[Code of Federal Regulations]
[Title 37, Volume 1]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 37CFR401.5]

[Page 614-615]
 
              TITLE 37--PATENTS, TRADEMARKS, AND COPYRIGHTS
 
  CHAPTER IV--ASSISTANT SECRETARY FOR TECHNOLOGY POLICY, DEPARTMENT OF 
                                COMMERCE
 
PART 401--RIGHTS TO INVENTIONS MADE BY NONPROFIT ORGANIZATIONS AND SMALL BUSINESS FIRMS UNDER GOVERNMENT GRANTS, CONTRACTS, AND COOPERATIVE AGREEMENTS--Table of Contents
 
Sec. 401.5  Modification and tailoring of clauses.

    (a) Agencies should complete the blank in paragraph (g)(2) of the 
clauses at Sec. 401.14 in accordance with their own or applicable 
government-wide regulations such as the Federal Acquisition Regulation. 
In grants and cooperative agreements (and in contracts, if not 
inconsistent with the Federal Acquisition Regulation) agencies wishing 
to apply the same clause to all subcontractors as is applied to the 
contractor may delete paragraph (g)(2) of the clause and delete the 
words ``to be performed by a small business firm or domestic nonprofit 
organization'' from paragraph (g)(1). Also, if the funding agreement is 
a grant or cooperative agreement, paragraph (g)(3) may be deleted. When 
either paragraph (g)(2) or paragraphs (g) (2) and (3) are deleted, the 
remaining paragraph or paragraphs should be renumbered appropriately.
    (b) Agencies should complete paragraph (l), ``Communications'', at 
the end of the clauses at Sec. 401.14 by designating a central point of 
contact for communications on matters relating to the clause. Additional 
instructions on communications may also be included in paragraph (l).
    (c) Agencies may replace the italicized words and phrases in the 
clauses at Sec. 401.14 with those appropriate to the particular funding 
agreement. For example, ``contracts'' could be replaced by ``grant,'' 
``contractor'' by ``grantee,'' and ``contracting officer'' by ``grants 
officer.'' Depending on its use, ``Federal agency'' can be replaced 
either by the identification of the agency or by the specification of 
the particular office or official within the agency.
    (d) When the agency head or duly authorized designee determines at 
the time of contracting with a small business firm or nonprofit 
organization that it would be in the national interest to acquire the 
right to sublicense foreign governments or international organizations 
pursuant to any existing treaty or international agreement, a sentence 
may be added at the end of paragraph (b) of the clause at Sec. 401.14 as 
follows:

    This license will include the right of the government to sublicense 
foreign governments, their nationals, and international organizations, 
pursuant to the following treaties or international agreements:

----------------.


The blank above should be completed with the names of applicable 
existing treaties or international agreements, agreements of 
cooperation, memoranda of understanding, or similar arrangements, 
including military agreements relating to weapons development and 
production. The above language is not intended to apply to treaties or 
other agreements that are in effect on the date of the award but which 
are not listed. Alternatively, agencies may use substantially similar 
language relating the government's rights to specific treaties or other 
agreements identified elsewhere in the funding agreement. The language 
may also be modified to

[[Page 615]]

make clear that the rights granted to the foreign government, and its 
nationals or an international organization may be for additional rights 
beyond a license or sublicense if so required by the applicable treaty 
or international agreement. For example, in some exclusive licenses or 
even the assignment of title in the foreign country involved might be 
required. Agencies may also modify the language above to provide for the 
direct licensing by the contractor of the foreign government or 
international organization.
    (e) If the funding agreement involves performance over an extended 
period of time, such as the typical funding agreement for the operation 
of a government-owned facility, the following language may also be 
added:

    The agency reserves the right to unilaterally amend this funding 
agreement to identify specific treaties or international agreements 
entered into or to be entered into by the government after the effective 
date of this funding agreement and effectuate those license or other 
rights which are necessary for the government to meet its obligations to 
foreign governments, their nationals and international organizations 
under such treaties or international agreements with respect to subject 
inventions made after the date of the amendment.

    (f) Agencies may add additional subparagraphs to paragraph (f) of 
the clauses at Sec. 401.14 to require the contractor to do one or more 
of the following:
    (1) Provide a report prior to the close-out of a funding agreement 
listing all subject inventions or stating that there were none.
    (2) Provide, upon request, the filing date, patent application 
number and title; a copy of the patent application; and patent number 
and issue date for any subject invention in any country in which the 
contractor has applied for a patent.
    (3) Provide periodic (but no more frequently than annual) listings 
of all subject inventions which were disclosed to the agency during the 
period covered by the report.
    (g) If the contract is with a nonprofit organization and is for the 
operation of a government-owned, contractor-operated facility, the 
following will be substituted for paragraph (k)(3) of the clause at 
Sec. 401.14(a):

    (3) After payment of patenting costs, licensing costs, payments to 
inventors, and other expenses incidental to the administration of 
subject inventions, the balance of any royalties or income earned and 
retained by the contractor during any fiscal year on subject inventions 
under this or any successor contract containing the same requirement, up 
to any amount equal to five percent of the budget of the facility for 
that fiscal year, shall be used by the contractor for scientific 
research, development, and education consistent with the research and 
development mission and objectives of the facility, including activities 
that increase the licensing potential of other inventions of the 
facility. If the balance exceeds five percent, 75 percent of the excess 
above five percent shall be paid by the contractor to the Treasury of 
the United States and the remaining 25 percent shall be used by the 
contractor only for the same purposes as described above. To the extent 
it provides the most effective technology transfer, the licensing of 
subject inventions shall be administered by contractor employees on 
location at the facility.

    (h) If the contract is for the operation of a government-owned 
facility, agencies may add the following at the end of paragraph (f) of 
the clause at Sec. 401.14(a):

    (5) The contractor shall establish and maintain active and effective 
procedures to ensure that subject inventions are promptly identified and 
timely disclosed and shall submit a description of the procedures to the 
contracting officer so that the contracting officer may evaluate and 
determine their effectiveness.

[52 FR 8554, Mar. 18, 1987, as amended at 60 FR 41812, Aug. 14, 1995]