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PATENTS, DATA, AND COPYRIGHTS

tracting Officer, after consulting Patent Counsel, determines that the bidder's performance will not infringe the patent in question, and the bidder is to be awarded the contract, a patent indemnity clause shall be included in the contract, specifically identifying the asserted patent. This clause shall be included at no additional cost to the Government. Any bidder who fails to show that he is licensed under such patent or that his performance will not result in infringement of the patent, will be regarded as an unlicensed supplier for evaluation purposes.

(c) When the date for bid opening is imminent and there does not appear to be sufficient time to evaluate a preprocurement license request, the Contracting officer may delay bid opening for a specified period of time to allow evaluation of the request. In the event of such delay, all bidders will be notified and advised of the reason therefor.

(2) Negotiated. In negotiated procurements wherein the delivery of hardware or use of a specific process is contemplated, the following" Patent Royalties" shall be included in the request for proposals in order to notify prospective offerors that royalties payable to a patent owner may be a factor in evaluating their offers; except (1) when the contract to be awarded is not likely to exceed $2,500; or (ii) when the request calls for nonpersonal services.

PATENT ROYALTIES (Negotiated) (NOVEMBER 1970)

I. Purchase of Patented Items When Government is a Licensee. Award of a contract shall not be refused to an offeror merely because he is not the owner or a licensee under the patent involved in the procurement. If, at any time a solicitation is issued, the Government is obligated to pay royalties applicable to the proposed procurement because of a pre-existing license agreement between the Government and a patent owner, an amount equal to the royalty which the Government will be required to pay under the license agreement will be added as an evaluation factor to each offer unless the offeror is licensed under the patent. Before any such royalty payments are considered for evaluation purposes, each offeror will be given an opportunity to show that he is licensed under the patent, or that performance of the contract in

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accordance with his offer will not result in infringement of the patent.

II. Preprocurement License Agreements.

(a) Upon timely written notice by a patent owner, herein after interpreted to mean any party legally entitled to license the patent, to the Contracting Officer that this procurement will infringe his privately owned U.S. patent, and upon a determination by NASA Patent Counsel that this procurement will infringe the patent, NASA may enter into a patent license agreement with the patent owner prior to award of a contract pursuant to this request provided the following conditions are satisfied:

(i) The pertinent claim or claims of the patent have not been held invalid by a final determination of a court of competent jurisdiction or determined to be unenforceable against the Government by any department or agency in an administrative claim procedure, or form the basis of an resolved administrative claim against any Government department or agency;

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(ii) The patent owner demonstrates that his patent is respected commercially as evidenced by one or more royalty-bearing commercial licenses under the patent, or the patent owner shows that his patent has been held valid by a final determination of a court of competent jurisdiction;

(iii) The patent owner agrees to license NASA for the proposed procurement at a rate which is reasonable under the circumstances. Generally, such rate should not exceed the lowest rate at which the patent owner has licensed a private concern;

(iv) The Contracting Officer, in consultation with NASA Patent Counsel, determines that entering into the license agreement will not unduly delay the procurement.

(b) Under the agreement, royalties will be payable to the patent owner if the patented item is procured from an unlicensed source and only upon acceptance by NASA of the patented item. These royalties will be considered by NASA as a factor in determining the proposal which is most advantageous to the Government. Before any royalty payments are considered for evaluation purposes, each offeror will be given an opportunity to show that he is licensed under the patent determined by NASA Patent Counsel to be infringed by the procurement or that performance of the contract in accordance

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NASA PROCUREMENT REGULATION

PATENTS, DATA, AND COPYRIGHTS

with his offer will not result in infringement of the asserted patent. In the latter instance, each offeror will have 10 days from the date of notification in which to submit evidence to show that his contract performance will not infringe the patent, specifically pointing out how his article or process is distinct from the claimed subject matter. In the event that the Contracting Officer, after consulting Patent Counsel determines that the offeror's performance will not infringe the patent in question, and the offeror is to be awarded the contract, a patent indemnity clause shall be included in the contract, specifically identifying the asserted patent. This clause shall be included at no additional cost to the Government. Any offeror who fails to show that he is licensed under such patent or that his performance will not result in infringement of the patent, will be regarded as an unlicensed supplier for evaluation purposes.

(c) If NASA does not enter into a preprocurement license agreement with a patent owner prior to the procurement of patented items, competing bids, proposals or quotations will be evaluated without regard to royaltics or compensation which may timately be payable to the patent owner. In such event, the patent owner may bring a claim for patent infringement in accordance with 9.105.

9.102 Authorization and Consent.

(a) Under 28 U.S.C. 1498, any suit for infringement of a patent or copyright based on the manufacture or use of a patented invention or copying of copyrighted material for the Government by a contractor or by a subcontractor (including lower tier subcontractors) 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 such infringement. Accordingly, in order that work by contractor or subcontractor under a Government contract may not be enjoined by reason of patent infringement, authorization and consent will be given as herein provided. The Authorization and Consent" clause set forth below shall be included in all contracts for supplies (including construction work), and construction contracts, as follows:

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INVENTIONS, INNOVATIONS, AND PATENTS

AUTHORIZATION AND CONSENT (JANUARY 1964)

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 (i) embodied in the structure or composition of any article the delivery of which is accepted by the Government under this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the Contractor or the using subcontractor with (a) specifications or written provisions now or hereafter forming a part of this contract, or (b) specific written instructions given by the Contracting Officer directing the manner of performance.

(b) Since greater latitude in the use of patented inventions is to be allowed in a contract for research, experimental, design, engineering or developmental work than in a contract for supplies, the " Authorization and Consent" clause set forth below shall be used in contracts, including Facilities contracts, involving such work.

AUTHORIZATION AND CONSENT (SEPTEMBER 1962)

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 any lower tier subcontract).

9.103 Patent Indemnification Contractor.

of Government by

(a) A patent indemnity clause is not appropriate in contracts for experimental, developmental, or research work. When it is known that an item being procured is protected, or probably will be protected, by a United States patent or patents, the inclusion of a " Patent Indemnity" clause may be appropriate. In such case, where the patent owner informs a prospective bidder or otherwise contends that the item being procured would infringe his patent or patents, the patent indemnity clause set forth below, limited to the specifically designated patents in question, may be included in the

NASA PROCUREMENT REGULATION

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PATENTS, DATA, AND COPYRIGHTS

contract (other than construction contracts made with Standard Form 23A) if its use is approved by Patent Counsel.

PATENT INDEMNITY (NOVEMBER 1964)

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(a) The Contractor shall indemnify the Government and its officers, agents, and employees against liability, including costs, for infringement of the United States letters patent designated in paragraph (b) below and the United States letters patents which may mature on the patent applications, if any, designated in paragraph (b) below, arising out of the manufacture or delivery of supplies or out of construction, alteration, modification, or repair of real property (hereinafter 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 afforded by applicable laws, rules, or regulations to participate in the defense thereof; and further, such indemnity shall not apply if: (i) the infringement results 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; or (ii) the infringement results from the addition to, or change in, the supplies furnished or construction work performed, which addition or change was made subsequent to delivery or performance by the Contractor; or (iii) the claimed infringement is settled without the consent of the Contractor, unless required by final decree of a court of competent jurisdiction.

(b) This Patent Indemnity" clause is applicable to such United States patents and patent applications as are next designated (here designate the patents or patent applications).

(b) In construction contracts made with Standard Form 23A, retain the Patent Indemnity clause contained therein. Assistance. The Government

9.104 Notice and

should be notified by the contractor of all claims

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CFR TITLE 41 CHAPTER 18

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