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(ii) The steps taken to bring the invention to the point of practical application or to make invention available for licensing.

(8) The Government's retention of at least a nonexclusive, irrevocable, paid-up license to make, use, and sale the invention throughout the world by or on behalf of the Government (including any Government agency) and States and domestic municipal governments, unless the Secretary or his designee determines that it would not be in the public interest to acquire the license for the States and domestic municipal governments.

(9) The right of the Secretary or his designee to require the granting of nonexclusive, exclusive, or partially exclusive license to a responsible applicant or applicants, upon terms reasonable under the circumstances:

(i) To the extent that the invention is required for public use by Government regulations;

(ii) As may be necessary to fulfill health, safety, or energy needs; or

(iii) For such other purposes as may be stipulated in the applicable agreement.

(10) The right of the Secretary or his designee to terminate such waiver in whole or in part unless the recipient of such waiver demonstrates to the satisfaction of the Secretary or his designee that effective steps have been taken, or within a reasonable time thereafter are expected to be taken, necessary to accomplish substantial utilization of the invention.

(11) The right of the Secretary, or his designee, commencing four years after a waiver is effective as to an invention, to require the granting of a nonexclusive or partially exclusive license to a responsible applicant or applicants, upon terms reasonable under the circumstances, and in appropriate circumstances to terminate the waiver in whole or in part, following a hearing upon notice thereof to the public, upon a petition by an interested person justifying such hearing;

(i) If the Secretary or his designee determines upon review of such material as he deems relevant, and after the recipient of the waiver, or other interested person, has had the opportunity to provide such relevant and

material information as the Secretary or his designee may require, that such waiver has tended substantially to lessen competition or to result in undue market concentration in any section of the United States in any line of commerce to which the technology relates; or

(ii) Unless the recipient of the waiver demonstrates to the satisfaction of the Secretary or his designee at such hearing the he has taken effective steps, or within a reasonable time thereafter is expected to take such steps necessary to accomplish substantial utilization of the invention.

(j) Terminations. (1) Any waiver may be terminated at the discretion of the Secretary, or his designee, in whole or in part, if the request for waiver is found to contain false material statements or nondisclosure of material facts, and such were specifically relied upon in reaching the waiver determination.

(2) Any waiver, as applied to particular invention, may be terminated at the discretion of the Secretary, or his designee, in whole or in part, if the requirements set forth in paragraph (i) of this section (Terms and conditions of waivers) have not been fulfilled, and such failure is determined by the Secretary or his designee to be material and detrimental to the interests of the United States and the general public.

(3) Prior to terminating a waiver under paragraph (j)(1) or (j)(2) of this section, the recipient of the waiver will be given written notice of the intention to terminate the waiver, the extent of such proposed termination and the reason therefor, and a period of 30 days, or such longer period as the Secretary or his designee shall determine for good cause shown in writing, to show cause why the waiver should not be so terminated.

(4) All terminations of waivers shall be subject to the rights granted in paragraph (c)(1) of the clause of § 14R-9.107-5(a), and when justified by equitable considerations termination shall normally be partial in nature, requiring the waiver recipient to grant nonexclusive or partially exclusive licenses to responsible applicants upon terms reasonable under the circumstances.

(k) Effective date. Waivers shall be effective on the following dates:

(1) For advance waivers of identified invention, i.e., inventions conceived prior to the effective date of the contract, on the effective date of contract, even though the advance waiver may have been requested after this date;

(2) For identified inventions under advance waivers, i.e., invention conceived or first actually reduced to practice after the effective date of the contract, on the date the invention is reported with the election to retain rights as to that invention; and

(3) For waivers of identified inventions (other than under an advance waiver), on the date of the letter notifying the requestor that the waiver has been granted.

to its completion or final settlement the amount of any royalties or other payments paid or to be paid by it directly to others in connection with the performance of this contract together with the names and addresses of licensors to whom such payments are made and either the patent numbers involved or such other information as will permit identification of the patents or other basis on which the royalties are to be paid. The approval of OWRT of any individual payments or royalties shall not stop the Government at any time from contesting the enforceability, validity or scope of, or title to, any patent under which a royalty or payments are made.

Subpart 14R-9.2-Technical Data and

Copyrights

8 14R-9.110 Reporting of royalties.

In order that OWRT may be informed regarding royalty payments to be made by a contractor in connection with any procurement, construction, or operation where the amount of the royalty payments is reflected in the contract price, or is to be reimbursed by the Government, the negotiator shall (a) obtain from the offeror information concerning any royalty payments expected to be made in connection with the proposed procurement, construction, or operation, together with the names of the licensors and either the patent numbers involved or such other information as will permit identification of the patents and patent applications as well as the basis on which the royalties are to be paid, or (b) obtain from the offeror a certificate that the contract price includes no amount representing the payment of any royalty by the offeror directly to others in connection with the performance of the contract, or (c) insert in the contract the clause set forth below:

§ 14R-9.200 Scope of subpart.

This subpart sets forth OWRT'S policy, procedures, and contract clauses with respect to the acquisition and use of technical data and copyrights in contracts or subcontracts entered into, with or for the benefit of the Government. The policy, as implemented by the procedures and contract clauses, is promulgated to comply with section 408, of the Water Research and Development Act of 1978, Public Law 95-467, which in a concluding proviso states:

That, subject to the patent policy of section 408, all research or development contracted for, sponsored, cosponsored, or authorized under authority of this Act, shall be provided in such manner that all information, data, and know-how, regardless of their nature or mediums, resulting from such research and development will (with such exceptions and limitations, if any, as the Secretary may find to be necessary in the interest of national defense) be usefully available for practice by the general public consonant with the purpose of this Act. Thus, the statutorily mandated availability for practical utility of the contract's resulting informational products is carried out by this Subpart with provisions requiring acquisition by the Government of unlimited rights in all technical data produced in the performance of the contract, which are supplemented with further provisions ensuring compliance with the mandate by requiring where essential for use in connection with the practice of the informational products,

REPORTING OF ROYALTIES If this contract is in an amount which exceed $10,000 and if any royalty payments are directly involved in the contract or are reflected in the contract price to the Government, the Contractor agrees to report in writing to the Contracting Officer during the performance of this contract and prior

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the availability of contractor's proprietary data in the form of results obtained by their use through marketing in sufficient quantity and at reasonable price, or by licensing that proprietary data on suitable terms to the Government and third parties applying for such licensing.

(3) Are not already available to the Government without obligation concerning their confidentiality.

(c) “Contract data" means technical data first produced in the performance of the contract, technical data which are specified to be delivered in the contract, technical data that may be called for under the Additional Technical Data Requirements clause of the contract, if any, or technical data actually delivered in connection with the contract.

(d) “Unlimited rights" means rights to use, duplicate, or disclose technical data, in whole or in part, in any manner and for any purpose whatsoever, and to permit others to do so.

8 14R-9.202 Acquisition and use of techni

cal data.

8 14R-9.201 Definitions.

For the purpose of this subpart, the following terms have the meanings set forth below:

(a) “Technical data” means recorded information, regardless of form or characteristic, of a scientific or techni. cal nature. It may, for example, document research, experimental, developmental, demonstration, or engineering work, or be usable or used to define a design or process or to procure, produce, support, maintain, or operate materiel. The data may be graphic or pictorial delineations in media such as drawings or photographs, text in specifications or related performance or design type documents, or computer software (including computer programs, computer software data bases, and computer software documentation). Examples of technical data include test, sampling, research and engineering data, engineering drawings and associated lists, specifications, standards, process sheets, manuals, all technical reports, catalog item identification, and related information. Technical data as used in this Subpart does not include financial reports, cost analyses, and other information incidental to contract administration.

(b) “Proprietary data” means technical data which embody trade secrets developed at private expense, such as design procedures or techniques, chemical composition of materials, manufacturing methods, process, or treatments, including minor modifications thereof, or computer formatting, provided that such data are protectable and accordingly:

(1) Are not generally known or available from other sources without obligation concerning their confidentiality,

(2) Have not been made available by the owner to others without obligation concerning their confidentiality, and

8 14R-9.202-1 General.

(a) The provisions herein pertain to contracts other than those for the operation of a Government-owned facility and special contracts covered by § 14R-9.202.4. Under OWRT's broad charter to perform research, development, and demonstration work in water fields, and in operating Government-owned facilities, OWRT has extensive needs for technical data. The satisfaction of these needs and the achievement of OWRT's objectives through a sound data policy are found in the balancing of the needs and equi. ties of the Government, industry, and the general public.

(b) It is important to keep a clear distinction between contract requirements for the furnishing of technical data on the one hand, and rights in the technical data furnished on the other. The legal rights which the Government acquires in technical data are set forth in a "Rights in Technical Data" clause of $ 14R-9.202-3(e)(2). However, this clause does not obtain for the Government he delivery of any data whatsoever. Rather, known requirements for specific technical data to be furnished by the contractor shall be set forth as part of the contract (e.g., in the Statement of Work). An “Additional Technical Data Requirements" clause is included in this subpart to enable the Contracting Officer to require the contractor to fur

nish additional technical data, the requirement for which was not known at the time of contracting. There is, however, a built-in limitation of the kind of technical data which a contractor may be required to deliver under either the contract Statement of Work or the “Additional Technical Data Requirements" clause. This limitation is found in the withholding procedure of paragraph (e) of the “Rights in Technical Data" (long form) clause which provides that the contractor need not furnish “proprietary data.” It is specifically intended that the contractor may withhold “proprietary data” even though a requirement for technical data specified in the Statement of Work or called for pursuant to the “Additional Technical Data Requirements" clause would seemingly require the furnishing of proprietary data. This withholding of proprietary data is the primary means by which the contractor may protect its proprietary position. However, in no event is withholding of data first produced in the performance of the contract to be sanctioned since not having been developed at private expense it cannot be proprietary for the purposes of withholding.

(c) There are, however, two situations where the Government, or its representatives, may need to have limited access to a contractor's proprietary data. First, paragraph (f) of the “Rights in Technical Data" (long form) clause gives the Contracting Officer's representatives the limited right to inspect at the contractor's facility the contractor's proprietary data which was withheld from delivery under paragraph (e) for the purpose of verifying that such data was properly withheld or to evaluate work performance. In carrying out the inspection, normally the Contracting Officer's representative is a Government employee, although he may be an employee of a Government contractor acting under an agreement to treat in confidence the proprietary data to be inspected. However, where the contractor whose data are to be inspected demonstrates that there would be a possible conflict of interest if the inspection were made by such a contractor employee, the Contracting Offi

cer's representative may be limited to a Government employee. Paragraph (f) has a built-in exclusion from these inspection rights for “specific items of proprietary data" when they are so specified in the contract schedule. Such exclusions limit even OWRT'S minimum rights of evaluating contract work performance and verifying that technical data withheld by the contractor is proprietary in fact. Such exclusions should be sparingly used, and only in situations where program personnel stipulate to the fact that OWRT has no need for access to the specified items to be excluded from paragraph (f), i.e., that the nondisclosure and nonaccessibility will not adversely affect the OWRT program involved. It should also be noted that paragraph (f) permits exclusion of “specific items” of proprietary data and, accordingly, should not be used to exclude classes of technical data or all technical data pertaining to specific items or process or classes of items or processes. The second situation, where the Government may have limited access to a contractor's proprietary data, is provided in paragraph (h) of the Rights in Technical Data (long form) clause. When used, paragraph (h) provides the Government the right to require the contractor to furnish with limited rights the proprietary data previously withheld under paragraph (e). In this situation, the limited rights in proprietary data and the Government's obligation for limited use and disclosure of such data as set forth in the Rights in Technical Data (long form) clause provides the means by which the contractor protects its proprietary position. Paragraph (h) will be used only where it is determined by OWRT that for programmatic reasons there is a need for the delivery of proprietary data to the Government. Where proprietary data is to be delivered under paragraph (h) and subparagraph (a) or (b) of the Limited Rights Legend is to be applied to the data, the contractor may, if he can show the possiblity of a conflict of interest regarding disclosure of such data to other contractors, limit or modify subparagraphs (a) or (b) as set forth in § 14R-9.202-3(e)(3), to exclude or include certain contractors.

(d) The contractor licensing provisions of paragraph (g) of the Rights in Technical Data (long form) clause enable OWRT to require limited licenses in proprietary contract data to be granted to the Government and responsible parties in certain circumstances. Such a license may parallel or supplement a license obtained in Background Patents under the provisions of paragraph (k) of the Patent Rights clause of Subpart 14R-9.1. Paragraph (g) is included in contracts for research, development, or demonstration where the limited license afforded therein may be necessary to ensure widespread commercial use or practical utilization of a subject of the contract including any Subject Invention. As explained in $ 14R-9.202-3(e)(1), paragraph (g) provides that upon request by the Government or responsible third parties the contractor will grant to the Government and such responsible third parties a license in proprietary data only where such data in the form of results obtained by its use, i.e., essential equipment, articles, products, and the like which were the subject of the contract or are necessary for the practice of a Subject Invention, are not otherwise available or cannot be made available in a reasonable time as set forth in paragraph (g).

(e) It is the responsibility of prime contractors and higher-tier subcontractors, in meeting their obligations with respect to contract data, to obtain from their subcontractors the rights in, access to, and delivery of such data on behalf of the Government. Accordingly, subject to the policy set forth in these regulations, and subject to the approval of the Contracting Officer where required, selection of appropriate technical data provisions for subcontracts is the responsibility of the prime contractor or higher-tier subcontractor. In many, but not all, instances, inclusion in a subcontract of the Rights in Technical Data (long form) clause of $ 14R9.202-3(e)(2) will suffice to obtain for the benefit of the Government the rights in and, if appropriate, access to technical data. Access by OWRT to technical data, i.e., the inspection rights afforded in paragraph (f) of the Rights in Technical Data (long form)

clause, $ 14R-9.202-3(e)(2) normally should be obtained only in first tier subcontracts having as a purpose the conduct of research, development, or demonstration work or the furnishing of supplies for which there are substantial technical data requirements as reflected in the prime contract. If a subcontractor refuses to accept techni. cal data provisions affording rights in and access to technical data on behalf of the Government, the contractor shall so inform the Contracting Officer in writing and not proceed with the subcontract without written authorization of the Contracting Officer. In prime contracts (or higher-tier subcontracts) which contain the Additional Technical Data Requirements clause, it is the further responsibility of the contractor (or higher-tier subcontractor) to determine whether inclusion of such clause in a subcontract is required to satisfy technical data requirements of the prime contract (or higher-tier subcontract). As is the case for OWRT in its determination of technical data requirements, the Additional Technical Data Requirements clause should not be used at any subcontracting tier where the technical data requirements are fully known, and normally the clause will be used only in subcontracts having as a purpose the conduct of research, development, or demonstration. Prime contractors and higher-tier subcontractor shall not use their power to award subcontracts as economic leverage to inequitably acquire rights in the subcontractor's proprietary data for their pri. vate use, and they shall not acquire rights on behalf of the Government to proprietary data for standard commercial items unless required by the prime contract.

(f) Related to the acquisition and use of technical data are the contractor's rights in contract data as well as technical data furnished to the contractor by OWRT or its contractors. These rights are set forth in paragraph (b)(2) of each Rights in Technical Data clause of this subpart and provide that the contractor may, subject to patent, security, and other provisions of the contract, use for its private purposes contract data it first produces in the performance of the

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