)(1) may be substituted for paragraph (c)(1) of $9-9.107-5(a), or the paragraphs in $9-9.107-5(g)(2) may be substituted for paragraphs (c)(1), (c)(2), and (c)(3) of $9-9.107-5(a), as appropriate.

(g) Facilities license.

Whenever a contract has as a purpose the design, construction, or operation of a Government-owned research, development, demonstration or production facility, 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 a contract. Accordingly, the paragraph 9-9.107-5(h) shall be used in all such contracts in addition to the provisions of the "long form" Patent Rights clause.

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(1) The policy expressed in §9-9.107-3 is applicable to prime contracts and to subcontracts regardless of tier. The Patent Rights clause of $9-9.107-5(a) or $9-9.107-6 shall be included in all subcontracts having as a purpose the conduct of research, development, or demonstration work. However, the Patent Rights clause contained in the prime contract is not to be deemed automatically appropriate for subcontracts. For example, it would not be appropriate to the extent that waivers have been granted the prime contractor at the time of contracting. A separate waiver, if any, must be obtained by subcontractors. Further, the withholding of payment provision of the prime contract will not normally be included in a subcontract except upon request of the contracting officer and except for subcontracts awarded by contractors who operate Government-owned facilities and for special contracting situations in which cases the withholding of payment provision may be flowed down to the first tier subcontractor only. Whenever either the prime contractor or a proposed subcontractor considers the inclusion of the Patent Rights clause of §9-9. 107-5(a) or $9-9.107-6 to be inappropriate, or the subcontractor refuses to accept such a clause in its subcontract, the matter shall be referred, prior to award of the subcontract, to the contracting officer for a resolution in accordance with $9-9.107-4(k). Upon such referral, the same considerations and procedures followed in selecting the appropriate Patent Rights clause included in the prime contract shall be used in selecting the subcontractor clause.

(2) Contractors shall not use their ability to award subcontracts as economic leverage to acquire rights for themselves in the inventions resulting from subcontracts, and a waiver granted to a prime contractor is not normally applicable to inventions of subcontractors. However, in appropriate circumstances the prime contractor's waiver may be made applicable to the inventions of any or all subcontractors, such as, for example, where there are pre-existing special research and development arrangements between the prime contractor and subcontractor, or where the prime contractor and subcontractor are partners in a cooperative effort. In addition, in such circumstances the prime contractor may be permitted to acquire non

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exclusive

licenses in the subcontractor's inventions when a waiver

for subcontractor inventions is not applicable.

(i) Record of decisions.

Patent counsel assisting the procuring activity shall record the basis for the following actions: (1) waivers at the time of contracting; (2) waivers granted on identified inventions; (3) determinations that no license need be obtained for States or domestic municipal governments; (4) determinations that the right to sublicense foreign governments should be obtained; and (5) the grant of irrevocable license.

(j) Publication of invention disclosures.

The Patent Rights clauses specify that the Government may duplicate and disclose invention disclosures reported under the contract, although it is not ERDA's practice to publish invention disclosures. Because public disclosure before the filing of a U.S. patent application may create a bar to filing certain foreign applications, the clauses also require that patent approval for release or publication of information relating to the contract work be secured from patent counsel prior to any such release or publication. When the contractor has requested or obtained a waiver, or has advised of its interest in obtaining certain foreign filing rights, provision is made for ERDA to use its best efforts to withhold release or publication of such information for a specified time period in accordance with paragraph(d)(1) of the clause in $9-9.107-5(a) to permit the timely filing of a U.S. patent application by the contractor.

(k) Negotiations and deviations.

Contracting officers shall contact the field patent counsel assisting their procuring activity or the Assistant General Counsel for Patents, for assistance to the contracting officer in selecting negotiating, or approving appropriate patent, copyright, and data clauses. It should be noted that such clauses may be involved in and affected by the negotiations for a patent waiver. In the case of field procuring activities, Patent counsel will coordinate such review and assistance with the Chief Counsel in accordance with established local procedures. Any intended departures or deviations from the policy, procedures, or the clauses specified in this Part 9-9 which shall constitute a deviation from these regulations or from the Federal Procurement Regulations shall be referred by the contracting officer to the Assistant General Counsel for Patents for review and concurrence prior to obtaining approval in accordance with §9-1.009-2. A deviation amounting to a class deviation to the FPR or the ERDA-PR shall be forwarded through the Assistant General Counsel for Patents to the senior procurement official, Headquarters.

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When the contracting officer has determined that a contract falls within $9-9.107-4(a)(1), except where the clause of $9-9.107-6 is applicable, the following clause shall be included in the contract.

(a) Definitions.

PATENT RIGHTS

(1) "Subject invention" means any invention or discovery of the contractor conceived or first actually reduced to practice in the course of or under this contract, and includes composition of matter, or any new and useful improvement thereof, or any variety of plants, whether patented or unpatented under the Patent Laws of the United States of America or any foreign country.

(2) "Contract" means any contract, grant, agreement, understanding, or other arrangement, which includes research, development, or demonstration work, and includes any assignment or substitution of parties.

(3) "States and domestic municipal governments" means the States of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, the Trust Territory of the Pacific Islands, and any political subdivision and agencies thereof.

(4) "Government agency" includes an executive department, independent commission, board, office, agency, administration, authority, government corporation, or other Government establishment of the Executive Branch of the Government of the United States of America.

(5) "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 and under such conditions as to establish that the invention is being worked and that its benefits are reasonably accessible to the public.

(6) "Patent counsel" means the ERDA patent counsel assisting the procuring activity.

(b) Allocation of principal rights.

(1) Assignment to the Government.

The contractor agrees to assign to the Government the entire right, title, and interest throughout the world in and to each subject invention, except to the extent that rights are retained by the contractor under paragraphs (b)(2) and (c) of this clause.

(2) Greater rights determinations.

The contractor or the employee-inventor with authorization of the contractor may request greater rights than the nonexclusive license and the foreign patent rights provided in paragraph (c) of this clause on identified inventions in accordance with 41 CFR 9-9.109-6. Such requests must be submitted to patent counsel (with notification by patent counsel to the contracting officer) at the time of the first disclosure pursuant to paragraph (e)(2) of this clause, or not later than 9 months after conception or first actual reduction to practice whichever occurs first, or such longer periods as may be authorized by patent counsel (with notification by patent counsel to the contracting officer) for good cause shown in writing by the contractor.

(c) Minimum rights to the contractor.

(1) Contractor license.

The contractor reserves a revocable, nonexclusive, paidup license in each patent application filed in any country on a subject invention and any resulting patent in which the Government acquires title. The license shall extend to the contractor's domestic subsidiaries and affiliates, if any, within the corporate structure of which the contractor is a part and shall include the right to grant sublicenses of the same scope to the extent the contractor was legally obligated to do so at the time the contract was awarded. The license shall be transferable only with approval of ERDA except when transferred to the successor of that part of the contractor's business to which the invention pertains.

(2) Revocation limitations.

The contractor's nonexclusive license retained pursuant to paragraph (c)(1) of this clause and sublicenses granted thereunder may be revoked or modified by ERDA, either in whole or in part, only to the extent necessary to achieve expeditious practical application of the subject invention

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