[Federal Register Volume 60, Number 41 (Thursday, March 2, 1995)]
[Rules and Regulations]
[Pages 11812-11825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4611]
[[Page 11811]]
_______________________________________________________________________
Part IV
Department of Energy
_______________________________________________________________________
48 CFR Parts 927, 952 and 970
Acquisition Regulation; Updating of Patent Regulations; Final Rule
Federal Register / Vol. 60, No. 41 / Thursday, March 2, 1995 / Rules
and Regulations
[[Page 11812]]
DEPARTMENT OF ENERGY
48 CFR Parts 927, 952 and 970
RIN 1991-AA23
Acquisition Regulation; Updating of Patent Regulations
AGENCY: Department of Energy (DOE).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department today amends the Department of Energy
Acquisition Regulation (DEAR) to base the DOE patent regulations on the
Federal Acquisition Regulation (FAR) patent regulations at Subpart 27.2
and the associated FAR patent clauses at 52.227 to the extent that the
FAR coverage is consistent with the DOE statutory patent requirements.
EFFECTIVE DATE: April 3, 1995.
FOR FURTHER INFORMATION CONTACT:
Robert M. Webb, Procurement Policy Division (PR-121), U.S. Department
of Energy, 1000 Independence Avenue, SW., Washington, D.C. 20585, (202)
586-8264
Sue Palk, Office of the Assistant General Counsel for Intellectual
Property (GC-42), U.S. Department of Energy, 1000 Independence Avenue,
SW., Washington, D.C. 20585, (202) 586-2802
SUPPLEMENTARY INFORMATION:
I. Background
A. Discussion
B. Disposition of comments
II. Procedural Requirements
A. Regulatory Review
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act
E. Review Under Executive Order 12612
F. Review Under Executive Order 12778
I. Background
A. Discussion
The proposed rule was published on March 29, 1994, at 59 FR 14593
(1994). It was intended to amend the Department of Energy Acquisition
Regulation to reflect the changes to DOE's statutory patent policy,
arising out of the Atomic Energy Act of 1954, as amended, 42 U.S.C.
2011 et seq., and the Federal Non-Nuclear Energy Research and
Development Act, 42 U.S.C. 5901 et seq., necessitated by the Bayh-Dole
Act of 1980 and the Trademark Clarification Act of 1984. The rule is
based on patent provisions at FAR 27.3 and FAR 52.227, varying to the
extent necessary to fulfill DOE statutory and programmatic duties.
Six sets of comments were received. Of those one was from a private
citizen, one was from a private organization, and four were from
current DOE management and operating contractor organizations.
B. Disposition of Comments
Two commenters question the relationship of this rulemaking to
DOE's contract reform initiative. This rulemaking, as stated in the
preamble to the proposed rule is intended to update the DOE coverage of
patent rights and to bring DOE's regulations on the subject more in
line with the provisions of the Federal Acquisition Regulation (FAR).
DOE believes this rulemaking is overdue and must be carried to
completion. Any final developments of the Contract Reform Initiative
that will affect patent rights will be reflected in a subsequent
rulemaking.
One commenter questions the Department's ability to ``issue
independent technical data clauses which are deviations from those
clauses published in the FAR.'' This rulemaking is directed to DOE's
patent regulations, not its technical data regulations. The special
status for DOE's patent coverage is statutory and was discussed in
detail in the preamble to the proposed rule for this rulemaking. No
change has been made.
The same commenter has questioned the inclusion of
``demonstration'' with research and development in establishing the
scope of this regulation, while another has requested that the term be
defined to distinguish the term from ``research and development'' to
clarify the different rights that may accrue. As explained in the
proposed rule, ``research, development, and demonstration'' is the
statutory scope for the Department's patent policy and has been
incorporated into this rulemaking. The second commenter requested a
definition of ``demonstration'' predicated upon an assumption that
different rights may accrue. This is not the case. We believe that the
term ``demonstration,'' particularly in light of its statutory basis,
to be sufficiently clear. Therefore, neither change has been made.
One commenter suggests that the regulations at 927.300 and 927.302
refer to financial assistance transactions. The DEAR controls the award
and administration in DOE of procurement contracts, the purposes of
which are described in Public Law 95-224. It does not control the award
or administration of either grants or cooperative agreements,
assistance transactions, as the purposes of those terms are described
in the same public law. For the Department of Energy, the regulations
governing assistance transactions are contained at 10 CFR part 600. For
this reason, we have made not made the suggested change. The
regulations governing patents for assistance instruments will be the
subject of a separate rulemaking.
A commenter noted that at the new 927.300 the reference to the
regulations that control DOE's granting of waivers of its ownership of
inventions should be corrected to reflect that the location and content
of those is not being affected by this rulemaking and will continue to
exist at 41 CFR 9-9.1 of the old Department of Energy Procurement
Regulations (DOE PR) until they are made the subject of their own
rulemaking. A change has been made to the first sentence of 927.300(b).
That same commenter suggests that the restatement of DOE policy
concerning the granting of waivers at 927.300(b) and (c) be deleted. We
believe those provisions are descriptive of the policy and yet make it
clear that the controlling regulations are located elsewhere.
Therefore, we have retained those provisions, modified as described
above. We deleted the second sentence of 927.300(a) as unnecessary.
One commenter suggests that ``Government'' be substituted for
``DOE'' in the first sentence of 927.302(a). We have chosen to make a
change using the phrase ``the United States, as represented by DOE,''.
The same commenter states that the statement of the authorities of
the Assistant General Counsel for Technology Transfer and Intellectual
Property that were contained at 9-9.109-3(d) of the DOE PR should be
retained. We agree and have added them at 927.302(d).
Another commenter requests the addition of the phrase ``or is
unable to meet these market demands within a reasonable time'' be added
to the description of circumstances at 927.302(b) in which DOE would
exercise its rights to require licensing of background patents to third
parties on reasonable terms and conditions. The statement at 927.302(b)
is merely descriptive, and, in fact, describes the substantial
considerations in the Government's application for licensing of third
parties. The terms of paragraph (k) of the clause at 952.227-13
control, and provide the contractor the opportunity to demonstrate to
the Department's satisfaction that either the current market situation
is satisfactory or can be made so in a reasonable time. We have not
made a change, believing that the current sentence is descriptive. Any
additional discussion would [[Page 11813]] require additional
clarification, adding to the complexity of a provision that is merely
descriptive, not regulatory.
A commenter has suggested revision of the third sentence of
927.302(c) to correct ambiguities in the listing of types of contracts
for which the Government's rights in background patents may not be
appropriate. We have made changes to the sentence that accomplish the
intended purpose.
One commenter has noted that the clause at FAR 52.227-12,
appropriately modified may suffice as a patent rights clause in a
contract for which DOE has granted an advance waiver of its title. That
may be the case. We have modified section 927.303(b) to reflect that
possibility while maintaining the prohibition against the use of the
clause generally.
One commenter objects to the inclusion at 952.227-9 of the Refund
of Royalties clause in place of a clause of the same name in the FAR.
The commenter suggests the use of a supplemental provision and, along
with a second commenter, questions the authority of DOE to publish this
clause where there is already a FAR provision. As explained in the
preamble to the proposed rule, this clause is the FAR clause at 52.227-
9 with the addition of sentences to assure the recognition of royalties
deriving from technical data and copyrighted material and a disclaimer.
The purpose of this clause and the FAR clause upon which it is based is
to prevent the Government's paying royalties relating to a form of
intellectual property to which it already has a license, perhaps
royalty free. We have acted to expand the FAR provision to include all
forms of intellectual property and to assure a continuing right to
challenge the validity of intellectual property giving rise to the
royalty. We believe these concerns to be of significant importance to
DOE with its expansive technological mission. No entity is hurt by the
minor changes to the FAR clause, except a firm that may today be in a
position to acquire royalties from a Government contractor for use of
technical data or copyrighted material to which the Government already
has a license. We have retained the clause as it is in the proposed
rule.
The second commenter says that the clause ``is unclear on whether
costs paid for technical assistance and transfer of know how are
subject to repayment when the information transferred is not protected
by a valid patent, copyright, or otherwise qualifies for intellectual
property protections.'' We disagree. This clause in either of its forms
is premised upon the payment of what is commonly recognized as a
royalty or license fee. In order for a royalty to be paid the payee
must recognize a proprietary right in the property. If no such basis
exists, a royalty would not be paid. The types of costs would be
subject to the clause only to the extent that they are part of a
royalty agreement and could be classified as a royalty. We have made no
change.
We have deleted the phrase ``in the performance of work'' from the
definition of ``subject invention'' as it appears in the clause at
952.227-13 to conform more closely to the statutory language. We have
altered the definition of ``patent counsel'' in that clause to mean the
patent counsel responsible for patent administration under the specific
contract, rather than Headquarters Patent Counsel.
One commenter objects to the use of the word ``consultation'' in
paragraph (b)(2) of the clause at 952.227-13 expressing the obligations
of an employee prior to that employee's asserting an interest in a
subject invention. The previous DOE clause allowed an employee-inventor
to request greater rights after acquiring the authorization of the
contractor-employer. Since the promulgation of the previous DOE clause,
Bayh-Dole was enacted, offering this right to employee-inventors upon
consultation with their small business or nonprofit employers. The FAR
in the clause at 52.227-13 for use with large, profit-making companies
has reflected this change.
The proposed rule language was premised upon the FAR language.
Bayh-Dole and the FAR reflect an interest in maximizing the
commercialization of inventions under Government contracts in these
circumstances in which the contractor-employer has chosen not to pursue
a request for greater rights in a subject invention. We can identify no
DOE interest that demands that the employee-inventor acquire the
permission of his employer. The contractor-employer can control this
situation by fashioning an employment agreement to protect its
interest. Such an agreement, not this clause, will control what form
the employee-inventor's ``consultation'' takes. We have made no change.
One commenter has suggested that paragraph (e)(2) of the clause at
952.227-13 include a recognition of a statutory premise ``that a
reported invention will be deemed to have been made in the manner
specified in Section (a) (1) and (2) of 42 U.S.C. 5908 unless the
contractor contends in writing when the invention is reported that it
was not so made.'' We agree and have made the change.
A commenter opposes the Government's acquisition of rights in
background patents in paragraph (k) of the clause at 952.227-13(k) and
as described at 927.302(b), stating that ``it could be argued that the
DOE is vesting itself with the power to take the property of others
without paying valid compensation.'' The commenter suggests that ``[i]f
the DOE requires such rights, it can negotiate to purchase them like
any contracting party, or (sic) in the alternative, it may utilize its
rights under FAR 52.227-1 ``Authorization and Consent.'' We disagree.
First, the inclusion of paragraph (k) represents the acquisition of an
inchoate right which goes to the heart of the involvement of public
funds in the particular project at a time in which the parties are at
an equal bargaining position. These rights provide DOE only a
nonexclusive and royalty free license ``for the purposes of practicing
a subject of this contract by or for the Government in research,
development, and demonstration work only.'' Furthermore, DOE can demand
that the contractor license third parties to its background patents
only under a limited set of circumstances ``on terms that are
reasonable under the circumstances.'' Should, in fact, the contractor
be put in a monopolistic position in the market place as a result of
the research, development, or demonstration of the contract with DOE
and should that contractor choose not to meet market demand, DOE would
be in a compromised bargaining position. Without the rights provided
for in paragraph (k), DOE or any third party would have to pay dearly
to acquire these background rights even though Federal taxpayer funds
would have played a meaningful part in the contractor's market
position. We have made no change.
Additionally, we have reviewed the proposed clause at 952.227-13
after having reflected the comments received and have made technical
changes necessary to accurately reflect DOE's statutory patent policy
and to enhance the smooth operation of the clause. We believe that the
only changes of any significance, both occurring in the definition of
``subject invention,'' are required by DOE's statute, i.e., adding the
phrase ``in the course of or'' before ``under this contract'' and
deleting the ``provided'' clause that runs to the end of that
definition. The first of these causes that definition to accurately
reflect the statutory scope, and the second is necessary to reflect the
breadth of that statutory scope.
We have added a definition of Patent Counsel and substituted that
office for the Secretary of Energy where receipt of
[[Page 11814]] communication occurs in the text of the clause. We have
also added a definition of DOE patent waiver regulations and used that
term where appropriate in the text of the clause. We deleted the
definition of the Head of contracting agency and used Secretary of
Energy where appropriate throughout the clause.
In several places in the clause the proposed clause used the word
``retain'' in the context of the greater rights determination. We have
used more specific terms depending upon the context to reflect the
contractor's right to ``request'' greater rights or the Department's
having ``granted'' the contractor greater rights.
In the third sentence of paragraph (b)(2)(i), we have substituted a
definite condition for the application of the minimum rights flowing to
the Government under paragraph (c) upon its granting a request for
waiver in place of ``normally.''
At paragraph (b)(2)(ii) we have substituted a time certain, two
months after filing the patent application, rather than ``upon
request'' for the contractor's providing identifying information
relating to the application. We have also edited that subparagraph to
grammatically reflect the separate duties with regard to a patent
application and issuance of the patent. In order to assure that a
contractor's patent application not expire for failure to prosecute we
have added new subparagraph (b)(2)(iii) requiring notice by the
contractor should it decide not to prosecute. The subparagraph (iii) of
the proposed rule has been redesignated as subparagraph (iv).
We have substituted the term ``subparagraphs(c)(1)'' for
``subdivisions'' in subparagraph (c)(1)(iii). The former reference
added unnecessarily to the opportunity for misinterpretation.
At paragraph (d)(4)(vi) we have corrected a reference for the
duration of the time period for DOE's not publishing invention
disclosures relating to an application for foreign patent rights by
providing for that time period to be determined by the DOE patent
counsel. At subparagraph (d)(4)(vii), we have corrected a mistaken
reference in the first sentence with the phrase ``in a timely manner.''
We have added as the penultimate sentence of paragraph (e)(2) a
description of the report called for. At paragraph (e)(5) we have
corrected a reference that is in error in the FAR clause, i.e, ``FAR
27.302(j)'' in place of ``FAR 27.302(i).''
Finally, with regard to the clause, at paragraph (g)(3), we have
substituted the obligation of acquiring an affirmative patent clearance
before final payment in lieu of ``past due confirmatory instruments.''
A commenter questions the provision at 970.2702(b) that describes
the right of management and operating contractors, not small businesses
or nonprofit entities, to request advance waivers and waivers in
identified inventions. He suggests that this premise makes this a
``significant regulatory action.'' We disagree. These rights have
existed throughout the history of DOE's statutory patent policy. We
have made an attendant change in the last sentence of this subsection
substituting ``42 U.S.C. 5908'' for ``927.300.''
The same commenter has suggested the insertion of the word
``nonprofit'' in the first sentence of 970.2702(e) describing Bayh-Dole
rights of DOE management and operating contractors. We have made the
change.
Two commenters question the provisions of 970.2703 and the
provisions of paragraph (m) of the clause at 970.5204-XX, relating to
the transfer of title and reservation of income from licensing of
subject inventions for the benefit of the laboratory, rather than the
contractor. Both note that Bayh-Dole vests title in the nonprofit or
educational entities and suggest that the provisions do not comply with
the law where DOE employs such an entity to manage and operate one of
its facilities. This provision merely reflects the reality of
provisions of DOE's management and operating contracts in the interplay
between patent provisions and technology transfer. That reality takes
into account the special position of DOE's management and operating
contractors as was recognized in Bayh-Dole. We have made no change at
either place.
One commenter questions 970.2795(c), saying that it should be
revised ``to indicate that the limitations on the use of contractor
employees only apply to those contractor employees assigned to, and
working at the DOE facility.'' This provision verbatim existed before
this rulemaking at 970.2701(d). An underlying premise of DOE's
management and operating contracts is that the organization is
independent of its corporate body. The workforce is dedicated to the
work and is located at the DOE facility. This provision is written to
that reality, and must remain that way to prevent any unintended
restriction on its application. No change has been made.
II. Procedural Requirements
A. Regulatory Review
Today's regulatory action has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993).
Accordingly, today's action was not subject to review under the
Executive Order by the Office of Information and Regulatory Affairs.
B. Review Under the Regulatory Flexibility Act
This final rule was reviewed under the Regulatory Flexibility Act
of 1980, Public Law 96-354, which requires preparation of a regulatory
flexibility analysis for any rule which is likely to have significant
economic impact on a substantial number of small entities. DOE
certifies that this rule will not have a significant economic impact on
a substantial number of small entities and, therefore, no regulatory
flexibility analysis has been prepared.
C. Review Under the Paperwork Reduction Act
No new information collection or recordkeeping requirements are
imposed by this final rulemaking. Accordingly, no OMB clearance is
required by the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et
seq.).
D. Review Under NEPA
The DOE has concluded that promulgation of this rule would not
represent a major Federal action having significant impact on the human
environment under the National Environmental Policy Act (NEPA) of 1969
(42 U.S.C. 4321, 4331-4335, 4341-4347 (1976)), the Council on
Environmental Quality regulations (40 CFR Parts 1500-1508), or the DOE
guidelines (10 CFR Part 1021), and, therefore, does not require an
environmental impact statement or an environmental assessment pursuant
to NEPA.
E. Review Under Executive Order 12612
Executive Order 12612, 52 FR 41685 (October 30, 1987), requires
that regulations, rules, legislation, and any other policy actions be
reviewed for any substantial direct effects on States, on the
relationship between the national Government and the States, and in the
distribution of power and responsibilities among various levels of
Government. If there are sufficient substantial direct effects, then
the Executive Order requires preparation of a federalism assessment to
be used in all [[Page 11815]] decisions involved in promulgating and
implementing a policy action.
Today's final rule will revise certain policy and procedural
requirements. However, DOE has determined that none of the revisions
will have a substantial direct effect on the institutional interests or
traditional functions of States.
F. Review Under Executive Order 12778
Section 2 of Executive Order 12778 instructs each agency to adhere
to certain requirements in promulgating new regulations and reviewing
existing regulations. These requirements, set forth in sections 2(a)
and (b)(2), include eliminating drafting errors and needless ambiguity,
drafting the regulations to minimize litigation, providing clear and
certain legal standards for affected conduct, and promoting
simplification and burden reduction. Agencies are also instructed to
make every reasonable effort to ensure that the regulation: Specifies
clearly any preemptive effect, effect on existing Federal law or
regulation, and retroactive effect; describes any administrative
proceedings to be available prior to judicial review and any provisions
for the exhaustion of such administrative proceedings; and defines key
terms. This final rule will have no preemptive effect, will not have
any effect on existing Federal laws, and will only clarify the existing
regulations on this subject. The revised clauses will apply only to
contracts which would be awarded after the effective date of the final
rule, and, thus, have no retroactive effect. Therefore, DOE certifies
that this final rule meets the requirements of sections 2 (a) and (b)
of Executive Order 12778.
List of Subjects in 48 CFR Parts 927, 952, 970
Government procurement, Patents.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is amended as set forth below.
Issued in Washington, D.C., on February 16, 1995.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.
PART 927--PATENTS, DATA, AND COPYRIGHTS
1. The authority citation for part 927 continues to read as
follows:
Authority: Sec. 644 of the Department of Energy Organization
Act, Pub. L. 95-91 (42 U.S.C. 7254); Sec. 148 of the Atomic Energy
Act of 1954, as amended (42 U.S.C. 2168); Federal Nonnuclear Energy
Research and Development Act of 1974, sec. 9 (42 U.S.C. 5908);
Atomic Energy Act of 1954, as amended, sec. 152 (42 U.S.C. 2182);
Department of Energy National Security and Military Applications of
Nuclear Energy Authorization Act of 1987, as amended, sec. 3131(a)
(42 U.S.C. 7261a.)
2. Subpart 927.2 is added to read as follows:
Subpart 927.2--Patents
Sec.
927.200 Scope of subpart.
927.201 Authorization and consent.
927.201-1 General.
927.206 Refund of royalties.
927.206-1 General.
927.206-2 Clause for refund of royalties.
927.207 Classified contracts.
927.207-1 General.
Subpart 927.2--Patents
927.200 Scope of subpart.
When consulting 48 CFR part 27, subpart 27.2 of the FAR, consider
``research, development, and demonstration'' to replace the phrase
``research and development'' or ``R&D,'' for the purposes of DOE
actions.
927.201 Authorization and consent.
927.201-1 General.
In certain contracting situations, such as those involving
research, development, or demonstration projects, consideration should
be given to the impact of third party-owned patents covering technology
that may be incorporated in the project which patents may ultimately
affect widespread commercial use of the project results. In such
situations, Patent Counsel shall be consulted to determine what
modifications, if any, are to be made to the utilization of the
Authorization and Consent and Patent Indemnity provisions or what other
action might be deemed appropriate.
927.206 Refund of royalties.
927.206-1 General.
The clause at 952.227-9, Refund of Royalties, obligates the
contractor to inform DOE of the payment of royalties pertaining to the
use of intellectual property, either patent or data related, in the
performance of the contract. This information may result in
identification of instances in which the Government already has a
license for itself or others acting in its behalf or the right to
sublicense others. Also, there may be pending antitrust actions or
challenges to the validity of a patent or the proprietary nature of the
data, or the contractor may be able to gain unrestricted access to the
same data through other sources. In such situations the contractor may
avoid the payment of a royalty in its entirety or may be charged a
reduced royalty.
927.206-2 Clause for refund of royalties.
The contracting officer shall insert the clause at 952.227-9,
Refund of Royalties, in solicitations and contracts for experimental,
research, developmental, or demonstration work or other solicitations
and contracts in which the contracting officer believes royalties will
have to be paid by the contractor or a subcontractor of any tier.
927.207 Classified contracts.
927.207-1 General.
Unauthorized disclosure of classified subject matter, whether in a
patent application or resulting from the issuance of a patent, may be a
violation of the Atomic Energy Act of 1954, as amended, other laws
relating to espionage and national security, and provisions of the
proposed contract pertaining to disclosure of information.
3. Section 927.300 is revised to read as follows:
927.300 General.
(a) One of the primary missions of the Department of Energy is the
use of its procurement process to ensure the conduct of research,
development, and demonstration leading to the ultimate
commercialization of efficient sources of energy. To accomplish its
mission, DOE must work in cooperation with industry in the development
of new energy sources and in achieving the ultimate goal of widespread
commercial use of those energy sources. To this end, Congress has
provided DOE with the authority to invoke an array of incentives to
secure the commercialization of new technologies developed for DOE. One
such important incentive is provided by the patent system.
(b) Pursuant to 42 U.S.C. 2182 and 42 U.S.C. 5908, DOE takes title
to all inventions conceived or first actually reduced to practice in
the course of or under contracts with large, for-profit companies,
foreign organizations, and others not beneficiaries of Pub. L. 96-517.
Regulations dealing with Department's authority to waive its title to
subject inventions, including the relevant statutory objectives, exist
at 41 CFR 9-9.109. Pursuant to that section, DOE may waive the
Government's patent rights in appropriate situations at the time of
contracting to encourage industrial participation, foster commercial
utilization and competition, and make the benefits of DOE activities
widely available to the public. In [[Page 11816]] addition to
considering the waiver of patent rights at the time of contracting, DOE
will also consider the incentive of a waiver of patent rights upon the
reporting of an identified invention when requested by such entities or
by the employee-inventor with the permission of the contractor. These
requests can be made whether or not a waiver request was made at the
time of contracting. Waivers for identified inventions will be granted
where it is determined that the patent waiver will be a meaningful
incentive to achieving the development and ultimate commercial
utilization of inventions. Where DOE grants a waiver of the
Government's patent rights, either at the time of contracting or after
an invention is made, certain minimum rights and obligations will be
required by DOE to protect the public interest.
(c) Another major DOE mission is to manage the nation's nuclear
weapons and other classified programs, where research and development
procurements are directed toward processes and equipment not available
to the public. To accomplish DOE programs for bringing private industry
into these and other special programs to the maximum extent permitted
by national security and policy considerations, it is desirable that
the technology developed in these programs be made available on a
selected basis for use in the particular fields of interest and under
controlled conditions by properly cleared industrial and scientific
research institutions. To ensure such availability and control, the
grant of waivers in these programs may necessarily be more limited,
either by the imposition of field of use restrictions or national
security measures, than in other DOE programs.
4. Section 927.302 is added to read as follows:
927.302 Policy.
(a) Except for contracts with organizations that are beneficiaries
of Public Law 96-517, the United States, as represented by DOE, shall
normally acquire title in and to any invention or discovery conceived
or first actually reduced to practice in the course of or under the
contract, allowing the contractor to retain a nonexclusive, revocable,
paid-up license in the invention and the right to request permission to
file an application for a patent and retain title to any ensuing patent
in any foreign country in which DOE does not elect to secure patent
rights. DOE may approve the request if it determines that such approval
would be in the national interest. The contractor's nonexclusive
license may be revoked or modified by DOE only to the extent necessary
to achieve expeditious practical application of the invention pursuant
to any application for and the grant of an exclusive license in the
invention to another party.
(b) In contracts having as a purpose the conduct of research,
development, or demonstration work and in certain other contracts, DOE
may need to require those contractors that are not the beneficiaries of
Public Law 96-517 to license background patents to ensure reasonable
public availability and accessibility necessary to practice the subject
of the contract in the fields of technology specifically contemplated
in the contract effort. That need may arise where the contractor is not
attempting to take the technology resulting from the contract to the
commercial marketplace, or is not meeting market demands. The need for
background patent rights and the particular rights that should be
obtained for either the Government or the public will depend upon the
type, purpose, and scope of the contract effort, impact on the DOE
program, and the cost to the Government of obtaining such rights.
(c) Provisions to deal specifically with DOE background patent
rights are contained in paragraph (k) of the clause at 952.227-13. That
paragraph may be modified with the concurrence of Patent Counsel in
order to reflect the equities of the parties in particular contracting
situations. Paragraph (k) should normally be deleted for contracts with
an estimated cost and fee or price of $250,000 or less and may not be
appropriate for certain types of study contracts; for planning
contracts; for contracts with educational institutions; for contracts
for specialized equipment for in-house Government use, not involving
use by the public; and for contracts the work products of which will
not be the subject of future procurements by the Government or its
contractors.
(d) The Assistant General Counsel for Technology Transfer and
Intellectual Property shall:
(1) Make the determination that whether reported inventions are
subject inventions under the patent rights clause of the contract;
(2) Determine whether and where patent protection will be obtained
on inventions;
(3) Represent DOE before domestic and foreign patent offices;
(4) Accept assignments and instruments confirmatory of the
Government's rights to inventions; and
(5) Represent DOE in patent, technical data, and copyright matters
not specifically reserved to the Head of the Agency or designee.
5. Section 927.303 is added to read as follows:
927.303 Contract clauses.
(a) In solicitations and contracts for experimental, research,
developmental, or demonstration work (but see (FAR) 48 CFR 27.304-3
regarding contracts for construction work or architect-engineer
services), the contracting officer shall include the clause:
(1) At 952.227-13, Patent Rights Acquisition by the Government, in
all such contracts other than those described in paragraphs (a)(2) and
(a)(3) of this section;
(2) At 952.227-11, Patent Rights by the Contractor (Short Form), in
contracts in which the contractor is a domestic small business or
nonprofit organization as defined at (FAR) 48 CFR 27.301, except where
the work of the contract is subject to an Exceptional Circumstances
Determination by DOE; and
(3) At 970.5204-71 or 970.5204-72, as discussed in 970.27, Patent,
Data, and Copyrights, in contracts for the management and operation of
DOE laboratories and production facilities.
(b) DOE shall not use the clause at (FAR) 48 CFR 52.227-12 except
in situations where patent counsel grants a request for advance waiver
and supplies the contracting officer with that clause with appropriate
modifications. Otherwise, in instances in which DOE grants an advance
waiver or waives its rights in an identified invention, contracting
officers shall consult with patent counsel for the appropriate clause.
6. Section 927.304 is added to read as follows:
927.304 Procedures.
Where the contract contains the clause at 952.227-11 and the
contractor does not elect to retain title to a subject invention, DOE
may consider and, after consultation with the contractor, grant
requests for retention of rights by the inventor subject to the
provisions of 35 U.S.C. 200 et seq. This statement is in lieu of (FAR)
48 CFR 27.304-1(c).
PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
7. The authority citation for part 952 continues to read as
follows:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).
8. Subsection 952.227-9 is added to read as follows:
[[Page 11817]]
952.227-9 Refund of Royalties.
As prescribed in 927.206-2, insert the following clause:
Refund of Royalties (MAR 1995)
(a) The contract price includes certain amounts for royalties
payable by the Contractor or subcontractors or both, which amounts
have been reported to the Contracting Officer.
(b) The term ``royalties'' as used in this clause refers to any
costs or charges in the nature of royalties, license fees, patent or
license amortization costs, or the like, for the use of or for
rights in patents and patent applications in connection with
performing this contract or any subcontract here-under. The term
also includes any costs or charges associated with the access to,
use of, or other right pertaining to data that is represented to be
proprietary and is related to the performance of this contract or
the copying of such data or data that is copyrighted.
(c) The Contractor shall furnish to the Contracting Officer,
before final payment under this contract, a statement of royalties
paid or required to be paid in connection with performing this
contract and subcontracts hereunder together with the reasons.
(d) The Contractor will be compensated for royalties reported
under paragraph (c) of this clause, only to the extent that such
royalties were included in the contract price and are determined by
the Contracting Officer to be properly chargeable to the Government
and allocable to the contract. To the extent that any royalties that
are included in the contract price are not, in fact, paid by the
Contractor or are determined by the Contracting Officer not to be
properly chargeable to the government and allocable to the contract,
the contract price shall be reduced. Repayment or credit to the
Government shall be made as the Contracting Officer directs. The
approval by DOE of any individual payments or royalties shall not
prevent the Government from contesting at any time the
enforceability, validity, scope of, or title to, any patent or the
proprietary nature of data pursuant to which a royalty or other
payment is to be or has been made.
(e) If, at any time within 3 years after final payment under
this contract, the Contractor for any reason is relieved in whole or
in part from the payment of the royalties included in the final
contract price as adjusted pursuant to paragraph (d) of this clause,
the Contractor shall promptly notify the Contracting Officer of that
fact and shall reimburse the Government in a corresponding amount.
(f) The substance of this clause, including this paragraph (f),
shall be included in any subcontract in which the amount of
royalties reported during negotiation of the subcontract exceeds
$250.
(End of clause)
9. Subsection 952.227-11 is added to read as follows:
952.227-11 Patent rights--retention by the contractor (short form).
As prescribed in 927.303(a), insert the following clause:
PATENT RIGHTS--RETENTION BY THE CONTRACTOR (SHORT FORM) (MAR 1995)
(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) Made when used in relation to any invention means the
conception of first actual reduction to practice of such invention.
(3) 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 (26 U.S.C. 501(a)) or any nonprofit
scientific or educational organization qualified under a state
nonprofit organization statute.
(4) 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.
(5) Small business firm means a small business concern as
defined at section 2 of Public Law 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) 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.
(7) Agency licensing regulations and agency regulations
concerning the licensing of Government-owned inventions mean the
Department of Energy patent licensing regulations at 10 CFR part
781.
(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 Department of Energy (DOE) within 2
months after the inventor discloses it in writing to Contractor
personnel responsible for patent matters. The disclosure to DOE
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 DOE, the Contractor will promptly
notify that 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 DOE within 2 years
of disclosure to DOE. However, in any case where publication, on
sale or public use has initiated the l-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 DOE 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 1 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 10 months of the
corresponding initial patent application or 6 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 (c)(l), (2), and (3) of this clause
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 paragraph (c) of
this clause, or elects not to retain title; provided, that DOE 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 paragraph (c) of
this clause; provided, however, that if the Contractor has filed a
patent application in a country after the times specified in
paragraph (c) of this clause, but prior to its receipt of the
written request of the Federal agency, the Contractor shall continue
to retain title in that country. [[Page 11818]]
(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 paragraph (c) of this clause. 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
successor of that part of the Contractor's business to which the
invention pertains.
(2) The Contractor's domestic license may be revoked or modified
by DOE to the extent necessary to achieve expeditious practical
application of 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. 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 DOE 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, DOE will
furnish the Contractor a written notice of its intention to revoke
or modify the license, and the Contractor will be allowed 30 days
(or such other time as may be authorized by DOE 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 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 DOE 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 DOE when requested under paragraph (d) of this
clause 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) of this clause, 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
subparagraph (c)(1) of this clause. 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 DOE of any decision 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 30 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 application 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 the United States Department of Energy. The
Government has certain rights in the invention.''
(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 shall include in all other subcontracts,
regardless of tier, for experimental, developmental, demonstration,
or research work the patent rights clause at 952.227-13.
(3) In the case of subcontracts, at any tier, DOE,
subcontractor, and the Contractor agree that the mutual obligations
of the parties created by this clause constitute a contract between
the subcontractor and DOE 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 commercial sale or use, gross royalties received, by the
Contractor, and such other data and information as DOE may
reasonably specify. The Contractor also agrees to provide additional
reports as may be requested by DOE in connection with any march-in
proceeding undertaken by that agency in accordance with paragraph
(j) of this clause. As required by 35 U.S.C. 202(c)(5), DOE 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 invention in the United States unless such
person agrees that any product 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 DOE 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 commercially feasible.
(j) March-in rights. The Contractor agrees that, with respect to
any subject invention in which it has acquired title, DOE 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, DOE has the
right to grant such a license itself if DOE 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 [[Page 11819]] 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 DOE 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) incidental 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 inventions 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 of Commerce 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
of Commerce when that Secretary's review discloses that the
Contractor could take reasonable steps to more effectively implement
the requirements of this subparagraph (k)(4).
(l) Communications.
(1) The contractor shall direct any notification, disclosure, or
request to DOE provided for in this clause to the DOE patent counsel
assisting the DOE contracting activity, with a copy of the
communication to the Contracting Officer.
(2) Each exercise of discretion or decision provided for in this
clause, except subparagraph (k)(4), is reserved for the DOE Patent
Counsel and is not a claim or dispute and is not subject to the
Contract Disputes Act of 1978.
(3) Upon request of the DOE Patent Counsel or the contracting
officer, the contractor shall provide any or all of the following:
(i) A copy of the patent application, filing date, serial number
and title, patent number, and issue date for any subject invention
in any country in which the contractor has applied for a patent;
(ii) A report, not more often than annually, summarizing all
subject inventions which were disclosed to DOE individually during
the reporting period specified; or
(iii) A report, prior to closeout of the contract, listing all
subject inventions or stating that there were none.
(End of clause)
10. Subsection 952.227-13 is added to read as follows:
952.227-13 Patent Rights--Acquisition by the Government.
As prescribed at 927.303(c), insert the following clause:
PATENT RIGHTS--ACQUISITION BY THE GOVERNMENT (MAR 1995)
(a) Definitions.
Invention, as used in this clause, 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 that is or may be protectable under the Plant Variety
Protection Act (7 U.S.C. 2321, et seq.).
Practical application, as used in this clause, 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.
Subject invention, as used in this clause, means any invention
of the Contractor conceived or first actually reduced to practice in
the course of or under this contract.
Patent Counsel, as used in this clause, means the Department of
Energy Patent Counsel assisting the procuring activity.
DOE patent waiver regulations, as used in this clause, means the
Department of Energy patent waiver regulations in effect on the date
of award of this contract.
Agency licensing regulations and applicable agency licensing
regulations, as used in this clause, mean the Department of Energy
patent licensing regulations at 10 CFR part 781.
(b) Allocations of principal rights.
(1) Assignment to the Government. The Contractor agrees to
assign to the Government the entire right, title, and interest
throughout the world in and to each subject invention, except to the
extent that rights are retained by the Contractor under subparagraph
(b)(2) and paragraph (d) of this clause.
(2) Greater rights determinations. (i) The Contractor, or an
employee-inventor after consultation with the Contractor, may
request greater rights than the nonexclusive license and the foreign
patent rights provided in paragraph (d) of this clause on identified
inventions in accordance with the DOE patent waiver regulations. A
request for a determination of whether the Contractor or the
employee-inventor is entitled to acquire such greater rights must be
submitted to the Patent Counsel with a copy to the Contracting
Officer at the time of the first disclosure of the invention
pursuant to subparagraph (e)(2) of this clause, or not later than 8
months thereafter, unless a longer period is authorized in writing
by the Contracting Officer for good cause shown in writing by the
Contractor. Each determination of greater rights under this contract
shall be subject to paragraph (c) of this clause, unless otherwise
provided in the greater rights determination, and to the
reservations and conditions deemed to be appropriate by the
Secretary of Energy or designee.
(ii) Within two (2) months after the filing of a patent
application, the Contractor shall provide the filing date, serial
number and title, a copy of the patent application (including an
English-language version if filed in a language other than English),
and, promptly upon issuance of a patent, provide the patent number
and issue date for any subject invention in any country for which
the Contractor has been granted title or the right to file and
prosecute on behalf of the United States by the Department of
Energy.
(iii) Not less than thirty (30) days before the expiration of
the response period for any action required by the Patent and
Trademark Office, notify the Patent Counsel of any decision not to
continue prosecution of the application.
(iv) Upon request, the Contractor shall furnish the Government
an irrevocable power to inspect and make copies of the patent
application file.
(c) Minimum rights acquired by the Government.
(1) With respect to each subject invention to which the
Department of Energy grants the Contractor principal or exclusive
rights, the Contractor agrees as follows:
(i) The Contractor hereby grants to the Government a
nonexclusive, nontransferable, irrevocable, paid-up license to
practice or have practiced each subject invention throughout the
world by or on behalf of the Government of the United States
(including any Government agency).
(ii) The Contractor agrees that with respect to any subject
invention in which DOE has granted it title, DOE has the right in
accordance with the procedures in the DOE patent waiver regulations
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, DOE has the right to grant such a license itself if it
determines that--
(A) 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;
(B) Such action is necessary to alleviate health or safety needs
which are not reasonably satisfied by the Contractor, assignee, or
their licensees;
(C) 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
(D) Such action is necessary because the agreement required by
paragraph (i) of this clause has neither been obtained nor 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.
[[Page 11820]]
(iii) 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 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 commercial sale or use, gross royalties
received by the Contractor, and such other data and information as
DOE may reasonably specify. The Contractor also agrees to provide
additional reports as may be requested by DOE in connection with any
march-in proceedings undertaken by that agency in accordance with
subparagraph (c)(1)(ii) of this clause. To the extent data or
information supplied under this section is considered by the
Contractor, its licensee, or assignee to be privileged and
confidential and is so marked, the Department of Energy agrees that,
to the extent permitted by law, it will not disclose such
information to persons outside the Government.
(iv) The Contractor agrees, when licensing a subject invention,
to arrange to avoid royalty charges on acquisitions involving
Government funds, including funds derived through a Military
Assistance Program of the Government or otherwise derived through
the Government, to refund any amounts received as royalty charges on
a subject invention in acquisitions for, or on behalf of, the
Government, and to provide for such refund in any instrument
transferring rights in the invention to any party.
(v) The Contractor agrees to provide for the Government's paid-
up license pursuant to subparagraph (c)(1)(i) of this clause in any
instrument transferring rights in a subject invention and to provide
for the granting of licenses as required by subparagraph (c)(1)(ii)
of this clause, and for the reporting of utilization information as
required by subparagraph (c)(1)(iii) of this clause, whenever the
instrument transfers principal or exclusive rights in a subject
invention.
(2) Nothing contained in this paragraph (c) shall be deemed to
grant to the Government any rights with respect to any invention
other than a subject invention.
(d) Minimum rights to the Contractor. (1) The Contractor is
hereby granted a revocable, nonexclusive, royalty-free license in
each patent application filed in any country on a subject invention
and any resulting patent in which the Government obtains title,
unless the Contractor fails to disclose the subject invention within
the times specified in subparagraph (e)(2) of this clause. The
Contractor's license extends to its domestic subsidiaries and
affiliates, if any, within the corporate structure of which the
Contractor is a part 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 DOE except when transferred
to the successor of that part of the Contractor's business to which
the invention pertains.
(2) The Contractor's domestic license may be revoked or modified
by DOE 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 in 37 CFR part 404 and agency licensing regulations. This
license will not be revoked in that field of use or the geographical
areas in which the Contractor has achieved practical applications
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 DOE to the extent the
Contractor, its licensees, or its domestic subsidiaries or
affiliates have failed to achieve practical application in that
foreign country.
(3) Before revocation or modification of the license, DOE will
furnish the Contractor a written notice of its intention to revoke
or modify the license, and the Contractor will be allowed 30 days
(or such other time as may be authorized by DOE 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 agency licensing regulations
and 37 CFR part 404 concerning the licensing of Government-owned
inventions, any decision concerning the revocation or modification
of its license.
(4) The Contractor may request the right to acquire patent
rights to a subject invention in any foreign country where the
Government has elected not to secure such rights, subject to the
conditions in subparagraphs (d)(4)(i) through (d)(4)(vii) of this
clause. Such request must be made in writing to the Patent Counsel
as part of the disclosure required by subparagraph (e)(2) of this
clause, with a copy to the DOE Contracting Officer. DOE approval, if
given, will be based on a determination that this would best serve
the national interest.
(i) The recipient of such rights, when specifically requested by
DOE, and three years after issuance of a foreign patent disclosing
the subject invention, shall furnish DOE a report stating:
(A) The commercial use that is being made, or is intended to be
made, of said invention, and
(B) The steps taken to bring the invention to the point of
practical application or to make the invention available for
licensing.
(ii) The Government shall retain at least an irrevocable,
nonexclusive, paid-up license to make, use, and sell the invention
throughout the world by or on behalf of the Government (including
any Government agency) and States and domestic municipal
governments, unless the Secretary of Energy or designee determines
that it would not be in the public interest to acquire the license
for the States and domestic municipal governments.
(iii) If noted elsewhere in this contract as a condition of the
grant of an advance waiver of the Government's title to inventions
under this contract, or, if no advance waiver was granted but a
waiver of the Government's title to an identified invention is
granted pursuant to subparagraph (b)(2) of this clause upon a
determination by the Secretary of Energy that it is in the
Government's best interest, this license shall include the right of
the Government to sublicense foreign governments pursuant to any
existing or future treaty or agreement with such foreign
governments.
(iv) Subject to the rights granted in subparagraphs (d)(1), (2),
and (3) of this clause, the Secretary of Energy or designee shall
have the right to terminate the foreign patent rights granted in
this subparagraph (d)(4) in whole or in part unless the recipient of
such rights demonstrates to the satisfaction of the Secretary of
Energy or designee that effective steps necessary to accomplish
substantial utilization of the invention have been taken or within a
reasonable time will be taken.
(v) Subject to the rights granted in subparagraphs (d)(1), (2),
and (3) of this clause, the Secretary of Energy or designee shall
have the right, commencing four years after foreign patent rights
are accorded under this subparagraph (d)(4), to require the granting
of a nonexclusive or partially exclusive license to a responsible
applicant or applicants, upon terms reasonable under the
circumstances, and in appropriate circumstances to terminate said
foreign patent rights in whole or in part, following a hearing upon
notice thereof to the public, upon a petition by an interested
person justifying such hearing:
(A) If the Secretary of Energy or designee determines, upon
review of such material as he deems relevant, and after the
recipient of such rights or other interested person has had the
opportunity to provide such relevant and material information as the
Secretary or designee may require, that such foreign patent rights
have tended substantially to lessen competition or to result in
undue market concentration in any section of the United States in
any line of commerce to which the technology relates; or
(B) Unless the recipient of such rights demonstrates to the
satisfaction of the Secretary of Energy or designee at such hearing
that the recipient has taken effective steps, or within a reasonable
time thereafter is expected to take such steps, necessary to
accomplish substantial utilization of the invention.
(vi) If the contractor is to file a foreign patent application
on a subject invention, the Government agrees, upon written request,
to use its best efforts to withhold publication of such invention
disclosures for such period of time as specified by Patent Counsel,
but in no event shall the Government or its employees be liable for
any publication thereof.
(vii) Subject to the license specified in subparagraphs (d) (1),
(2), and (3) of this clause, the contractor or inventor agrees to
convey to the Government, upon request, the entire right, title, and
interest in any foreign country in which the contractor or inventor
fails to have a patent application filed in a timely manner or
decides not to continue prosecution or to pay any maintenance fees
covering the invention. To avoid forfeiture of the patent
application or patent, the contractor or inventor shall, not less
than 60 days before the expiration period for any action required by
any patent office, notify the Patent Counsel of such failure or
decision, and deliver to the Patent Counsel, the executed
instruments necessary for the conveyance specified in this
paragraph. [[Page 11821]]
(e) Invention identification, disclosures, and reports. (1) The
Contractor shall establish and maintain active and effective
procedures to assure that subject inventions are promptly identified
and disclosed to Contractor personnel responsible for patent matters
within 6 months of conception and/or first actual reduction to
practice, whichever occurs first in the performance of work under
this contract. These procedures shall include the maintenance of
laboratory notebooks or equivalent records and other records as are
reasonably necessary to document the conception and/or the first
actual reduction to practice of subject inventions, and records that
show that the procedures for identifying and disclosing the
inventions are followed. Upon request, the Contractor shall furnish
the Contracting Officer a description of such procedures for
evaluation and for determination as to their effectiveness.
(2) The Contractor shall disclose each subject invention to the
DOE Patent Counsel with a copy to the Contracting Officer within 2
months after the inventor discloses it in writing to Contractor
personnel responsible for patent matters or, if earlier, within 6
months after the Contractor becomes aware that a subject invention
has been made, but in any event before any on sale, public use, or
publication of such invention known to the Contractor. The
disclosure to DOE 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 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 DOE, the Contractor
shall promptly notify Patent Counsel of the acceptance of any
manuscript describing the invention for publication or of any on
sale or public use planned by the Contractor. The report should also
include any request for a greater rights determination in accordance
with subparagraph (b)(2) of this clause. When an invention is
disclosed to DOE under this paragraph, it shall be deemed to have
been made in the manner specified in Sections (a)(1) and (a)(2) of
42 U.S.C. 5908, unless the Contractor contends in writing at the
time the invention is disclosed that is was not so made.
(3) The Contractor shall furnish the Contracting Officer the
following:
(i) Interim reports every 12 months (or such longer period as
may be specified by the Contracting Officer) from the date of the
contract, listing subject inventions during that period, and
certifying that all subject inventions have been disclosed (or that
there are not such inventions) and that the procedures required by
subparagraph (e)(1) of this clause have been followed.
(ii) A final report, within 3 months after completion of the
contracted work listing all subject inventions or certifying that
there were no such inventions, and listing all subcontracts at any
tier containing a patent rights clause or certifying that there were
no such subcontracts.
(4) 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) of this clause, 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
subparagraph (e)(2) of this clause.
(5) The Contractor agrees, subject to FAR 27.302(j), that the
Government may duplicate and disclose subject invention disclosures
and all other reports and papers furnished or required to be
furnished pursuant to this clause.
(f) Examination of records relating to inventions.
(1) The Contracting Officer or any authorized representative
shall, until 3 years after final payment under this contract, have
the right to examine any books (including laboratory notebooks),
records, and documents of the Contractor relating to the conception
or first actual reduction to practice of inventions in the same
field of technology as the work under this contract to determine
whether--
(i) Any such inventions are subject inventions;
(ii) The Contractor has established and maintains the procedures
required by subparagraphs (e) (1) and (4) of this clause;
(iii) The Contractor and its inventors have complied with the
procedures.
(2) If the Contracting Officer learns of an unreported
Contractor invention which the Contracting Officer believes may be a
subject invention, the Contractor may be required to disclose the
invention to DOE for a determination of ownership rights.
(3) Any examination of records under this paragraph will be
subject to appropriate conditions to protect the confidentiality of
the information involved.
(g) Withholding of payment (This paragraph does not apply to
subcontracts). (1) Any time before final payment under this
contract, the Contracting Officer may, in the Government's interest,
withhold payment until a reserve not exceeding $50,000 or 5 percent
of the amount of this contract, whichever is less, shall have been
set aside if, in the Contracting Officer's opinion, the Contractor
fails to--
(i) Convey to the Government, using a DOE-approved form, the
title and/or rights of the Government in each subject invention as
required by this clause.
(ii) Establish, maintain, and follow effective procedures for
identifying and disclosing subject inventions pursuant to
subparagraph (e)(1) of this clause;
(iii) Disclose any subject invention pursuant to subparagraph
(e)(2) of this clause;
(iv) Deliver acceptable interim reports pursuant to subparagraph
(e)(3)(i) of this clause; or
(v) Provide the information regarding subcontracts pursuant to
subparagraph (h)(4) of this clause.
(2) Such reserve or balance shall be withheld until the
Contracting Officer has determined that the Contractor has rectified
whatever deficiencies exist and has delivered all reports,
disclosures, and other information required by this clause.
(3) Final payment under this contract shall not be made before
the Contractor delivers to the Contracting Officer all disclosures
of subject inventions required by subparagraph (e)(2) of this
clause, and acceptable final report pursuant to subparagraph
(e)(3)(ii) of this clause, and the Patent Counsel has issued a
patent clearance certification to the Contracting Officer.
(4) The Contracting Officer may decrease or increase the sums
withheld up to the maximum authorized above. No amount shall be
withheld under this paragraph while the amount specified by this
paragraph is being withheld under other provisions of the contract.
The withholding of any amount or the subsequent payment thereof
shall not be construed as a waiver of any Government rights.
(h) Subcontracts.
(1) The contractor shall include the clause at 48 CFR 952.227-11
(suitably modified to identify the parties) in all subcontracts,
regardless of tier, for experimental, developmental, demonstration,
or research work to be performed by a small business firm or
domestic nonprofit organization, except where the work of the
subcontract is subject to an Exceptional Circumstances Determination
by DOE. In all other subcontracts, regardless of tier, for
experimental, developmental, demonstration, or research work, the
contractor shall include this clause (suitably modified to identify
the parties). The contractor shall not, as part of the consideration
for awarding the subcontract, obtain rights in the subcontractor's
subject inventions.
(2) In the event of a refusal by a prospective subcontractor to
accept such a clause the Contractor--
(i) Shall promptly submit a written notice to the Contracting
Officer setting forth the subcontractor's reasons for such refusal
and other pertinent information that may expedite disposition of the
matter; and
(ii) Shall not proceed with such subcontract without the written
authorization of the Contracting Officer.
(3) In the case of subcontracts at any tier, DOE, the
subcontractor, and Contractor agree that the mutual obligations of
the parties created by this clause constitute a contract between the
subcontractor and DOE with respect to those matters covered by this
clause.
(4) The Contractor shall promptly notify the Contracting Officer
in writing upon the award of any subcontract at any tier containing
a patent rights clause by identifying the subcontractor, the
applicable [[Page 11822]] patent rights clause, the work to be
performed under the subcontract, and the dates of award and
estimated completion. Upon request of the Contracting Officer, the
Contractor shall furnish a copy of such subcontract, and, no more
frequently than annually, a listing of the subcontracts that have
been awarded.
(5) The contractor shall identify all subject inventions of the
subcontractor of which it acquires knowledge in the performance of
this contract and shall notify the Patent Counsel, with a copy to
the contracting officer, promptly upon identification of the
inventions.
(i) Preference United States industry. Unless provided
otherwise, no Contractor that receives title to any subject
invention and no assignee of any such Contractor shall grant to any
person the exclusive right to use or sell any subject invention in
the United States unless such person agrees that any products
embodying the subject invention will be manufactured substantially
in the United States. However, in individual cases, the requirement
may be waived by the Government upon a showing by the Contractor or
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 commercially
feasible.
(j) Atomic energy.
(1) No claim for pecuniary award of compensation under the
provisions of the Atomic Energy Act of 1954, as amended, shall be
asserted with respect to any invention or discovery made or
conceived in the course of or under this contract.
(2) Except as otherwise authorized in writing by the Contracting
Officer, the Contractor will obtain patent agreements to effectuate
the provisions of subparagraph (e)(1) of this clause from all
persons who perform any part of the work under this contract, except
nontechnical personnel, such as clerical employees and manual
laborers.
(k) Background Patents. (1) Background Patent means a domestic
patent covering an invention or discovery which is not a subject
invention and which is owned or controlled by the Contractor at any
time through the completion of this contract:
(i) Which the contractor, but not the Government, has the right
to license to others without obligation to pay royalties thereon,
and
(ii) Infringement of which cannot reasonably be avoided upon the
practice of any specific process, method, machine, manufacture, or
composition of matter (including relatively minor modifications
thereof) which is a subject of the research, development, or
demonstration work performed under this contract.
(2) The Contractor agrees to and does hereby grant to the
Government a royalty-free, nonexclusive license under any background
patent for purposes of practicing a subject of this contract by or
for the Government in research, development, and demonstration work
only.
(3) The Contractor also agrees that upon written application by
DOE, it will grant to responsible parties, for purposes of
practicing a subject of this contract, nonexclusive licenses under
any background patent on terms that are reasonable under the
circumstances. If, however, the Contractor believes that exclusive
rights are necessary to achieve expeditious commercial development
or utilization, then a request may be made to DOE for DOE approval
of such licensing by the Contractor.
(4) Notwithstanding subparagraph (k)(3) of this clause, the
contractor shall not be obligated to license any background patent
if the Contractor demonstrates to the satisfaction of the Secretary
of Energy or designee that:
(i) A competitive alternative to the subject matter covered by
said background patent is commercially available or readily
introducible from one or more other sources; or
(ii) The Contractor or its licensees are supplying the subject
matter covered by said background patent in sufficient quantity and
at reasonable prices to satisfy market needs, or have taken
effective steps or within a reasonable time are expected to take
effective steps to so supply the subject matter.
(l) Publication. It is recognized that during the course of the
work under this contract, the Contractor or its employees may from
time to time desire to release or publish information regarding
scientific or technical developments conceived or first actually
reduced to practice in the course of or under this contract. In
order that public disclosure of such information will not adversely
affect the patent interests of DOE or the Contractor, patent
approval for release of publication shall be secured from Patent
Counsel prior to any such release or publication.
(m) Forfeiture of rights in unreported subject inventions. (1)
The Contractor shall forfeit and assign to the Government, at the
request of the Secretary of Energy or designee, all rights in any
subject invention which the Contractor fails to report to Patent
Counsel within six months after the time the Contractor:
(i) Files or causes to be filed a United States or foreign
patent application thereon; or
(ii) Submits the final report required by subparagraph
(e)(2)(ii) of this clause, whichever is later.
(2) However, the Contractor shall not forfeit rights in a
subject invention if, within the time specified in subparagraph
(m)(1) of this clause, the Contractor:
(i) Prepares a written decision based upon a review of the
record that the invention was neither conceived nor first actually
reduced to practice in the course of or under the contract and
delivers the decision to Patent Counsel, with a copy to the
Contracting Officer; or
(ii) Contending that the invention is not a subject invention,
the Contractor nevertheless discloses the invention and all facts
pertinent to this contention to the Patent Counsel, with a copy to
the Contracting Officer; or
(iii) Establishes that the failure to disclose did not result
from the Contractor's fault or negligence.
(3) Pending written assignment of the patent application and
patents on a subject invention determined by the Secretary of Energy
or designee to be forfeited (such determination to be a final
decision under the Disputes clause of this contract), the Contractor
shall be deemed to hold the invention and the patent applications
and patents pertaining thereto in trust for the Government. The
forfeiture provision of this paragraph (m) shall be in addition to
and shall not supersede other rights and remedies which the
Government may have with respect to subject inventions.
(End of clause)
952.227-71 [Removed and Reserved]
11. Section 952.227-71 is removed and reserved.
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
12. The authority citation for Part 970 continues to read as
follows:
Authority. Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.
2201), sec. 644 of the Department of Energy Organization Act, Pub.
L. 95-91 (42 U.S.C. 7254), sec. 201 of the Federal Civilian Employee
and Contractor Travel Expenses Act of 1985 (41 U.S.C. 420) and sec.
1534 of the Department of Defense Authorization Act, 1986, Pub. L.
99-145 (42 U.S.C. 7256a), as amended.
13. Revise Section 970.2701 to read as follows:
970.2701 General.
This subpart applies to negotiation of patent rights and rights in
technical data provisions for the Department of Energy contracts for
the management and operation of its research and development and
production facilities.
14. Revise 970.2702 to read as follows:
970.2702 Patent rights.
(a) Whenever a contract has as a purpose, the design, construction,
or operation of a Government-owned research, development, demonstration
or production facility, it is necessary that the Government be accorded
certain rights with respect to further use of the facility by or on
behalf of the Government upon termination of the contract, including
the right to make, use, transfer, or otherwise dispose of all articles,
materials, products, or processes embodying inventions or discoveries
used or embodied in the facility regardless of whether or not conceived
or first actually reduced to practice under or in the course of such a
contract. Thus, both versions of the patent rights clause for
management and operating contracts contain a facilities license.
(b) In the case of contractors operating and managing DOE research
and development or production facilities, that are not the
beneficiaries of Public [[Page 11823]] Law 96-517, the Department is
statutorily obligated to take title to inventions conceived or first
actually reduced to practice in the performance of the contracts. Here,
as in all other circumstances in which the Department takes title to
inventions by statute, the contractors may request a waiver at the time
of contracting for a class of inventions or during contract performance
for identified inventions. DOE includes the considerations at 42 U.S.C.
5908 in its determination as to whether to approve the request.
(c) While no contractor that manages and operates a DOE research
and development or production facility is a small business, several
have historically been nonprofit organizations. As such, they are the
beneficiaries of the Bayh-Dole Act (35 U.S.C. 200 et seq., as amended)
and, therefore, receive the right to retain title to inventions
conceived or first actually reduced to practice in the performance of
their contracts with the Department, except in areas of technology
covered by Exceptional Circumstances Determinations made by DOE or of
nuclear weapons and naval nuclear propulsion. In these latter two
areas, the contractor may request that the Department waive its title
and, therefore, subject to the exceptions identified below, may be
granted title to inventions conceived or first actually reduced to
practice in the performance of its contract with the Department.
(d) DOE has exercised statutory authority granted under 35 U.S.C.
202(a)(ii) and 202(a)(iv). In accordance with 35 U.S.C. 202(a)(ii), DOE
has issued several Exceptional Circumstances Determinations pursuant to
which DOE nonprofit management and operating contractors have no right
to elect title to inventions conceived or first actually reduced to
practice in the course of or under their contracts within covered areas
of technology. However, those contractors may be given some lesser
property right in an invention within limits set by DOE in a particular
Exceptional Circumstances Determination so that the contractor can
effectively assist with a mission of DOE, such as technology transfer.
As new technologies evolve, DOE may issue additional Exceptional
Circumstances Determinations, as appropriate.
(e) In accordance with 35 U.S.C. 202(a)(iv), the Department of
Energy has exempted its weapons related and naval nuclear propulsion
programs from the broad Bayh-Dole right of its nonprofit management and
operating contractors to elect title to inventions conceived or first
actually reduced to practice in the course of or under their contracts.
The effect of this exemption is that, if the contractors want to
acquire title, they must request title to covered inventions. DOE may
then grant the request subject to a case-by-case determination that the
contractor has met all procedural requirements unilaterally set by DOE
to insure that all national security concerns of DOE relating to the
contractor's use of an invention in either of these two areas for
commercialization have been met.
15. Section 970.2703 is added to read as follows:
970.2703 Technology transfer.
The National Competitiveness Technology Transfer Act of 1989
(NCTTA) (Pub. L. 101-189) established technology transfer as a mission
for Government-owned, contractor-operated laboratories, including
weapons production facilities, and authorizes those laboratories to
negotiate and award cooperative research and development agreements
with public and private entities for purposes of conducting research
and development and transferring technology to the private sector. In
implementing the NCTTA, DOE has negotiated technology transfer clauses
with the contractors managing and operating its laboratories. Those
technology transfer clauses must be read in concert with the patent
rights clause required by this subpart. Thus, each management and
operating contractor holds title to subject inventions for the benefit
of the laboratory or facility being managed and operated by that
contractor.
16. Section 970.2704 is added to read as follows:
970.2704 Patent clauses.
(a) Contracting officers shall insert the clause at 970.5204-71 in
all management and operating contracts with nonprofit organizations.
(b) Contracting officers shall insert the clause at 970.5204-72 in
all management and operating contracts with profit-making entities.
17. Add section 970.2705, and section 970.2706, as follows:
970.2705 Rights in technical data--general.
(a) A management and operating contractor's obligations for
protection of information and data received from DOE and other
contractors or subcontractors, and for the contractor's private use of
contract data first produced in the performance of the contract, are
set forth in paragraph (b)(2) of each Rights in Technical Data clause
in 952.227. That subparagraph provides that the contractor may, subject
to patent, security, or other provisions of the contract, use for its
private purposes, contract data it first produces in the performance of
the contract, provided that the contractor has met its data
requirements (e.g., delivery of data in the form of progress or status
reports specified to be delivered) as of the date of private use of
such data. It is not necessary that a ``Final Report'' be submitted in
order to privately use data if all required progress and interim
reports and other technical data then due have been delivered.
Paragraph (b)(2) of each Rights in Technical Data clause in 952.227
further provides that technical or other data received by the
contractor in the performance of the contract must be held in
confidence by the contractor in accordance with restrictions
accompanying the data.
(b) Contractors should be aware that technical information which is
reported to DOE by DOE contractors may be disseminated by DOE to
others, subject to the restrictions included in the ``Rights to
Technical Data'' clause.
(c) Employees of contractors operating DOE facilities may not be
used to assist in the preparation of a proposal or bid for the
performance of private commercial services similar or related to those
being performed under the DOE contract unless such employee has been
separated, with DOE approval, from performance of work under the DOE
contract for such period as the Head of the Contracting Activity or
designee shall direct consistent with the purpose of this section.
(d) Contractors operating DOE facilities and performing services as
a part of their contract work for other Government agencies or private
organizations should not be permitted to utilize information which is
furnished by such customers for their own private activities unless it
is generally available to others, or unless the customer authorizes
such use.
970.2706 Rights in technical data--procedures.
(a) General. It is essential that DOE maintain continuity in its
programs which are implemented by contracts for the operation of
Government-owned facilities. Contract data first produced or
specifically used in the performance of such contracts must be
considered as integral to and remaining with the facility or plant
after termination of such contracts and thus available to DOE and its
future contractors for the continued use of the facility or plant.
However, it is recognized that these contracts by their nature cannot
always be subject to one set of prescribed contract provisions which
will always [[Page 11824]] apply. Accordingly, the Rights in Technical
Data-Facility clause set forth in 952.227-78 is to be used as a basic
or minimal clause which may be modified or expanded with the
concurrence of Patent Counsel to meet particular contract situations.
(b) Whenever a contract has as a purpose the operation of a
Government-owned research or production facility, the clause set forth
at 952.227-78 shall normally be included in the contract. Inasmuch as
this clause secures to the Government ownership, access to, and, if
requested, delivery of all technical data first produced in the
performance of the contract and access to and delivery of technical
data which are specifically used in the performance of the contract,
there is no need to include the Additional Technical Data Requirements
Clause of 952.227-73.
(c) Subcontracting. Unless otherwise directed by the contracting
officer, the contractor shall be required to follow the policy and
procedures of 927.402-1, 927.402-2, and 927.402-3 and shall employ the
provisions of the Additional Technical Data Requirements clause of
952.227-73 and the Rights in Technical Data (Long Form) clause of
952.227-75, where appropriate, except in subcontracts for the design of
special production plants or facilities or specially designed equipment
for facilities or plants, in which instances contractors shall include
the provisions of the Rights in Technical Data--Facility clause of
952.227-78.
(d) Optional clause--Limited rights in proprietary data. In
contracts where it is determined that delivery of proprietary data is
necessary with limited rights in the Government, the Rights in
Technical Data clause of this section shall be supplemented by the
additional paragraph (e), set forth in 952.227-79. Paragraph (e)
provides that technical data may be specified in the contract as being
excluded from the delivery requirements thereof. Alternatively,
paragraph (e) may be limited or made applicable to only those classes
of proprietary data determined as being necessary for delivery with
limited rights. In addition, when furnishing proprietary data with the
limited rights legend, paragraphs (a), (b) and (c) of 952.227-79 may be
modified as follows. When proprietary data is to be furnished only for
evaluation, paragraph (a) of the limited rights legend shall be used,
and paragraphs (b) and (c), if otherwise inapplicable, may be deleted.
When there is a programmatic requirement that proprietary data be
disclosed to other DOE contractors only for information or use in
connection with work performed under their contracts, paragraph (b) of
the limited rights legend shall be used, and paragraphs (a) and (c) may
be deleted if otherwise inapplicable. In either of the foregoing
examples, the contractor may, if it can show the possibility of a
conflict of interest because of disclosure of such data to certain
contractors or evaluators, exclude contractors or evaluators from
paragraph (a) or (b). If the data is required solely for emergency
repair or overhaul, paragraph (c) of the limited rights legend shall be
retained, and paragraphs (a) and (b) may, unless otherwise applicable,
be deleted. In the event that it is determined that all of the
paragraphs (a), (b) and (c) of the limited rights legend are to be
deleted, the word ``none'' shall be inserted in the legend after the
colon (:).
(e) For contracts involving access to certain categories of DOE-
owned restricted data, as set forth in 10 CFR Part 725, see 927.402-
1(h).
18. Subsection 970.5204-71 is added to read as follows:
970.5204-71 Patent Rights--Nonprofit Management and Operating
Contractors.
As prescribed at 970.2703, insert the clause at 952.227-11, Patent
Rights-Retention by the Contractor (Short Form) with the following
changes:
PATENT RIGHTS-NONPROFIT MANAGEMENT AND OPERATING CONTRACTORS (MAR 1995)
1. Replace subparagraph (e)(1) with the following: (e)(1) The
contractor may request the right to reserve a revocable,
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 paragraph (c) of this clause. When DOE approves such
reservation, the contractor's license will extend to its domestic
subsidiaries 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 DOE, except when
transferred to the successor of that part of the contractor's
business to which the invention pertains.
2. Add the following paragraphs (m) and (n): (m) Transfer to
successor contractor. (1) In the event of termination or expiration
of this contract, the contractor shall transfer any unexpended
balance of income received relating to intellectual property, in
accordance with instructions from the contracting officer, to a
successor contractor, or in the absence of a successor contractor,
to such other entity as designated by the contracting officer. The
contractor shall also transfer title, as one package, in all patents
and patent applications, license agreements, accounts containing
royalty revenues from such license agreements, including equity
positions in third-party entities, and other intellectual property
that arose under the performance of this contract, to the successor
contractor or to the Government, as directed by the contracting
officer.
(2) The Government agrees that the recipient of such title shall
assume any remaining obligations and liabilities in connection with
the patents and patent applications.
(n) Facilities license. In addition to the rights of the parties
with respect to inventions or discoveries conceived or first
actually reduced to practice in the course of or under this
contract, the contractor agrees to and does hereby grant to the
Government an irrevocable, nonexclusive, paid-up license in and to
any inventions or discoveries regardless of when conceived or
actually reduced to practice or acquired by the contractor at any
time through completion of this contract and which are incorporated
or embodied in the construction of the facility or which are
utilized in the operation of the facility or which cover articles,
materials, or products manufactured at the facility (1) to practice
or have practiced by or for the Government at the facility, and (2)
to transfer such license with the transfer of that facility. The
acceptance or exercise by the Government of these rights shall not
prevent the Government at any time from contesting the
enforceability, validity or scope of, or title to, any rights or
patents herein licensed.
(End of clause)
19. Subsection 970.5204-72 is added to read as follows:
970.5204-72 Patent Rights--Profit-Making Management and Operating
Contractors
As prescribed at 970.2703, insert the clause at 952.227-13, Patent
Rights-Retention by the Government, with the following changes:
PATENT RIGHTS--PROFIT-MAKING MANAGEMENT AND OPERATING CONTRACTORS (MAR
1995)
1. Add the following paragraphs (j) and (k):
(j) Transfer to successor contractor. (1) In the event of
termination or expiration of this contract, the contractor shall
transfer any unexpended balance of income received relating to
intellectual property, in accordance with instructions from the
contracting officer, to a successor contractor, or in the absence of
a successor contractor, to such other entity as designated by the
contracting officer. The contractor shall also transfer title, as
one package, in all patents and patent applications, license
agreements, accounts containing royalty revenues from such license
agreements, including equity positions in third-party entities, and
other intellectual property that arose under the performance of this
contract, to the successor contractor or to the Government, as
directed by the contracting officer.
(2) The Government agrees that the recipient of such title shall
assume any remaining obligations and liabilities in connection with
the patents and patent applications.
(k) Facilities License. In addition to the rights of the parties
with respect to [[Page 11825]] inventions or discoveries conceived
or first actually reduced to practice in the course of or under this
contract, the contractor agrees to and does hereby grant to the
Government an irrevocable, nonexclusive, paid-up license in and to
any inventions or discoveries regardless of when conceived or
actually reduced to practice or acquired by the contractor at any
time through completion of this contract and which are incorporated
or embodied in the construction of the facility or which are
utilized in the operation of the facility or which cover articles,
materials, or products manufactured at the facility (1) to practice
or have practiced by or for the Government at the facility, and (2)
to transfer such license with the transfer of that facility. The
acceptance or exercise by the Government of these rights shall not
prevent the Government at any time from contesting the
enforceability, validity or scope of, or title to, any rights or
patents herein licensed.
(End of clause)
[FR Doc. 95-4611 Filed 3-1-95; 8:45 am]
BILLING CODE 6450-01-P
