brokerage, or contingent fee, excepting bona fide employees or bona fide offices established and maintained by the grantee for the purpose of securing grants or business. For breach or violation of this warranty, the Government shall have the right to annul this grant without liability or in its discretion to deduct from the grant award, or otherwise recover, the full amount of such commission, percentage, brokerage or contingent fee.

10. Officials not to benefit: No member of, or delegate to Congress, or Resident Commissioner, shall be permitted to any share, or part of this grant, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this grant if made with a corporation for its general benefit.

11. Subagreements: All subagreements in excess of $2,500 and not identified in the approved budget require the written approval of the Grants Officer. All subagreements must be in writing. A subagreement may not be in the nature of a grant. A copy of each subagreement shall be furnished to the Grants Officer upon request.

12. Requirements pertaining to federally assisted construction: The grantee warrants and represents that during the performance of work on the project for which this grant has been awarded, it will comply, and will ensure that parties to subagreements will comply, with the following requirements:

(a) The Davis-Bacon Act, as amended, 40 U.S.C. 276a et seq., 276c, and the regulations issued thereunder, 29 CFR 5.1 et seq., respecting wage rates for federally assisted construction contracts in excess of $2,000;

(b) The Copeland (Anti-Kickback) Act, 18 U.S.C. 874, 40 U.S.C. 276c, and the regulations issued thereunder, 29 CFR 3.1 et seq.; (c) The Contract Work Hours and Safety Standards Act, 40 U.S.C. 327 et seq., and the regulations issued thereunder;

(d) The Uniform Relocation Assistance and Land Acquisition Policies Act of 1970, 42 U.S.C. 4621 et seq., 4651 et seq.;

(e) Convict labor shall not be used in such construction unless it is labor performed by convicts who are on work release, parole or probation.

[36 FR 22724, Nov. 27, 1971, as amended at 37 FR 11651, June 9, 1972]

Appendix B-Patents and Inventions

A. Definitions: (1) "Background Patent" means a foreign or domestic patent (regardless of its date of issue relative to the date of the EPA grant):

(1) Which the grantee, but not the Government, has the right to license to others, and

(11) Infringement of which cannot be avoided upon the practice of a Subject Invention or Specified Work Object.

(2) "Commercial Item" means

(1) Any machine, manufacture, or composition of matter which, at the time of a request for a license pursuant to part D of this ap

pendix, has been sold, offered for sale or otherwise made available commercially to the public in the regular course of business, at terms reasonable in the circumstances, and

(ii) Any process which, at the time of a request for a license, is in commercial use, or is offered for commercial use, so the results of the process or the products produced thereby are or will be accessible to the public at terms reasonable in the circumstances.

(3) "Specified Work Object" means the specific process, method, machine, manufacture or composition of matter (including relatively minor modifications thereof) which is the subject of the experimental, developmental, or research work performed under this grant.

(4) "Grantee" is the party which has accepted this grant award and includes entities controlled by the grantee. The term "controlled" means the direct or indirect ownership of more than 50 percent of outstanding stock entitled to vote for the election of directors, or a directing influence over such stock: Provided, however, That foreign entities not wholly owned by the grantee shall not be considered as "controlled."

(5) "Subagreement" includes subagreements at any tier under this grant.

(6) "Domestic" and "foreign" refer, respectively, (i) to the United States of America, including its territories and possessions, Puerto Rico and the District of Columbia and (11) to countries other than the United States of America.

(7) "Government" means the Federal Government of the United States of America.

(8) "Subject Invention" means any invention, discovery, improvement or development (whether or not patentable) made in the course of or under this grant or any subagreement (at any tier) thereunder.

(9) "Made," when used in connection with any invention, means the conception of first actual reduction to such practice of invention.

(10) To "practice an invention or patent" means the right of a licensee on his own behalf to make, have made, use or have used, sell or have sold, or otherwise dispose of according to law, any machine, design, manufacture, or composition of matter physically embodying the invention, or to use or have used the process or method comprising the invention.

(11) The term "to bring to the point of practical application” means to manufacture in the case of composition or product, to use 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.

(12) "Statement" means the President's Patent Policy Statement of August 23, 1971, 36 F.R. 16,889, August 26, 1971.

B. Domestic patent rights in Subject Inventions: (1) The grantee agrees that he will promptly disclose to the Grants Officer in writing each Subject Invention in a

manner sufficiently complete as to technical details to convey to one skilled in the art to which the invention pertains a clear understanding of the nature, purpose, operation and, as the case may be, the physical, chemical, biological, or electrical characteristics of the invention. However, if any Subject Invention is obviously unpatentable under the patent laws of the United States, such disclosure need not be made thereon. On request of the Grants Officer, the grantee shall comment respecting the differences or similarities between the invention and the closest prior art drawn to his attention.

(2) Except in the instance of a determination, pursuant to paragraph (3) of this section, by the Administrator to leave to the grantee, rights greater than a nonexclusive license, the grantee agrees to grant and does hereby grant to the Government the full and entire domestic right, title, and interest in the Subject Invention. The Government may upon written request, grant to the grantee 8 revocable or irrevocable, deemed appropriate, royalty-free and nonexclusive license to practice the Subject Invention. Any such license granted shall extend to any existing and future companies, controlled by, controlling or under common control with the grantee and shall be assignable to the successor of the part of the grantee's business to which such invention pertains.

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(3) Not later than (3) months after the disclosure of a Subject Invention pursuant to paragraph (1) of this section, and without regard to whether the invention is a primary object of this grant, the grantee may submit a request in writing to the Grants Officer for a determination by the Administrator leaving the grantee greater rights than that reserved to the grantee in paragraph (2) of this section. Such request should set forth information and facts which in the grantee's opinion, would justify a determination that:

(1) In the case of a Subject Invention which is clearly a primary object of this grant, the acquisition of such greater rights by the grantee is both consistent with the intent of section 1(a) of the Statement and is either, a necessary incentive to call forth private risk capital and expense to bring the invention to the point of practical application or is justified because the Government's contribution to such invention is small compared to that of the grantee; or that

(ii) The Subject Invention is not a primary object of this grant, and that the acquisition of such greater rights will serve the public interest as expressed in the Statement, particularly when taking into account the scope and nature of the grantee's stated intentions to bring the invention to the point of commercial application and the guidelines of section 1(a) of the Statement. The Administrator will review the grantee's request for greater rights and will make a

determination, either granting the request in whole or in part, or denying the request in its entirety. The grantee will be notified of such determination.

(4) In the event greater rights in any Subject Invention are vested in or granted to the grantee pursuant to paragraph (3) of this section:

(1) The grantee's rights in such inventions shall, as a minimum, be subject to a nonexclusive, nontransferable, paid-up 11cense to the Government to practice the invention throughout the world by or on behalf of the Government (including any Government agency) and States and domestic municipal governments, unless the Administrator determines that it would not be in the public interest to acquire the 11cense for the States and domestic municipal governments; and said license shall include the right to sublicense any foreign government pursuant to any existing or future treaty or agreement if the Administrator determines it would be in the national interest to acquire this right; and

(11) The grantee further agrees to and does hereby grant to the Government the right to require the granting of a license to a responsible applicant(s) under any such invention:

(a) On a nonexclusive or exclusive basis on terms that are reasonable under the circumstances, unless the grantee, its licensees or its assignees demonstrate to the Government, at the Government's request, that effective steps have been taken within three (3) years after a patent issued on any such invention to bring it to the point of practical application or that it has been made available for licensing royalty-free or on terms that are reasonable in the circumstances, or can show cause why the time period should be extended or

(b) On a nonexclusive or exclusive basis on terms that are reasonable in the circumstances to the extent that the invention is required for public use by Governmental regulations or as may be necessary to fulfill health or safety needs or for such other public purposes as are stipulated in this grant and

(111) The grantee shall file in due form and within six (6) months of the granting of such greater rights a U.S. patent application claiming the Subject Invention and shall furnish, as soon as practicable, the information and materials required under paragraph (2) of section F. As to each Subject Invention in which the grantee has been given greater rights, the grantee shall notify the Grants Officer at the end of six (6) months period if he has failed to file or caused to be filed a patent application covering such invention. If the grantee has filed or caused to be filled such an application within six (6) month period but elects not to continue prosecution of such application, he shall so notify the Grants Officer not less than sixty (60) days before the expiration of the response period. In either of

the situations covered by the two immediately preceding sentences, the Government shall be entitled to all right, title and interest in such Subject Inventions subject to the reservation to the grantee of a royalty-free, nonexclusive license therein.

(iv) The grantee shall, if requested by the Government, either before or after final closeout of this grant, furnish written reports at reasonable intervals, as to:

(a) The commercial use that is being made or is intended to be made of such invention;

(b) The steps taken by the grantee to bring such invention to the point of practical application, or to make the invention available for licensing.

C. Foreign rights and obligations: (1) Subject to the waiver provisions of paragraph (2) of this section, it is agreed that the entire foreign right, title and interest in any subject invention shall be in the Government, as represented for this purpose by the Administrator. The Government agrees to grant and does hereby grant to the grantee a royalty-free nonexclusive license to practice the invention under any patent obtained on such subject invention in any foreign country. The license shall extend to existing and any future companies controlled by controlling or under common control with the grantee, and shall be assignable to the successor of the part of the grantee's business to which such invention pertains.

(2) The grantee may request the foreign rights to a subject invention at any time subsequent to the reporting of such invention. The response to such request and notification thereof to the grantee will not be unreasonably delayed. The Government will waive title to the grantee to such subject invention in foreign countries in which the Government will not file an application for a patent for such invention, or otherwise secure protection therefor. Whenever the grantee is authorized to file in any foreign country the Government will not thereafter proceed with filing in such country except on the written agreement of the grantee, unless such authorization has been revoked pursuant to paragraph (3) of this section.

(3) In the event the grantee is authorized to file a foreign patent application on a subject invention, the Government agrees that it will use its best efforts not to publish a description of such invention until a United States or foreign application on such invention is filed, whichever is earlier, but neither the Government, its officers, agents or employees shall be liable for an inadvertent publication thereof. If the grantee is authorized to file in any foreign country, he shall, on request of the Grants Officer, furnish to the Government a patent specification in English within six (6) months after such authorization is granted, prior to any foreign filling and without additional compensation. The Grants Officer may revoke such authorization on failure on the part of the grantee to file any such foreign applica

tion within nine (9) months after such authorization has been granted.

(4) If the grantee files patent applications in foreign countries pursuant to authorization granted under paragraph (2) of this section, the grantee agrees to grant to the Government an irrevocable, nonexclusive, paid-up license to practice by or on its behalf the invention under any patents which may issue thereon in any foreign country. Such license shall include the right to issue sublicenses pursuant to any existing or future treaties or agreements between the Government and a foreign government for uses of such foreign government, provided the Administrator determines that it is in the national interest to acquire such right to sublicense. The grantee further agrees to grant under such foreign patents a nonexclusive royalty-free license (1) to sell and to use, but not to make, any composition of matter, article of manufacture, apparatus or system, made under a license granted by the Government to practice the Subject Invention in the United States, and (ii) to practice any process comprising the Subject Invention. Said licensees must be U.S. citizens or U.S. corporations in which 75 percent of the voting stock is owned by U.S. citizens.

(5) In the event the Government or the grantee elects not to continue prosecuting any foreign application or to maintain any foreign patent on a Subject Invention, the other party shall be notified no less than sixty (60) days before the expiration of the response period or maintenance tax due date, and upon written request, shall execute such instruments (prepared by the party wishing to continue the prosecution or to maintain such patent) as are necessary to enable such party to carry out its wishes in this regard.

D. Licenses under Background Patents: (1) The grantee agrees that he will make his Background Patent(s) available for use in conjunction with a Subject Invention or Specified Work Object for use in the specific field of technology in which the purpose of this grant or the work called for or required thereunder falls. This may be done (1) by making available, in quality, quantity, and price all of which are reasonable to the circumstances, an embodiment of the Subject Invention or Specified Work Object, which incorporates the invention covered by such Background Patent, as a Commercial Item, or (ii), by the sale or an embodiment of such Background Patent as a Commercial Item in a form which can be employed in the practice of a Subject Invention or Specified Work Object or can be so employed with relatively minor modifications, or (ii) by the licensing of the domestic Background Patent(s) at reasonable royalty to responsible applicants on their request.

(2) If the Administrator determines after a hearing that the quality, quantity, or price of embodiments of the Subject Invention or Specified Work Object sold or otherwise made available commercially as set forth in (D)

(1) (i) is unreasonable in the circumstances, he may require the grantee to license such domestic Background Patent to a responsible applicant at reasonable terms, including a reasonable royalty, for use in the specific field of technology in which the purpose of this grant or the work called for thereunder falls, and for use in connection with (i) a Specified Work Object, or (ii) a Subject Invention.

(3) (1) When a license to practice a domestic Background Patent in conjunction with a Subject Invention or Specified Work Object is requested, in writing by a responsible applicant, for use in the specific field of technology in which the purpose of this grant or the work called for thereunder falls, and such Background Patent is not available as set forth in D(1) (1) or (ii), the grantee shall have six (6) months from the date of his receipt of such request to decide whether to make such Background Patent so available. The grantee shall promptly notify the Grants Officer of any request in writing for a license to practice a Background Patent in conjunction with a Subject Invention or Specified Work Object, which the grantee or his exclusive licensee wish to attempt to make available as set forth in D(1) (1) or (11).

(ii) If the grantee decides to make such domestic Background Patent so available either by himself or by an exclusive licensee, he shall so notify the Administrator within the said six (6) months, whereupon the Administrator shall then designate the reasonable time within which the grantee must make such Background Patent available in reasonable quantity and quality, and at a reasonable price. If the grantee or his exclusive licensee decides not to make such Background Patent so available, or falls to make it available within the time designated by the Administrator, the Background Patent shall be licensed to a responsible applicant at reasonable terms, including a reasonable royalty, in conjunction with (a) a Specified Work Object, or (b) a Subject Invention, and may be limited to the specific field of technology in which the purpose of this grant or the work called for thereunder falls.

(iii) The grantee agrees to grant or have granted to a designated applicant, upon the written request of the Government, a nonexclusive license at reasonable terms, including reasonable royalties, under any foreign Background Patent in furtherance of any treaty or agreement between the Government of the United States and a foreign government for practice by or on the behalf of such foreign government, if an embodiment of the Background Patent is not commercially available in that country: Provided, however, That no such license will be required unless the Administrator determines that issuance of such license is in the national interest. Such license may be limited by the licensor to the practice of such Background Patent in conjunction with a Subject

Invention or a Specified Work Object and for use in only the specific field of technology in which the purpose of this grant or the work called for thereunder falls.

(iv) The grantee agrees it will not seek injunctive relief or other prohibition of the use of the invention in enforcing its rights against any responsible applicant for such license and that it will not join with others in any such action. It is understood and agreed that the foregoing shall not affect the grantee's right to injunctive relief or other prohibition of the use of Background Patents in areas not connected with the practice of a Subject Invention or Specified Work Object in the specific field of technology in which the purpose of this grant or the work called for thereunder falls, or where the grantee has made available a Commercial Item as set out in paragraph D(1) (1) or (li).

(4) For use in the specific field of technology in which the purpose of this grant or the work called for thereunder falls, and in conjunction with a Subject Invention or a Specified Work Object, the grantee agrees to grant to the Government a license under any Background Patent. Such license shall be nonexclusive, nontransferable, royalty-free and worldwide to practice such patent which is not available as a Commercial Item as specified in paragraph D(1) (11) for use of the Federal Government in connection with pi lot plants, demonstration plants, test beds, and test modules. For all other Government uses, any royalty charged the Government under such license shall be reasonable and shall give due credit and allowance for the Government's contribution, if any, toward the making, commercial development or enhancement of the invention (s) covered by the Background Patent.

(5) Any license granted under a process Background Patent for use with a Specified Work Object shall be additionally limited to employment of the Background Patent under conditions and parameters reasonably equiv alent to those called for or employed under this grant.

(6) It is understood and agreed that the grantee's obligation to grant licenses under Background Patents shall be limited to the extent of the grantee's right to grant the same without breaching any unexpired contract it had entered into prior to this grant or prior to the identification of a Background Patent, or without incurring any obligation to another solely on account of said grant. However, where such obligation is the payment of royalties or other compensation, the grantee's obligation to license his Background Patents shall continue and the reasonable license terms shall include such payments by the applicant as will at least fully compensate the grantee under said obligation to another.

(7) On the request of the Grants Officer the grantee shall identify and describe any license agreement which would limit his

right to grant licenses under any Background Patent.

(8) In the event the grantee has a parent or an affiliated company, which has the right to license a patent which would be a Background Patent if owned by the grantee, but which is not available as a Commercial Item as specified in paragraph D(1) (1) or (11), and a qualified applicant requests a license under such patent for use in the specific field of technology in which the purpose of this contract or the work called for thereunder falls, and in connection with the use of a Subject Invention or Specified Work Object, the grantee shall, at the written request of the Government, recommend to his parent company, or affiliated company, as the case may be, the granting of the requested license on reasonable terms, including reasonable royalties, and actively assist and participate with the Government and such applicant, as to technical matters and in liaison functions between the parties, as may reasonably be required in connection with any negotiations for issuance of such license. For the purpose of this subparagraph, (1) a parent company is one which owns or controls, through direct or indirect ownership of more than 50 percent of the outstanding stock entitled to vote for the election of directors, another company or other entity and, (ii) affiliated companies are companies or other entities owned or controlled by the same parent company.

E. Related inventions: The grantee shall submit to the Grants Officer within six (6) months after the submission of the final invention report submitted pursuant to paragraph F(6), written information concerning the conception or actual reduction to practice, or both, as may be applicable, of every invention made by the grantee pertaining to the work called for in this grant which was conceived or first actually reduced to practice within the period of three (3) months prior, during, or three (3) months subsequent to the term of this grant, which invention would be a Subject Invention if made under this grant, but which the grantee believes was made outside the performance of work required under this grant. The Grants Officer may require additional information to be furnished in confidence by the grantee. At the request of the Grants Officer made during or subsequent to the term of this grant including any extensions for additional research and development work, the grantee shall furnish information concerning any other invention which appears to the Grants Officer to reasonably have the possibility of being a Subject Invention.

All information supplied by the grantee hereunder shall be of such nature and character as to enable the Grants Officer reasonably to ascertain whether or not the invention concerned is a Subject Invention. Failure to furnish such information called for herein shall, in any subsequent proceeding, place on the grantee the burden of going forward with the evidence to establish that such in

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vention is not a Subject Invention. If such evidence is not then presented the invention shall be deemed to be a Subject Invention. After receipt of information furnished pursuant hereto, the Grants Officer shall not unduly delay rendering his opinion on the matter. The Grants Officer's decision shall be subject to the Disputes Clause of the grant. The grantee may furnish the information required under this section E as grantee confidential information, which shall be identified as such.

F. General provisions: (1) The grantee shall obtain the execution of and deliver to the Grants Officer any document relating to Subject Inventions as the Grants Officer may require under the terms hereof to enable the Government to file and prosecute patent applications therefor in any country and to evidence and preserve its rights. Each party hereto agrees to execute and deliver to the other party on its request suitable documents to evidence and preserve license rights derived from this appendix.

(2) The Government and the grantee shall promptly notify each other of the filing of a patent application on a Subject Invention in any country, identifying the country or countries in which such filing occurs and the date and serial number of the application, and on request shall furnish a copy of such application to the other party and a copy of any action on such patent application by any Patent Office and the responses thereto. Any applications or responses furnished shall be kept confidential.

(3) Any other provisions of this appendix notwithstanding, the Grants Officer, or his authorized representative shall, until the expiration of three (3) years after final payment under this grant, have the right to examine in confidence any books, records, documents, and other supporting data of the grantee which the Grants Officer or his authorized representative shall reasonably deem directly pertinent to the discovery or identification of Subject Inventions or to the compliance by the grantee with the requirements of this appendix.

(4) Notwithstanding the grant of a license under any patents to the Government pursuant to any provisions of this appendix, the Government shall not be prevented from contesting the validity, enforceability, scope, or title of such licensed patent.

(5) The grantee shall furnish to the Grants Officer every 12 months, or earlier as may be agreed in this grant (the initial period shall commence with the date of award of this grant) a interim report listing all Subject Inventions required to be disclosed which were made during the interim reporting period or certify that there are no such unreported inventions.

(6) The grantee shall submit a final report under this grant listing all Subject Inventions required to be disclosed which were made in the course of the work performed under this grant, and all subagreements subject to this appendix. If to the best of the