In concluding his opening remarks, Mr. Johnson observed that the question of background rights is not explicitly covered in the legislation, but that ERDA proposes to deal with it in the regulations.

Stating that the degree of rights which the government has or should have to a contractor's background patent position is a sensitive matter, Mr. Johnson stated it is one or real concern to both ERDA and industry. He recognized that in the usual situation the contractors which ERDA will seek will be ones that are well qualified to perform research and development work as a result of their having had considerable background expertise, much of which is likely to be technology covered by their own patents. If the contractor is to use his best efforts under the contract, it is most likely that he will be utilizing some of the technology covered by his background patents.

This may frequently cause a dilemma for ERDA and its contractors. ERDA must seek to avoid situations where the contractor will be the

only firm that can utilize the results of the contract because of its background patent technology being essential to the achievement of those results. On the other hand, ERDA wishes to respect the contractor's legitimate rights to protect its own background patents. ERDA's approach to this delicate balancing problem, Johnson explained, was to develop a narrow background patent rights clause under which ERDA would acquire a carefully defined right to background patent technology where such technology is essential to practice the contract

results.

Mr. Johnson explained further that the right which ERDA acquires in this situation is not that of ownership, but rather the power to provide for the licensing of third parties, at ERDA's request, on reasonable commercial terms. This license will be limited to the field of contract effort and only when it is absolutely necessary to practice the ERDA-developed technology. Moreover, it is to be invoked only when the contractor and his licensees are not meeting the commercial needs for the subject of the license.

As a final point on which to focus the hearings, Mr. Johnson emphasized that the objectives, power and authority of the Administrator granted by the Congress present one central question: "How does ERDA intend to administer this authority?" ERDA fully realizes that the administration of this policy ultimately will determine its success or failure. Its policies will become meaningless unless an enlightened Administration undertakes to implement the spirit of the two legislative

enactments.

To emphasize this point, Johnson declared:

"I can state emphatically that it is the intention of the Administrator of ERDA to make prudent use of the authority which has been granted to him, with the intention of early commercial utilization, consistent, of course, with the underlying thrust of the Act to protect the rights of the United States and the general public.

"We read the Act as permitting us to make use of the

patent incentive as one of many incentives that this

country will need in its long fight to regain control

As if to request those persons about to testify at the hearings to focus their remarks on points which were essential to ERDA's future operations, Johnson then explained that ERDA sought advice from all segements of the public as to what patent policies it should adopt in order to carry out the purposes of the Atomic Energy Act and the Federal Nonnuclear Energy Act.

He asked these specific questions:

"1.

What modifications to these statutory enactments should ERDA propose to Congress? Why are such modifications, if any,

needed?

"2. Is legislation requiring mandatory licensing of energyrelated patents needed to carry out the purposes of the Federal Nonnuclear Research and Development Act of 1974?

"3. Mandatory licensing may be broadly defined as requiring a patent owner to forego the injunctive remedy provided by Title 35 of the United States Code against the infringing acts. of another. Is legislation required to do this? And, if so, what should be its essential provisions?

Following Mr. Johnson's introductory comments he called upon

Dr. Betsy Ancker-Johnson, Assistant Secretary of Commerce for Science

and Technology, to speak. She recalled that a year earlier the Department of Commerce had been deeply involved with negotiations with the United States Senate rejecting the substance of the ERDA patent policy. She pointed out that neither the Administration (Executive Branch) nor the Department of Commerce offered the ERDA patent policy, and that Commerce would not feel in any way offended by criticism of that policy. However, she indicated that Commerce would be carefully considering and evaluating all the suggestions made at the ERDA hearings, "not only in the context of possible changes in ERDA legislation, but also in the formulation of an Administration proposal looking towards the establishment of a uniform patent policy covering all federal agencies."

With these rather comprehensive introductory remarks, the hearings ensued with 15 witnesses being heard on the first day and 13 more on the second day. In addition to the 28 participants who offered their views at the public hearings, ERDA received an additional 31 letters containing comments on ERDA patent policy and/or the issue of mandatory licensing. (ERDA also received written comments on the proposed revision of Part 9-9 of the ERDA Procurement Regulations published October 15, 1975 (40 FR 48363-48380). Because of the close relation

ship between comments directed to patent policy (Appendix C) and comments directed to the proposed regulations (Appendix B), some letters were summarized in both appendices.) For the sake of convenience of

identification and reference, the people and organizations that expressed their views (either by way of the public hearings or through

written comments) have been classified into five groups, as follows:

*Speaker represented Subcommittee on Patents, Copyrights, and Rights in Data, Committee on Governmental Relations, National Association of College and University Business Officers whose membership consists of 98 institutions.