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I Policy I Policy

l 0 J Findings' 101 Findings

l02 Purpose 102 Purpose

;

I Policy

101 Findings

102 D~claration of Purpose

This is more detailed than bothversions of os. 1657

103 Definitions

contract,contractordisclosureFederal agencyGovernmentinventioninventormade 'under contractnonprofit organizationpersonpractical applicationSecretary (of Commerce)small business firm

< •.~ ..

103 Definitions

contractcontractor,

Federal agencyGovernmentinvention (includes ref. to Plant

Variety Protection Act)

nonprofit organization

practical application (modifies orig.Sec'y (or other designated official)small business firmDirector (of OMB)subject invention

,

V501 Definitions

contract (similar to both bills)contractor (similar to both bills)

Fed. agency (identical to both bills)

invention (most similar to Admin bill)

made (similar to original bill)nonprofit organ. (ident. to both bills)person (defined per u.S.Code,Title 1 )pract. app. (identical to orig .. bill)

sm. bus. fir-m (doesn't include "size s-l.q~·

subj. invent. (similar to Admin. bilantitr-ust law

II Implementation II;

Functions of OSTP & FCCSET

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ImplementationTJ

201 Responsibilities 201 Responsibilities 201 FCCSET

Secretary (of Commerce) shallcoordinate policy under the_Act.

a Director (of OMB) shall issue necess- aary regulations and standard contractprovisions implementing rights, terms,conditions under Sec. 301 for allagencies.

FCCSET shall make recommendationsto the Director of OSTP regardingplanning/policies re patents andthis Act. The Sec'y of Commerceshall chair a committee of FCCSETfor this purpose.

b Sec'y's duties re consistent policy,including consultation with theOffice of Federal Procurement Polic)

.

b Sec'y's duties re consistent policy(minus consultation with Office ofFed. Procurement Policy (probablyLmpl Lc i. t in (a) above) minus Dept. ofCommerce final administrative pro­ceeding involving the parties, asrequired in the original bill).

b Recommendations under (a) are to betransmitted to Federal agencies.

c Sec'y's duties re effective manage­ment.

c Sec'y's duties re effective managemen_ c(minus receiving funds from fees,royalties. etc. under the Act as inthe original bill).

FCCSET responsibilities for effect­ive management,

d Sec'y to submit annual report toCongress.

d Sec'y to submit annual report toCongress

including annual report.

2.02 Expiration of Title II after 7 years 202unless' renewed.

Expiration of Title II (b-d) after 7years, unless revewed •

.

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III Allocation of Rights-Gov't Contractor III .Allocation of property Rights inInventions Resulting From Federally

JSponsored R&D(301-303 of original bill struck outl

301 Disposition of Rights· 301 Ownership & Rights of Gov'tRights of the Government

Allocation of Rights-Gov'tContractors

HI

301

a

b

c

Each Fed. agency shall acquire titleunder contracts involving:-Fed. R&D Centers-security reasons-exceptional circumstances-products, etc. for use by Gov'tregulations

Agency must file a statement withthe Secretary of Commerce re Sec. (a

Inventor/contractor must report oncommercialization.

a Each contractor has the option of aretaining title worldwide or bycountry to any subject invention(o f , original Sec. 302 (a».

However, unless inconsistent withinternational agreements, Federalagencies may limit or eliminate thisright if (cf. originalSec. 301 (a»:-security reasons (similar to original)-for-profit with no place of businessin U.S.

-university or non-profit not locatedin u.s.

-contractor is subject to foreigngovernment control

-exceptional circumstances (similarto original bill)

b ~gency must file a statement with the .b~ecretary of Commerce re Sec. (a)~ithin 30 days (except for securityIreasons) . (Similar to Sec. 301 (b)bf origin'll bill.) Regarding security~easons, the Director of OMB may issue~egulations for consistency.

Each Fed. agency shall acquire titleunder contracts involving:-Fed. R&D Centers-security reasons-exceptional circumstances, includin3

DNA research-products, etc. for compliance withGovernment regulations

-contract is not to be performed inU.S. or possessions

-contractor 1s a business entitywithout a place of business in U.S.

-contr·actor is subj edt to controlof a foreign government

In other situations, each Fed. agencYshall acquire title if the contracto~

~lects not to file a patent applicat­~on in any country.

~ach Fed. agency has the right to~equire contractor reports onFommercialization

J.S. Gov't has an irrevocahle, non­'xclusivo, nontransferable, paid-uplLcun ae ,

~.s. Gov't ht\:J U nonexc.l u s f ve ,lontrung[eruLle, irrevocable,nlid-up 1 Lcou uo ,

I

c-e Disposition of Rights (Continued)302 General Provisions

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.Rights of Contractor

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302

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301Rights of the Contractor

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Generally contain the provisionsfound in the following sections ofthe original version of S. 1657,considerably rearranged, plusprovisions not found in the originalbill :

(.1

b

Other than cases under Sec. 301 (a),contractor has the option ofretaining title.

When Government obtains title underSec. 301, ,contractor has non­exclusive, royalty-free license. aria. bill

3Q1, Rights ofthe Gov't

Administration billMainly 301 (c) (7) &(9), 301 (e),302 (d)

a a~her than cases under Sec. 301 (a),contractor has the option ofretaining title (same as originalS. 1657).

b When Gov't. obtains title underSec. 301, contractor has non­exclusive, royalty-free ,license(same as original S. 1657), pluscontractor's license includes thethe right to sublicense.

302, Rights ofthe Contractor

301 (a), 301 (c) (3)& (12)

c Similar to Sec. 302 (a) of Admin­istration bill.

305, GeneralProvisions

Mainly 301 (c) & (d302 (c), 201 (a)

d Similar to Sec. 302 (b) of Admin­istration bill.

c

305

a

b

General Provisions

Each contract shall use a singlepatent rights clause including 5provisions.

301

~nder Sec. 304 (March-In Rights) the'edera1 agency may specify the terms~nd conditions. (Under the Adminis- (2).ration bill, this provision seems tc)e covered by Sec. 201 (a), whicheplaces the original bill's Sec.01 (al).

Basically, the Administration bill is 305more specific about requiring acontractor to take steps to commer- acialize an invention, such as filinginitial patent applications bothdomestically and internationally.

Additional provisions not found in th?r~ginal bill include:

Each contract shall contain appropria Eprovisions to effectuate the f o Ll.ow Lriq : b

employees and others under the corrtr ad tmust report subject inventions to the·contractor

3eneral Provisions

Each contract shall use a singlepatent rights clause including 5Jrovisions very similar to original

. 1657, except that the singlepatent rights clause shall beetermined by uniform regulations

·'ssued by the Administrator of,eneral Services, the Administratorf NASA, and the Sec'y of Defense.

lnder Sec. 304 (March-In Rights) the'ederal agency may specify the termsnd conditions. (Very similar toec. 305 (b) of original S. 1657.)Under the Administration bill, thisrovision seems to be covered by Sec01 (a), which replaces the originalill's Sec. 201 (a).)

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(5)

(6 )

contractor electing rights toinventions must file in othercountries within a reasonable timein order to retain title

upon written request by the Federalagency, the contractor will transfertitle to any subject invention tothe Government in any country undercertain conditions

c Regulations under' Sec. 305 (a)may contain provisions applicableonly to contractors which arenonprofits, small business, orotper contractors.

d Provisions of the Act do notapply to TVA. (The definitionof "contract" in the Administra­tion's bill excludes TVA.)

(8) when subject inventions are sUbjectto international agreements, thecontractor will convey any requiredlicens~s or assignment of rights inspecific countries to the Gov't

(11) similar to "disposition of rights"subsections of P.L. 96-517, Sec. .202 (c)'(7) (A), (e), and' (D) regardingthe assignment of rights to asubject invention by nonprofitprganizations located in the U.S.

(13 ) any other administrative requiremeJ:ltsr,hat the Director of OMB determines/;.0 be necessary to effectuate the>-iahts of the Government

• lO-2 . 02 (repeated from above)a If the contractor does not elect ,to c Similar to Sec. 302 (a) of Admin-

retain worldwide title, the Federal istration bill.~gency may grant requests for retentionDf rights by the inventor.

b 'Ihen Fed. employee is a coinventor, d Similar to Sec. 302 (b) of Admin-bed. agency may transfer rights which istration bill.

t may acquire in the subject inventioll1'0 the contractor.

c I'otification of a patent's issuance inhe PTa Official Gazette shall indicat~nvention was made with Gov't funds.

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303 Waiver

Federal agency may waive its rightsunder Sec. 301

301d Waiver

Similar to Sec. 303 of both originalS. 1657 and H.R. 4564 .as amended, plua section similar to Sec. 305 (a) (5):'(A) pf both originalS. 1657 andH.R. 4564 as amended.

303 Waiver

Federal agency may its riqhtsunder Sec. 301 (a)' (identical toSec. 303 of original S. 1657 andsimilar to Sec. 301 (d) of theAdministration bill minus Subsec.(2) ) •

304

a

b

March-In Rights 303

Agency has the right to require the acontractor to grant a license under4 conditions, including lessening ofcompetition and inconsistency withantitrust laws.

Agency rights under (a) are subject bto the Secretary's approval aftera formal hearing.

March-In Rights

Agency has the right to require thecontractor to grant a license under3 conditions (eliminates the fourthcondition of the original bill relessening of competition or unduemarket concentration and inconsist­ency with antitrust laws).

Eliminates (b) of original bill andSUbstitutes a procedure to settledisputes under this section byrecourse to the U.S. Court of Claimsrather than the Sec'y of Commerce.

304 March-In Rights

a Agency has the right to require thecontractor to grant a license under4 conditions (almost identical tooriginal S. 1657).

b Agency rights under (a) are to bedetermined after a hearing, butwithout reference to the Sec'y of

'of Commerce ~pproval as required byoriginal S. 1657 .

.

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304 Appeals(No equ.tval.ent; section in originalS. 1657)

a Agency d~cisions. to take title toinventions under Sec. 301 (c) (1) andSec. 301 (c) (6) (ii) and (iii) andagency refusal to grant approval ofan assignment of rights by a non­profit organization under Sec.301 (c) (11) shall be accompanied bywritten explanatio to the contractor.

b within 30 days, the contractor mayappeal to the head of·the agency.

306 Judicial Review~No equivalent section in originalS. 1657)

Any person adversely affected bya Federal agency determinationunder this Act has 60 days there­after to file a petition with theu.s. Court of Customs and PatentAppeals.

·

c The agency head shall determine issue~

of fact after affording the contract­or a h~aring.

d The proceclures under the ContractDisputes Act will satisfy therequirements of this section.

Descn'~-j,;"..

Contractor's Payments tO,theGovernment(No equivalent section in eitherversion of S. 1657.)

7711.(5«rlr,..307

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.a The Administrator of General

Services, the Administrator ofNASA, and the Sec'y of Defenseshall issue regulations for pay­ment to the Government by acontractor, except for smallbusiness firms or. nonprofits, ofan equitable share of royaltiesreceived from a patent or subjectinvention under 2 conditions, butnot to exceed Government fundsexpended except by agreement.

b A Federal agency may waive paymentsunder (a) under 5 conditions.

c Such regulations to be promulgatedwithin 12 months of enactment, butshall not take effect if eitherHouse of Congress adopts a resolutiondisapproving such regulations.

d Until the regulations becomeeffective, the agencies shall obtainpayment on a contract-by-contractbasis.

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3116 Background Rights 305a,b

Background Rights

To the one-sentence statement in theoriginal bill, Subsec. (b), theAdministration bill adds, in effect,Sec. 202 (f) of P.L. 96-517 regardingthird-party licensing prohibition ofinventions owned by the contractorthat are not sUbject inventions,specifically for funding agreementswith small business firms or non~

profit organizations.

308 Background Rights

(Identical to original S. 1657.)

401 Authority of Federal Agencies

307 Government Licensing Authority

A Federal agency may grant exclusiveor partically exclusive licensesin which the Government hasacquired title, under 3 conditions.

IV Licen,sing of Government OwnedInventions

401-403 (This replaces Sec. 307 of the

original S. 1657.)

Identical to the following sectionsof P.L. 96-517 with the exceptionsnoted:

Sec. 207 (identical except fortechnical additions)

IV Domestic and Foreign Protectionand Licensing of FederallyOwned Inventions

(This replaces Sec. 307 of theoriginal S. 1657.)

Similar to the following sectionsof P.L. 96-517 with the exceptionsnoted:

Sec. 208 (Administration bill adds arequirement for concurrence of theDirector of OMB)Sec. 209 (except Subsec. (c) (2) .and(d), which prohibit licensing wpichwould tend to lessen competition orbe inconsistent with antitrust laws.See Subsec. (a) of the March-In Right~lrovisions of both versions of S. 165 ;the Administration version of S. 1657deletes a similar prOVision from theMarch-In Rights provisions found inthe original bill.)

Sec. 207, delineates specificsteps in Subsec. 401 (2) through(5) of H.R. 4564 as amended thatexpand upon Subsec. (3) of Sec.207 of P.L. 96-517 maximizingbenefits to the public and FederalGov't; adds to Subsec. (4) ofSec. 207 by increasing the role ofthe Dept. of Commerce in receivingcustody and administration ofinventions and receiving royaltiestherefrom.

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402 Authority of tne SecOy ,ofCommerce in Cooperation WithOther Federal Agencies,

G:i!ves the Sec'y'of Commerce a rolein coordinating a program to carryout Sec. 401. (No equivalentsection ,in P.L. 96-517.)

403 Authority of Administrator ofGeneral Services

(Identical to Sec. 208 of P.L.96­517, Regulations Governing Fed.Licensing, except that it doesnot exclude TVA.)

404 Grants of an Exclusive ora-c Partially Exclusive License

Similar to Sec. 209 of P.L. 96­517, Restrictions on Licensingof Federally Owned Inventions,except:

,

Sec. 209 (a) and (b) dealing with(a) development ofa marketingplan by the contractor and (b)u.S. manufacture of the invention,are deleted.

Sec. 209 (c) (3) dealing with smallbusiness preference is deleted.

Sec. 209 (c) (2) and (d) dealingwith antitrust factors deletereferences to the granting oflicenses that would tend to lessencompetition.

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d The language of Sec. 209, (f)regarding the terms and conditionsin any grant of a license by aFederal agency, appropriate forthe protection of the interests ofthe Federal Government and thepublic, reqUires provisions whichdiffer significantly from Sec.404 (d) of H.R. 4564 as amended,although they are similar inoverall intent to protect theFederal Government's and thepublic's interests.

IV Miscellaneous v Misce~laneous v Miscellaneous

401 Acts. amended 501 Repeal of Existing Statutory R&D Auth 503 Identified Act Amended

Identical to Sec. 401 of originalS. 1657 with a notation that " anumber of additions and technicalcorrections are required in thissection."

Similar, but not identical toacts amended by both versions ofS. 1657.

502 Relationship to Antitrust Laws 502 Relationship to Other Laws

(No equivalent section in the originabill. )

. a Defines "acquisition of assets" .forallegations of violation of Sec. 7of the Clayton Act.

b No immunity conveyed by this Actunder any antitrust law.

(Similar to Sec. 502 (b) ofthe Administration bill regardingnot granting immunity under anyanti trust law.)

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·111} Effective date--6 months afterenactment.

503a Effective date--9months after

enactment.

504 Effective date~-first day of theseventh month after enactment.

(The following have no equivalentsections in the original bill andH.R. 4564 as amended.)

b After the effective date, if thecontractor agrees, prior contractsmay be amended to substitutecontract provisions issued by theDirector of OMB under Sec. 201 (a).,

c After the effective date, each Fed;agency is authorized to allow acontractor or inventor to retaintitle made under prior contractsunder the same conditions as if thisAct and the Director's (of OMB)regulations had been in force.