[Federal Register Volume 63, Number 224 (Friday, November 20, 1998)]
[Rules and Regulations]
[Pages 64411-64415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30956]
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DEPARTMENT OF COMMERCE
National Institute of Standards and Technology
15 CFR Part 295
[Docket No. 980717184-8277-02]
RIN 0693-AB48
Advanced Technology Program
AGENCY: National Institute of Standards and Technology, Technology
Administration, Commerce.
ACTION: Final rule.
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SUMMARY: The National Institute of Standards and Technology is today
issuing a final rule which amends the implementing regulations for the
Advanced Technology Program (ATP). Changes include modification of the
ATP evaluation criteria and weights for project selection and
clarification of other sections of the rule.
EFFECTIVE DATE: This rule is effective November 20, 1998.
FOR FURTHER INFORMATION CONTACT:
To receive additional program information, contact Barbara Lambis at
301-975-4447.
SUPPLEMENTARY INFORMATION: The National Institute of Standards and
Technology is today issuing a final rule which amends regulations found
at Part 295 of Title 15 of the Code of Federal
[[Page 64412]]
Regulations, which implements the Advanced Technology Program (ATP).
These changes strengthen the fundamental mission of the ATP; for
government to work in partnership with industry to foster the
development and broad dissemination of challenging, high-risk
technologies that offer the potential for significant, broad-based
economic benefits for the nation. Such a unique government-industry
research partnership fosters dramatic gains in existing industries,
accelerates the development of emerging or enabling technologies
leading to revolutionary new products, industrial processes and
services for the world's markets, and helps spawn new industries of the
21st century. Furthermore, the changes also ensure that the fundamental
strengths of the ATP remain unchanged, especially the requirement that
the ATP continue to be a wholly merit-driven program based on peer
review. Changes to Part 295 include revisions on the following topics
(please see the analysis of comments below for additional details):
Section 295.2, Definitions, is modified to add a
definition of ``company'' for clarity; revises the definition of
``industry-led joint research and development venture'' for clarity;
and removes the definition of ``joint research and development
venture'' or ``joint venture'' which is already included in the ATP
statute.
Section 295.4, The selection process, is modified to
eliminate funding to assist proposers in overcoming any organizational
deficiencies because the adequacy of the organizational structure is
included in one of the ATP selection criteria.
Section 295.6, Criteria for selection, is modified to
place equal emphasis on the technical and economic merits of a proposal
in accordance with the purpose of the Program.
Sections 295.10 and 295.11 are removed because they are
operational procedures unnecessary for inclusion in a regulation.
Redesignated section 295.11, NIST technical and
educational services for ATP recipients, is modified to add educational
services to be provided to ATP recipients.
Section 295.21, Qualifications of proposers, is modified
to state that for joint ventures, costs will only be allowed after the
execution of the joint venture agreement and approval by NIST.
Also, a number of administrative and clerical changes are
implemented to sections 295.5, 295.7, 295.8, and 295.24 for consistency
and clarity.
Summary of Comments
On September 25, 1998, NIST published a notice of proposed
rulemaking in the Federal Register (63 FR 51307). In response to this
notice three comments were received; two from associations representing
universities and one from a state entity. An analysis of the comments
follows.
Section 295.2 Definitions--(2 Comments)
One commenter stated that the definition of ``company'' should
include ``limited liability company (LLC). Another commenter raised
concern that the current and proposed definition of a joint venture
imposes restrictions on the participation of universities and urged
that it be conceptualized as broadly as possible so that universities
can more fully participate in partnership with private industry.
NIST Response: ATP accepts the suggestion to include limited
liability partnership in the definition and the change is reflected
herein. No change is made with respect to the second comment since the
definition of a joint venture already offers universities the
opportunity to participate in partnership with the private industry and
the ATP statute requires joint ventures to be industry-led.
Section 295.5 Use of Pre-proposals in the Selection Process--(1
Comment)
One commenter stated that it was uncertain from the proposed change
whether or not proposers are ``accepted'' or ``rejected'' at the pre-
proposal stage, or whether they are just given feedback as to how they
can improve their full proposal.
NIST Response: To clarify any uncertainty, the section is modified
to indicate that written feedback is provided to the proposers to
determine whether the proposed projects appear sufficiently promising
to warrant further development into full proposals and that proposals
are neither ``accepted'' or ``rejected'' at the pre-proposal stage.
Section 295.6 Criteria for Selection--(1 Comment)
One commenter stated that the criteria may be too broad and
suggested that ATP add some level of breakdown of each major category
to better guide proposers in the proposal development process.
NIST Response: Some level of breakdown of each of the two major
categories is included in this section. The ATP Proposal Preparation
Kit will help guide proposers further in the proposal development
process by providing detailed information about the types of
documentation that will fulfill the evaluation criteria.
Section 295.7 Notice of Availability of Funds--(1 Comment)
One commenter suggested that information on pre-proposals be added
to be consistent with section 295.5.
NIST Response: Since NIST may use mandatory or optional pre-
proposals, the appropriate Commerce Business Daily notice and ATP
Proposal Preparation Kit will provide the appropriate information.
Section 295.8 Intellectual Property Rights: Publication of Research
Results--(3 Comments)
Two commenters raised opposition to the restriction that title to
inventions arising from ATP funded projects must vest in a company or
companies incorporated in the United States and requested that the
proposed rulemaking be deferred until this is resolved or the
restriction be lifted to include universities. Another commenter
suggested that this section be modified to require companies to list
their ``background intellectual property rights'' they bring to the
program at the beginning of the project, so there is no confusion as to
what is actually developed in the course of the technology development.
NIST Response: The proposed rule made no change to the ATP patent
policy. Since NIST did not seek public comment on the ATP patent
policy, no changes are made here. No change is made with respect to the
second comment because requiring the companies to list their
``background intellectual property rights'' they bring to the program
at the beginning of the project would cause a significant burden on the
companies and is unnecessary.
Additional Information
Effective Date of Final Rule
Pursuant to authority at 5 U.S.C. 553(a)(2), this final rule
relating to grants, benefits, and contracts is exempt from the delayed
effective date requirement of 5 U.S.C. 553(d), and is therefore being
made effective immediately without a 30 day delay in effective date.
Executive Order 12866
This rule has been determined to be significant under section 3(f)
of Executive Order 12866.
Executive Order 12612
This rule does not contain policies with Federalism implications
sufficient to warrant preparation of a Federalism
[[Page 64413]]
assessment under Executive Order 12612.
Regulatory Flexibility Act
The Assistant General Counsel for Legislation and Regulation of the
Department of Commerce certified to the Chief Counsel for Advocacy,
Small Business Administration, that this rule, if promulgated, will not
have a significant economic effect on a substantial number of small
entities. (5 U.S.C. 605(b)). This is because there are only a small
number of awardees and thus only a small number of awards will be given
to small businesses. Specifically, based on past experience and
currently foreseen budgets, the ATP would expect to receive only a few
hundred proposals annually from small businesses, and from these, to
make under 100 awards. Seeking ATP funding is entirely voluntary. No
comments were received regarding this certification. As such, a final
regulatory flexibility analysis is not required and none has been
prepared.
Paperwork Reduction Act
Notwithstanding any other provisions of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with a collection-of-information, subject to the
requirements of the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et
seq., unless that collection of information displays a currently valid
Office of Management and Budget (OMB) control number.
This rule contains collection of information requirements subject
to review and approval by the OMB under the PRA. The collection of
information requirement applies to persons seeking financial assistance
under the ATP as well as reporting requirements if financial assistance
is granted. The collection of information requirements have been
approved under OMB Control Number 0693-0009 and 0651-0032. The public
reporting burden per respondent for the collection of information
contained in this rule is estimated to range between 20 and 30 hours
per submission and 3 hours annually for recipients of financial
assistance to provide monitoring reports. This estimate includes the
time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information.
Comments on the burden estimates, or any other aspect of the
information requirements, should be addressed to Barbara Lambis,
National Institutes of Standards and Technology; Advanced Technology
Program; 100 Bureau Drive, Stop 4700; Administration Bldg. 101, Room
A333; Gaithersburg, MD 20899-4700.
National Environmental Policy Act
This rule will not significantly affect the quality of the human
environment. Therefore, an environmental assessment or Environmental
Impact Statement is not required to be prepared under the National
Environmental Policy Act of 1969.
Executive Order 12372
Executive Order 12372 ``Intergovernmental Review of Federal
Programs'' does not apply to this Program.
List of Subjects in 15 CFR Part 295
Inventions and patents, Laboratories, Research and development,
Science and technology.
Dated: November 16, 1998.
Robert E. Hebner,
Acting Deputy Director, National Institute of Standards and Technology.
For reasons set forth in the preamble, Title 15, Part 295 of the
Code of Federal Regulations is amended as follows:
PART 295--ADVANCED TECHNOLOGY PROGRAM
1. The authority citation for Part 295 continues to read as
follows:
Authority: 15 U.S.C. 278n.
2. Section 295.2 is amended by removing paragraph (j),
redesignating paragraphs (b) through (i) as paragraphs(c) through (j),
revising newly redesignated paragraph (i), and adding new paragraph (b)
to read as follows:
Sec. 295.2 Definitions.
* * * * *
(b) The term ``company'' means a for-profit organization, including
sole proprietors, partnerships, limited liability companies (LLCs), or
corporations.
* * * * *
(i) The term ``industry-led joint research and development
venture'' or ``joint venture'' means a business arrangement that
consists of two or more separately-owned, for-profit companies that
perform research and development in the project; control the joint
venture's membership, research directions, and funding priorities; and
share total project costs with the Federal government. The joint
venture may include additional companies, independent research
organizations, universities, and/or governmental laboratories (other
than NIST) which may or may not contribute funds (other than Federal
funds) to the project and perform research and development. A for-
profit company or an independent research organization may serve as an
Administrator and perform administrative tasks on behalf of a joint
venture, such as handling receipts and disbursements of funds and
making antitrust filings. The following activities are not permissible
for ATP funded joint ventures:
(1) Exchanging information among competitors relating to costs,
sales, profitability, prices, marketing, or distribution of any
product, process, or service that is not reasonably required to conduct
the research and development that is the purpose of such venture;
(2) Entering into any agreement or engaging in any other conduct
restricting, requiring, or otherwise involving the production or
marketing by any person who is a party to such joint venture of any
product, process, or service, other than the production or marketing of
proprietary information developed through such venture, such as patents
and trade secrets; and
(3) Entering into any agreement or engaging in any other conduct:
(i) To restrict or require the sale, licensing, or sharing of
inventions or developments not developed through such venture, or
(ii) To restrict or require participation by such party in other
research and development activities, that is not reasonably required to
prevent misappropriation of proprietary information contributed by any
person who is a party to such venture or of the results of such
venture.
* * * * *
4. Section 295.4 is revised to read as follows:
Sec. 295.4 The selection process.
(a) The selection process for awards is a multi-step process based
on the criteria listed in Sec. 295.6. Source evaluation boards (SEB)
are established to ensure that all proposals receive careful
consideration. In the first step, called ``preliminary screening,''
proposals may be eliminated by the SEB that do not meet the
requirements of this Part of the annual Federal Register Program
announcement. Typical but not exclusive of the reasons for eliminating
a proposal at this stage are that the proposal: is deemed to have
serious deficiencies in either the technical or business plan; involves
product development rather than high-risk R&D; is not industry-led; is
significantly overpriced or underpriced given the scope of the work;
does not meet the requirements set out in the notice of availability of
funds issued pursuant to
[[Page 64414]]
Sec. 295.7; or does not meet the cost-sharing requirement. NIST will
also examine proposals that have been submitted to a previous
competition to determine whether substantive revisions have been made
to the earlier proposal, and, if not, may reject the proposal.
(b) In the second step, referred to as the ``technical and business
review,'' proposals are evaluated under the criteria found in
Sec. 295.6. Proposals judged by the SEB after considering the technical
and business evaluations to have the highest merit based on the
selection criteria receive further consideration and are referred to as
``semifinalists.''
(c) In the third step, referred to as ``selection of finalists,''
the SEB prepares a final ranking of semifinalist proposals by a
majority vote, based on the evaluation criteria in Sec. 295.6. During
this step, the semifinalist proposers will be invited to an oral review
of their proposals with NIST, and in some cases site visits may be
required. Subject to the provisions of Sec. 295.6, a list of ranked
finalists is submitted to the Selecting Official.
(d) In the final step, referred to as ``selection of recipients,''
the Selecting Official selects funding recipients from among the
finalists, based upon: the SEB rank order of the proposals on the basis
of all selection criteria (Sec. 295.6); assuring an appropriate
distribution of funds among technologies and their applications; the
availability of funds; and adherence to the Program selection criteria.
The Program reserves the right to deny awards in any case where
information is uncovered which raises a reasonable doubt as to the
responsibility of the proposer. The decision of the Selecting Official
is final.
(e) NIST reserves the right to negotiate the cost and scope of the
proposed work with the proposers that have been selected to receive
awards. For example, NIST may request that the proposer delete from the
scope of work a particular task that is deemed by NIST to be product
development or otherwise inappropriate for ATP support.
5. Section 295.5 is revised to read as follows:
Sec. 295.5 Use of pre-proposals in the selection process.
To reduce proposal preparation costs incurred by proposers and to
make the selection process more efficient, NIST may use mandatory or
optional preliminary qualification processes based on pre-proposals. In
such cases, announcements requesting pre-proposals will be published as
indicated in Sec. 295.7, and will seek abbreviated proposals (pre-
proposals) that address both of the selection criteria, but in
considerably less detail than full proposals. The Program will review
the pre-proposals in accordance with the selection criteria and provide
written feedback to the proposers to determine whether the proposed
projects appear sufficiently promising to warrant further development
into full proposals. Proposals are neither ``accepted'' or ``rejected''
at the pre-proposal stage. When the full proposals are received in
response to the notice of availability of funds described in
Sec. 295.7, the review and selection process will occur as described in
Sec. 295.4.
6. Section 295.6 is revised to read as follows:
Sec. 295.6 Criteria for selection.
The evaluation criteria to be used in selecting any proposal for
funding under this program, and their respective weights, are listed in
this section. No proposal will be funded unless the Program determines
that it has scientific and technological merit and that the proposed
technology has strong potential for broad-based economic benefits to
the nation. Additionally, no proposal will be funded that does not
require Federal support, that is product development rather than high
risk R&D, that does not display an appropriate level of commitment from
the proposer, or does not have an adequate technical and
commercialization plan.
(a) Scientific and Technological Merit (50%). The proposed
technology must be highly innovative. The research must be challenging,
with high technical risk. It must be aimed at overcoming an important
problem(s) or exploiting a promising opportunity. The technical
leverage of the technology must be adequately explained.
The research must have a strong potential for advancing the state
of the art and contributing significantly to the U.S. scientific and
technical knowledge base. The technical plan must be clear and concise,
and must clearly identify the core innovation, the technical approach,
major technical hurdles, the attendant risks, and clearly establish
feasibility through adequately detailed plans linked to major technical
barriers. The plan must address the questions of ``what, how, where,
when, why, and by whom'' in substantial detail. The Program will assess
the proposing team's relevant experience for pursuing the technical
plan. The team carrying out the work must demonstrate a high level of
scientific/technical expertise to conduct the R&D and have access to
the necessary research facilities.
(b) Potential for broad-based economic benefits (50%). The proposed
technology must have a strong potential to generate substantial
benefits to the nation that extend significantly beyond the direct
returns to the proposing organization(s). The proposal must explain why
ATP support is needed and what difference ATP funding is expected to
make in terms of what will be accomplished with the ATP funding versus
without it. The pathways to economic benefit must be described,
including the proposer's plan for getting the technology into
commercial use, as well as additional routes that might be taken to
achieve broader diffusion of the technology. The proposal should
identify the expected returns that the proposer expects to gain, as
well as returns that are expected to accrue to others, i.e., spillover
effects. The Program will assess the proposer's relevant experience and
level of commitment to the project and project's organizational
structure and management plan, including the extent to which
participation by small businesses is encouraged and is a key component
in a joint venture proposal, and for large company single proposers,
the extent to which subcontractor/subrecipient teaming arrangements are
featured and are a key component of the proposal.
7. Section 295.7 is revised to read as follows:
Sec. 295.7 Notice of availability of funds.
The Program shall publish at least annually a Federal Register
notice inviting interested parties to submit proposals, and may more
frequently publish invitations for proposals in the Commerce Business
Daily, based upon the annual notice. Proposals must be submitted in
accordance with the guidelines in the ATP Proposal Preparation Kit as
identified in the published notice. Proposals will only be considered
for funding when submitted in response to an invitation published in
the Federal Register, or a related announcement in the Commerce
Business Daily.
8. Section 295.8(a)(1) and 295.8(a)(2) are revised to read as
follows:
Sec. 295.8 Intellectual property rights; Publication of research
results.
(a)(1) Patent Rights. Title to inventions arising from assistance
provided by the Program must vest in a company or companies
incorporated in the United States. Joint ventures shall provide to NIST
a copy of their written agreement which defines the disposition of
ownership rights among the members of the joint venture, and their
contractors and subcontractors as appropriate, that complies with the
first
[[Page 64415]]
sentence of this paragraph. The United States will reserve a
nonexclusive, nontransferable, irrevocable, paid-up license to practice
or have practiced for or on behalf of the United States any such
intellectual property, but shall not, in the exercise of such license,
publicly disclose proprietary information related to the license. Title
to any such intellectual property shall not be transferred or passed,
except to a company incorporated in the United States, until the
expiration of the first patent obtained in connection with such
intellectual property. Nothing in this paragraph shall be construed to
prohibit the licensing to any company of intellectual property rights
arising from assistance provided under this section.
(2) Patent Procedures. Each award by the Program shall include
provisions assuring the retention of a governmental use license in each
disclosed invention, and the government's retention of march-in rights.
In addition, each award by the Program will contain procedures
regarding reporting of subject inventions by the funding Recipient to
the Program, including the subject inventions of members of the joint
venture (if applicable) in which the funding Recipient is a
participant, contractors and subcontractors of the funding Recipient.
The funding Recipient shall disclose such subject inventions to the
Program within two months after the inventor discloses it in writing to
the Recipient's designated representative responsible for patent
matters. The disclosure shall consist of a detailed, written report
which provides the Program with the following: the title of the present
invention; the names of all inventors; the name and address of the
assignee (if any); an acknowledgment that the United States has rights
in the subject invention; the filing date of the present invention, or,
in the alternative, a statement identifying that the Recipient
determined that filing was not feasible; an abstract of the disclosure;
a description or summary of the present invention; the background of
the present invention or the prior art; a description of the preferred
embodiments; and what matter is claimed. Upon issuance of the patent,
the funding Recipient or Recipients must notify the Program
accordingly, providing it with the Serial Number of the patent as
issued, the date of issuance, a copy of the disclosure as issued, and
if appropriate, the name, address, and telephone number(s) of an
assignee.
* * * * *
Secs. 295.10 and 295.11 [Removed]
Secs. 295.12 and 295.13 [Redesignated as sections 295.10 and 295.11]
9. Sections 295.10 and 295.11 are removed and Secs. 295.12 and
295.13 are redesignated as Secs. 295.10 and 295.11.
10. The newly redesignated Sec. 295.11 is amended by revising the
heading and by adding a new paragraph (c) to read as follows:
Sec. 295.11 Technical and educational services for ATP recipients.
* * * * *
(c) From time to time, ATP may conduct public workshops and
undertake other educational activities to foster the collaboration of
funding Recipients with other funding resources for purposes of further
development and commercialization of ATP-related technologies. In no
event will ATP provide recommendations, endorsements, or approvals of
any ATP funding Recipients to any outside party.
11. Section 295.21 is revised to read as follows:
Sec. 295.21 Qualifications of proposers.
Subject to the limitations set out in Sec. 295.3, assistance under
this subpart is available only to industry-led joint research and
development ventures. These ventures may include universities,
independent research organizations, and governmental entities.
Proposals for funding under this Subpart may be submitted on behalf of
a joint venture by a for-profit company or an independent research
organization that is a member of the joint venture. Proposals should
include letters of commitment or excerpts of such letters from all
proposed members of the joint venture, verifying the availability of
cost-sharing funds, and authorizing the party submitting the proposal
to act on behalf of the venture with the Program on all matters
pertaining to the proposal. No costs shall be incurred under an ATP
project by the joint venture members until such time as a joint venture
agreement has been executed by all of the joint venture members and
approved by NIST. NIST will withhold approval until it determines that
a sufficient number of members have signed the joint venture agreement.
Costs will only be allowed after the execution of the joint venture
agreement and approval by NIST.
12. Section 295.24 is revised to read as follows:
Sec. 295.24 Registration.
Joint ventures selected for funding under the Program must notify
the Department of Justice and the Federal Trade Commission under the
National Cooperative Research Act of 1984. No funds will be released
prior to receipt by the Program of copies of such notification.
[FR Doc. 98-30956 Filed 11-17-98; 2:55 pm]
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