PANEL* for PUBLIC HEARINGS on PROPOSED ERDA PATENT POLICY November 18 and 19, 1975 James E. Denny, Assistant General Counsel for Patents, ERDA Jefferson Hill, Department of Justice Alternate: Kenneth Frankel Hugh E. Witt, Office of Federal Procurement Policy Dr. Betsy Ancker-Johnson, Department of Commmerce R. Tenny Johnson, General Counsel, ERDA Alternate: Leonard Rawicz, Deputy General Counsel, ERDA J. Frederick Weinhold, APA, ERDA Alternate: Ralph Bayrer, APA, ERDA Dr. Philip C. White, AAFE, ERDA Alternate: Dr. George Fumich, AFE, ERDA Gen. Edmund F. O'Connor, DAANE, ERDA Alternate: George Kimball, SNS, ERDA Donald Beattie, ASGA, ERDA Alternate: Jack Blasy, ASGA, ERDA Robert W. Ritzmann, ISL, ERDA Wade Blackman, ERDA *Note: Not all of the preceding persons actually sat on the members of the inter-agency task force mentioned The hearings were opened by R. Tenney Johnson, Esq., ERDA General Counsel, and variously thereafter either he or Leonard Rawicz, Esq., ERDA Deputy General Counsel, or James E. Denny, Esq., Assistant General Counsel for Patents, ERDA, presided. Mr. Johnson presented a brief overview of ERDA's present patent policy. He explained that it is controlled by two statutes, the Atomic Energy Act of 1954 and the Federal Nonnuclear Energy Research and Development Act of 1974. Both statutes, Mr. Johnson explained, direct the Administration to formulate policy so as as to acquire title to inventions made under ERDA contracts. However, both give the Administrator discretionary authority to waive the title-taking rights when it is determined that to do so would be in the best interests of the United States and the general public. When ERDA began operations in January 1975 its only implementing regulations of its legislative enactments were those it inherited from the pre-existing Atomic Energy Commission regulations interpreting the Atomic Energy Act. In April 1975, ERDA issued temporary implementing regulations to provide interim guidance for ERDA's two contracting and waiver patent policies. On October 15, 1975, ERDA published Proposed Policies and Procedures for Patents, Data & Copyrights (41 CFR Part 9-9) which, for the first time, harmonized its patent policies in regard to both nuclear and nonnuclear activities into one set of regulations. Mr. Johnson called attention to the fact that Section 9 of the Nonnuclear Act provides more detailed guidance in the administration of patent policy than does Section 152 of the Atomic Energy Act. He pointed out, moreover, that this guidance was derived from established patent legislation and government executive patent policies, and is of the type normally considered in making determinations under any flexible government patent policy. Discussing Section 9 of the Federal Nonnuclear Energy Research and Development Act, Mr. Johnson noted that it "provides that the Administrator may waive all or any part of the rights to any invention or class of invention made under ERDA contracts if he determines that the interests of the United States and the general public will best be served by such a waiver." Describing the basic criteria in making such a determination, Mr. Johnson stated they are as follows: "1. The benefits of the energy research, development and demonstration programs will be made widely available to the public in the shortest practical time. "2. promoted. The commercial utilization of such inventions will be "3. The participation by private persons in the Administration's energy research, development and demonstration programs will be maintained." "4. The fostering of competition and the prevention of undue market concentration or the creation or maintenance of other situations inconsistent with the antitrust laws will be maintained." The question in each situation is whether the proposed waiver will meet those criteria. Johnson observed that the specific requirements for a waiver cannot be precisely categorized in advance, as the facts in each contract situation may vary in relation to the criteria just enumerated. However, waivers may be granted in advance of contracting in regard to individual inventions identified after award of the contract. There is also a provision, explained Johnson, that when ERDA keeps title to an invention ERDA makes available a revocable license to the contractor which made the invention. This will permit the government at some later stage to license the government-owned invention to someone else on an exclusive basis when that is necessary to meet the objectives of early utilization. ERDA will not revoke, in fact, it does not have the power to revoke the contractor's right or license to use his own invention in any field of use in which the contractor is commercializing the invention. Mr. Johnson pointedly commented that the Administrator is given clear authority to license ERDA inventions on an exclusive or nonexclusive basis. However, in granting exclusive licenses, the Administrator must be concerned that in doing so competition will not be lessened, and that the licenses granted will not result in undue concentration of any particular commerce, in any section of the country, in the sense that such concentration would tend to be in violation of the antitrust laws. In those cases where the government's rights have been waived or a license granted, the government will retain certain "march-in" rights, i.e., the right to march in and take back the rights: (a) if necessary for governmental purposes; or (b) otherwise to prevent breach of existing law, e.g., the antitrust laws; or (c) if it is evident that the patent owner or licensee is not trying to achieve early commercial utilization of the invention. |