Sec.
401.1 Scope.
- (a)
Traditionally there have been no conditions imposed by the
government on research performers while using private facilities which
would preclude them from accepting research funding from other sources
to expand, to aid in completing or to conduct separate investigations
closely related to research activities sponsored by the government.
Notwithstanding the right of research organizations to accept
supplemental funding from other sources for the purpose of expediting or
more comprehensively accomplishing the research objectives of the
government sponsored project, it is clear that the ownership provisions
of these regulations would remain applicable in any invention
"conceived or first actually reduced to practice in performance" of
the project. Separate accounting for the two funds used to support the
project in this case is not a determining factor.
- (1)
To the extent that a non-government sponsor established a
project which, although closely related, falls outside the planned and
committed activities of a government-funded project and does not
diminish or distract from the performance of such activities, inventions
made in performance of the non-government sponsored project would not be
subject to the conditions of these regulations. An example of such
related but separate projects would be a government sponsored project
having research objectives to expand scientific understanding in a field
and a closely related industry sponsored project having as its
objectives the application of such new knowledge to develop usable new
technology. The time relationship in conducting the two projects and the
use of new fundamental knowledge from one in the performance of the
other are not important determinants since most inventions rest on a
knowledge base built up by numerous independent research efforts
extending over many years. Should such an invention be claimed by the
performing organization to be the product of non-government sponsored
research and be challenged by the sponsoring agency as being reportable
to the government as a "subject invention", the challenge is
appealable as described in
Sec. 401.11(d).
- (2)
An invention which is made outside of the research activities of
a government-funded project is not viewed as a "subject invention"
since it cannot be shown to have been "conceived or first actually
reduced to practice" in performance of the project. An obvious example
of this is a situation where an instrument purchased with government
funds is later used, without interference with or cost to the
government-funded project, in making an invention all expenses of which
involve only non-government funds.
- (b)
This part inplements 35 U.S.C. 202 through 204 and is applicable
to all Federal agencies. It applies to all funding agreements with small
business firms and nonprofit organizations executed after the effective
date of this part, except for a funding agreement
made primarily for educational purposes. Certain sections also provide
guidance for the administration of funding agreements which predate the
effective date of this part. In accordance with 35 U.S.C. 212, no
scholarship, fellowship, training grant, or other funding agreement made
by a Federal agency primarily to an awardee for educational purposes
will contain any provision giving the Federal agency any rights to
inventions made by the awardee.
- (c) The march-in and appeals procedures in
Secs. 401.6 and
401.11 shall apply to any march-in or
appeal proceeding under a funding agreement subject to Chapter 18 of
Title 35, U.S.C., initiated after the effective date of this part even
if the funding agreement was executed prior to that date.
- (d)
At the request of the contractor, a funding agreement for the
operation of a government-owned facility which is in effect on the
effective date of this part shall be promptly amended to include the
provisions required by
Secs. 401.3(a)
unless the agency determines
that one of the exceptions at 35 U.S.C. 202(a)(i) through (iv) Sec.
401.3(a)(8) through (iv) of this part) is applicable and will be
applied. If the exception at Sec. 401.3(a)(iv) is determined to be
applicable, the funding agreement will be promptly amended to include
the provisions required by
Sec. 401.3(c).
- (e)
This regulation supersedes OMB Circular A-124 and shall take
precedence over any regulations dealing with ownership of inventions
made by small businesses and nonprofit organizations which are
inconsistent with it. This regulation will be followed by all agencies
pending amendment of agency regulations to conform to this part and
amended Chapter 18 of Title 35. Only deviations requested by a
contractor and not inconsistent with Chapter 18 of Title 35, United
States Code, may be made without approval of the Secretary.
Modifications or tailoring of clauses as authorized by
Sec. 401.5 or
Sec. 401.3,
when alternative provisions are used under
Sec. 401.3(a)(1) through
(4),
are not considered deviations requiring the Secretary's
approval. Three copies of proposed and final agency regulations
supplementing this part shall be submitted to the Secretary at the
office set out in
Sec. 401.16
for approval for consistency with this
part before they are submitted to the Office of Management and Budget
(OMB) for review under Executive Order 12291 or, if no submission is
required to be made to OMB, before their submission to the Federal
Register for publication.
- (f)
In the event an agency has outstanding prime funding agreements
that do not contain patent flow-down provisions consistent with this
part or earlier Office of Federal Procurement Policy regulations (OMB
Circular A-124 or OMB Bulletin 81-22), the agency shall take appropriate
action to ensure that small business firms or nonprofit organizations
that are subcontractors under any such agreements and that received
their subcontracts after July 1, 1981, receive rights in their subject
inventions that are consistent with Chapter 18 and this part.
- (g)
This part is not intended to apply to arrangements under which
nonprofit organizations, small business firms, or others are allowed to
use government-owned research facilities and normal technical assistance
provided to users of those facilities, whether on a reimbursable or
nonreimbursable basis. This part is also not intended to apply to
arrangements under which sponsors reimburse the government or facility
contractor for the contractor employee's time in performing work for the
sponsor. Such arrangements are not considered "funding agreements" as
defined at 35 U.S.C. 201(b) and
Sec. 401.2(a) of this part.
Sec. 401.2
Definitions.
As used in this part --
- (a) The term funding agreement
means any contract, grant, or
cooperative agreement entered into between any Federal agency, other
than the Tennessee Valley Authority, and any contractor for the
performance of experimental, developmental, or research work funded in
whole or in part by the Federal government. This term also includes any
assignment, substitution of parties, or subcontract of any type entered
into for the performance of experimental, developmental, or research
work under a funding agreement as defined in the first sentence of this
paragraph.
- (b) The term contractor
means any person, small business firm or
nonprofit organization which is a party to a funding agreement.
- (c) The term invention
means any invention or discovery which is or
may be patentable or otherwise protectable under Title 35 of the United
States Code, or any novel variety of plant which is or may be
protectable under the Plant Variety Protection Act (7 U.S.C. 2321 et
seq.).
- (d) The term subject invention
means any invention of a contractor
conceived or first actually reduced to practice in the performance of
work under a funding agreement; provided that in the case of a variety
of plant, the date of determination (as defined in section 41(d) of the
Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during
the period of contract performance.
- (e) The term practical application
means to manufacture in the case
of a composition of product, to practice in the case of a process or
method, or to operate in the case of a machine or system; and, in each
case, under such conditions as to establish that the invention is being
utilized and that its benefits are, to the extent permitted by law or
government regulations, available to the public on reasonable terms.
- (f) The term made when
used in relation to any invention
means the conception or first actual reduction to practice of such invention.
- (g) The term small business firm
means a small business concern as
defined at section 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing
regulations of the Administrator of the Small Business Administration.
For the purpose of this part, the size standards for small business
concerns involved in government procurement and subcontracting at 13 CFR
121.5 will be used.
- (h) The term nonprofit organization
means universities and other
institutions of higher education or an organization of the type
described in section 501(c)(3) of the Internal Revenue Code of 1954 (26
U.S.C. 501(c) and exempt from taxation under section 501(a) of the
Internal Revenue Code (26 U.S.C. 501(a)) or any nonprofit scientific or
educational organization qualified under a state nonprofit organization
statute.
- (i) The term Chapter 18
means Chapter 18 of Title 35 of the United States Code.
- (j) The term Secretary
means the Assistant Secretary of Commerce for Technology Policy.
- (k) The term electronically filed
means any submission of information transmitted by an electronic or
optical-electronic system.
- (l) The term electronic
or optical-electronic system
means a software-based system approved by the agency for the transmission of
information.
- (m) The term patent application
or "application for patent"
includes a provisional or nonprovisional U.S. national application for
patent as defined in 37 CFR 1.9 (a)(2) and (a)(3), respectively, or an
application for patent in a foreign country or in an international
patent office.
- (n) The term initial patent application
means a nonprovisional U.S. national application for patent as defined
in 37 CFR 1.9(a)(3).
Sec. 401.3
Use of the standard clauses at Sec. 401.14.
- (a)
Each funding agreement awarded to a small business firm or
nonprofit organization (except those subject to 35 U.S.C. 212) shall
contain the clause found in
Sec. 401.14(a)
with such modifications and
tailoring as authorized or required elsewhere in this part. However, a
funding agreement may contain alternative provisions --
- (1)
When the contractor is not located in the United States or does
not have a place of business located in the United States or is subject
to the control of a foreign government; or
- (2)
In exceptional circumstances when it is determined by the agency
that restriction or elimination of the right to retain title to any
subject invention will better promote the policy and objectives of
Chapter 18 of Title 35 of the United States Code; or
- (3)
When it is determined by a government authority which is
authorized by statute or executive order to conduct foreign intelligence or
counterintelligence activities that the restriction or elimination of
the right to retain title to any subject invention is necessary to
protect the security to such activities; or
- (4)
When the funding agreement includes the operation of the
government-owned, contractor-operated facility of the Department of
Energy primarily dedicated to that Department's naval nuclear propulsion
or weapons related programs and all funding agreement limitations under
this subparagraph on the contractor's right to elect title to a subject
invention are limited to inventions occurring under the above two
programs.
- (5)
If any part of the contract may require the contractor to
perform work on behalf of the Government at a Government laboratory
under a Cooperative Research and Development Agreement (CRADA) pursuant
to the statutory authority of 15 U.S.C. 3710a, the contracting officer
may include alternate paragraph (b) in the basic patent rights clause in
Sec. 401.14
Because the use of the alternate is based on a
determination of exceptional circumstances under
Sec. 401.3(a)(2)
, the contracting officer shall ensure that the appeal procedures of
Sec. 401.4
are satisfied whenever the alternate is used.
- (b) When an agency exercises the exceptions at
Sec. 401.3(a)(2) or
(3),
it shall use the standard clause at
Sec. 401.14(a)
with only such
modifications as are necessary to address the exceptional circumstances
or concerns which led to the use of the exception. For example, if the
justification relates to a particular field of use or market, the clause
might be modified along lines similar to those described in
Sec. 401.14(b).
In any event, the clause should provide the contractor with
an opportunity to receive greater rights in accordance with the
procedures at
Sec. 401.15.
When an agency justifies and exercises the exception at
Sec. 401.3(a)(2)
and uses an alternative provision in the
funding agreement on the basis of national security, the provision shall
provide the contractor with the right to elect ownership to any
invention made under such funding agreement as provided by the Standard
Patent Rights Clause found at
Sec. 401.14(a)
if the invention is not
classified by the agency within six months of the date it is reported to
the agency, or within the same time period the Department of Energy does
not, as authorized by regulation, law or Executive order or implementing
regulations thereto, prohibit unauthorized dissemination of the
invention. Contracts in support of DOE's naval nuclear propulsion
program are exempted from this paragraph.
- (c)
When the Department of Energy exercises the exception at
Sec. 401.3(a)(4),
it shall use the clause prescribed at
Sec. 401.14(b)
or substitute thereto with such modification and tailoring as authorized or
required elsewhere in this part.
- (d)
When a funding agreement involves a series of separate task
orders, an agency may apply the exceptions at
Sec. 401.3(a)(2) or
(3)
to individual task orders, and it may structure the contract so that
modified patent rights provisions will apply to the task order even
though the clauses at either
Sec. 401.14(a) or
(b)
are applicable to
the remainder of the work. Agencies are authorized to negotiate such
modified provisions with respect to task orders added to a funding
agreement after its initial award.
- (e)
Before utilizing any of the exceptions in
Sec. 401.3(a)
of this
section, the agency shall prepare a written determination, including a
statement of facts supporting the determination, that the conditions
identified in the exception exist. A separate statement of facts shall
be prepared for each exceptional circumstances determination, except
that in appropriate cases a single determination may apply to both a
funding agreement and any subcontracts issued under it or to any funding
agreement to which such an exception is applicable. In cases when
Sec. 401.3(a)(2)
is used, the determination shall also include an analysis
justifying the determination. This analysis should address with
specificity how the alternate provisions will better achieve the
objectives set forth in 35 U.S.C. 200. A copy of each determination,
statement of facts, and, if applicable, analysis shall be promptly
provided to the contractor or prospective contractor
along with a notification to the contractor or prospective contractor of
its rights to appeal the determination of the exception under 35 U.S.C.
202(b)(4) and
Sec. 401.4 of this part.
- (f)
Except for determinations under
Sec. 401.3(a)(3),
the agency
shall also provide copies of each determination, statement of fact, and
analysis to the Secretary. These shall be sent within 30 days after the
award of the funding agreement to which they pertain. Copies shall also
be sent to the Chief Counsel for Advocacy of the Small Business
Administration if the funding agreement is with a small business firm.
If the Secretary of Commerce believes that any individual determination
or pattern of determinations is contrary to the policies and objectives
of this chapter or otherwise not in conformance with this chapter, the
Secretary shall so advise the head of the agency concerned and the
Administrator of the Office of Federal Procurement Policy and recommend
corrective actions.
- (g)
To assist the Comptroller General of the United States to
accomplish his or her responsibilities under 35 U.S.C. 202, each Federal
agency that enters into any funding agreements with nonprofit
organizations or small business firms shall accumulate and, at the
request of the Comptroller General, provide the Comptroller General or
his or her duly authorized representative the total number of prime
agreements entered into with small business firms or nonprofit
organizations that contain the patent rights clause in this part or
under OMB Circular A-124 for each fiscal year beginning with October 1,
1982.
- (h)
To qualify for the standard clause, a prospective contractor may
be required by an agency to certify that it is either a small business
firm or a nonprofit organization. If the agency has reason to question
the status of the prospective contractor as a small business firm, it
may file a protest in accordance with 13 CFR 121.9. If it questions
nonprofit status, it may require the prospective contractor to furnish
evidence to establish its status as a nonprofit organization.
Sec. 401.4
Contractor appeals of exceptions.
- (a)
In accordance with 35 U.S.C. 202(b)(4) a contractor has the
right to an administrative review of a determination to use one of the
exceptions at
Sec. 401.3(a) (1) through
(4)
if the contractor believes
that a determination is either contrary to the policies and objectives
of this chapter or constitutes an abuse of discretion by the agency.
Paragraph (b)
of this section specifies the procedures to be followed by
contractors and agencies in such cases. The assertion of such a claim by
the contractor shall not be used as a basis for withholding or delaying
the award of a funding agreement or for suspending performance under an
award. Pending final resolution of the claim the contract may be issued
with the patent rights provision proposed by the agency; however, should
the final decision be in favor of the contractor, the funding agreement
will be amended accordingly and the amendment made retroactive to the
effective date of the funding agreement.
- (b)
- (1)
A contractor may appeal a determination by providing written
notice to the agency within 30 working days from the time it receives a
copy of the agency's determination, or within such longer time as an
agency may specify in its regulations. The contractor's notice should
specifically identify the basis for the appeal.
- (2)
The appeal shall be decided by the head of the agency or by his/
her designee who is at a level above the person who made the
determination. If the notice raises a genuine dispute over the material
facts, the head of the agency or the designee shall undertake, or refer
the matter for, fact-finding.
- (3)
Fact-finding shall be conducted in accordance with procedures
established by the agency. Such procedures shall be as informal as
practicable and be consistent with principles of fundamental fairness.
The procedures should afford the contractor the opportunity to appear
with counsel, submit documentary evidence, present witnesses and
confront such persons as the agency may rely upon. A transcribed record
shall be made and shall be available at cost to the contractor upon
request. The requirement for a transcribed record may be waived by mutual
agreement of the contractor and the agency.
- (4)
The official conducting the fact-finding shall prepare or adopt
written findings of fact and transmit them to the head of the agency or
designee promptly after the conclusion of the fact-finding proceeding
along with a recommended decision. A copy of the findings of fact and
recommended decision shall be sent to the contractor by registered or
certified mail.
- (5)
Fact-finding should be completed within 45 working days from the
date the agency receives the contractor's written notice.
- (6)
When fact-finding has been conducted, the head of the agency or
designee shall base his or her decision on the facts found, together
with any argument submitted by the contractor, agency officials or any
other information in the administrative record. In cases referred for
fact-finding, the agency head or the designee may reject only those
facts that have been found to be clearly erroneous, but must explicitly
state the rejection and indicate the basis for the contrary finding. The
agency head or the designee may hear oral arguments after fact-finding
provided that the contractor or contractor's attorney or representative
is present and given an opportunity to make arguments and rebuttal. The
decision of the agency head or the designee shall be in writing and, if
it is unfavorable to the contractor shall include an explanation of the
basis of the decision. The decision of the agency or designee shall be
made within 30 working days after fact-finding or, if there was no
fact-finding, within 45 working days from the date the agency received the
contractor's written notice. A contractor adversely affected by a
determination under this section may, at any time within sixty days
after the determination is issued, file a petition in the United States
Claims Court, which shall have jurisdiction to determine the appeal on
the record and to affirm, reverse, remand, or modify as appropriate, the
determination of the Federal agency.
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 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.
Sec. 401.6
Exercise of march-in rights.
- (a)
The following procedures
shall govern the exercise of the march- in rights
of the agencies set forth in 35 U.S.C. 203 and
paragraph (j) of the clause at
Sec. 401.14.
- (b)
Whenever an agency receives information that it believes might
warrant the exercise of march-in rights, before initiating any march-in
proceeding, it shall notify the contractor in writing of the information
and request informal written or oral comments from the contractor as
well as information relevant to the matter. In the absence of any
comments from the contractor within 30 days, the agency may, at its
discretion, proceed with the procedures below. If a comment is received
within 30 days, or later if the agency has not initiated the procedures
below, then the agency shall, within 60 days after it receives the
comment, either initiate the procedures below or notify the contractor,
in writing, that it will not pursue march-in rights on the basis of the
available information.
- (c)
A march-in proceeding shall be initiated by the issuance of a
written notice by the agency to the contractor and its assignee or
exclusive licensee, as applicable and if known to the agency, stating
that the agency is considering the exercise of march-in rights. The
notice shall state the reasons for the proposed march-in in terms
sufficient to put the contractor on notice of the facts upon which the
action would be based and shall specify the field or fields of use in
which the agency is considering requiring licensing. The notice shall
advise the contractor (assignee or exclusive licensee) of its rights, as
set forth in this section and in any supplemental agency regulations.
The determination to exercise march-in rights shall be made by the head
of the agency or his or her designee.
- (d)
Within 30 days after the receipt of the written notice of march-
in, the contractor (assignee or exclusive licensee) may submit in
person, in writing, or through a representative, information or argument
in opposition to the proposed march-in, including any additional
specific information which raises a genuine dispute over the material
facts upon which the march-in is based. If the information presented
raises a genuine dispute over the material facts, the head of the agency
or designee shall undertake or refer the matter to another official for
fact-finding.
- (e)
Fact-finding shall be conducted in accordance with the
procedures established by the agency. Such procedures shall be as
informal as practicable and be consistent with principles of fundamental
fairness. The procedures should afford the contractor the opportunity to
appear with counsel, submit documentary evidence, present witnesses and
confront such persons as the agency may present. A transcribed record
shall be made and shall be available at cost to the contractor upon
request. The requirement for a transcribed record may be waived by
mutual agreement of the contractor and the agency. Any portion of the
march-in proceeding, including a fact-finding hearing that involves
testimony or evidence relating to the utilization or efforts at
obtaining utilization that are being made by the contractor, its
assignee, or licensees shall be closed to the public, including
potential licensees. In accordance with 35 U.S.C. 202(c)(5), agencies
shall not disclose any such information obtained during a march-in
proceeding to persons outside the government except when such release is
authorized by the contractor (assignee or licensee).
- (f)
The official conducting the fact-finding shall prepare or adopt
written findings of fact and transmit them to the head of the agency or
designee promptly after the conclusion of the fact-finding proceeding
along with a recommended determination. A copy of the findings of fact
shall be sent to the contractor (assignee or exclusive licensee) by
registered or certified mail. The contractor (assignee or exclusive
licensee) and agency representatives will be given 30 days to submit
written arguments to the head of the agency or
designee; and, upon request by the contractor oral arguments will be
held before the agency head or designee that will make the final
determination.
- (g)
In cases in which fact-finding has been conducted, the head of
the agency or designee shall base his or her determination on the facts
found, together with any other information and written or oral arguments
submitted by the contractor (assignee or exclusive licensee) and agency
representatives, and any other information in the administrative record.
The consistency of the exercise of march-in rights with the policy and
objectives of 35 U.S.C. 200 shall also be considered. In cases referred
for fact-finding, the head of the agency or designee may reject only
those facts that have been found to be clearly erroneous, but must
explicitly state the rejection and indicate the basis for the contrary
finding. Written notice of the determination whether march-in rights
will be exercised shall be made by the head of the agency or designee
and sent to the contractor (assignee of exclusive licensee) by certified
or registered mail within 90 days after the completion of fact-finding
or 90 days after oral arguments, whichever is later, or the proceedings
will be deemed to have been terminated and thereafter no march-in based
on the facts and reasons upon which the proceeding was initiated may be
exercised.
- (h)
An agency may, at any time, terminate a march-in proceeding if
it is satisfied that it does not wish to exercise march-in rights.
(i)
The procedures of this part shall also apply to the exercise of
march-in rights against inventors receiving title to subject inventions
under 35 U.S.C. 202(d) and, for that purpose, the term "contractor" as
used in this section shall be deemed to include the inventor.
- (j)
An agency determination unfavorable to the contractor (assignee
or exclusive licensee) shall be held in abeyance pending the exhaustion
of appeals or petitions filed under 35 U.S.C. 203(2).
- (k)
For purposes of this section the term exclusive licensee
includes a partially exclusive licensee.
- (l)
Agencies are authorized to issue supplemental procedures not
inconsistent with this part for the conduct of march-in proceedings.
Sec. 401.7
Small business preference.
- (a)
Paragraph (k)(4) of the clauses at
Sec. 401.14
Implements the
small business preference requirement of 35 U.S.C. 202(c)(7)(D).
Contractors are expected to use efforts that are reasonable under the
circumstances to attract small business licensees. They are also
expected to give small business firms that meet the standard outlined in
the clause a preference over other applicants for licenses. What
constitutes reasonable efforts to attract small business licensees will
vary with the circumstances and the nature, duration, and expense of
efforts needed to bring the invention to the market.
Paragraph (k)(4)
is not intended, for example, to prevent nonprofit organizations from
providing larger firms with a right of first refusal or other options in
inventions that relate to research being supported under long-term or
other arrangements with larger companies. Under such circumstances it
would not be resonable [sic] to seek and to give a preference to small
business licensees.
- (b)
Small business firms that believe a nonprofit organization is
not meeting its obligations under the clause may report their concerns
to the Secretary. To the extent deemed appropriate, the Secretary will
undertake informal investigation of the concern, and, if appropriate,
enter into discussions or negotiations with the nonprofit organization
to the end of improving its efforts in meeting its obligations under the
clause. However, in no event will the Secretary intervene in ongoing
negotiations or contractor decisions concerning the licensing of a
specific subject invention. All the above investigations, discussions,
and negotiations of the Secretary will be in coordination with other
interested agencies, including the Small Business Administration; and in
the case of a contract for the operation of a government-owned,
contractor operated research or production facility, the Secretary will
coordinate with the agency responsible for the facility prior to any
discussions or negotiations with the contractor.
Sec. 401.8 Reporting on utilization of subject inventions
- (a)
Paragraph (h) of the clauses at
401.14
and its counterpart
in the clause at Attachment A to OMB Circular A-124 provides that
agencies have the right to receive periodic reports from the contractor
on utilization of inventions. Agencies exercising this right should
accept such information, to the extent feasible, in the format that the
contractor normally prepares it for its own internal purposes. The
prescription of forms should be avoided. However, any forms or standard
questionnaires that are adopted by an agency for this purpose must
comply with the requirements of the Paperwork Reduction Act. Copies
shall be sent to the Secretary.
-
(b) In accordance with 35 U.S.C. 202(c)(5) and the terms of the
clauses at
Sec. 401.14,
agencies shall not disclose such information to
persons outside the government. Contractors will continue to provide
confidential markings to help prevent inadvertent release outside the
agency.
Sec. 401.9 Retention of rights by contractor employee inventor.
Agencies which allow an employee/inventor of the contractor to
retain rights to a subject invention made under a funding agreement with
a small business firm or nonprofit organization contractor, as
authorized by 35 U.S.C. 202(d), will impose upon the inventor at least
those conditions that would apply to a small business firm contractor
under paragraphs
(d)(1) and
(3);
(f)(4);
(h);
(i); and
(j) of the clause at
Sec. 401.14(a).
Sec. 401.10 Government assignment to contractor of rights in invention
of government Employee.
In any case when a Federal employee is a co-inventor of any
invention made under a funding agreement with a small business firm or
nonprofit organization and the Federal agency employing such co-inventor
transfers or reassigns the right it has acquired in the subject
invention from its employee to the contractor as authorized by 35 U.S.C.
202(e), the assignment will be made subject to the same conditions as
apply to the contractor under the patent rights clause of its funding
agreement. Agencies may add additional conditions as long as they are
consistent with 35 U.S.C. 201-206.
Sec. 401.11 Appeals.
- (a) As used in this section, the term standard clause means the
clause at
Sec. 401.14
of this part and the clauses previously
prescribed by either OMB Circular A-124 or OMB Bulletin 81-22.
- (b)
The agency official initially authorized to take any of the
following actions shall provide the contractor with a written statement
of the basis for his or her action at the time the action is taken,
including any relevant facts that were relied upon in taking the action.
- (1)
A refusal to grant an extension under
paragraph (c)(4) of the standard clauses.
- (2)
A request for a conveyance of title under
paragraph (d) of the standard clauses.
- (3)
A refusal to grant a waiver under
paragraph (i) of the standard clauses.
- (4)
A refusal to approve an assignment under paragraph
(k)(1) of the standard clauses.
- (5)
A refusal to grant an extension of the exclusive license period under
paragraph (k)(2)
of the clauses prescribed by either OMB Circular
A-124 or OMB Bulletin 81-22.
- (c)
Each agency shall establish and publish procedures under which
any of the agency actions listed in
paragraph (b)
of this section may be
appealed to the head of the agency or designee. Review at this level
shall consider both the factual and legal basis for the actions and its
consistency with the policy and objectives of 35 U.S.C. 200-206.
- (d) Appeals procedures established
under
paragraph (c)
of this
section shall include administrative due process procedures and
standards for fact-finding at least comparable to those set forth in
Sec. 401.6 (e) through
(g)
whenever there is a dispute as to the
factual basis for an agency request for a conveyance of title under
paragraph (d) of the standard clause, including any dispute as to
whether or not an invention is a subject invention.
- (e)
To the extent that any of the actions described in
paragraph (b)
of this section are subject to appeal under the
Contract Dispute Act, the procedures under the Act will satisfy the
requirements of
paragraphs (c) and
(d)
of this section.
Sec. 401.12
Licensing of background patent rights to third parties.
- (a)
A funding agreement with a small business firm or a domestic
nonprofit organization will not contain a provision allowing a Federal
agency to require the licensing to third parties of inventions owned by
the contractor that are not subject inventions unless such provision has
been approved by the agency head and a written justification has been
signed by the agency head. Any such provision will clearly state whether
the licensing may be required in connection with the practice of a
subject invention, a specifically identified work object, or both. The
agency head may not delegate the authority to approve such provisions or
to sign the justification required for such provisions.
- (b)
A Federal agency will not require the licensing of third parties
under any such provision unless the agency head determines that the use
of the invention by others is necessary for the practice of a subject
invention or for the use of a work object of the funding agreement and
that such action is necessary to achieve practical application of the
subject invention or work object. Any such determination will be on the
record after an opportunity for an agency hearing. The contractor shall
be given prompt notification of the determination by certified or
registered mail. Any action commenced for judicial review of such
determination shall be brought within sixty days after notification of
such determination.
Sec. 401.13
Administration of patent rights clauses.
- (a)
In the event a subject invention is made under funding
agreements of more than one agency, at the request of the contractor or
on their own initiative the agencies shall designate one agency as
responsible for administration of the rights of the government in the
invention.
- (b)
Agencies shall promptly grant, unless there is a significant
reason not to, a request by a nonprofit organization under paragraph
(k)(2) of the clauses prescribed by either OMB Circular A-124 or OMB
Bulletin 81-22 inasmuch as 35 U.S.C. 202(c)(7) has since been amended to
eliminate the limitation on the duration of exclusive licenses.
Similarly, unless there is a significant reason not to, agencies shall
promptly approve an assignment by a nonprofit organization to an
organization which has as one of its primary functions the management of
inventions when a request for approval has been necessitated under
paragraph (k)(1) of the clauses prescribed by either OMB Circular A-124
or OMB Bulletin 81-22 because the patent management organization is
engaged in or holds a substantial interest in other organizations
engaged in the manfacture [sic] or sale of products or the use of processes
that might utilize the invention or be in competition with embodiments
of the invention. As amended, 35 U.S.C. 202(c)(7) no longer contains
this limitation. The policy of this subsection should also be followed
in connection with similar approvals that may be required under
Institutional Patent Agreements, other patent rights clauses, or waivers
that predate Chapter 18 of Title 35, United States Code.
- (c)
The President's Patent Policy Memorandum of February 18, 1983,
states that agencies should protect the confidentiality of invention
disclosure, patent applications, and utilization reports required in
performance or in consequence of awards to the extent permitted by 35
U.S.C. 205 or other applicable laws. The following requirements should
be followed for funding agreements covered by and predating this part
401.
- (1)
To the extent authorized by 35 U.S.C. 205, agencies shall not
disclose to third parties pursuant to requests under the Freedom of
Information Act (FOIA) any information disclosing a subject invention
for a reasonable time in order for a patent application to be filed.
With respect to subject inventions of contractors that are small
business firms or nonprofit organizations, a reasonable time shall be
the time during which an initial patent application may be filed under
paragraph (c)
of the standard clause found at
Sec. 401.14(a)
or such other clause may be
used in the funding agreement. However, an agency may disclose such
subject inventions under the FOIA, at its discretion, after a contractor
has elected not to retain title or after the time in which the
contractor is required to make an election if the contractor has not
made an election within that time. Similarly, an agency may honor a FOIA
request at its discretion if it finds that the same information has
previously been published by the inventor, contractor, or otherwise. If
the agency plans to file itself when the contractor has not elected
title, it may, of course, continue to avail itself of the authority of
35 U.S.C. 205.
- (2)
In accordance with 35 U.S.C. 205, agencies shall not disclose or
release for a period of 18 months from the filing date of the patent
application to third parties pursuant to requests under the Freedom of
Information Act, or otherwise, copies of any document which the agency
obtained under this clause which is part of an application for patent
with the U.S. Patent and Trademark Office or any foreign patent office
filed by the contractor (or its assignees, licensees, or employees) on a
subject invention to which the contractor has elected to retain title.
This prohibition does not extend to disclosure to other government
agencies or contractors of government agencies under an obligation to
maintain such information in confidence.
- (3)
A number of agencies have policies to encourage public
dissemination of the results of work supported by the agency through
publication in government or other publications of technical reports of
contractors or others. In recognition of the fact that such publication,
if it included descriptions of a subject invention could create bars to
obtaining patent protection, it is the policy of the executive branch
that agencies will not include in such publication programs copies of
disclosures of inventions submitted by small business firms or nonprofit
organizations, pursuant to
paragraph (c)
of the standard clause found at
Sec. 401.14(a),
except that under the same circumstances under which
agencies are authorized to release such information pursuant to FOIA
requests under
paragraph (c)(1)
of this section, agencies may publish such disclosures.
- (4)
Nothing in this paragraph is intended to preclude agencies from
including in the publication activities described in the first sentence of
paragraph (c)(3),
the publication of materials describing a subject
invention to the extent such materials were provided as part of a
technical report or other submission of the contractor which were
submitted independently of the requirements of the patent rights
provisions of the contract. However, if a small business firm or
nonprofit organization notifies the agency that a particular report or
other submission contains a disclosure of a subject invention to which
it has elected title or may elect title, the agency shall use reasonable
efforts to restrict its publication of the material for six months from
date of its receipt of the report or submission or, if earlier, until
the contractor has filed an initial patent application. Agencies, of
course, retain the discretion to delay publication for additional
periods of time.
- (5)
Nothing in this paragraph is intended to limit the authority of
agencies provided in 35 U.S.C. 205 in circumstances not specifically
described in this paragraph.
Sec. 401.14 Standard patent rights clauses.
(a)
The following is the standard patent rights clause
to be used as specified in
Sec. 401.3(a).
Patent Rights (Small Business Firms and Nonprofit
Organizations)
-
(a) Definitions
- (1) Invention
means any invention or discovery which is or may be
patentable or otherwise protectable under Title 35 of the United States
Code, or any novel variety of plant which is or may be protected under
the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
- (2) Subject invention
means any invention of the contractor
conceived or first actually reduced to practice in the performance of
work under this contract, provided that in the case of a variety of
plant, the date of determination (as defined in section 41(d) of the
Plant Variety Protection Act, 7 U.S.C. 2401(d))
must also occur during the period of contract performance.
- (3) Practical Application
means to manufacture in the case of a
composition or product, to practice in the case of a process or method,
or to operate in the case of a machine or system; and, in each case,
under such conditions as to establish that the invention is being
utilized and that its benefits are, to the extent permitted by law or
government regulations, available to the public on reasonable terms.
- (4) Made when used
in relation to any invention means the conception
or first actual reduction to practice of such invention.
- (5) Small Business Firm
means a small business concern as defined at
section 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing regulations
of the Administrator of the Small Business Administration. For the
purpose of this clause, the size standards for small business concerns
involved in government procurement and subcontracting at 13 CFR 121.3-8
and 13 CFR 121.3-12, respectively, will be used.
- (6) Nonprofit Organization
means a university or other institution
of higher education or an organization of the type described in section
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c) and
exempt from taxation under section 501(a) of the Internal Revenue Code
(25 U.S.C. 501(a)) or any nonprofit scientific or educational
organization qualified under a state nonprofit organization statute.
- (b) Allocation of Principal
Rights
The Contractor may retain the entire right, title, and interest
throughout the world to each subject invention subject to the provisions
of this clause and 35 U.S.C. 203. With respect to any subject invention
in which the Contractor retains title, the Federal government shall have
a nonexclusive, nontransferable, irrevocable, paid-up license to
practice or have practiced for or on behalf of the United States the
subject invention throughout the world.
- (c) Invention Disclosure,
Election of Title and Filing of Patent Application
by Contractor
- (1)
The contractor will disclose each subject invention to the
Federal Agency within two months after the inventor discloses it in
writing to contractor personnel responsible for patent matters. The
disclosure to the agency shall be in the form of a written report and
shall identify the contract under which the invention was made and the
inventor(s). It shall be sufficiently complete in technical detail to
convey a clear understanding to the extent known at the time of the
disclosure, of the nature, purpose, operation, and the physical,
chemical, biological or electrical characteristics of the invention. The
disclosure shall also identify any publication, on sale or public use of
the invention and whether a manuscript describing the invention has been
submitted for publication and, if so, whether it has been accepted for
publication at the time of disclosure. In addition, after disclosure to
the agency, the Contractor will promptly notify the agency of the
acceptance of any manuscript describing the invention for publication or
of any on sale or public use planned by the contractor.
- (2)
The Contractor will elect in writing whether or not to retain
title to any such invention by notifying the Federal agency within two
years of disclosure to the Federal agency. However, in any case where
publication, on sale or public use has initiated the one year statutory
period wherein valid patent protection can still be obtained in the
United States, the period for election of title may be shortened by the
agency to a date that is no more than 60 days prior to the end of the
statutory period.
- (3)
The contractor will file its initial patent application on a
subject invention to which it elects to retain title within one year
after election of title or, if earlier, prior to the end of any
statutory period wherein valid patent protection can be obtained in the
United States after a publication, on sale, or public use. The
contractor will file patent applications in additional countries or
international patent offices within either ten months of the
corresponding initial patent application or six months from the date
permission is granted by the Commissioner of Patents and Trademarks to
file foreign patent applications where such filing has been prohibited
by a Secrecy Order.
- (4)
Requests for extension of the time for disclosure, election, and
filing under subparagraphs
(1),
(2), and
(3)
may, at the discretion of the agency, be granted.
- (d) Conditions When the Government
May Obtain Title
The contractor will convey to the Federal
agency, upon written request, title to any
subject invention --
- (1)
If the contractor fails to disclose or elect title to the
subject invention within the times specified in
(c),
above, or elects
not to retain title; provided that the agency may only request title
within 60 days after learning of the failure of the contractor to
disclose or elect within the specified times.
- (2)
In those countries in which the contractor fails to file patent
applications within the times specified in
(c)
above; provided, however,
that if the contractor has filed a patent application in a country after
the times specified in
(c)
above, but prior to its receipt of the
written request of the Federal agency, the contractor shall continue to
retain title in that country.
- (3)
In any country in which the contractor decides not to continue
the prosecution of any application for, to pay the maintenance fees
on, or defend in reexamination or opposition proceeding on, a patent
on a subject invention.
- (e) Minimum Rights to Contractor
and Protection of the Contractor Right to File
- (1)
The contractor will retain a nonexclusive royalty-free license
throughout the world in each subject invention to which the Government
obtains title, except if the contractor fails to disclose the invention
within the times specified in
(c),
above. The contractor's license
extends to its domestic subsidiary and affiliates, if any, within the
corporate structure of which the contractor is a party and includes the
right to grant sublicenses of the same scope to the extent the
contractor was legally obligated to do so at the time the contract was
awarded. The license is transferable only with the approval of the
Federal agency except when transferred to the sucessor [sic] of that party of
the contractor's business to which the invention pertains.
- (2)
The contractor's domestic license may be revoked or modified by
the funding Federal agency to the extent necessary to achieve
expeditious practical application of the subject invention pursuant to
an application for an exclusive license submitted in accordance with
applicable provisions at 37 CFR part 404 and agency licensing
regulations (if any). This license will not be revoked in that field of
use or the geographical areas in which the contractor has achieved
practical application and continues to make the benefits of the
invention reasonably accessible to the public. The license in any
foreign country may be revoked or modified at the discretion of the
funding Federal agency to the extent the contractor, its licensees, or
the domestic subsidiaries or affiliates have failed to achieve practical
application in that foreign country.
- (3)
Before revocation or modification of the license, the funding
Federal agency will furnish the contractor a written notice of its
intention to revoke or modify the license, and the contractor will be
allowed thirty days (or such other time as may be authorized by the
funding Federal agency for good cause shown by the contractor) after the
notice to show cause why the license should not be revoked or modified.
The contractor has the right to appeal, in accordance with applicable
regulations in 37 CFR part 404 and agency regulations (if any)
concerning the licensing of Government-owned inventions, any decision
concerning the revocation or modification of the license.
- (f) Contractor Action to Protect
the Government's Interest
- (1)
The contractor agrees to execute or to have executed and
promptly deliver to the Federal agency all instruments necessary to
- (i)
establish or confirm the rights the Government has throughout the world
in those subject inventions to which the contractor elects to retain
title, and
- (ii)
convey title to the Federal agency when requested under
paragraph (d)
above and to enable the government to obtain patent
protection throughout the world in that subject invention.
- (2)
The contractor agrees to require, by written agreement, its
employees, other than clerical and nontechnical employees, to disclose
promptly in writing to personnel identified as responsible for the
administration of patent matters and in a format suggested by the
contractor each subject invention made under contract in order that the
contractor can comply with the disclosure provisions of
paragraph (c),
above, and to execute all papers necessary to file patent applications
on subject inventions and to establish the government's rights in the
subject inventions. This disclosure format should require, as a minimum,
the information required by
(c)(1),
above. The contractor shall instruct
such employees through employee agreements or other suitable educational
programs on the importance of reporting inventions in sufficient time to
permit the filing of patent applications prior to U.S. or foreign
statutory bars.
- (3)
The contractor will notify the Federal agency of any decisions
not to continue the prosecution of a patent application, pay maintenance
fees, or defend in a reexamination or opposition proceeding on a patent,
in any country, not less than thirty days before the expiration of the
response period required by the relevant patent office.
- (4)
The contractor agrees to include, within the specification of
any United States patent applications and any patent issuing thereon
covering a subject invention, the following statement, "This invention
was made with government support under (identify the contract) awarded
by (identify the Federal agency). The government has certain rights in
the invention."
- (5) Provide a report prior to the close-out of a
funding agreement listing all subject inventions or stating that there were none.
- (6)
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.
- (7)
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) Subcontracts
- (1)
The contractor will include this clause, suitably modified to
identify the parties, in all subcontracts, regardless of tier, for
experimental, developmental or research work to be performed by a small
business firm or domestic nonprofit organization. The subcontractor will
retain all rights provided for the contractor in this clause, and the
contractor will not, as part of the consideration for awarding the
subcontract, obtain rights in the subcontractor's subject inventions.
- (2)
The contractor will include in all other subcontracts,
regardless of tier, for experimental developmental or research work the
patent rights clause required by (cite section of agency implementing
regulations or FAR).
- (3)
In the case of subcontracts, at any tier, when the prime award
with the Federal agency was a contract (but not a grant or cooperative
agreement), the agency, subcontractor, and the contractor agree that the
mutual obligations of the parties created by this clause constitute a
contract between the subcontractor and the Federal agency with respect
to the matters covered by the clause; provided, however, that nothing in
this paragraph is intended to confer any jurisdiction under the Contract
Disputes Act in connection with proceedings under
paragraph (j)
of this clause.
- (h) Reporting on Utilization
of Subject Inventions
The Contractor agrees to submit on request periodic reports no more
frequently than annually on the utilization of a subject invention or on
efforts at obtaining such utilization that are being made by the
contractor or its licensees or assignees. Such reports shall include
information regarding the status of development, date of first
commerical [sic] sale or use, gross royalties received by the contractor, and
such other data and information as the agency may reasonably specify.
The contractor also agrees to provide additional reports as may be
requested by the agency in connection with any march-in proceeding
undertaken by the agency in accordance with
paragraph (j)
of this clause. As required by 35 U.S.C. 202(c)(5), the agency agrees it will
not disclose such information to persons outside the government without
permission of the contractor.
-
(i) Preference for United States Industry
Notwithstanding any other provision of this clause, the contractor
agrees that neither it nor any assignee will grant to any person the
exclusive right to use or sell any subject inventions in the United
States unless such person agrees that any products embodying the subject
invention or produced through the use of the subject invention will be
manufactured substantially in the United States. However, in individual
cases, the requirement for such an agreement may be waived by the
Federal agency upon a showing by the contractor or its assignee that
reasonable but unsuccessful efforts have been made to grant licenses on
similar terms to potential licensees that would be likely to manufacture
substantially in the United States or that under the circumstances
domestic manufacture is not commerically [sic] feasible.
- (j) March-in Rights
The contractor agrees that with respect to any subject invention in
which it has acquired title, the Federal agency has the right in
accordance with the procedures in 37 CFR 401.6 and any supplemental
regulations of the agency to require the contractor, an assignee or
exclusive licensee of a subject invention to grant a nonexclusive,
partially exclusive, or exclusive license in any field of use to a
responsible applicant or applicants, upon terms that are reasonable
under the circumstances, and if the contractor, assignee, or exclusive
licensee refuses such a request the Federal agency has the right to
grant such a license itself if the Federal agency determines that:
- (1)
Such action is necessary because the contractor or assignee has
not taken, or is not expected to take within a reasonable time,
effective steps to achieve practical application of the subject
invention in such field of use.
- (2)
Such action is necessary to alleviate health or safety needs
which are not reasonably satisfied by the contractor, assignee or their
licensees;
- (3)
Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not
reasonably satisfied by the contractor, assignee or licensees; or
- (4)
Such action is necessary because the agreement required by
paragraph (i)
of this clause has not been obtained or waived or because
a licensee of the exclusive right to use or sell any subject invention
in the United States is in breach of such agreement.
- (k) Special Provisions for
Contracts with Nonprofit Organizations
If the contractor is a nonprofit organization, it agrees that:
- (1)
Rights to a subject invention in the United States may not be
assigned without the approval of the Federal agency, except where such
assignment is made to an organization which has as one of its primary
functions the management of inventions, provided that such assignee will
be subject to the same provisions as the contractor;
- (2)
The contractor will share royalties collected on a subject
invention with the inventor, including Federal employee co-inventors
(when the agency deems it appropriate) when the subject invention is
assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
- (3)
The balance of any royalties or income earned by the contractor
with respect to subject inventions, after payment of expenses (including
payments to inventors) incidential [sic] to the administration of subject
inventions, will be utilized for the support of scientific research or
education; and
- (4)
It will make efforts that are reasonable under the circumstances
to attract licensees of subject invention that are small business firms
and that it will give a preference to a small business firm when
licensing a subject invention if the contractor determines that the
small business firm has a plan or proposal for marketing the invention
which, if executed, is equally as likely to bring the invention to
practical application as any plans
or proposals from applicants that are not small business firms;
provided, that the contractor is also satisfied that the small business
firm has the capability and resources to carry out its plan or proposal.
The decision whether to give a preference in any specific case will be
at the discretion of the contractor. However, the contractor agrees that
the Secretary may review the contractor's licensing program and
decisions regarding small business applicants, and the contractor will
negotiate changes to its licensing policies, procedures, or practices
with the Secretary when the Secretary's review discloses that the
contractor could take reasonable steps to implement more effectively the
requirements of this
paragraph (k)(4).
- (l) Communication
All NIH-related disclosures, elections, confirmatory licenses to the government,
patent applications, waivers, and other communications should be sent to:
National Institutes of Health
Division of Extramural Inventions & Technology Resources
6705 Rockledge Drive, Room 310, MSC 7980
Bethesda, MD 20892-7980
(301) 435-1986
Fax: (301) 480-0272
For other iEdison-participatory awarding components, please refer to the iEdison
POC list.
For other agency awards please refer to your funding agreement or you may contact the
iEdison helpline for additional information.
The NIH electronic Edison extramural invention
reporting system can be accessed through the
Web
(http://edison.gov/).
This electronic reporting system has been
designed to facilitate reporting compliance,
timeliness, and reduce paperwork. Edison also
has an e-mail address
(Edison@nih.gov).
(b) When the Department of Energy (DOE) determines to use
alternative provisions under Sec. 401.3(a)(4), the standard clause at
Sec. 401.14(a), of this section, shall be used with the following
modifications unless a substitute clause is drafted by DOE:
(1) The title of the clause shall be changed to read as follows:
Patent Rights to Nonprofit DOE Facility Operators
(2) Add an ``(A)'' after ``(1)'' in paragraph (c)(1) and add
subparagraphs (B) and (C) to paragraph (c)(1) as follows:
(B) If the subject invention occurred under activities funded by the
naval nuclear propulsion or weapons related programs of DOE, then the
provisions of this subparagraph (c)(1)(B) will apply in lieu of
paragraphs (c)(2) and (3). In such cases the contractor agrees to assign
the government the entire right, title, and interest thereto throughout
the world in and to the subject invention except to the extent that
rights are retained by the contractor through a greater rights
determination or under paragraph (e), below. The contractor, or an
employee-inventor, with authorization of the contractor, may submit a
request for greater rights at the time the invention is disclosed or
within a reasonable time thereafter. DOE will process such a request in
accordance with procedures at 37 CFR 401.15. Each determination of
greater rights will be subject to paragraphs (h)-(k) of this clause and
such additional conditions, if any, deemed to be appropriate by the
Department of Energy.
(C) At the time an invention is disclosed in accordance with
(c)(1)(A) above, or within 90 days thereafter, the contractor will
submit a written statement as to whether or not the invention occurred
under a naval nuclear propulsion or weapons-related program of the
Department of Energy. If this statement is not filed within this time,
subparagraph (c)(1)(B) will apply in lieu of paragraphs (c)(2) and (3).
The contractor statement will be deemed conclusive unless, within 60
days thereafter, the Contracting Officer disagrees in writing, in which
case the determination of the Contracting Officer will be deemed
conclusive unless the contractor files a claim under the Contract
Disputes Act within 60 days after the Contracting Officer's
determination. Pending resolution of the matter, the invention will be
subject to subparagraph (c)(1)(B).
-
(3) Paragraph (k)(3) of the clause will be modified as prescribed at
Sec. 401.5(g).
-
(c) As prescribed in Sec. 401.3, replace (b) of the basic clause
with the following paragraphs (1) and (2):
(b) Allocation of principal rights.
- (1) The Contractor may retain
the entire right, title, and interest throughout the world to each
subject invention subject to the provisions of this clause, including
(2) below, and 35 U.S.C. 203. With respect to any subject invention in
which the Contractor retains title, the Federal Government shall have a
nonexclusive, nontransferable, irrevocable, paid-up license to practice
or have practiced for or on behalf of the United States the subject
invention throughout the world.
(2) If the Contractor performs services at a Government owned and
operated laboratory or at a Government owned and contractor operated
laboratory directed by the Government to fulfill the Government's
obligations under a Cooperative Research and Development Agreement
(CRADA) authorized by 15 U.S.C. 3710a, the Government may require the
Contractor to negotiate an agreement with the CRADA collaborating party
or parties regarding the allocation of rights to any subject invention
the Contractor makes, solely or jointly, under the CRADA. The agreement
shall be negotiated prior to the Contractor undertaking the CRADA work
or, with the permission of the Government, upon the identification of a
subject invention. In the absence of such an agreement, the Contractor
agrees to grant the collaborating party or parties an option for a
license in its inventions of the same scope and terms set forth in the
CRADA for inventions made by the Government.
Sec. 401.15
Deferred determinations.
- (a)
This section applies to requests for greater rights in subject
inventions made by contractors when deferred determination provisions
were included in the funding agreement because one
of the exceptions at
Sec. 401.3(a)
was applied, except that the
Department of Energy is authorized to process deferred determinations
either in accordance with its waiver regulations or this section. A
contractor requesting greater rights should include with its request
information on its plans and intentions to bring the invention to
practical application. Within 90 days after receiving a request and
supporting information, or sooner if a statutory bar to patenting is
imminent, the agency should seek to make a determination. In any event,
if a bar to patenting is imminent, unless the agency plans to file on
its own, it shall authorize the contractor to file a patent application
pending a determination by the agency. Such a filing shall normally be
at the contractor's own risk and expense. However, if the agency
subsequently refuses to allow the contractor to retain title and elects
to proceed with the patent application under government ownership, it
shall reimburse the contractor for the cost of preparing and filing the
patent application.
- (b)
If the circumstances of concerns which originally led the agency
to invoke an exception under
Sec. 401.3(a)
are not applicable to the
actual subject invention or are no longer valid because of subsequent
events, the agency should allow the contractor to retain title to the
invention on the same conditions as would have applied if the standard
clause at
Sec. 401.14(a)
had been used originally, unless it has been licensed.
- (c) If
paragraph (b)
is not applicable the agency shall make its
determination based on an assessment whether its own plans regarding the
invention will better promote the policies and objectives of 35 U.S.C.
200 than will contractor ownership of the invention. Moreover, if the
agency is concerned only about specific uses or applications of the
invention, it shall consider leaving title in the contractor with
additional conditions imposed upon the contractor's use of the invention
for such applications or with expanded government license rights in such
applications.
- (d)
A determination not to allow the contractor to retain title to a
subject invention or to restrict or condition its title with conditions
differing from those in the clause at
Sec. 401.14(a),
unless made by
the head of the agency, shall be appealable by the contractor to an
agency official at a level above the person who made the determination.
This appeal shall be subject to the procedures applicable to appeals under
Sec. 401.11 of this part.
Sec. 401.16
Electronic filing.
Unless otherwise requested or directed by the agency,
- (a) The written report required in
(c)(1)
of the standard clause in
Sec. 401.14(a)
may be electronically filed;
- (b)
The written election required in
(c)(2)
of the standard clause in
Sec. 401.14(a)
may be electronically filed; and
- (c)
The close-out report in
(f)(1)
and the information identified in
(f)(2) and
(f)(3) of
Sec. 401.5
may be electronically filed.
The above is taken from 37 CFR 401 with changes, with certain
specifics provided for NIH reporting, e.g., 401.14(f) and 401.14(l).
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