. l

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EXECUTIVE ORDPJlS

NO. 10096

15 F. R. 389

PROVIDING FOR A UNIFORM PATENT POLICY FOR TIl;: GOVERNMENT WITH RESPEQTTO IlNEh-rIONS IWlEsr GOYF.lU/­HE!IT EMPLOYEES AND FOR THE ADMINISTRATION OF SUCH POLICY

WHEREAS~ inventive advances in .0iontHio and technological !ield. trequentl.;r re.ult tro.~ go" rn_mental activities carried on bt Government empl?yeEtlsJ and.

- WHEREAS the Government of the Un.1ted State. i. expending largo .UIIlll of mono,. annUAll,. for thoconduct of these activities) and

WHERF.AS these advances con:!ltltute a vast national resource; and

WHEREAS it i. !itting and proper that the inventive product of function. of the Goverru:>ontcarried Qutby' Government employees, should be available to the Government; &.nd '

WHEREAS tho right. of Government employe.. in their invontio"- .hould be rocognized in appropriateinstances; .and

WHEREAS the carrying out of the polioy of this order require. approp~lote administrative arrangs_~ents:

NOW, THERE:FGRE, by virtue of the authorit,. vea'ted in me by tho Constitution and .tetutos, andas Pre.ident of the United State. and Command.r in Chi.f of the armod forco. of tho United Stnto.,in the' interest of the e.tabli.hment and operation of a uniform patent poli.,. for the Govornmentwith r-eapect, to inventions made by Government empl.,.e•• , it 10 hereb1 ordered a. follow.;

1. The following ba.io policy i. established for all Government agencies with respect to in­ventions her'eafter made by and Government employee;

(a) The Governmsnt shall obtain the entire right, title and interest in and to all inventionssade b1 any Government employee (1) during working hoUrs, or '(4) with a oontribution b1 the Govorn­

ment of facilities, equipment,-materla1s, funds, or information, or of time or services of othorGovernment employees on official duty, or (3) \/bich bear a direct relation to or are- madaln con­sequence of the official duties of the inventor.----.

_ (b) In anycas9 wher~ the contribution of the Government, aff measuredQy anyone or moreof the criteria set forth in paragraph (a) la.t above, to the invention;is in.uffioiont oquitnblyto jU5ti~ a reqUirement of assignment to the Government of the entire right, title and intoroat tosuch invention, or in any caso where the Government haa insufficient interest' in an invention toobtain~entire right, title and intarest therein (although the Governmen~ could obtain some undorparagraph (al, above), the Government agen.,. concerned, subject to the approval. of the Chairman ofthe Government Patents Board (provided for in paragraph 3 of this order and hereinafter referred

,to as the Cha~), shall leave title to such invention in the emplo,yee, subject, ho~ovor, to thereservation to the Government of a non-exclusive, irrevocable, royalty-free license in tho inventionwithpewer to grant licenses for all governmental purposes, Buch reservation, in the ,terms theroot,to appear, where practicable, in ~ patent, domestic or foreign, which may issue on such invontion.

(c) In applying the provisions of par-agraphs (a.> and (b), above, to ths f.ct. and circum­stances relating to the making of any particular invention, it shall bo prosumed that an inventionmade by an employee who 1s employed oras91gned (1) to invent or improve orporfect any art, machino,~nuf~ctur8, or composition of matter, (ii) to conduct or perform research, devalolnont work, orboth, (iil) to auper-vfae , direct, coordinate, or review Government financed or conducted r-esear-ch,deve'Lopaent, work, or both, or (lv) to act in a lial!oncapacity SAOng governmental or noneovornmontalagencies or individuals engaged in such vork, or made.by an employee included 'Within any other categoryof employee••pecified b1 regulation. i.sued pur.uant to .ection 4(b) hereof, falls within theprovisions of paragraph (a), above, and 1t shall be pr-esumed that an,- invention mode b1 an,. othoremployee fall. within the provisions or paragraph (b). above. Eithor pr-eeuraptdon ma,. be rsbuttodb1 the facts or circumstance. attendant upon the conditions under which an,- particular inv.ntion ismade and notwithstanding the 1'oregoinll, .hall not preolude a determination that the invention fall.within the provi.ion. of paragraph (d) next belOll. .

(d) In an,- ca.e wherein the Government neither (1) pur.uant to the provi.ions of paragraph,a) above, obtain. entire right, title and intere.t 10 and to an invention nor (4) pur.uant to tho'provisions of paragraph (b). above, reserve8a non-exclusive, irrevocable, rqralty-free licensoin vthe invention with power to grant license9 for all governmental purposes, 'the Government shall leavethe entire rlght~ title and "interest in and to the invention 1n the Governmont employoo, subject to~w. . . ..

-,,.

EXECUTIVE ORDERS

2. Subj~ct. to cona Ider-a'tLone or .nntloMl 150curltYJ or publlo hoalth, Gnfetr, 0:' .... '.lr'lrG. thofollo ....ing m:3ic policy La eotablishod for tho c011'3ot10n, and dis9o:n.1n.fltion to tho public. or infor­mation concor-adng Lnverrtdono re:3Ulting from. Govornmont rosoarch and deve lopeont, actlvitloat

(a) Whon an invention 1a made undor c1rc~~t~nc99 definod in paragraph l(a) of -thl! orjurgiving the U~ited States the right to t1tle thereto, the Governmentagoncy concomod ~hAll elthorprepare and file nn application for patent therefor in the UnltedStat9s Patent Office or ~ke &full disclosure of the invention promptly to the Chairman, yho may, if he dete~n03 tho Govern=antinterest 80 requires, cauao appllcatlonfor patent to bofiled or CRUSa tho invention to be fullydiscloaed qy publication thereof: Provided, hovever, That, consistent vith prosQnt prnctlco ~r thoDepartment of Agricul~ure, no application for paten~ shalt, vithout tho approval of the Socretary J

or- Agriculture, be filed in respect of8.IJY' variety of plant Invented by any eapkoyee of that DOP'\:"t­ment.

(b) Undor arrangements made and policios adopted· bw the Chairman, all invention. or right.theroin, including licenses, ownod or controlled by tho UnitedStnteo or any Gov~r~~ont nconcy ~hnlt

be indexed and copies, summaries, analyses and abstracts thoreof ahall be maintainod and mado &vnl1_able to all Government agencies and to public librarios, universities, tradeassociationa, 8clontlstaand scientific groups, induatrial and ·commeroial organizations, and all othor Intereotad groups ofper90ns~

3. (a) A Government Patents Board ie established consisting of a Chairman of the Goven>~ont

Patents Board, vhc shall be appointed bw the President, and of one representative fro:n each of thefollowing:

Departmont of AericultureDepartment of CommerceDepartment of the InteriorDepartment of JusticeDepar~ent of StateDepart~ent of DefenseCivil. Service Commis3ionFederal Security AgencyNational AdVisorY Committee for AeronauticsGeneral Services Administration

Each such represent~tive, together· with ~ alternate, shall be designated b,y the head of the agonc,yconcerned.

(b) The Government Patents Board ehall adviso and confer with tho Chairman concerning thooperation of those aspects of the Government's patent policy which are affected by tho provisionsof this or-der' or of Executive Order No. 9865, and suggest modifications or improvements 'Where nee­essary.

(c) Consonant with la\l, the agencies referred to in paragraph 3(a) hereof shall as roay bonecessary for thepurpos8 of effectuating this order furnish assistance to the Board in accordance\lith section 214 of the Independent Offices Appropriation Act, 1946, 59 Stat. 134, 31 U.S.C. 691. 12

The Department of Co~~erce shall provide necessaryorrice accommodations and facilities for tho unoof the Board and the Chairman.

(d) The Cheirman shall establish euch committees and other \lorking groups ao may bo requirodto advise or assist him in the performance of Rnf of his functions.

(e) The Chairman of the Government Patents Board and the Chairman of the IntordepartmontalCo=ittae on SQientific Research and Development (provided forbw Executive Order No. 9912 of Deeoa­bar 24, 1947)lJ shall establish and lIlllintain such mutual consultation ae will effect ths proparcoordination of affaIrs of CO~lon concern."

4. With a viell j:.c~9btaining untj'omeppkfcatdon of the policies est out in this ordor and unli"ormoperations thereunder, the Chairman is authorized and directed.

(a) To coneult and advise \lith Government agencies concerning the application and oporetioar the policies outlined berein;

(b) After consultation with the Government Patente Board to formulate and oubmit to thePresident for approval such proposed rules and regulations as may be necessary or desirable to im­plement and effectuate the aforesaid policies, together with the recommendations of the Covernmont

'Patents Board thereon;

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EXFx;\ITIVE ORDras

(e) To 9uhmlt nnnunl1..y 0. r-epor-t, to tho ProIJldont conoornlna thD opo:"4tlQn 0: :S'JI"'h l~')':..1"1f"!'\tand trom t1.m.e to timo euch r-ecora-aendut.Lona for modification thoreo~ as may bo dco'acd d~s1rnb:o;

Cd) To .dot.ermfne with finality any eont.roverntee or disputes bet. ....eon any Gover-n..~ont f\~"ncy

end its omplllyeea,- to tho extontsubQitted by any pnrty to tho dispute, concornf ng tho o'.lIj·Jrohlp0: Inventio?9 made b'J such ampl.oyeee or rights thflroln;. and "--......

(e) To perform such other or further functions or dutles as' my fro:n t1.110~"! the Pr-eaLdent; or by stJ3.tute.

5. The' functionB and dut.Lee of tho S~crctflry of Corn.""1Orc'J and tho Depo.rt:':lont of cce-reecc under­the provlaion~ of Executive Order No. 9865 of June 14, 1947 14 are h~roqy tranIJferroj to thG Chni~~nand the ",hol~ or any part of such I'unct.Lona and duties may be dell:'lgated by hLl1·toanyGov",rn.:uantagency or officer: Provided, That said Executive Order No. 9865 shall not be deemed to be aracndod Or'

affected Qy any provision orthls Ex~cutlve order other ~han this paragraph 5.

6. Each Government agency shall ~lke all steps appropriate to effectuate this o~dor, inclw'lngthe promulgation of necessary regulations ~hlch shall not be IncOD~iBtent ~lth this order or ~ith

regulations is.ued pursuant to paragraph 4(b) hereof.

7. As used in this Executive order, the next stated tarms, 1n s1.ngular .end plura.l, ar-e dofinodas follovs for the purposes hereofl

(a) "Government, agency" includes anyexocutive department and a..,yind.epend~nt cCl:'lI:41'l'lion,board, offico, ucency, authority, or othor- establishmont of tho Executive Brunch of the Govor~~ont

of the United St.tes (including any such independent regulatory cm"lis,ion or bonrd, any such ~hol1y­

owned corporatlon,and the Smithsonian Institution), but exeludes the Atomic ~nergy CamuBsion.

(b) "Government employee" includes any of ricer or employee, civilian or military, of anyGover~~ent agency, except such part-tL~e conBultan~s or employeos as maybe excluded b.Y rerrulationnpr-omu'lge ted pur-suant, to paragraph 4(b) hereof.

(0) "EnvenbLon" includes any art, machine, manu.factura, design or cornpoalti-:m of ma.tter,or any new and useful improvemeht thereof, or aDyvariety of plant, Yhich lsor ~ba patentableunder the patent 1"". of the United State••

The White HouseJanuary.23, 1950

12. 31 U.s.C.A. 691

13. U.S. Code Cong. Service 1947, p. 2062

Harry S. TrUlOlln

14. 5 U.S.C.A. 599 note.

.,. or''''I._.f A' .,. T....

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27.306

27.304-427.304·527.305

27.3QS..127.305·227.305-327.305...·

27.204-3 Patents-notice of GovernmentII' 8 Heeneee,

Z?.204.... ClyUR for reporting of royaltiesIfo"'isnJ. c", •

21.205 Adjustment of royaltie~;

27.206 Refund of royalties.27.ZlJ6.t Genera!. ..' •. I-

27.~ Cause for refund of royalties.27,207 Claaifled" cootract.. I~.l

27.207-1 ~. •27.207-2 Clause (ar classified contract..

SUBPART 2T.3-PATENT RIGHTS ";'601 ""GOVERNMENT CONTRACTS27.300 Scope of subpart.27.301 Definitions.27.302 Policy.27.303 Contract clauses.21.301 Procedures..27.304-1 General.27.304-2 Contracts placed by or for other

Government agencies. .27.304-3 Contr.acts for construction work

or architect- engineer services.Subcontracts,Appeala,Administration of patent rishts

clauses.Patent rights follow-up.Follow-up by contractor.Follow-up by Government.Conveyance of invention rights

acquired by the Go...·ernment.27.305-5 Publication or release of

invention disclosures.Licensing background patent

rights to third parties.

SUBPART 27.4-RIGHTS IN DATA ANDCOPYRIGHTS27.401 General

SUBPART 27.S-RESERVED

SUCPART 27.S-FOREIGN LICENSE ANDTECHNICAL ASSiSTANCE AGREEMENTS27.601 General

AUTHORITY: 40 USC 486{c); Chapter137. 10USC; and 42 USC 2453{c).

27.000 Sco.po 01 part.

This part prescribes policies.procedures. and contract clausespertaining to patents and directsagencies to develop coverage for Rightsin Data and Copyrights.

SU6PART2~1-GENERAL

27.101 Applicability.

The policies. procedures. and clausesprescribed by this Part 27 are applicableto all agencies. Agencies are authorizedto adopt alternate policies. procedures,and clauses. but only to the extentdetennined necessary to meet the­specific requIrements of laws. executiveorders. treaties. or internationalagreements. Any agency action adoptingsuch alternate policies. procedures. andclauses shall be covered in publishedagency regulations.

27.102 Rosorved.

27.103 Policy.The policies pertaining to patents;

data, and copyrights are set fodll in thiaPart 221apd thereJa.ted clauses in Part52. ",'4f'

27.104 General guIdance.·(a~eCovernment encourages the

maximum practical commercial use ofinveqtions made while perfonning.Govemment contracts.

[b) Generally, the Government willnot refuse to award a ccatract on thegrounds that the prospective contractormay infringe a patent.

(c) Generally. the Governmentencourages the use of inventions inperformingcontracta and, by ~

appropriate contract clauses. authorizesand consents to such use. even thoughthe inventions may be covered by.U.S.patents and indemnification againstinfringement may be appropriate,

(d) Generally. the Government shouldbe indemnified against infringement ofU.S. patents resulting from perfonningcontracts when the supplies or servicesacquired under the contracts normallyare or have been sold or offered for saleby any supplier to the public in thecommercial open market or-are the sameas such supplies or services withrelatively minor modifications.

[e) The Government acquires suppliesor services on a competitive basis to themaximum practical extent. but it isimportant that the efforts directedtoward increasing competition notimproperly demand or use data relatingto private developments.

[I) The Government honors the rightsin data resulting from privatedevelopments and limits its demands forsuch rights to those essential forGovernment purposes,

[g)The Government honors rights inpatents. data. and copyrights. andcomplies with the stipulations of law inusing or acquiring such rights.

[hJ Generally, the Governmentrequires that contractors obtainpermission from copyright ownersbefore including privately-ownedcopyrighted works in data required to bedelivered under Government contracts.

SU6PART27~-PATENTS

27.200 Scope of lubpart.This subpart prescribes policy with

respect to--(a) Patent infringement liability

resulting from work perfonned by or forthe Government;

(b) Royalties payable in connectionwith performing Government contracts:and

(cl Security requirements coveringpatent applications containing classifiedsubject matter rued by contractors.

21.201 Authortzation and consent.

27.201-1 G......L

[a) In those cases where th..Govemmenr h81l authorized orconsented to the- manufacture or use ofan inventio·n described in and caveredby If patent of th. United Stales. anysuit for infringemem of the paten1 basedon th.. manufacture or use of th..invention by or for th.. United States bya contractor [including a subcontractor­at any tierJ can be maintained only­against the Government in the U.S.Claims Caurt and not against th..contractor or subcontractor (28 U.S.C.1498J. To ensure that work by acontractor or subcontractor under aGovernment contract may not beenjoined by reason of patentinfringement, the Government shall giveauthoriza.ion and consent in accordancewith this regulation. The liability of theGovernment for damages in a.:lY suchsuit against it may. however. ultimatelybe borne by the contractor orsubcontractor in accordance with theteJ'1!ls of any patent Indemnity clausealso included in the contract" and anauthorization and consent clause doesnot detract from any patentindemnification commitment by thecontractor or subcontractor. Therefore.both a patent indemnity clause and anauthorization and consent clause maybe included in the same contract.

(b) The contracting officer shall notinclude in any solicitation or contract-

(1) Any clause whereby theGovernment expressly agrees toindemnify the contractor againstliability for patent infringement; or

(2) Any authorization and consentclause when both complete performanceand delivery are outside the UnitedStates. its possessions. and Puerto Rico.

27.201·2 Clauselon authorization andconsent.

(a) The contracting officer shall insertthe clause at 52.227-1. Authorizatlon andConsent. in solicitations and contracts(including those for construction:architect-engineer services: dismantling.demolition, or removal of improvements:and noncommon carrier communicationservices), except when small purchaseprocedures spply or both completeperformance and delivery are outsidethe United States. its possessions. andPuerto Rico. Although the clause is notrequired when small purchaseprocedures apply. it may be used withthem.

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(b) The contracting officer s~all insertthe clause with its Alternate lin all R&Dsolidtations and conteacts (includingthose for construction and archltect­engineer services calling e~clusively rorR&D work or exclusively forexperimental work). unless bothcomplete performance and delivery areoutside the United States. itspossessions, and Puerto Rico. When aproposed contract involves both R&Dwork and supplies or services. and theR&Dwork i. the primary purpose of thecontract. the contracting officer shall usethis alternate. In all other proposedcontract. involving both R&Dwork andsupplies or services. the contractingofficer shall use the basic clause. Also.when a proposed contract involv:s .either R&D or supplies and materials. In

addition to construction or architect­engineer work. the contracting officershall use the basic clause.

(c) If the solicitation or contract is forcommunication services with a commoncarrier and the services are unregulatedand not priced by a tariff schedule setby a regulatory body. the contractingofficer shall use the clause with itsAlternate 11.

27.202 Notice and assistance.

27.202,1 Genenl

The contractor is required to notifythe contracting officer of all claims ofinfringement that come to thecontractor's attention in connection withperforming 8 Govemment contract. Thecontractor is also required. whenrequested. to assist the Gov8tnn:Jent. .with any evidence and informatton tn.ltspossession in connection with any ~Ult

against the Government. or any claimsagainst the Government made beforesuit has been instituted. on account ofany alleged patent or copyright .infringement arising out of or resultingfrom the contract performance.

27.202·2 ctau..on notre. and .ssiltanc•.

The contracting officer shall insert theclause at 52.227-2, Notice andAssistance Regarding Patent andCopyright Infringement. in supply.service. or research and development.olicitation. and contract. (includingconstnaction· and architect--engineercontracts) which anticipate a contractvalue above the dollar limit set forth at13.000. except when small purchaseprocedure. apply or both completaperformance and delivery are outside

. the United State•• it. 'po.sessions. andPuerto Rico. unless the contract.indicate that the supplie. or otherdeliverable. are ultimately to beshipped into one of those area•.

27.203 Patent Indemnification ofGovernment by contractor.

27.20:J,1 General(a) To the extent set forth in this

section. the Govemment requiresreimbursement for liability for pate?tinfringement arising out of or resultingfrom performing construction contractsor contracts for supplies or services thatnormally are or have been sold oroffered for sale by any supplier to thepublic in the commercial open market orthat are the same as such supplies orservices with relatively minor -modifications. Appropriate clauses forindemnification of the Government areprescribed in the following subsections.

(b) A patent indemnity clause shaIlnot be used in the following situahons:

(lJ When the clause at 52.227.1..Authorization and Consent. wtth ttsAlternate I. is included in the contract.except that in contracts calling also forsupplies of the kind described in .paragraph (a) above. a patent indemnityclause may be used solely with respectto such supplies.

(2) When the contract is for suppliesor services (or such items with relativelyminor modifications) that clearly are notor have not been sold or offered for saleby any supplier to the public in thecommercial open market. However. apatent indemnity clause may ~e

included in (i) formally adverhsedcontracts to obtain an indemnityregarding specific components. spareparts or services so sold or offered forsale isee 27.203·2(b) below). and (ii)contract. to be awarded (either byformal advertising or negotiation) if apatent owner contends that thaacquisition would result in patentinfringement and the prospectivecontractor. after responding to asolicitation that did not contain anindemnity clause. is willing to indemnifythe Govemment against suchinfringement either (A) without increasein price on the basis that the patent I.invalid or not infringed. or (B) for othergood reasons.

(3) When both perfo?"ance anddelivery are to be outside the Urtlted.States. ita possessions. and Puerto RICO.unless the contract indicates that th~•...upplie. or other deliverable._areultimately to be shipped into one of ~those areas. ...

(4) When the contract i. awarded bysmaIl purchasa procedures. :dHJI,

(5) When the contract i. solely'f"ot'architect-engineer work (see_Part 36).

27.2O:J,2 CIauaee for formally od....u.edcontnlc:ts (e.dudlnll con.ll'uction~

(a) Except when prohibited by 27.203­l(b) above. the contracting officer shaIl

insert the clause at 52.227-3. PatentIndemnity. in formally advertisedcontracts for supplies or services(excluding construction and disma~tlin8.demolition. and removal ofimprovements). if the con~racting 6f~cer

determines that the supplies or services(or such items with relatively minormodifications) normalty are or havebeen sold-or offered for sala by anysupplier to the public in the commercialopen market. Also the clause may beincluded as authorized in 27.203­1(b)(2)(i).

(bJ In solicitations and cont~acts

[excluding those for construchon) thatcall in part for specific components.spare parts. or services (o~ suc~ itemswith relatively minor modifications) thatnormally are or have been sold oroffered for sale by any supplier to thepublic in the commercial open market.the contracting officer may use theclause with its Alternate I or II. asappropriate. The choice betweenAlternate I [identification of excludeditems} and Alternate" [identification ofincluded items) should be based uponsimplicity. GOvernment a~min~strat~veconvenience and ease of Identificationof the items.

(c) In solicitations and contra~t!~orcommunication services and faclhtleswhere performance is by a common .carrier. and the services are unregulatedand are not priced by a tariff scheduleset by a regulatory body. use the baSICclause with its Alternate III.

27.203-3 Negotiated contracts (excludingconltructlon).

A patent inderrinity clauseis notrequired in negotiated contracts. (exceptconstruction contracts covered at 27.20:J..5). but may be used as discussed in27.203-4 below. A decision to omit apatent indemnity clause i~ a n~goti?ted.fixed-price contrac.t described In th~s

subsection should Debased on a pnceconsideration to the Government for theforegoing indemnification rightsnormally received by commercialpurchasers of the same supplies orservices.

27~2f)3.4 Claus•• tor negotlat.d co~tracta·

('·i:IudJl'1c~n.tructlon~(0) The contracting officer may insert

the cJalW~ ot52.227-3. PatentIndemnlty-

(1) As authorized in 27.203·1(b}(2)(ii):and ' {.,. .

- (2) Except as prohibit~dby.27.203­l(b).in .solicitations anttctpatingnegotiated contracts (and such

. contracts) for supplies or services(excluding construction and dismantlfng.demolition. and removal of

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27.20M Clause for Government waiver·of Ind!!mnlty.

If. in theGovernment's interest. it isappropriate to exempt one or morespecific United Slates patents from thepatent indemnity clause. the contractingoffic~' shall obtain written approvalfrom the agency-head or designee andshell insert the clause at 52.227-5.

improvements). if the contracting officer Waiver of IndelllJlity. in solicitationsdeterminestbat the supplies or services and contrac!s in addition to the(or such items withrelativeJy minor sppropriate ,ateat indemnity clause.modifications] normally are or,hsve The contracting officer shall documentbeen sold or offered for sale by any tbe contract file with a capy of t1tesupplier to the public in the commercial writtellrill>llrevaJ.open markel. Ordinarily: 'lin! tontracting f/fi"- .

ffi I th h 27.204 Reportlng of royalll_antlcipataclo leer, in cansu tation wi tear Iltllprospective contractor. should belll>!e to .P,...determine whether the supplies ot 27.204-1 GanatoLservices being purchased normal~ ,re .ra] ~) To determine whether royaltiesor have b~en sold or off~r~d for oaI""'Y -,J· anticfpated or actually paid underany suppher to the pubhc In the Government contracts are excessive.com~erciill open ma.rket. (For improper, or inconsistent. with anynegotiated construction contracts. see Government rights in particular27.203·S). .. . inventions. patents, or patent

(b~ In sohcltat1on~ ,and contracts that applications. contracting officers shallcall In part for specific compone~ts. require prospective contractors to8~8re pa~s. or se:-:lces (o~ suc~ Items furnish certain royalty infprmation andWith relatively rmnor modiflcations] that ... shall require contractors to furnishnormally are or have been s~ld or certain royalty reports. Contrnctingoffer.ed for sale by any supplier 10 the officers shall take appropriate action topubhc In the commercial open market. reduce or eliminate excessive orthe contr~ct~ng officer may use the improper royalties.clause ~Ith Its Alte~ale lor II. as (2) Royalty information shall not beappropriate. The choice between required rexcept for information underAlternate I (identification of excluded 27.204-3) in formally advertiseditems) and Alternate II [identification of contracts unless the need for suchIncluded items) should be bas~d upon information is approved at a level abovesimpllcity, Government administrative that of the contracting officer as being'~onv~01en~e.and th~ ease of necessary for proper protection of theIdenttflcaticn of the Items. Government's interests.

[c) In ~olidtationsand contra~ts for . (b) When it is expected that work maycommuntcanon seI'\·~ces and faclhhes be performed in the United States. its

.whc:e performance J.s by a common possessions. or Puerto Rico. anycarrier. and th~ services ar~ unregulated solicitation that may result in aand are not pnced by a tariff schedule negotiated contract for which royaltyset by a regulatory body. the clause information is desired or for which costshall be used with its Alternate III, or pricing data is obtained [see 15.804)27.203--5 Clause f:Jr construction should contain a provision requestingcor-tracts and for dismantling, demolition.. information relating to any proposedand removal of Improvements contracts. charge for royalties. -H the work is to be

Except as prohibited by 27.203-1(b). performed in the United. States. itsthe contracting officer shan insert the possessions. or Puerto Rico and theclause at 52.227-4. Patent Indemnity- response to the solicitation includes aConstruction Contracts. in solicitations charge for royalties. the contractingand contracts for construction or that officer shall. before award of theare fixed-price for dismantling. contract. forward the informationdemolition. or removal of improvements. relating to the proposed payments ofIf it is determined thanhe construction royalties to the office having cognizancewill necessarily involve the use of of patent mattets fer the contractingstructures, products, materials. . activity concerned. The cognizant officeequipment. processes, or methods that shall promptly advise the contractingare nonstandard. noncommercial. or officer of appropriate action. Beforespecial. the contracting officer may award. the contracting officer shall takeexpressly exclude them from the patej1t action to protect the Government'sindemnification by using the basic interest with respectto such royalties.clause with its Alternate 1. giving due, regard to all pertinent factors

relating to the proposed contract and theadvice of the cognizant office.

[e) The contracting officer. whenconsidering the approval of asubcontract for work to be performed inthe United States. its possessions. orPuerto Rico. shall require and obtain thesame royalty information and take thesame action with respect to suchsubcontracts in relation-to royalties aa

required for prime contracts underparagraph (b) above. However. consentneed not be withheld pending receipt otadvice in regard to such royalties from":!'the office having cognizance of patentmattera.

(d) The.contracting officer shallforward the royalty infonnalion and/orroyalty reports received to the officehaving cognizance of patent matters-forthe contracting activity concerned foradvice as to appropriate action.

21.204-2 Solicitation proYlafon for royaltyInformation.

If it is expected that work may beperformed in the United States. itspossessions. or Puerto Rico. thecontracting officer shall insert asolicitation provision substantially 89

shown in 52.227-6. Royalty Information,in any solicitation that may result in anegotiated contract for which royaltyinformation is desired or for which costor pricing data is obtained under 15.604.If the solicitation is for communicationservices and facilities by a commoncarrier. use the provision with itsAlternate I.

27.204--3 Patents-notice of GO'tcr.nment••• lIc.n....

[a) When the Government is ob:igaledto pay a royalty on a patent because ofa license agreement between. theGovernment and a patent owner and thecontracting officer knows (or hes reesonto believe) that the licensed patent willbe applicable to a prospeetlve contract.the Government should furnishinformation relating to the roya~ty toprospective afferors since it serves theinterest of both the Government and theofferors. In such situations. thecontracting officer should include In thesolicitation a notice of the license. thenumber of the patent, and the royaltyrate recited in the license.

[b) When the Government is obligatedto pay such s royalty. the solicitationshould also require ofrerors to fumishinfonnation indicating whether or noteach offeror is a licensee under thepatent or the patent owner. ThisinformaUon is necessary so that theGovernment may either (ll evaluate anofferor's price by adding an amountequal to the royalty. or (2) negotiate aprice reduction with an offeror-licenseewhen the offeror is licensed under thesame-patent at a lower royalty rate.

(cJ IT the Government is obligated topay a rei·.lly on a patent involved in theprospective contract. the contractingofficer shall insert in the solicitation.substantially as shown. the provision at52.2:7-7. Patents-Notice of GovernmentLicensee.

Federal Register I Vol. 49. No. 63 I Friday. March 30. 1984 I Rules and Regulations:1-2978

. 27.20~ Clause for reporting of royalties(Ioreign~

In solicitations contemplatingnegotiated contracts (and suchcontracta) to be perfonned outside the

"United States. its possessions. andPuerto Rico. regardless of the p!ace ofdelivery. the contracting officer shallinsert the clause at 52.227-8. Reporting orRoyaltiea (Foreign).

27.205 AdJustment of royalties.(a) U at any time the contracting

officer has reason to believe that anyroyalties paid. or to be paid, under anexisting or prospective contract orsubcontract are inconsistent withGovernment rights. excessive. orotherwise improper, the facts shall bepromptly reported to the office havingcognizance of patent matters for thecontracting activity concerned. Thecognizant office shan review theroyalties thus reported and suchroyalties as are reported under 27.204and 27.206 and. in accordance withagency procedures. shan eitherrecommend appropriate action to thecontracting officer or. if authorized. shalltake appropriate action.

(b) In coordination with the cognizantoffice. the contracting officer shallpromptly act to protect the Governmentagainst payment of royalties on suppliesor services-

(1) With respect to which theGovernment has a royalty-free license:

(2) At a rate in excess of the rate atwhich the Government is licensed: or

(3) When the royalties in whole or inpart otherwise constitute an impropercharge.

(c) rn appropriate cases. thecontracting officer in coordination withthe·cognizant office shan obtain arefund pursuant to any refund orroyalties clause in the contract (see27.206J or negotiale for a reduction orroyalties.

(d) For guidance in evaluatinginformation furnished pursuant to 27.204and 27.205(a) above. aee 31.205-37 and31.311-34.See also 31.109 regardingadvance understandings on particularcoat Items, including royalties.

27.201 Relund 01 royelUeL

27.2Q601 Ge"-.When a fixed-price contract ia

negotiated under circumstances thinmake it questionable whether or notsubstantial amoul1ls of royaltiea willhave to be paid by the contractor or aaubcontractor. such royalties may baincluded in the target or contract price,provided the contract specifies that theGovernment will be reimbursed theamount or auch royalties if they are not

paid. Such circumstances might include•for example. either a pendingGovernment anti-trust action orprospective litigation on the validity of apatent or patents or on theenforceability of an agreement (uponwhich the contractor or subcontractorbases the asserted obligation) to pay theroyalties to be included in the target orcontract price.

27.20&-2 Clause for refund of royalties.The contracting officer shan insert the

clause at 52.227-9. Refund of Royalties.in negotiated fixed-price contracts andsolicitations contemplating suchcontracts if the contracting officerdetermines that circumstances make itquestionable whether or not substantialamounts of royalties will have to bepaid by the contractor or asubcontractor at any tier.

27.207 CJassifi~ contracts.

27.207-1. General.(a) Unauthorized disclosure of

'classtfied subject matter, whether inpatent applications or resulting from theissuance of a patent. may be a violationor 18 U.S.C. 792 et seq. (Espionage andCensorship), and related statutes. andmay be contrary to the interests ofnational security.

(b) Upon receipt from the contractoror a patent application. not yet filed,that has been submitted by thecontractor in compliance with paragraph(a) or (b) of the clause at 52.227-10.Filing of Patent Applications-ClassifiedSubject Matter. the contracting officershan ascertain the proper aecuri tyclassification of the patent application.Upon a detennination that theapplication contains classified subjectmatter, the contracting officer shaninform the contractor of any insiructionsdeemed necesaary or advisable relatingto transmittal of the application to theUnited States Patent Office inaccordance with procedure. in theDepartment of Defense IndustrialSecurity Manual for SafeguardingClassified Security Information. If thematerial is classified "Secret" or higher.the contracting orlicer shall make everyeffort to notify the contractor of thedetermination within 30 daya. pUrS\lliht

·to paragraph (aJ of the clause.(c) In tha caae of all applicationa iiled

under the provisions of this sectio"­27.207. the contracting omcer. uponreceiving the application serial ~er,the fiUng date. and the infonnatlonfurnished by the contractor underparagraph (dJ of the clause at 52.227-10,Filing of Patent AppUcations-ClaasifiedSubject Matter. shall promptly aubmitthat infonnation to personnel having

•cognizance or patent matters in orderthat the steps necessary to ensure thesecurity or the application may be taken.

(d) A request for the approval referredto in paragraph (c) or the clause at52.227-10. Filing or Patent Applications­Classified Subject Matter. must beconsidered and acted upon promptly bythe contracting officer in order to avoidthe loss or valuable patent rights or theGovernment or the contractor.

27.207·2 Clause for classified contracts.The contracting officer shall insert tha

clause at 52.227-10. Filing of PatentApplications-Classified SubjectMatter. in all classified solicitations andcontracts and in all solicitations andcontracts where the nature of the workor classified subject matter involved inthe work reasonably might be expectedto result in a patent applicationcontaining classified subject matter.

SUBPART 27.3-PATENT RIGHTSUNDER GOVERNMENT CONTRACTS

27.300 Sco~ of subpart.This subpart prescribes policies,

procedures. and contract clauses withrespect to inventions made in theperformance of work under aGovernment contract or subcontractthereunder if a purpose of the contractor subcontract is the conduct ofexperimental. developmental. orresearch work. except to the extentstatutory requirements necessitatedifferent agency policies. procedures.and clauses as specified in agencysupplemental regulations.

27.301 Dellnltlons."Invention," as used in this subpart.

means any invention or discovery that isor may be patentable or otherwiseprotectable under Title 35 of the U.S.Gode.

"Made." as used in this subpart, whenused in relation to any invention, meansthe conception or first actual reductionto practice of such invention.

"Nonprofit organization,' as used inthis subpart. means a domesticuniversity or other institution of highereducation or an organization of the typep'~scribed in section 501(c)(3) of the .

, Inte/liaj'Revenue Code of 1954 (28 U.~.C.501(c)) and exempt from taxation underaectiq~~(a)or the Internal RevenueCode (26 U.S.C. 501(a)). or any domesticnonprofit scientific or educationalorganizatiod q1Ia1ified under a Statenonprofit organization statute.

."Practical application," as used in thissubpart. means to manufacture. in thecase of a composition or product: topractice. in the case of a precess ormethod: or to operate. in the casa or a

Federal Register / Vol. 49; No•. 83 / Friday, March 30, 1984 / Rules and RegulationsI!I

machine or system; and. in each case.under such conditions as to establishthat the invention is being utilized andthat its benefits are, to the extent 'permitted by lew or Governmentregulations. available to the public onreasonable terms. ;'-...i I-

"Small business firm:' as used in thissubpart. means a domestic smallbusiness concern as defined atdS'U.S.C.632 and implementing reguJatioJ]s of theAdministrator of the Small Bu'itn¥,a. J'Administration. (For the purpose of tlifsdefinition, the size standard containedin 13 CFR 121.3-8 for small businesscontractors and in 13 eFR 121.3·12 forsmall business subcontractors will beused. See FAR Part 19J.

"Subject invention," as used in thissubpart. means any invention of thecontractor conceived or first actuaIIyreduced to practice in the performanceof work under 8 Government contract.

27.302 Polley.(a) Introduction. (IJ The policy of this

section is based on 35 U.S.C. Chapter 18(Pub. L. 96-517J, OMB Circular A·124.and the Presidential Memorandum onGovernment Patent Policy to the Headsof Executive Departments and Agenciesdated February 18. 1983. The objectivesof this policy are to use the patentsystem to promote the utilization ofinventions arising from federallysupported research or development: toencourage maximum participation ofindustry in federally supported researchand development efforts: to ensure thatthese inventions are used in a manner topromote free competition and enterprise:to promote the commercialization andpublic availability of the Inventionsmade in the Uniled States by UnitedStales industry and labor: to ensure thatthe Government obtains sufficient rightsin federally supported inventions tomeet the needs of the Government andprotect thepubhc against nonuse orunreasonable use of inventions; and tominimize the costs of administeringpolicies in this art-a.

(2) SOOlf: eacuci-s arc subject. inwhole or In t-art. tn one of the followingstatutes...vhtcn require that informationas to ub~S. products. processes. patents.or other de\:c:Q;:.m,~nts"be available tothe genera! public": 31 U.S.C. 868, 22U.S.C. 2572, 50 U.s.C. 167b. 30 U.S.C.951(c). 30 U.S.G. 937(bJ. 40 U.S.C. App.302[e).30 U.S.C. 1226, and 15 U.S.C.1395[c).Such agencies shall generallyuse the clauses herein allowing title topatents to be retained by the contractor.and the related procedures.

(bJ Controctorrightto elect title.Under the policy set Icrth in paragraph(a) above. each ccntractor may. 'afterdisclosure to the Government 8S

required by the patent riBht. clauseincluded in the contract, elect to retaintitle to any invention made in theperformance of work under the contract.To theextent an agency's stiltutOryreq~yements necessitate 8 differentpolreyi'or different procedure. and/orcontract clauses to effectuate the policysQ/Jorth in paragraph (a) above. suchllal'l'cy,procedures. and clauses shall becontained in or expressly referred to in.thlII··agency'. supplement to thissubpart. In addition. a contract mayprovide otherwise (1) when the contractis for the operation of a Governrnent­owned research or production facility.(2) it) exceptional circumstances when itis determined by the agency thatrestriction or elimination of the right toretain title in any subjeet invention willbetter promote the policy and objectivesof 35 U.S.C. Chapter 18 and thePresidential Memorandum. or (3) whenit is determined by 8 Governmentau!hority which ia authorized by statuteor Executive Order to conduct forefgninteUigence or counterintelligenceactivities that the restriction orelimination of the right to retain title toanysubject invention is necessary toprotect the security of such activities. Inthoae instances when the Governmenthas the right to acquire title at the timeof contracting the contractor may.nevertheless, request greater rights to anidentified invention. (See 27.304-1 (aJ.JThe ri;ht of the contractor to retain titleshall, in any event. be suhjectto theprovisions of paragraphs (c) through (gJbelow unless for contracts with otherthan small business or nonprofitorganizations the agency determinesbefore contract award that all orportions of these provision. may bemodified. waived, or omitted. {See27.304-1(f).J

(c) Government license. TheGovernment shall have (unless providedotherwise in accordance with 27.304­1(f)J at least a nonexclusive,nontransferable. irrevoca ble, paid-uplicense to practice. or have practiced foror on behalf of the Unit cd Stales. anysubject invention throughout top world;and may. if provided in the contract (seeAlternate I of the applicable patentrights clause). have additional rights tosublicense any foreign government orinternational organization pursuant toexisting treaties or agreementsidentified in the contract. and any futuretreaty or agreement.

(d) Government right to receive title.(IJ The Covernment has the right toreceive title to any invention if thecontract so provides pursuant to adetermination made in accordance withsubparagraph (bJllJ, (2), or (3) above. Inaddition, to the extent provided in the

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patent rights clause. the Governmenthas the right to receive title to aninvention-

(iJ If the contraclor has not disclosedthe invention within the time specifiedin the clause:

(iiJ In any country where thecontractor does not elect to retain rightaor fails to elect to retain rights to theinvention within the time specified inthe clause; .

(iiiJ In any country where thecontractor bes not filed a patentapplication within the time specified inthe clause:

(iv) In any country where thecontractor decides not to continueprosecution of a patent application. paymaintenance fees. or defend in areexamination or opposition proceedingon the patent and/or

(vJ In any country where thecontractor no longer desires to retaintitle:. (2J For the purpose. of this paragraph,

'election or fiUng in a European PatentOffice Region or under the PalentCooperation Treaty constitutes eJectionor filing in ahy country covered thereinto meet the times specified in the clause.provided that the Govemment has theright to receive title in those countriesnot subsequently designated by thecontractor.

(e) Utllization reports. Unlessprovided otherwise in accordance with27.304-1(f).contracts provide that theGovernment shall have the right torequire periodic reporting on theutilization or efforts at obtainingutilization that are being made by thecontractor or its licensees or assignees.Such reporting by small business firmsand nonprofit organizations may berequired in accordance with Instrucrionsas may be issued by the Department ofCommerce. Agencies should protect theconfidentiality of utilization reports tothe ex lent permitted hy 35 U.S.C. 205 orother applicable laws and OMB CircularA-124.

(f) March-in rights. (lJ With respect toany subject invention in which acontractor has acquired title. contractsprovide that the agency shall have theright (unless provided otherwise inaccordance with 27.304-1[f)) to requirethe contractor. an assignee. or exclusivelicensee of a subject invention to grant anonexclusive; partially exclusive. orexclusive license in any field of use to aresponsible applicant or applicants,upon terms that are reasonable underthe circumstances, ana if~e contractor,assignee. cr exclusive licensee refusessuch request. to grant such a licenseitself. if the agency determines that suchaction is necessary-

Federal Register I Vol. 49. No. 63 I Friday. March 30. 1984 I Rules and Regulations

Rights-Retention by the Contractor(Short Form). if all the followingcondition. apply:

(I) The contractor is a small bqsinessconcern Of nonprofit organizati~as

defined in 27,301 or. except Ior contractsof the Department of Defense (000). theDepartment of Energy (DOE). or theNational Aeronautics and SpaceAdministration (NASA). any other typeof contractor.

(ii) No alternative patent rights clauseis used- in accordance with paragraphs(cJ or (dJ below or 27.304·2.

(2) To the ext.!'t the information is notrequired elsewhere in the contract. andunless otherwise specified by agencysupplemental regulations. thecontracting officer may modifyparagraph (f) of the clause to require thecontractor to do one or more of thefollowing:

(i) Provide penodtc [but.not morefrequently than annually] listings of allsubject inven-tions required to bedisclosed during the period covered bythe report.

(ii) Provide a report prior to thecloseout of the contract Hsting allsubject inventions or stating that therewere none.

(iii) Provide notification of allsubcontracts for experimental.developmental. or research work.

(ivJ Provide. upon request. the filingdate. serial number and title: a copy ofthe patent application: and patentnumber and issue date for any subjectinvention in any country in which the

.contractor has applied for patents.(vJ Furnish the Government an

irrevocable power to inspect and makecopies of the patent application file. ~

(3) If the acquisition of patent rightsfor the benefit of a foreign government isrequired under a treaty or executiveagreement or if the agency head or adesignee determines at the time ofcontracting that it would be in thenational interest to acquire the right tosublicense foreign governments orinternational organizations pursuant toany existing or future treaty or .agreement. the contracting officer shalluse the clause with its AlternateI,

(b) (1) The contracting. officer shall·linS"lI.t~plause aI52.227·12. Patent

Righls-Retention by the Contractor(Long Fprm). if all the followingcondlllons apply:

(i) The contractor is other than a smallbusiness fiqn,er..nonprofit organization.

(ii) No alternative clause is used in .".accordance with paragraph (cJ or (dJ

below or 27.304-2.(iii) The contracting agency is one of

those excepted under subdivision(a)(ll(i) above.

contractor was legally obligated to do soat the time the contract was awarded.The license is transferable only with theapproval of the contracting officerexcept when transferred to thesuccessor of that part of the contractor'sbusiness to which the inventionpertains.

(2) The contractor's domestic licensemay be revoked or modified to the .~

extent necessary to achieve expeditiouspractical application of the subjectinvention pursuant to an application foran exclusive license submitted inaccordance with the applicableprovisions in the Federal PropertyManagement Regulations and agencylicensing regulations. This license willnot be revoked in that field of use or thegeographical areas in which thecontractor has achieved practicalapplication and continues to make thebenefits of the invention reasonablyaccessible to the public. The license inany foreign country may be revoked ormodified to the extent the contractor. itslicensees. or its domestic subsidiaries oraffiliates have failed to achieve practicalapplication in that country. See theprocedures at 27.304·1(e).

(i) Confidentiality of inventions. Thepublic.ation of information disclosing an ­invention by any party b.efore the filingof a patent application may create a barto a valid patent. Accordingly, 35 U.S.C.205 and OMB Circular A·124 providethat Federal agencies are authorized towithhold from disclosure to the publicinformation disclosing any invention inwhich the Federal Government owns ormay own a right. title. or interest(including a nonexclusive license) for areasonable time in order for a patentapplication to be filed. Furthennore.Federal agencies shall not be required torelease copies of any document which ispart of an application for patent filedwith the United States Patent andTrademark Office or with any foreignpat~nt office. The PresidentialMemorandum on Government PatentPolicy specifies that agencies shouldprotect the confidentiality of inventiondisclosures and patent applicationsrequired in performance or inconsequence of awards to the extentpennitted by 35 U.S.C. 205 or otherapplicable laws. " •

27.303 Contract clause..In contract. (and solicitations 1'1

thereforJ for experimental.developmental, or research wOI!.• .a....tsee 27.304-3regarding contractlTOr'construction work Of architect-engineerservices], a patent right. clause shall beinserted as follows:

[a] (1) The contracting officer shall'inserlthe clause at 52.227·11. Patent

12980

(f) Because the contractor or assigneehas not taken; or is not expected to lakewithin 8 reasonable time. effective stepsto achieve practical.application of thesubject invention in suCh field otuse:

(ii) To alleviate health or safety needswhich are not reasonably satisfied bythe contractor, assignee. or theirlicensees:

(iii) To meet requirements for publicuse specified by Federal regulations andsuch requirements are nat reasonablysatisfied by the contractor. assignee. orlicensees: or

(iv) Because the agreement requiredby paragraph (g) below has neither beenobtained nor waived. or because alicensee of the exclusive rightto use orsell any subject invention in the UnitedStates is in breach of its agreementobtained pursuant to paragraph (gJbelow.

(2) This right of the agency shall beexercised only after the contractor hasbeen provided a reasonable time topresent facts and show cause why theproposed agency action should not betaken. and afforded an opportunity totake appropriate action if the contractorwishes to dispute or appeal theproposed action. in accordance with27.304·1 [g).

(g) Preference far United Statesindustry. Unless provided otherwise inaccordance with 27.304·1(f). contractsprovide that no contractor whichreceives title to any subject inventionand no assignee of any such contractorshall grant to any person the exclusiveright to use or sell any subject inventionin the United States unless such personagrees that any products embodying thesubject invention or produced throughthe use of the subject invention will bemanufactured substantially in theUnited States. However. in individualcases. t~e requirement for such anagreement may be waived by the agencyupon a showing by the contractor orassignee that reasonable but .

.unsuccessful efforts have been made togrant licenses on similar terms topotential licensees that would be likelyto manufacture substantially in theUnited States or that under thecircumstances domestic manufacture isnot commercially feasible. .

(h) Minimum rights to contractor. (t)When the Government acquires title to a.subject invention. the contractor isnormally granted a revocable.nonexclusive. royalty-free license to thatinvention throughoulthe world. Thecontractor's license extends to itsdomestic sub~diariesand affiliates. ifany, within the corporate structure ofwhich the contractor is a part andincludes the right to grant sublicenses ofthe same scope to the extent the

Federal Register I Vol. 49. No. 63 I Friday. March 30. 1984 I-Rules and Regulations 12981

title in the foreign country involvedmight be required. In addition. theAlternate may be modified to providefor direct licensing by the contractor <ifthe foreign government or internationalorganization.

27.304 Procedur...

. 27.304-1 G......L

[a) Greater rights determinations.Whenever the contract contains theclause at 52.227-13. Patent Rights­Acquisition by the Government. Ihecontractor (or an employee-Inventor ofthe contractor after consultation withthe contractor) may request greaterrights to an identified invention withinthe period specified in such clause.Requests for greater rights may begranted if the agency head or designeedetermines that the interests of theUnited States and -thegeneral public willbe better served therehy. In making suchdeterminations. the agency head ordesignee shall consider at least thefollOWing objectives, .

(1) Promoting the utilization ofinventions arising from federallysupported research and developmenL

(2) Ensuring that inventions -are usedin a manner to promote free competitionand enterprise,

(3) Promoting public availability, ofinventions made in Ihe United Slates byUnited States industry and labor.. (4) Ensuring that the Government

obtains sufficient rights in federally­supported inventions to meet the needsof the Government and protect thepublic against nonuse or unreasonableuse of inventions.

(b) Retention afrights by inventor. Ifthe contractor does not elect to retaintitle to 8 subject invention. the agencymay consider and. after consultationwith the contractor, grant requests forretention of rights by the inventer.Retention of rights by the inventor willbe subiect to the conditione inparagraph (d) (except subparagraph[d)(l)), subparagraph (f)[4), andparagraphs (h). (i). and (j) of theapplicable Patent Rights-Retention bythe Contractor clause.

(c) Government assignment tocontractor ofrights in Governmentemployees' inventions. \Vhen aGovernment employee is a coinventor ofan inventlon made under 8 contract with8 smaIl business firm or nonprofitorganization, the agency employing thecomventnr may transfer or reassignwhatever light it may acquire in thesubject invention from its emplol'ee tothe contractor. subject to the conditionsof 35 U.S,C. Chapter 18 and OMBCircular A·124.

Chapter 18 of Title 35 of the UnitedStatel Code.

(iii) It is determined by a Govemmentauthority which is authorized by slatuteor executive order to conduct foreignintelligence or counterintelligencaactioiiill.s that restriction 0' eliminationof the right to retain any subjectil1f.Ftion i. necessary to protect these1!!rity of such activities.

(2) Any determination underauqdivision (lllii) above will be inwriting and accompanied by a writtenstatement of facta justifying thedetermination. The statement offsetswill contain such information 88 theagency deems relevant and. at aminimum. will (i) identify theorganization involved. (ii) describe theextent to which agency.action restrictedor eliminated the right to retain title to asubject invention. (iii) state the factsand rationale supporting the agencyaction. [ivJ provide supporting .documentation for those factI and

-. rationale. and (v) indicate the nature ofany objections 10 the agency-actien andprovide any documentation in which

.those objections appear. In the casa of- contracts with small business ccncerns

or nonprofit organizations. a copy ofeach such determination and writtenstatement of facts will be sent to theComptroller General of the UnitedStates within 30 days after the award ofthe applicable funding agreement. In thecase of contracts with small businessconcerns, copies will also be sent to theChief Counsel for Advocacy of the SmallBusiness Administration.

[e) To qualify for the clause at 52.227-11. 8 prospective contractor may berequired by the agencies excepted undersubdivision [aJ(l)(i) above to certify thatit is either a small business firm or anonprofit organization. If one of theseagencies has reason to question thestatus of the prospective contractor. theagency may file 8 protest in accordancewith 13 CFR 121.3-5 if small businessfirm status is questioned or require theprospective contractor to furnishevidence of its status as a nonprofitorganization.

(f) The Alternates to the clauses at52.227-11.52.227-12.and 52.227-13. asapplicable. may be modified by deletingthe reference to future treaties oragreements or by otherwise morenarrowly defining classes of futuretreaties or agreements. It may also bemodified to make clear that the rightsgranted to the foreign government orinternational organization may be foradditional rights beyond a license orsublicense if so required by theapplicable treaty or internationalagreen:ent. For example. in some casesexclusive licenses or even assignment of

(2) If the acquisition of patent rightlfor the benefit of a foreign government isrequired under a treaty or·~xecutiveagreement or if the agency he.actor adesignee determines at the time ofcontracting that it would be in thenational interelllto ac~iJire'theright tosublicense foreign governments orInternational organizations purslifnt toany existing or future treaty Of·'agreement. the contracting officer shall­use the clause with its Altemall.l!J .,.1_

[c) (1)The contracting officer shallinsert the clause at 52.227-13. Patent .Rights-Acquisition by the Govemment,if any of the following conditions apply:

(i) No alternative cJause is used inaccordance with subparagraph (cJ(2Jorparagraph (dJ below or 27,304-2.

(ii) The work is to be performedoutside the United States, its

-possessions, and Puerto Rico bycontractors that are not small businessfirms. nonprofit organizations as definedin 27.301. or domestic firms. Forpurposes of this subparagraph. the­contracting officer may presume that acontractor is not 8 domestic firm unlessit is known that the firm is not foreignowned. controlled. or influencad. (See27.304-4(a) regarding subcontracts withU.S. flrms.]

(2) Pursuant to their statutoryrequirements. DOE and NASA mayspecify in their supplemental regulationsuse of 8 modified version of the clauseat 52.227-13 in contracts with other thansmall business concerns or nonprofitorganizations.

(3) If the acquisition of patent rightsfor the benefits of 8 foreign governmentis required under a treaty or executiveagreement or if the agency head or adesignee determines at the time ofcontracting that it would be in thenational interest to acquire the right tosublicense foreign governmants orintemational or.;anizations pursuant toany existing or future treaty oragreement. the contracting officer shalluse the clause with its Alternate I.

(d) (1) If one of the following applies.the contracting officer may insert theclause prescribed in paragraph (a) or (b)ahove as otherwise applicable; agencysupplemental regulations may provideanother clause and specify its use: or thecontracting officer shall insert the clauseprescribed in paragraph (c) above:

(i) The contract is for the operation ofa Govemment-owned research orproduction facility.

(ii) 11>eteare exceptionalcircumstances and the agency headdetermines that restriction orelimination of the right to retain title toany subject inv~ntion will bettarpromote the pohcy and objectives of

Federal Register I Vol. 49. No. 83 I Friday. March 30. 1984 I Rules and Regulations12982

[d] Additional requirements. (1) If it isdesired to have the right to require anyof the following. the contract shall bemodified to require the contractor to da­one or more of the following:

(i) Provide periodic (but not morefrequently than annuaIly) listings of allsubject inventions required to bedisclosed during the period covered bythe report,

[ii] Provide a report prior to thecloseout of the contract listing allsubject inventions or stating that therewere none.

(iiiJ Provide notification of allsubcontracts for experimental.developmental. or research work.

(iv) Provide upon request. the filingdate. serial number and title: a copy ofthe patent application: and patentnumber and issue date for any subjectinvention in any country in which thecontractor has applied for patents.

.Ivl Furnish the Government anirrevocable power to inspect and makecopies of the patent application file.

(2) To the extent provided by suchmodification (and automatically underthe term. of the clauses at 52.227·12 and:"13), the contracting officer may requirethe contractor to-

(i) Furnish a copy of each subcontractcontaining a patent rights clause (but ifa copy of a subcontract is furnishedunder another clause. a duplicate! shallnot be requested under the patent rightsclause):

(ii) Submit interim and final inventionreports listing subject inventions andnotifying the- contracting officer of allsubcontracts awarded for experimental.developmental. or research work;

(iiiJ Submit information regarding thefiling date. serial number and titl•• and.upon request. a copy of the patentapplication. and patent number andissue date for any subject invention lnany country for which the contractor hasretained title: and

[iv) Submit periodic reports on theutilization of a subject invention or onefforts at obtaining utilization that arebeing made by the contractor or itslicensees or assignees.

(3) The contractor is required todeliver 10 the contracting officer aninstrument confirmatory of all rights towhich the Government is entitled and tofurnish the Government an irrevocablepower to inspect and make copies of thepatent application file. Such deliveryshould nonnally be made within 6months after filing each patentapplication. or within 6 months aftersubmitting the invention disclosure if theapplication has been previously filed.

(e) Revocation or modification ofcontractor's minimum rights. Beforerevocation or modification of the

contractor's Hcense in accordance witir27.302(hl(2). the contracting officer willfurnish the contractor a written notice ofintention to revoke or modify thelicense. and the contractor will beallowed 30 days (or such other time asmay be authorized by the contractingofficer for good cause shown by thecontractor} after the notice to showcause why the license should not berevoked or modified. The. contractor hasthe right to appeal. in accordance withapplicable provisions in the FederalProperty Management Regulations andagency licensing_ regulations. any

" decisions concerning the revocation ormodification.

(0Modification, waiver. or omissionof rights of the Government orobligations of the contractor. (1) Incontracts not subject to 35 U.S.C.Chapter 16, an agency may modify.waive. or omit. in whole or in part. anyof the rights of the Government orobligations of the contractor describedin 27.302[c) through [h) if the agencyhead or deSignee determines at the timeof contracting (i) that the interests of theUnited States and the general public willbe better served thereby as. forexample. where this is necessary toobtain a uniquely or highly qualifiedcontractor. or (Ii] that the contractinvolves cosponsored. cost sharing, or .joint venlure research and development,and the contractor. cosponsor. or jointventurer is making a substantialcontribution of funds. facilities. orequipment to the work performed underthe contract.

(2) Any modification. waiver. oromission of the rights of the Governmentshall be in writing and accompanied bya written statement of fact. justifyi!lgthe determination. Inasmuch-as theserights are normally considered theminimum rights necessary to protect theinterests of the United States and thegeneral public under the policy andobjectives of 27.302(a)[1), suchstatement must spectflcally-«

(iJ Describe the extent tq which theGovernment's rights are to be modified,waived. or omitted: .

(ii) State the facts and rationale forsuch modification, waiver, oromission:and . .,. ..

(iii) Include a statement as to why'theinterests of the United State. and thegeneral public will be better servedIJJ .such modification. waiver. or omiSSionunder the policy and objectives of.,,,,,

• 27.302(a)(l). with particular empili'm on(AI ensuring that tha Governmentobtains sufficient rights to meet itsneeds competitively and at the lowestcost when relinquishing theGovernment's royalty-free license rights.(B) protecting the public against nonuse

or unreasonable use of inventionsarising aut of the contract whenrelinquishing march-in rights intended toprevent suppression of such inventionsand to assure their availability to meethealth or safety needs or regulatoryrequirements. and [C) promoting thepublic availability of such inventionsthrough commercialization by UnitedStates industry and labor.

(g) Exercise ofmarch-in rights. Thefollowing procedures shall govern theexercise of the march-in rights set forthin 35 U.S.C. 203. paragraph (j) of thePatent RightlJ-Retention by theContractor clauses. and subdivision(c)(l)(iiJ of the Patent Rights­AcquisHion.by the Government clause:

(1) When the agency receivesinformation that it believes mightwarrant the exercise of march-in rights.before initiating any march-inproceeding in accordance wi th theprocedures of subparagraph (2) below. itshall'notify the contractor in writing ofthe information and request informal­written or oral comments from thecontractor. In the absence of anycomments from the contractor within 30days the agency may, at its discretion.initiate the procedures below. If acomment is received. whether or notwithin 30 days. then the agency shall.within 60 days after it receives thecomment. either initiate the proceduresbelow or notify the contractor. inwriting. that it will not pursue march-inrights based an the information aboutwhich the contractor was notified.

(2) A march-in proceeding shall beinitiated by the issuance of a writtennotice by the agency head or a designeeto the contractor and its assignee orexclusive licensee. as applicable. statingthat the Government has determined toexercise march-in rights. The noticeshall state the reasons for the pruposedmarch-in in terms sufficient to put thecontractor on notice of the facts uponwhich the action is based. and shallspecify the field or fields of use in whichthe Government is considering requiring

. licensing. The notice shall advise thecontractor. assignee. or exclusive}iP>nseFof its rights as set forth in 33,011and iMl~ supplemental agencyregulations or procedures. Thedetermioa'ation to exercise march-inrights shall be made by the contractingofficer, as a final decisfon for purposesof the Contnfcltlisputes Act inaccordance with 33.011.

(3J These procedures shall also applyto the exercise or march-in rightsagainst inventors receiving title tosubject inventions under 35 U.S.C. 202(d)and. for that purpose. the term

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Federal Register I VoL 49. No. 63 I Friday. March 30. 1984 I Rules and Regulations 12983

"contractor" sa used he<ein shall bedeemed to include the inventor.

(4) The contractor. assignee. orexclusive licensee will not be requiredto grant a license and the GoVernmentwill not grant any IiceJlS& Wltil aftereither [i) 90 daya from the date of thecontractor". receipt of the contractingomcer's decision. if no appeal o,fthedecision has been made to a Board oCContract Appeals and if no actianA>asbeen brought under 41 U.S.c. 66ll \tithiJl'that time. or (ii) the board or court basmade a final decision. in cases when anappeal or action bas been broughtwithin 90 days of the contractingofficer's decision.

(h) licenses and assignments undercontracts with nonprofit organizations.ITthe contractor is 8 nonprofitorganization. the clause at 52.227-11provides that certain contractor actionsrequire agency approvef ee specifiedbelow. Agencies shall provideprocedures for obtaining such approval,

[1) Rights to a subject invention in theUnited States may not be assignedwithout the approval of the contractingagency, except where such assignmentis made to an organization which has asone of its primary functions themanagement of inventions and which isnot, itself. engaged in or does not hold asubstantial interest in otherorganizations engaged in themanufacture or sale of products or theuse of processes that mighl utilize theinvention or be in competition withembodiments of the invention (providedthat such assignee will be subject to thesame provisions as the contractor).

(2) The contractor may not grantexclusive licenses under United Statespatents or patent applications in subjectinventions to persons other than smallbusiness firms for a period in excess ofthe e~:'.:~~ of-

[I] fin" years from first commercialsale 0:" use of the invention; or

[iij"Eight years from the date of theexclusive license excepting that timebefore regulatory agencies necessary toobtain premarket clearance. unless on acase-by-case basis the contractingagency approves a longer exclusivelicanse. If exclusive field of use licensesare granted, commercial sale or use inone field of use wiil not be deemed

. commercial sale or use as to other fieldsof use, and a first commercial sale oruse with respect to a product of theinvention will not be deemed to end theexclusive period to different subsequentproducts covered by the invention.

27.304-2 COntraeta pl:oced by or for otherGovernment a;endea.

The following procedures apply unlessagency agreements provide otherwise:

(a] When 8 Govemment agencyrequests another Government agency toaward a contract on its behal!. therequest ahould explain any specialcircumstances surrounding the contractan~fyand furnish lhe patent rightsclause to be used. Normally, the clause~~e in accordance with the policiesa rocedures of this subparL If.however. the request states that a clauseor.!!,!, requesting egen.cy ia required [e.g"because of statutory requirements. adeviation, or exceptional circumstances)that clause shall be used rather thanthose of thia subpart,

[lJ If the request states that an agencyclause is required and the work to beperformed under the contract is notseverahie and is funded wholly or inpart by the agency. then- that agencyclause and no other patent rights clauseshall be included in the contract.

(2) If the request stales that an agenuyclause is required. and the work to beperformed under the contraot isseverable and is only in part for tharequesting agency, then the work whichis on behalf of the requesting agencyshall be identified in the contract, andthe agency clause shall be madeapplicable to that portion. In suchsituations. the remaining portion of thework [for the agency awarding thecontract) shall likewise be identifiedand the appropriate patent rights clause[if required) shall be made applicable tothat remaining portion.

(3) If the request states that an agencyclause is not required in any resultingcontract. then the appropriate patentrights clause shall be used. if a patentrights clause is required.

(b) Where use of the specified clause.or any modification. waiver, or omissionof the Government's rights under any 1 .provisions therein, requires 8 written .determination. the reporting of suchdetermination,. or a deviation. if anysuch acts are required in accordancewith 27.303(d)(2), 27.304-1[1](2). or 1.4. itshall be the responsibility of therequesting agency to make suchdetermination. submit the requiredreports. and obtain such deviations. inconsultation with the contractingagency. unless otherwise agreedbetween the contracting and requestingagencies. However. a deviation to aspecified clause of the requestingagency shall not be mace without priorapproval of that agency.

(c) The requesting agency mayrequire, and provide instroctionsregarding, the forwarding or hanaling ofeny invention disclosures or otherreporting requirements of the specifiedclauses. Normally the requesting agencyshall be responsible for the handling ofany disclosed inventions. including the

filing of patent applications where theGovernment receive. title. and thecustody. control and licensing thereatunless provided otherwise in the "instructiom or other agreements wit~

;'he contracting agency. .

27.304-3 Contracts for constructron workor archJtect..ngln• ., aervlces.

(a) If a.solicitation or contract forCODstruction work or architect-engineerservices haa as a purpose theperformance of experimental,developmental. or research work or testand evaluation studies involving suchwork and calls for. or can be expectedto involv•. the design of a Governmentfacility or of navel .tructure•• machines.products. material•• processes. orequipment (including constructionequipment). it shall include a patentrights clause selected in accordancewith the policies and procedures of thisSubpart 27.3,

[bJ A solicitation or contract forconstruction wopk or architect-engineerservices that calls for or can beexpected to involve only"standardtypes of construction" to be built bypreviously developed equipment,methods, and processes shall notinclude a patent rights clause. The term"standard types of construction" meansconstruction in which the distinctivefeatures. if any, in all likelihood willamount to no more than-

(1] Variations in size. shape. orcapacity of otherwise structurallyorthodox and conventionally actingstructures or structural groupings; or

(2) Purely artistic or esthetic (asdistinguished £rom functionallysignificant] architectural configurationsand designs of both structural andnonstructural members or groupings.which mayor may not be sufficientlynovel or meritorious to qualify fordesign protection under the designpatent or copyright laws.

27.304-4 Sub,:ontraets.

[a) The policies and procedurescovered by this subpart apply to allcontracts at any tier. Hence. acontractor awarding a subcontract and asubcontractor awarding a lower-tiersubcontract that has as a purpose theconduct of experimental. developmental.or research work is required to .determine the appropriate patent rightsclause to be included that is consistentwith JJlese policies and procedures,Generally. the clause at either 52.221-11.52.227'12, or 52.227·13 is to be used andwill be so specified in the patent rightsclause contained in the higher-tiercontract. but the contracting officer maydirect the use of a particular patenl

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Federal Register I Vol. 49;·No. 63 I Friday. March 30. 1984 I Rules and Regulations12984

rights clause in any lower-tier contractin accordance witbthe policies andprocedures of this subpart. For instance;when the clause at 5Z.227-13 is in theprime contract because- the work is to beperformed overseas. any subcontractwith a nonprofit organization wouldcontain the clause at 52.227·11.

(h) Whenever a prime contractor or asubcontractor considers the inclusion ofa particular clause in a subcontract tobe inappropriate or a subcontractorrefuses to accept the proffered clause.the matter shall be resolved by theagency contracting officer inconsultation with counsel.

(c) It is Government policy thatcontractors shall not use their ability toawardsubcontracts as economicleverage to acquire rights for themselvesin inventions resulting fromsubcontracts.

27.304-5 Appeals.[a) The agency officialinilially

authorized to take any of the followingactions shall provide the contractor witha written ststementof thebasis Cor theaction at the time the action is taken.includingany-relevant facts that wererelied upon in taking the action:

(1) A refusal to grant an extension tothe invention disclosure period undersubparagraph (c)(4)of the clauses at52.227-11 and 52.227-12.

(2) A request for a conveyance of titleto the Government under 27,302(d)[1)[i)through(v).. .

[3J A refusal to grant a waiver under27.302{g), Preference for U.S. Industry.

(4) A refusal to approve anassignment under 27.304-1[hJ(1).

(5) A refusal to approve an extensionof the exclusive license period under27.304-1[h)[2).

[bl Each agency shall establlsh andpublish procedures under which any ofthe agency actions listed in paragraph(a) above may be appealed to the head·.of the agency or designee. Review at thislevel shall consider both the factual andlegal basis for the action and itsconsistency with the policy andobjectives of 35 U.S.G. 200-206 and thissubpart.

(c) Appeall procedurel establlshedunder paragraph (b) above shall includeadminiltrative due process proceduresand standards for fact-finding at leastcomparable to those set forth in Part13e-gof OMS Circular A-I24 wheneverthere is a dispute as to the factual basilfor an agency request for a conveyanceof title under 21.302{d){1J{i) through (v)including any dispute al to whether ornot an invention is a subject invention.

(d) To the extent that any of theactions described in paragraph (a)above are subject to appeal under the

Contract Disputes Act. the proceduresunder that Act will satisfy therequirements of paragraphs (b) and (c)above.

27.305 Admini5tra~ 01 patent rightscJluaea.

27.305-1 I'3tent rights lollow-<lp.[a) It is important that the

Government and the contractor knowandexercise their rights in inventionsconceived or first actually reduced topractice in the course of or underGovemment contracts in order to ensuretheirexpeditious availability to the .publlc and to enable the Government,the contractor. and the public to avoidunnecessary payment of royalties and todefend themselves against claims andsuits for patent infringement. To attainthese ends. contracts balling a patentrights clause should be so administeredthat-

(I) Inventions are identified,disclosed, and reported al required bythe contract. and elections are made;

(2)The rights of the Govemment insuch inventions are established:

(3) Where patent protection ilappropriate. patent applications aretimely filed and prosecuted bycontractors or by the Government:

(4)The rights of the Govemment infiled patent applications aredocumented by fonnal instruments suchas licenses or assignments: and

(5).Expeditious commercial utilizationof such inventions is achieved.

(b) If a subject invention js madeunder funding agreements of more thanone agency, at the request of thecontractor or on their own initiative. theagenciel Ihall designate one agency asresponsible for administration of therights of the Government in theinvention.

27.305-2 Follow-up by contract.....(a) Controctorprocedures. If required

by the applicable clause. the contractorshall establish and maintain effectiveprocedures to ensure its patent rightsobligations are met and that subjectinventions are timely identified anddisclosed. and when appropriate. patentapplicationl are flled,

(b) Contractor reports. Contractod'shall submit all reporta required by thepatent rights clause to the contractillLofficer or other representative ~designated for sueh purpose in thecontract. Agencies may. in theireImplementing inltructionl, proVIdeIpecific fonno for use on an optionalbasis for lueb reporting.

27.305-3 Follow...,. by Government.(a) Agencies shall maintain

appropriate follow-up procedures to

protect the Government's interest and tocheck that subject inventions are

. identified and disclosed. and whenappropriate. patent application. arefiled, and that the Govemment'srightstherein are established and protected.Follow-up activities for contracts thatinclude a clause referenced in 27.3().1·2shall be coordinated with theappropriate agency.

(b) The contracting officeradministering the contract (or otherrepresentative specifically designated inthe contract for such purpose) isresponsible for receiving inventiondisclosures. reports. confirmatoryinstruments. notices. requests. and otherdocuments and information submittedby the contractor pursuant to a patentrights clause. If the contractor fails tofurnish documents or infonnation ascalled for by Lie clause within the timerequired, the contracting officer shallpromptly request the contractor tosupply the required documents orinformation and. if the failure persistl,shall take appropriate action to securecompliance. Invention disclosures;reports. confirmatory instruments.notices. requests, and other documentsand information relating to patent rightsclausea shall be promptly fumished bythe contracting officer administering thecontract (or other designee) to theprocuring agency or contracting activityfor which the procurement was made forappropriate-action.

(c) Contracting activities shallestablish appropriate procedures todetect and correct failures by thecontractor to comply with its obligationsunder the patent rights clauses, sueb 81failures to disclose and report subjectinventions. both during and aftercontract performance. Ordinarily acontractor should have writteninstructions for its employees covering

"compliance with these contractobligations. Govemment effort to reviewand correct contractor compliance with .its patent rights obligations should bedirected primarily towards contractlthat. because of the nature of theresearch. development. or experimental~ork or the large dollar amount Ipent

.6..s~1¥ork, are more likely to resultin IUDje!:t inventions significant innumber.or quality. and towardscontrdc'ts when thereis reasontobelieve the contracton may not becomplying witJoolheir contractualobligationl. Other contractl may be

. reviewed using a spot-check method. alfeasible. Appropriate follow-upprocedures and activities may includethe investigation or review of selectedcontracts or contractors bythosequalified in patent and technical matters

,-. Federal Register I Vol. 49. No. 63 I Priday. March 30. 1964 I Rules and Regulationa 12985

to detect failure. 10 comply withconU:ad obligation... (d) Follow.up activities .houl~lDelude, where appropriate, use ofGovernment patent .personnel-

(lJ To interview agency technicalpersonnel to Identify navel 'developments made in contracts: .

{2J To review technical reports ••submitted by contractors with cognizantagency technical personnel: _ ..

(3) To check the Official Gaz<:tle,;'f •the United States Patent and TrademaNOffice and other sources for patentsissued to-the contractor in fields relatedto its Government contracts; and

(4) If additional information isrequired. to have cognizant Governmentpersonnel interview contractorpersonnel regarding werk under thecontract involved. observe the work on

.site, an-d inspect laboratory notebooksand other records of the contractorrelated to work under the contract.

[e] If it is determined that a contractoror subcontractor does not have a clearunderstanding of the rights andobligations of the parties under a patentrights clause. or that its procedures forcomplying with the clause are deficient.a pest-sward orientation conference orletter should ordinarily be used toexplain these rights and obligations (seeSubpart 42.5). When a contractor fails toestablish. maintain. or follow effectiveprocedures for identifying, disclosing.and. when appropriate. filina patentapplications on inventions (if suchprocedures are required by the patentrights clause}. or after appropriate noticefails to correct any deficiency. thecontracting officer may require thecontractor to make available Iorexamination books. records. anddocuments relating to the contractor'sinventions in the same field oftechnology as the contract effort toenable a determination (II whether thereare such Inventions and may invoke thewithholding of payments provision (ifany] of th. clause. The withholding ofpayments e-ovlstcn [Ifany] oI the patentrights d~~:"t" ct of any other contractclause rnav .ilsc Le Invoked if thecontractor fails to disclose a subjectInvention. S:g:::ificant or repeatedfailures by u contractor to comply withthe patent rights obligation in itscontracts fohaU be documented andmad- ::I part of the general file (see4.601,;;(3)).

27.305-4 ConveYQnae of invention rightsacquired by tt,e Gc;;vernm::nt.

{a} Agencies are responsible Ior thoseprocedures necessary to protect theGovernment's interest in subject.inventions. When the Governmentacquires Lie entire right. title. end

interest in an mention by contract. thisis normally a"""",plished by aDassignment' either from each inventor tothe contractor and from the contractorto the Gavernment. or from the inventorto th.eUvemment with the consent ofthe ~tfuactor, so that the chain of titlefrom the inventor to the Government isc)~ established. When theGovemmenfs rights are limited to ali.ce~~e. there should be a confirmatoryinslroment to tha t effecl

(b) The form of conveyance of titlefrom the inventor to the contractor mustbe legally sufficient to convey the rightsthe contractor is required to convey tothe Government. Agencies may. bysupplemental instructions. developsuitable assignments. licenses. and otherpapers evidencing any rights of theGovernment in patents or patentapplications. including such instruments8S may be required to be recorded in theStatutory Register or documented in theCovemment Register maintained by theU.S. Patent and Trademark Officepursuant to Executive Order 9424.February 18, 1944.

27.305..5 Publication or release ofin ...ention disclosures.

(a) In accordance with the policy at27.302(i), to protect their mutualinterests. contractors and theGovernment should cooperate indefening the publication or release ofinvention disclosures until the fHing ofthe first patent application, and use theirbest efforts to achieve prompt filingwhen publication or release may beimminent. The Government will. on itspart and to the extent authorized by 35U.S.C. 205, withhold from disclosure tothe public any invention disclosuresreported under thepatent rights clausesof 52.227-11,52.227'12. or 52.227·13 for areasonable time in order for patentapplications to be filed, The policy in27.302(i) regarding protection ofconfidentiality shan be followed.

[b] The Government will also usereasonable efforts to withhold Irorndisclosure to the public for a reasonabletime other information disclosing areported invention included in any datadelivered pursuant to contractrequirements: provided, that thecontractor notifies the agency as to theidentity of the data and the invention towhich it relates at the time of delivery ofthe data. Such notification must be toboth the contracting officer and anypatent representative to which theinvention is reported. if other than thecontracting oificer.

27.301 Ucenalng background patentright. to third portl...

(a) A contract with a small business­firm or nonprofit organization will not:contain a provision allowing theGovemment to require the licensing tothird parties of inventions owned by thecontractor that are not subjectinventions unless such provision hasbeen approved by the agency head andwritten justification has been signed bythe agency head. Any such provisionwill clearly state whether the licensing.may be required in connection with thepractice of a subject invention. 8

specifically identified work object, orhath. The agency head may not delegalethe authority to approve such provisionsor to sign justifications required for suchprovisions.

[b] The Government will not requirethe licensing of third parties under anysuch provision unless the agency headdetermines that the use of t..":te inventionby others is necessary for the practice ofa subject invention or for the use of awork object of the contract and thatsuch action is necessary to achieve thepractical application of the subjectinvention or work object. Any suchdetermination will-be on the record aIteran opportunity for a hearing. and thecontractor chan be given notification oIthe determination by certified orregistered mail. The notification shalllncluda a statement that any actioncommenced for judicial review of suchdetermination must be brought by thecontractor within 60 days after thenotification.

SUBPART 27.4-RIGHTS IN DATA ANDCOPYRIGHTS

27.401 General.

It is necessary for Governmentdepartments and agencies. in order tocarry out their missions and-programs.to acquire or obtain access to manykinds of data developed under or usedin performing their contracts..-Such dataare required in order to obtaincompetition among suppliers: to meetacquisition needs; to ensure logistic

.support; to fulfill certain responsibilitiesfor disseminating arid publishing theresults of their activities: to ensureappropriate use oIthe results ofresearch. development. anddemonstration activities; and to meetother programmatic and statutoryrequirements. At the same time. the­Government recognizes that itscontractors may have 8 property-right"orother valid economic interest in certain

.data resulting from private investment.and that the protection fromunauthorized use and disclosure of this

Fe:!er::1 Register I Vol. 49. No. 63 I friday. March 30; 1984 I Rules and Regulations

PART 52-SOLICITATIONPROVISIONS AND CONTRACTCLAUSES

17. The table of contents for Part 52 i.amended by adding the followingentries:

(b) • • ··Contractors may not supplya foreign end product with a total valueof $161.000 or more unless the foreignend product is a designated country endproduct (see FAR 25.401). or unless awaiver is granted under section 302 ofthe Trade Agreements Act of 1979 (seeFAR 25.402(b)).

Government under this contract or (2)used in machinery. tools. or methodswhose use necessarily results fromcompliance by the Contractor or a_subcontractor with Itl specifications orwritten provisions forming a part of thiscontract or (ii) specific writteninstructions given by the ContractingOfficer directing the manner ofperformance. The entire ljability to theGovernment for Infrlnjement of a patentof the Ur.ited States shaJl be determinedsolely by the provisions of the indemnityclause. if any. included in this contractor any subcontract hereunder (includingany lower-tier subcontract). and theGovernment assumes liability for allother infringement to the extent of theauthorization and consent hereinabovegranted. .

(b) The Contractor agrees to include.and require inclusion of. this clause.suitably modified to identify the parties.in all subcontracts at any tier forsupplies or services (includingconstruction. architect-engineerservices. and materials. supplies.models. samples. and design or testingservices expected to exceed $25.000:however. omission of this clause fromany subcontract. under or over $25.000.does not affect this authorization andconsent.

(End of clause) (R 7·103.22 1981 JAN)Alternate I [APR 1984). The following

is substituted for paragraph (a] of theclause:

(a) The Government authorizes andconsents to all use and manufacture ofany invention described in and coveredby a United States patent in theperformance of this contract or anysubcontract at any tier.

[R 7-302.211964 MAR)Alternate II (APR 1984). The following

is substituted for paragraph (a) of theclause: '

- (a) The Covernment authorizes andconsents to all use and manufacture inthe performance of any order at Bny tieror subcontract at any tier piaced underthis contract for communication servicesand facilities for which rates. charge..and tariffs are not established by a8I!vernment regulatory body. of any'iltiie~oo'described in and covered by aUnited s'iates patent (1) embodied in thastroct~rJP'0r composition of any articlethe delIVery of whi.ch is accepted by theGovernment under this contract or (2)used in macIJiQ~l. tools. or method.whose use necessarily results from'cempllance by the contractor or asubcontractor with specification. orwritten provisions forming 8 part of thiscontract or with specific writteninstruction. given by the Contracting

•

•

•

•

•

•

•

•

•

•

•

•

•

•

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52.227';"1 Authorization and Consent.52.227-2 Notice and Assistance Regarding

Patent and Copyright Infringement.52.227-3 Patent Indemnity.52.227-4 Patent lndamnity-Constructton

Contracts.52.227-5 Waive!' of Indemnity.52.227-3 Royalty Information.52.227-7 Patents-Notice of Government

Licensee.-.52.227-8 Reporting of Royalties {Foreign}.52.227-9 Refund of Royalties.52.227-10 Filing of Patent Applications­

Classified. Subject Matter.52.227-11 Patent Rights-Retention by the

Contractor (Short Form).52.227-12 Patent Rights-c-Retenttcn by the

Contractor (Long Form).52.227-13 Patent Rights-Acquisition by the

Government.

52.227 (Removed)20. Section 52.227 [Reserved] is

removed.21. Subsections 52.227-1 through

52.227-13 are added to read as follows:

52.227·1 Authorization and ConsenLAs prescribed at 27.201·2(8). inser.f'the

following clause:AUTIiORIZATION AND CONSEIlal

(APR 1984) .,.(a) The Government authorizes and

consents to all use and manufac)l'lWinperforming this contract or any .subcontract at any tier. of any inventiondescribed in and covered by a UnitedSlates patent(t) embodied in thestructure or composition of any articlethe delivery of which i. acceptel! by the

Authority:40 U.S.c. 488{c); Chapter 137.10U.S.C.: snd 4ZU.S.C. Z453(c).

18. The titles and text of subsections·52.222-40 through 52.222-44 are removedand reserved. .

19. In paragraph (b) of the contractclause at subsection 52.225-9. the lastsentence is revised to read as follows:

52.225-9 Buy American Act-TradeAgreements Aet-Bal3nee 01 PaymentsProgram.

12986

data. and other data made available tothe Government for use. is required inorder to preclude the ccmpromise.ofsuch property right or eccnpmlc interest.jeopardizing the contractor's commercialposition. and impairment of theGovernment's ability to obtain access toor use of such data. Protecting this datais therefore necessary to encouragequalified contractors to participate inGovernment programs and applyinnovative concepts to such programs.Specific agency regulations shall beframed in light of the aboveconsiderations to strike a baJancebetween the Government's need and thecontractor's economic interest.

SUBPART 27.S-RESERVED

SUBPART 27.6-FOREIGN LICENSEAND TECHNICAL ASSiSTANCEAGREEMENTS

27.601 General.~gencies shall provide all necessary

rules and regulations as are required forthe proper application of the laws andpolicies of the U.S. Governmentregarding-

(a) Elimination in agreements betweendomestic concerns and foreigngovernments or foreign concerns ofcharges for the use of patents in whichthe U.S. Government has a royalty-freelicense or of charges in agreements forthe use of data that the U.S. Covemment­has a right to use and disclose to others.that is in the public domain. or that wasacquired by the U.S. Government withthe unrestricted right to use. duplicate.or disclose and to have or permit othersto do so;

(b) Foreign license and technicalassistance agreements between the U.S.Covernment and United States domesticconcerns:

(c) Guidance on negotiating contractprices and terms concerning patents anddata: includtng royalties. in contractsbetween the U.S. Government and aforeign government or foreign concern;and

(d) Regulations and guidance oncontrols on the exportation of datarelating to certain designated items.such as arms or munitions of war. andguidance on reviews of agreementsinvolving such data (see 22 CFR 124).

PART 31-CONTRACT COSTPRINCIPLES AND PROCEDURES

31.201>-18 (Amended)16. In subseclion 31.205-18.

paragraphs (c)(I)(i) and (c)(t)(v) areamended by changing "$4 million" toread "$4,400,000", and paragraph(c)(I)(H) is amended by changing''$SOO.OOO~· to read "$550.000".

Federal Regiater I Vol. 49. No, 63 I Friday. March 30. 1984 I Rules and Regulations- 12!l87

Officer directing the manner ofperfonnance.

(R 7-1702.5(a) 1971 APR)

52.227·2 Nollce Ind Aaa/8WiOeRegarding Patlnt Ind CopyrightInfringement." .... ' ,

As prescribed at 27.202-2. insert thefollowing clause: _NOTICE AND ASSISTANCE ~ECARD­

L'l/G PAID'IIT AND COPYRU;aIT IN­FRINGEMENT (APR 1984). t,l,{a}The Contractor shall report /0 th~/'

. Contracting Officer. promptly and I!,reasonable written detail. each notice orclaim of patent or copyrightinfringement based on the performanceof this contract of which the Contractorhas knowledge. . .

(b) In the event of any claim or suitagainst illeGovemment on account of

. any alleged patent or copyrightinfringement arising out of theperformance of this.contract or out ofthe use of any supplies furnished orwork or services perfonned under thiscontract. the Contractor shall furnish tothe Governmen~ when requested by theContracting Officer. all evidencc andinformation in possession of theContractor pertaining to such suit orclaim. Such evidence and informationshall be furnished at the expense of theGovernment except where theContractor has agreed to indemnify theGovernment.

(c) The Contractor agrees to include;and require Inclusion of, this clause inall subcontracts at an!' tier for suppliesor services (including construction andarchitect-engineer subcontracts andthose for material. supplies; models.samples. or design or testing services)expected to exceed the dollar amountset forth in 13.000 of the FederalAcquisition Regulation [FAR).

[End of clause} (R 7-103.z3 1965 JAN)

£2.227·3 Pstent Indemnity.Insert the following clause as

prescribed at 27.203-1(bJ. 27.203-2{a}. or27.203-4(s)[2)as applicable:

PATF_'iT INDE.>"INITY (APR 1984)(a) Tb Contractor shall indemnify the

Covernment and its officers. agents, andemployees against liability. includingcosts. for infringE'ment of any UnitedSlates patent (except a patent issuedupon an application that is now or mayhereafter be withheld from issuepwsuant to a Secrecy Order under 35U.S.C. 1B1)arising out of themar..ufacture or delivery of supplies. theperformance of services. or theconstruction. alteration. modification. orrepair of real property (hereinafterreferred to a8 "construction work"]under this contract. or out of the use ordisposal by or for the account of the

Government of such supplies orconstruction work.

{b} This indemnity shall not applyunless the Contractor shall hsve beeninformed .. soon as practicable by theGov!"'l"'enl of the suit or action allegingsudl'lntringement and shall have beengiven such opportunity .. is sfforded bya~ble laws. rules. or regulations topartlcipate in its defense. Further. thisindemnity shall not apply to {1} aninfl1iigemenl resulting from compliancewith specific wrillen instructions of theContracting Officer directing a change inthe supplies to be delivered or in thematerials or equipment to be used. ordirecting a manner of performance ofthe contract not normally used by theContractor. {2}an infringement resultingfrom addition to or change in supplies orcomponents furnished or constructionwork performed that was made .subsequent to delivery or performance.or (3J a claimed infringement that isunreasonably settled without theconsent of the Contractor. unlessrequired by final decree uta court ofcompetent jurisdiction.

{End of clause} (R 7'-104.5 1975jUN)Alternate I (APR 1984). The following

paragraph [c] is added 10 the clause:(cJ This palent indemnification shall

not apply to the follOWing items:

[Contracting Officer list and/or identifythe items to be e.•eludedfrom thisindemnity]

[R 7-104.5(a}1004 SEP)Altornate II (APR 1984). The following

paragraph (c) is added to the clause:(a) This patent indemnification shall

cover the followingitems: .[List and/or identify the items to be in­

cluded under tbis indemnit}·] (R 7­104.5(0}1984 SEP)Alternate III (APR 1984). The

following parasraph is added to theclause:

( ) As 10 subcontracts at any tier forcommunication service. this clause shallapply only to individua! communicationservice authorizations over $5.000 issuedunder this contract and covering thosecommunications services and fadlities{lJ that are or have heen sold or offeredfor sale by the Contractor to the public.(2J that call be prcvided overcommercially available equipment, or(3) that involve relatively minormodifications.

(R 7-1701.10 1971 APR)

52.221.... Putent IndemnJtr-.constructJon­Contract&.

As prescribed at 27.203-5. insert thefollowing c1811se:

PATEr>.T INDEMNITY-CONSTRUC_TION CONTRACTS (APR 1984)Except Be othcrwise provided. the,-,§

Contractor agrees to ingemnify the ~-:

Government and its officers. agentl. ""demployees against liability. including"costs and expenses. for infringementupon any United States patent (except apatent issued upon an application that isnow or may hereafter be withheld fromissue pursuant to a Secrecy Order under35 U.S.C. 181) arising out of perfonningthis contract or out of the use or .disposal by or for the account of theGovernment of supplies furnished orwork performed l1nderthis contract.

(End of clause) (R 7-802.16 1904 jUN)Alternate I (APR 1984J Designate the

first paragraph as paragraph{a} and addthe following to the basi~ clause asparagraph (b):

(bJ This patent indemnification shallnot apply to the following items:

[Contracting Officer specificolly iden­tify L~e item to be excluded)

(R 7-802.16(b) 1986 APR} .NOTE: Exclusion from indemnity of

specified. identified patents. osdistinguished from items. is theexclusive prerogative of the agencyhead or designee (See 27.203~).

52.227-5 Ws'.ar of Indemnity.As prescribed at 27.203-8. insert the

following clause:WAIVER OF INDEMNITY (APR 1984)Any provision or clause of this

contract to the contrarynotwithstanding. the Government .hereby authorizes and consents to theuse and manufacture. solely inperforming this contract, of anyinvention covered by the United Statespatents identified below and waivesindemnification by the Contractor withrespect to such patents:

[Contl'actingOfficer identJfy tbe patentsby number or by other means ifmoreappropriate].

[End of clause} (AV 7-104.5(b} 1955JAN)

!"o2.2271 Royalty Information..

A~ prescribed at 27.204-2, insert theIollov..·jr.g provision:ROYALTY INFORMATION (APR 1984)

(a) Cost or charges for royalties.When the response to this solicitationcontains costs or charges for royaltiestotaling more than $250. the followinginformation shall be included in theresponse relating to each separate itemof royally or license ree:

(lJ Name and address of licensor.[2) Date of license agreernenf,

Federal Register I Vol. 49. No. 63 I Friday. March 30. 1964 I Rules and Regulations12988

(3}Patent numbe.... patent applicationserial numbers. orotherbasis on whichthe royalty is payable.

(4) Brief description~.Inciuding anypartor model numbers cfeachcontractitem or cnmponent on wnich the royaltyis payable. .

(5) Percentage or doUar rate of royaltyper unit

(6) Unit price of contract item;(7) Number of units.(8) Total dollar amounl of royalties.(b) Copies ofcurrent licenses. In

addition. if specificaUy requested by theContracting Officer before execution ofthe contract, the offeror shall furnish acopy of the current license agreementand an identification of applicableclaims of specific patents.

(End of provision] (R 7-2003.42 1961• AUG)

Alternate I. (APR 1984)Substitute thefollowing for the introductory portion ofparagraph (a) of the basic clause:

When the response to this solicitationcovers charges for special constructionor special assembly that contain costs orcharges for royalties totaling more than$250, the following information shall beincluded in the response relating to eachseparate item of royalty or license fee:

(R 7-1710.12/

52.227..7 Patents-Notice of GovernmentUcensee.

As prescribed at 27.204-3(c). insert thefollowing provision:

PATENTS-NOTICE OFGOVERNMENT UCENSEE (APR 1984)

The Government is obligated to pay a'royalty applicable to the proposedacquisition because of a licenseagreement between the Government andthe patent owner. The patent number is.......... [Contracting Officer fill in). andthe royalty rate is .......... [ContractingOIficer fill in]. If the offeror is the ownerof. or a licensee under. the patent.indicate below:

[ ) Owner ( ) Licensee. If an offeror does not indicate that it ia

the owner or a licensee afthe patent. itsoffer will be evaluated by adding theretoan amount equal to the royalty.

(End of provision) (R 7-2003.15 1974APR)

52.227-1 Reportlng of RoyalUes(Forelgn~As prescribed at 27.204-4. insert the /

following clause:~RTINGOFRQYALTIES

(FOREIGN) (APR 1984)(a] If this contract ia in an amount that

exceeds 50.000 United States dollars. theContractor shall report in wri!ing to theContracting Officer while performingthis contract the amount of royaltiespaid or to be paid by the Contractordirectly to others in performing this

contract. The Contractor shall also (1)furnish in writing any additionalinformation relating to such royalties asmay be requested by the ContractingOfficer and (2) insert a provision similarto this clause in any subcontract at anytier that involves an amount in excess ofthe equivalent of 50,000 United Stalesdollars.

(b) The term "royalties" as used in •this clause. reters to any costs or chargesin the nature of royalties, license fees.patent or license amortization costs. orthe like for the use of or for rights inpatents or patent applications.

(End of clause) (R 7-104.8 1968 OCT)

52.227-9 Refund of Royalties.As prescribed at 27.208-2. insert the

following.c!ause. In solicitations andcontracts with an incentive feearrangement. change "price" to "targetcost and target profit" wherever itappears. . ,

REFUND OF ROYALTIES (APR 1984)(a) The contract price includes certain

amounts for royalties payable by theContractor or subcontractors or both.which amounts have been reported tothe Contracting Officer.

(b) The term "royalties" as used inthis clause refers to any costs or chargesin the nature of royalties. license fees.patent or license amortization costs. orthe like. for the use of or for rights inpatents and patent applications inconnection with performing this contractor any subcontract hereunder.

(c) The Contractor shall furnish to theContracting Officer. before finaLpayment under this contract, astatement of royalties paid or requiredto be paid in connection with performingthis contract and subcontractshereunder togelher with the reasons.

(d) The Contractor will be ,compensated for royalties reported'under paragraph (c) above. only to theextent that such royalties were IncludedIn the contract price and are determinedby the Contracting Officer to be properlychargeable to the Government andallocable to the contract. To the extentthat any royalties that are includ-ed Inthe contract price are not in fact paid bythe Contractor or are determined by theContracting Officer not to be properlychargeable to the Government and ".allocable to the contract, the conteactprice shall be reduced. Repayment or~credit to the Government shall be malIl!as the Contracting Officer direcl••

(e/If. a t any time within 3 year~JI'rfinal payment under this contracl;·tf{iContractor for any reason is relieved inwhole or in part from the payment of theroyalties included in the final contractprice as adjusted pursuant to paragraph(d) above. the Contractor shall promptly

DQtify the Contracting Officer of tbatfact and shan reimburse theGovernment in a corresponding amount.

(f) The substance of this clause.including this paragraph (f). shall Deincluded in any subcontract in which theamount of royalties reported duringnegotiation of the subcontract exceeds5250. .(End of clause] (V 7.104.8(b) 1968 rEB)

52.227·10- Filing of Patent ApplicatlQns­Clasaifled SUbject MaUer.

As Prescribed at 27.207-2. inserlthefollowing clause:FlUNG OF PATENT APPLICATION5-

CLASSIFIED SUBJECT MATIER(APR 1984)(a/ Before filing or causing to be filed

a patent application in the United Statesdisclosing any subject matter of thiscontract classified "Secret" or higher.the Contractor shall. citing the 30·dayprovision below. transmit the proposedapplication to the Contracting Officer.The Government shall determinewhether. torreasons of nationalsecurity. the application should beplaced under an order ofsecrecy. sealedin accordance with the provision of 35U.S.C. 181-188, or the issuance of apatent otherwise delayed underpertinent United States statutes orregulations. The Contractor shallobserve any instructions of theContracting Officer regarding themanner of delivery of the patentapplication to the United Slates PalentOffice, but the Contractor shall not bedenied the right to file the application. Ifthe Contracting Officer shall not havegiven any such instructions within 30days from the date of mailing or othertransmittal of the proposed application.the Contractor may file the application.

(bfBefore filing a patent applicationin the United States disclosing anysubject matter of this contract classified"Confidential," the Contractor shall

.furnish to the Contracting Officer a copyof the application for Governmentdetermination whether. for reasons ofnational security, the application shouldbe placed under an order of secrecy orthe issuance of a patent should beotherwise delayed under pertinentulllledl:5t~e~statutes or regulations.

(c) Whire the subject matter of thiscontraclla classified for reasons ofsecuritY~the Contractor shall not file. orcause to be filed. in any country otherthan in the Uni!ell,States as provided inparagraphs (aJ and [b] of this clause. anapplication or registratIon for a patentcontaining any of the subject matter of·this contract without first obtainingwritten approval of the ContractingOfficer.

F~deral ~egister / Vol. 49. No•.83 / Friday. March 30. 1984 / Rules and Regulations- 12989

[d] When filing sny pstent ~pplicationComing within the scope of thIS clause.the Contractor shall obseJ;Ye allapplicable lecurily regulatiCIIUI coveringthe transmission of c1assified.!ubjeetmatter end Ihall promptly furnish to theContracting Omcer the...rialnumber.tiling date, and name of the country ofany such application. When tran~mittingthe application to the United Stat...Patent Office the Contractor shall byseparatelett~r identify by agen,y_'!Pdnumberthe contract or contrads Giat ...J.require aecurity classification markingsto be placed on the application.

(e) The Contractor agrees to include.and require the inclusion of. this clausein all subcontracts at any tier that coveror are likely to cover classified subjectmatter.

(End of clause) (R 7-104.61969 DECJ

52.227·11 Patont RIghts-Retention bythO Contractor (Short Form~

As prescribed at 27.303(aJ. insettthefollowing clause:PATENT RIGHTS-RETENTION BY

niB CONTRACTOR (SHORT FORMJ. (APR 1984J(a) Definitions."Invention" means any invention or

discovery which is or may be patentableor otherwise protectable under Title 35or-the United States Code.

"Subject invention" means anyinvention of the Contractor conceived orfirst actually reduced to practice in theperformanceof work under thiscontract.

"Practical application" means tomanufacture in the case of acomposition or product. to practice inthe case of 8 process or method, or tooperate in the case of a machine orsystem; and. in each case. under sucbconditions as to establish that theinvention is being utilized and that itsbenefits are. to the "tent permitted bylaw or Government regulations.available to the public on reasonableterms.

"Made", when used in relation to anyinvention. means the conception or firstactual reduction to practice of suchinvention.

"Small business firm" means a smalldomestic business concern 8S defined afSection 2 of Public Law 85·538 {15 U.s.C.832Jand implementing regulations of theAdministrator of the Small BusinessAdministration. For the purpose of thisclause. the size standards for smallbusiness concerns involved inGovernment procurement andsubcontracting at 13 CFR 121.3-8and 13CFR 121.3-12. respectively, will be used.

"Nonprofit organization" means adomestic university or other institutionof higher education or an organization or

the type described in section 501(c)(3J ofthe Internal Revenue Code of 1954 (28U.S.C. 501(c)) and exempt from taxationunder section 501(a) of the InternalRevenue Code (26 U.s.C. 501(a}Jor anydomestic ponprofit Icientific oredulll'lional organization qualified undera Itate nonprofit organization statute.

lblAJlocation ofprincipal rights. TheC""';:actor may retain the entire right.title. and interest throughout the world(0 each subject invention subject to theprO~isionsof this clause and 35 U.S.c.203. With respect to any aubjectinvention in which the Contractorretains title. the Federal Governmentshall have a nonexclusive.nontransferable. irrevocable. paid-uplicense to practice or have practiced foror on behalf of the United States thesubject invention throughout the world.

(c) Invention disclosure. election oftitle, and filing ofpatent applications byContractor.

(1) The Contractor shall disclose eachsubject invention to theContractingOfflcer within 2 months after theinventor discloses it in writing toContractor personnel responsible forpatent matters. The disclosure to theContracting Officer shall be in the formof a written report and shall identify thecontract under which the invention was.made and the inventor(sJ. It shall besufficiently complete in technical detailto convey a clear understanding. to theextent known at the time of thedisclosure. of the nature. purpose;operation. and physical. chemical.biological. or electrical characteristics of

. the invention. The disclosure shall alsoidentify any publication. on sale. orpublic use of the invention and whether8 manuscript describing the inventionhas been submitted for publication and.if so. whether it has been accepted forpublication at the time of disclosure. Inaddition. after disclosure to theContracting Officer, the Contractor shallpromptly notify the Contracting Orlicerof the acceptance oC any manuscriptdescribing the invention for publicationor of any on sale or public use plannedby the Contractor.

(2JThe Contractor shall elect inwriting whether or not to retain titJe toany such invention by notifying the

"Federal agency within 12 months ofdisclosure: provided. that in any casewhere publication. on sale. or public usehas initiated the I-year statutory periodwherein valid patent protection can stillbe obtained in the United States; theperiod of election of title may beshortened by the agency to a date that isno more than 00 days prior to the end orthe statutory period. "

(3) The Contractor shall tile its initialpatent application on an elected

invention within 2- years arter electionor. if earlier. prior to the end of anystatutory period wherein valid patentprotection can be obtained in the UnitedStates aller a publication. on sale. or"public uae. The Contractor wiIltilepatent applications in additionalcountries within either 10 months of thecorresponding initial patent applicationor 6 months from the date permission isgranted by the Commissioner of Patentsand Trademarks to tile foreign patent

. applications where such tiling hes beenprohibited by a Secrecy Order.

(4} Requests for extension of the timefor disclosure to the Contracting Officer.election, and filing may, at the discretionof the funding Federel agency. begranted.

[d] Conditians when the Government- mayobtain title. The Contractor sball

convey to the Federal agency. uponwritten request. title to any subjectinvention-

(1) If the Contractor fails to disclose orelect the subject invention within thetimes specified in paragraph (c) above.or elects not to retain title (the agencymay only request title within 80 daysafter learning of the Contractor's failureto report or elect within the specifiedtimes); _

(2) In those countries in which theContractor fails to file patentapplications within the times specifiedin paragraph (c) above; provided.however. that if the Contractor has tileda patent application in a country afterthe times specified in paragraph (cJabove. but prior to its receipt of thewritten request of the Federal agency.the Contractor shall continue to retaintitle in that country: or

(3) In any country in which theContractor decides not to continue theprosecution of any application"for. topay the maintenance fees on. or defendin reexamination or oppositionproceeding on. a patent on a subjectinvention.

(e) Minimum rights to contractor. (1)The Contractor shall retain anonexclusive, royalty-free licensethroughout the world in each subjectinvention to which the Governmentobtains title except if the Contractorfails to disclose the subject inventionwithin the times specified in paragraph[c) above. The Contractor's licenseextends to its domestic subsidiaries- andaffiliates. it any. within the corporatestructure of which the Contractor is apart and includes the right to grantsublicenses of the same scope to thecxtent the Contractor was legallyobligated to do so at the lime thecontract was awarded. The license istransferable only with the approval of

~-

12990 Federal Register I Vol. 49. No. 63 I Friday. March 30. 1984 I Rules and Regulation.

the funding Federal agency except whentransferred to the successor of that partof the Contractor'. bU'iness to whichthe invention pertains.

(2) The Contractor'. domestic licensemay be revoked or modified by thefunding Federal agency to Ihe extentnecessary to achieve expeditiouspractical application of the subjectinvention pursuant to an application foran exclusive license submitted inaccordance with applicable provisionsin the Federal Properly ManagementRegulaticns and agency licensingregulation. (if any], This license sballnot be revoked in that field of use or thegeographical areas in which theContractor has achieved practicalapplication and continues to make thebenefits of the invention reasonablyaccessible to the public. The license inany foreign country may bl!revoked ormodified at the discretion of the fundingFederal agency to the extent theContractor. its licensees. or its domesticsubsidiaries or affiliates have failed toachieve practical application in thatforeign country.

(3) Before revocation or modificationof the license. the funding Federalagency shall furnish the Contractor awritten notice of its intention to revokeor modify the license. and theContractor shall be allowed 30 day. (or'such other time as may be authorized bythe funding Federal agency for goodcause shown by the Contractor) afterthe notice to show cause why thelicense should not be revokad ormodified. The Contractor has the right toappeal. in accordance with applicableagency licensing regulation. (if any) endthe Federal Property ManagementRegulations concerning the licensing ofGovernment-owned inventions. anydecision concerning the revocation ormodification of its license.

(I) Contractor action to protect theGovernment's interest. (1) TheContractor agrees to execute or to haveexecuted and promptly delivar to theFederal agency all instrument.necessary to (i) establish or confirm theright. the Governmant has throughoutthe world in those subject inventions towhich tlie Contractor elect. to retaintitle. and [ii] convey title to the Federalagency when requested under paragraph(d) above. and to enable theGovemment to obtain patent protectionthroughout the world in that subjectinvention.

(21 The Contractor agree. to require.by written agreement its employee••other than clerical and nontechnicalemployees. to disclose promptly inwriting to personnel identified asresponsible for the administration orpatent matters and in a format

.uggested by the Contractor eachsubject invention made under contractin order that the Contractor can complywith the disclosure provisions orparagraph [c] above. and to execute allpapers necessary to file patentapplications on subject inventions andto establish the Governent's rights in thesubject inventions. This disclosurefonnat should require. as a minimum,the infonnation required bysubparagraph (C)(I) above. TheContractor .hall instruct such employee.through employee agreement. or othersuitable educational programs on theimportance of reporting inventions insufficient time to permit the filing ofpatent application. prior to U.S. orforeign statutory bars.

(31 The Contractor shall notify theFederal agency of any decision not tocontinue the prosecution of a patentapplication. pay maintenance fees. ordefend in a reexamination or oppositionproceeding on a patent. in any country.not Ie.. than 30 day. before theexpiration of the response periodrequired by the relevant patent office.

(41 The Contractor egrees to include.within the specification of any UnitedStates patent application and any patentissuing thereon covering a subjectinvention. the following statement: "Thisinvention was made with Governmentsupport under (identify the contract)awarded by (identify the Federalagency). The Government has certainrights in this invention:'

(g) Subcontracts. (1) The Contractorshall incude this clause (52.227.11 of theFederal Acquisition Regulation (FAR)l.SUitably modified to identify the parties.in all subcontracts. regardless of tier. forexperimental. developmental. orresearch work to be performed by Iismall business firm or nonprofitorganization, The subcontractor shallretain all right. provided for theContractor in this clause. and theContractor shall'not, a. part of the'consideration for awarding thesubcontract. obtain rights in thesubcontractor's subject inventions.

(2) In the case of subcontracts, at anytier. when the prime award with theFederal agency was a contract (but not agrant or cooperative agreement). theagency, subcontractor. and the ..'"Contractor agree that the mutualobligation. of the partie. created bJo!Jbisclause constitute a contract betwe~esubcontractor and the Federal agencywith respect to those matters co~bythis clause,

[h] Reporting utilization 01subjectinventions. The Contractor agrees tosubmit on request periodic reports nomore frequently than annually on theutilization of 8 subject invention or on

effort! at obtaining such utilization thatare being made by the Contractor or it!licensees or assignees. 'Such report,shall include information regarding thestatu. of development. date of first ­commercial sale or use. gross royaltiesreceived by the Contractor. and such.'other data and information as theagency may reasonably specify. TheContractor also agrees to provideadditional reports as rna)' be requestedby the agency in connection with anymarch-in proceeding. undertaken by theagency in accordance with paragraph (jJof this clause. To tbe extent data orInformation supplied under thisparagraph Is considered by theContractor, its licensee. or assignee tobe privileged and confidential and is somarked. the agency agree. that to theextent permitted·by law. it shall notdisclose such information to personsoutside the Government.

(I)Preference for United Statesindustry. Notwithstanding any otherpmvision of this clause. the Contractoragrees that neither it nor any assigneewill grant to any person the exclusiveright to use or sell any subject inventionin the United States unless suchpersonagree. that any products embodying thesubject invention will be manufacturedsubetanttally in the United States,However. in individual cases. therequirement for such an agreement maybe waived by the Federal agency upon ashewing-by the Contractor or its .assignee that reasonable butunsuccessful efforts have been made togrant licenses on similar terms topotential licensee. that would be likelyto manufacture substantially in theUnited State. or that under thecircumstances domestic manufacture isnot commercially feasible.

(j} March-in rights. (11 The Contractoragrees that with respect to any subjectinvention in which it has acquired title.

'the Federal agency has the right inaccordance with the procedures in FAR27.304-1(g) to require the Contractor. anassignee. or exclusive licensee of asubject invention to grant anonexclusive. partially exclusive. orexclusive license in any field of use to aresponsible applicant or applicants.'~po""JlirgI'I that are reasonable under·the circd"mstances, and if the Contractor.assigne$. or exclusive licensee refusessuch lr~eque.t. the Federal agency hasthe right to grant such a license itself ifthe Federal ~88'\'ydetermine. that-

(i) Such action is necessary becauseth~e Contractor or assignee has nottaken, or is not expected to take within8 reasonable time, effective steps toachieve practical application of thesubject invention in such field of use:

•Federal Register I Vol. 49, No. 63 I Friday. March 30. 1984 I Rules and Regulallons 12991

[il) Such action is necessary toalleViate health or saCety needs whichare not reasonaby satisfied.by.t!teContractor, assignee. or theU'bcensees:

(iiirSuch action i8 neceSSBl'Y. to meetrequirements for public ~se specified byFederal rP.gulations and ""cllrequirements are not reasonablysatisfied by the Contractor. assi~~. orlicensees: or .•

(iv) Such action is necessary b~caus~the agreement required by par.,.~h (I~.of this clause has not been obtained or"waived or because a licensee of theexclusive right to use or leU any subjectinvention in the United States is inbreach of such agreement,

[k] Special provisons for controctswith nonprofit organizations. If theContractor is a nonprofit organization. itagree. that-

(1) Rights to a subject invention in theUnited States may not be assignedwithout the approval of the Federalagency, exceptwhere such assignmentis made to an organize tion which has asone of its primary functions themanagement of inventions and which ilnot, itself, engaged in or does not hold asubstantial interest in otherorganizations engaged in themanufacture or sale of products or theuse of processes that might utilize theinvention or be in competition withembodiments of the invention (provided.that such assignee will be subject to thesame provisions as the Contractor):

(2) The Ccntractor may not grantexclusive licenses under United Statespatents or patent applications in subjectinventions to persons other than smallbusiness firms for a period in excess ofthe earlier of-

(i] Five years from first commercialsale or use of the invention: or

(ii) Eight years Cram the date of theexclusive license excepting that timebefore regulatory agencies necessary toobtain premarket clearance. unless on acase-by-case basis. the FederaJ agencyapproves a longer exclusive license, Ifexclusive field-of-use licenses aregranted. commercial sale or use in onefield of use will not be deemedcommercial sale or use as to other fieldsof use. and a first commercial sale oruse with respect to a product of theinvenllon will not be deemed to end theexclusive period to different subsequentproducts covered by the Invention:

(3)The Contractor shall shareroyalties collected on a subjectinvention with the inventor. and

(4)The balance of any royalties orincome earned by the Contractor withrespect to subject inventions. afterpS\1llent of expenses (including_paj:ments t~ inventor~) in~ident~l to theadIninistration of subject mvenhons.

will be utilized Cor the support of•cientific re.earch or education.

[I) Communications. Reserved.(End of clause) [R 7-302.23(h) 1981 JULI

Altemate 1 (APR 1984). Add thefollowi!!!! sentence at the end ofparll\iriiih (bJ of the basic clause:

The license shall include the right ofthe,Oovernmenl to sublicense CoreigngoRrnments and Internationalorganization. pursuant to the followingtreade. or international agreements:..................... or pursuant tc any futuretreaties or agreements with foreigngovernments or internationalorganizations.

{'Contracting Officer complete withthe names of applicable existing treatiesor internationaJ agreements. The abovelanguage is not intended to apply totreaties or agreementsthat are in effecton the date of the award but are notllsted.]

[R 7-302.23(b) 1981 ]UL)

52.227-12 Patent Rlghte-Retentlan bythe Contractor (Long Form)

As prescribed al 27.303(b]. insert thefollowing clause:PATENT RIGHTS-RETENTION BY

THE CONTRACTOR [LONG FORM](APR 1984)[a) Definitions•."Invention" means any invention or

discovery which is or may be patentableor otherwise protectable under Title 35of the United States Cede.

"Subject invention" means anyinvention of the Contractor conceived orfirst actaulIy reduced to practice in theperformance of work under thiscontract,

"Practical application" means to'manufacture in the case of acomposition or product, to practice inthe .case of a process or method. or tooperate in the case of a machine orsystem; and. in each case, under suchconditions as to establish that theinvention is being utilized and that itsbenefits are, to the extent permitted bylaw or Government regulations.available to the public on reasonableterms.

"Madeuwhen used in relation to anyinvention means the conception or firstactual reduction to practice of suchinvention.

"Small business firm" means adomestic small business concern aldefined at Section 2 of Public Law 85­536 (15 U.S.C.632) and implementingregulations of the Administrator of theSmall Business Administration. For thepurpose of this clause. the sizestandards for small business concernsinvolved in Covernment procurementand subcontracting at13 CFR 121.3-11

and 13 CFR 121.3-12. respectively, willbe used•

"Nonprofit organiaation' means adomestic university or other institutionof higher education or an organization ofthe type described in section 501(c)(3)01the Internal Revenue Code 011954 (26U.S.C. 501(c]) and exempt Cram taxationunder section 501(a) of the InternalRevenue Code (28 U.S.C. 501[a]) or anydomestic nonprofit scientific oreducational organization qualified undera state nonprofit organization statute.

(b) Allocation ofprincipal rights. TheContractor may eleel to retain the entireright. title, and interest throughout theworld to each subject invention subjectto the proVisions of this clause and 35U.S.C. 203. With respect to any subjectinvention in which the Contractor electsto retain title. the Federal Governmentshall have 8 nonexclusive.nontransferable. irrevocable. paid-uplicense to practice or have practiced foror on behalf oC the United States thesubject invention throughout the world.

(c) Inventiondisclosure, election oftitle. and fi1ing ofpatent applications byControctor. (1) The Contractor shalldisclose each subject invention to theContracting Officer within 2 monthsafter the inventor discloses it in writingto Contractor personnel responsible forpatent matters or within 6 months afterthe Contractor becomes aware that asubject invention has been made.whichever is earlier. The disclosure tothe Contracting Officer shall be in theform of a written report and shallidentify the contract under which theinvention was made and the inventor(s).It shall be sufficiently complete intechnical detail to convey a clearunderstanding. to the extent known atthe time of the disclosure. of the nature.purpose. operation. and physical,chemical, biological, or electricalcharacteristics of the invention. Thedisclosure shall also identify any .

. publication. on sale, or public use of theinvention and whether a manuscriptdescribing the invention has beensubmitted Cor publication and. if so.whether it.has been accepted forpublication at the time of disclosure. Inaddition. after disclosure to theContracting Officer. the Contractor shallpromptly notiCy the Contracting Officerof the acceptance of any manuscript

. describing the invention for publicationor of any on sale or public use plannedby the Contractor.

(2)The Contractor shall elect inwriting whether or not to retain title toany such invention by notifying theFederal agency at the time of disclosureor within 8 months of disclosure. 8a tothose countries (including the United

Federal Register / Vol. 49. No. 63 / Friday. March 30. 1984 / Rules and Regulations12992

States) in which the Contractor willretain title: provided. that in any casewherepublication. on sale. or publicusehas initiated the 1-yeM statutory periodwherein valid patent protection can stillbe obtained in the United· States, theperiod of election of title may beshortened by the agency to a da te tha t isno more than 60 days prior to the end ofthe statutory period. .

[3JThe Contractor shall file its initialpatent application on an electedinvention within 1 year after election or.if earlier. prior to the end of anystatutory period wherein valid patentprotectton can be obtained in the UnitedStates after 8 publication. on sele. orpublic use. The Contractor shall filepatent applications in additional .countries (including the European PatentOffice and under the Patent CooperationTreaty) within either 10 months of thecorresponding initial patent applicationor 6 months from the date permission isgranted by the Commissioner of Patentsand Trademarks to file foreign patentapplications where such filing has beenprohibited by a Secrecy Order.

(4) Requests for extension of the timefor disclosure to the Contracting Officer,election. and filing may. at the discretionof the funding Federal agency, begranted, and will normally be grantedunless the Contracting Officer hasreason to believe that a particularextension would prejudice theGovernment's interest.

(d) Conditions when the Governmentmay obtain title. The Contractor shallconvey to the Federal agency, uponwrillen request, title to any subjectinvention-

(I) If the Contractor elects not toretain title to a subject invention:

[Z)If the Contractor fails to disclose orelect the subject invention within thetimes specified in paragraph (c) above[the agency may only request titlewithin 60 days after learning of theContractor's failure to report or electwithin the specified times):

(3) fn those countries in which theContractor fails to fila patentapplications within the times specifiedin paragraph (c) above: provided•.however. that if the Contractor has fileda patent application in a country afterthe times specified in paragraph (c)above, but prior to its receipt of thewritten request of the Federal agency.the Contractor shall continue to retain'title in that country; or

(4) fn any country in which theContractor decides not to continue theprosecution of any application for, topay the maintenanca fees on, or defendin reexamination or oppositionproceeding on. a patent on a lubjectinvention.

[e] Minimum rights to Contractor. (1)The Contractor shall retain anonexclusive. royalty-free licensethroughout the world in each sub jectinvention to which the Governmentobtains title except if the Contractorfails to disclose the subject inventionwithin the times specified in paragraph(c) above. The Contractor's licenseextends to its domestic subsidiaries andaffiliates, if any, within the corporatestructuee of which the Contractor is apart and includes the right to grantsublicenses of the same scope to theextent the Contractor was legallyobligated to do so at the time thecontract was awarded. The license istransferable only with the approvalofthe funding Federal agency except whentransferred to the successor of that partof the Contractor's business to whichthe invention pertains. .

[Z) The Contractor's domestic licensemay be revoked or modified by thefunding Federal agency to the extentnecessary to achieve expeditiouspractical application of the subjectinvention pursuant to an application foran exclusive license submitted inaccordance with applicable provisionsin the Federal Properly ManagementRegulations and agency licensingregulation. (if any). This license shallnot be revoked in that field of use or the'geographical areas in which theContractor has achieved practicalapplication and continues to make thebenefits of the invention reasonablyaccessible to the public.The license inany foreign country may be revoked ormodified at the discretion of the fundingFederal agency to the extent theContractor. its licensees. or its domesticsubsidiaries or affiliates have failed toachieve practical applciation in thatforeign country; .

(3) Before revocation or modificationof the license, the funding Federalagency shall furnish tho Contractor awritten notice of its intention to revokeor modify the license, and theContractor shall be allowed 30 days [orsuch other time as may be authorized bythe funding Federal agency for goodcause shown by the ContractorJ afterthe notice to show cause why thelicense should not be revoked ormodified. The Contractor has the right 10'appeal, in accordance with applicableagency Iicenalng regulations and the.jlFederal Property ManagementRegulations concerning the licen~fGovemment·owned inventions. .decision concerning therevocation 'ormodification of its license.

(f] Contractor action to pratect theGovemment's interest. (1) TheContractor agrees to execute or to haveexecuted and promptly deliver to the .

Federal agency all Instrumentsnecessary to (i) establish or confirm therights the Government has throughoutthe world in those subject inventions towhich the Contractor elects to retaintitle, and [ii) convey title to the Federalagency when requested under paragraph(d) above and subparagraph (n)(Z)below. and to enable the Government toobtain patent protection throughout theworld in that subject invention.

[Z) The Contractor agrees to require.bywritten agreement. its employees.other than clerical and nontechnical

'employees. todisclose promptly inwriting to personnel identified asresponsible for the administration ofpatent matters and in a formatsuggested by the Contractor eachsubject invention made under contractin order that the Contractor can complywith the disclosure provisions ofparagraph [c) above. and 10 execute allpapers necessary to file patentapplications on subject inventions andto establish the Government's rights inthe subject inventions. This disclosurefonnat should require. as a minimum..the inromia~1l required bysubparagtallli(c)(l) above. TheContractor shan instruct such employeesthrough employee agreements or otherlui table educational program. on theimportance of reporting inventions insufficient lIme to permit the filing ofpatent applications prior to U.S, orforeign statutory bars.

(3) The Contractor shan notify theFederal agency of any decision not tocontinue the prosecution of a patentapplication. pay maintenance fees. ordefend in a reexamination or oppositionproceeding on a patent, in any country.not less than 30 days before theexpiration of the response periodrequired by the relevant patent office.

(4) The Contractor agrees to include.within the specification of any UnitedStates patent application and any patentissuing thereon covering a subjectinvention, the following etatemene "Thisinvention was made with Governmentsupport under (identify the contract)awarded by [identify the Federalagency). The Government has certainriJ.hts in thisinvention." ..'[5J 'llJiej:ontractor shall estabheh andmaintain active and effectiveprocedyi.... to assure that sublectinventiolls are promptly identified anddisclosed to Contractor personnelresponsible forl$tllnt malters within 8months of conception and/or first actualreduction to practice. whichever occurs .first in performance of work under thiscontract These procedures shall includethe maintenance of laboratorynotebooks or equivalent records and

Federal Regisler , Vol. 49. No.,53" Friday. March 30. 1984 , Rules and Regulations 12993

extent permitted by law. it shaIl notdioclose ouch information to perscnaoutoide the Government.

(i) Preference for United States ~'

industry. NOlwithstandin8 any othertprovision of this clause. the Contractor

. agrees that neither it nor any assigneeewill grant to any person the exclusiverighl 10 use or seU any subject inventionin the United States unless such personagrees that any products embodying thesubject invention will be manufacturedsubstantially in the United States,However. in individual cases. therequirement for such an agreement maybe waived by the Federal agency upon ashewing by the Contractor or itoassignee that reasonable butunsuccessful efforts have been made togrant licenses on similar terms topolentiallicensees that would be likelyto manufacture aubstantially in theUnited Slates or that under thecircumstances domestic manufacture isnot commercially feasible.

(j) March-in rights. The Contractoragrees that with respect to any subjectinvention in which it has acquired title.the Federal agency has the right inaccordance with the procedures in FAR27.304-1(8) to require the Contractor. anassignee. or exclusive licensee of asubject invention to grant anonexclusive. partially exclusive. orexclusive license in any field of use to aresponsible applicant or applicants.upon terms that are reasonable underthe circumstances. and if the Contractor.assignee. or exclusive licensee refusessuch a request. the Federal a8ency haslhe right to grant such a license itself ifthe Federal agency determines that-

{1}Such action is necessary becausethe Contractor or assignee has nottaken, or is not expected 10 take withina reasonable time. effective steps toachieve practical application of thesubject invention in such field of use:

,(2}Such action is necessary toalleviate health or safety needs whichare not reasonably satisfied by theContractor. assignee. or their licensees;

(3) Such action is necessary to meel .requirements for public use specified byFederal regulanons and suchrequirements are not reasonablysatisfied by the Contractor, assignee. or ­Iicensaes.; or

(4) Such action is necessary becausethe agreement required by paragraph (i)of this clause has not been obtained orwaived or because 8 licensee of the

. exclusive right to use or sell any subjectinvention in the United States is inbreach of such agreement.

(k) Specialprovisions for contractswith nonprofit organizations. Reserved.

(1) Communications. Reserved.

(10) The Contractor shall provide.upon request, the filin8 date. serialnumber and title. a copy of the patentapplication (includin8 an En8lish.lan8ua8e version if filed in a languageother than En81i.h). and patent numberan~~e date for any subject inventionfor which the Contractor has retainedI'll,. -.'~) Upon request. the Contractorshall furnish the Government anjrf'lyocable power to inspect and makecopies of the patent a,pplicalion file.

(8) Subcontracts. (1) The Contractor 'shall inj:ude the clause at 52.227-il ofthe Federal Acquisition Regulation(FAR). suitably modified to identify theparties. in all subcontracts. regardless oftier. for experimental. developmental. orresearch work to be performed by asmall business finn or nonprofitorganization. The subcontractor shallretain all rishts provided for Ihe 'Contractor in this clause. and theContractor shall not. as part of theconsideration for awarding thesubcontract. obtain rights in thesubcontractor's subject inventions.

(2)The Contractor shall include thisclause (FAR 52.222-12)in all othersubcontracts. regardless of tier. forexperimental, developmental. orresearch work.

(3) In the case of subcontracts. at any'tier. when the prime award with theFederal agency was a contract (hut not agrant or cooperative agreement). theagency, subcontractor. and theContractor agree that the mutualobligations of the parties created by thisclause constitute a contract between thesubcontractor and the Federal agency _with respect to those matters covered by

. this clause.(h) Reporting utilization ofsubject

inventions. The Contractor agrees to II

submit on request periodic reports nomore frequently than annually on theutilization of a subject invention or onefforts at cbtainlng such utilization thatare baing made by the Contractor or itslicensees or assignees. Such reportsshall include information regarding. thestatus of development, date of firstcommercial sale or use. gross royaltiesreceived by the Contractor. and suchother data and informalion as Iheagency may reasonably specify. TheContractor also agrees to provideadditional reports as may be requestedby the agency in connection with anymarch-in proceedings undertaken by theagency in accordance with paragraph lilof this clause. To the extent data orinformation supplied under thispara8raph is considered by theContractor. its licensee or assignee to bepnvileged and confidential and is somarked. the agency agrees that. to the

othOr recordo ao are reasonablyneceSlal}' to document the conceptionand/or the first actual rec!uction topractice or .ubject inventiQlI8i 804recordo that show that the p~cedureofor idenlify;n8 aDd disclosiD8 theinventions are followed",u,on request.the Contractor shall furnish the 'Contracting Officer a descriptioll ?' 8uchprocedures for evaluation and fdrdetennination as to their effectiyeness.

(6) The Contractor agrees, ,wb~licensing a subject invention. to ~'1'!~ns4·to avoid royaltY,charges on a~quJsJt~on8involving Government iu.ods. includingfunds derived throu8h Mllllal}' ,Assistance Program of the Governmentor otherwise derived through theGovernment. to refund any amountsreceived as royalty charges on the.subject in-vention in acquisitions for, oron behalf of. the Government. and toprovide for such refund in anyinstrument transferring rights in theinvention to any party.

(7) The Contractor shall furnish IheContracting Officer the following:

(i) Interim reports every 12 months (orsuch Jonger period as may be specifiedby the Contracting Officer) from thedate of the contract. listing subjectinventions during that period andcertifying that all subject inventionshave been disclosed or that there are nosuch inventions.

(ii) A final report, within 3 monthsafter completion of the contracted work.listing aU subject Inventions or certifyingthat there were no such inventions. andlisting all subcontracts at any tier'containing a patent rights clause orcertifying that there were no suchsubcontracts.

(8) The Contractor shall promptlynotify the Contracting Officer in writingupon the award of any subcontract atany tier containing a patent rights clauseby identifying the subcontractor. theapplicable patent rights clause. the workto be performed under the subcontract,and the dates of award and estimatedcompletion. Upon request of theContracting Officer, the Contractor shallfl:..:- ·';h a copy of such subcontract.andnc .re frequently than annually. aIistrng of the subcontracts that havebeen awarded.

(9) In the event of a refusal by aprospective subcontractor to accept oneoflhe.clauses in subparagraph (8)(1) or(2) below, the Contractor (i) shallpromptly submit a written notice to theContracting Officer setting forth thesubcontractor's reasons for such refusaland other pertinent information thatmay expedite disposition of the matterand (ii) shall not proceed with such&ubcontracting without the writtenauthorization of the Contracting Officer.

"Subject invention:' as used in thisclause. means any invention of theContractor conceived or first actuaHyreduced to practice in the performanceof work under this contract.

"Practical application," as used iIi-thisclause. means to manufacture. in thecase of a composition or product: to'practice, in thecase of a process ormethod: or to operate. in the case of amachine or system: and. in each case.under such conditions as to establishthat the invention is being utilized andthat its benefits are. to the extentpermilted by law or Governmentregulations. available to the public onreasonable terms.

(b) Allocations ofprincipal rights. (1)Assignment to the Government. TheContractor agrees to assign to theGovernment the entire right. title. andinterest throughout the worid in and toeach subject invention. except to theextent that rights are retained by theContractor under subparagraph Ib)(2Jand paragraph (d) below.

(2) Grealer rights determinations (iJThe Contractor. or an empJoyee-inventorafter consuJtation with the Contractor,may retain greater rights than thenonexclusive license provided inparagraph (d) below. in accordance wilhthe procedures of paragraph 27.304-1(a)of the Federal Acquisition Regulalion(FAR). A request for e determination ofwhether the Contractor or the employee­inventor is entitled-to retain such greaterrlghts must be submitted to the Head ofthe Contracting Agency or designee atthe time of the first disclosure of theinvention pursuant to subparagraph(e)(2J below. or not later then 8 mouthsthereafter. unless a longer period iseutharized in writing by the ContractingOfficer for good cause shown in writingby the Contractor. Each determinationof greater rights under this contractnormally shall be subject to paragraph[c] below. and to the reservations andconditions deemed 10 be appropriate bythe Head of the Contracting Agency ordesignee,

[Ii] Upon request, the Contractor shallprovide the filing date. serial numberand title, a copy of the patentapplication (including an English­ISlJIlua'l\v.'l'sion if filed in a languageother tlOO1.~rtglish). end patent numberand issue date for any subject inventionin any cO\llltry for which the Contractorhas retained title.

(iii] Upon request, the Contractor shallfurnish the GoUmment an irrevocablepnwer 10 inspect and make copies of thepatent application file.

(cJ Minimum rights acquired by IheGovernment. (1J With respect to eachsubject invention to which the .

_.- -[il] Disclose any subject invention

pursuant to subparagraph (c)(l) above:(iii) Deliver acceptable interim reports

pursuant to subdivision (f)(7J(i)above:or

(iv) Provide the information regardingsubcontracts pursuant to subparagraph(f)(6) above.

(2) Such reserve or balance shall bewithheld until the Contracling Officerhas determined that the Contractor hasrectified whatever deficiencies exist andhas delivered all reports. disclosures.and other information required by thisclause.

(3) Final payment under this contractshall not be made before the Contractordelivers to the Contracting Officer alldisclosures of subject Inventionsrequired by subparagraph [c)(l) above.an acceptable final report pursuant tosubdivision (f)(7)(ii) above. and all pastdue confirmatory instruments.

(4) The Contracting Officer maydecrease or increa~ the sums withheldup to the maximum authorized above.No amount shall be withheld under thisparagraph while the amount specifiedby this paragraph is being withheldunderother provisions of the contractThe withholding of any amount or thesubsequent payment thereof shail not beconstrued as a waiver of anyGovernment right(End of clause] (R 7-302.23(b) 1981 JULJ

Alternate I (APR 1984). Add thefollowing sentence at the end ofparagr-aph (b) of the basic clause:

The license shall include the right ofthe Government to sublicense foreigngovernments and internationalorganizations pursuant to the followingtreaties or international agreements:..................... or pursuant to any futuretreaties or agreements with foreigngovernments or internationalorganizations.

['Contracting Officer complete withthe names of applicable existing treatiesor international agreements. The abovelanguage is not intended to apply totreaties or agreements that are in effecton the date of the award but are notlis ted.]

(R 7-302.23(h) 1991 JULJ

52.227·13 -Patent Rlgh_Acquisltlon by.ttl. Govemmant. ,." .

As prescribed at Z7.303(c}. insert thefollowing clause: ~

PATEllIT RIGHTS-ACQUISITION llYTHIl GOVERNMENT (APR 19!11L

(8) Definitions. F;#"lnvention." a8 used in this clause.

meansany inventionordiscovery whichis or may be patentable or otherwiseprotectsble under Title 35 of the UnitedStates Code.

Federal Re:;i.ter I Vot. 49. No. 63 I Friday. M,m,h 30. 1984 I Rules and Regulattons

[rn] Other inventions, Nothingcontained in tnj3 clause shall be deemed.to grant to the Govern:nent any rightswith respect to any invention other thana subject invention.

(n) Bxamination ofrecair/sre/ating toinventions. (1) The Contracting Officeror any authorized representative shall.until 3 years after final payment underthis contract. have the right to examineany books (including laboratorynotebooks). records. and documents ofthe Contractor relating to the conceptionor first reduction to practice ofinventions in the same field oftechnology as the-work under thiscontract to determine whether-

[i] Any such Inventions are subjectinventions:

(ii) The Contractor has establishedand maintains the procedures requiredby subparagraphs (f)(2J and (f)(3) of thisclause: and

(iii) The Contractor and its inventorshave complied with the procedures.

(2J If the Contracting Officerdetermines that an inventor has notdisclosed a subject invention to theContractor in accordance with theprocedures required by subparagraph(fJr.;) of this clause. the ContractingOffir:er may. within 60 days after thedetermination. request title inaccordance with subparagraphs (dJ[21and (dJ(3J of this clause. However. if theContractor establishes that the failure todisclase did not result from theContractor's fault or negligence. theContracting Officer shall not requesttitle.

(3J If tbe Contracting Officer learns ofan unreported Contractor inventionwhich the Contracting Officer believesmay be a subject invention. theContractor may be required to disclosethe invention to the agency for adetermination of ownership rights.

(4) Any examination of records underthis paragraph shall be subject toappropriate conditions to protect theconfidentiality of the informationinvolved,

(0) Ir"hhCJ:ding ofpayment (thispara~!'apb does not apply tosubcontracts]. (1) Any time before finalpayment under this contract, theContracting Officer may. in theGovernment's interest. withholdpayment until a rcserye not exceeding$50.000 or 5 percent of the amount of thecontract, whichever islesa, shall havebeen set aside if. in the ContractingOfficer's opinion. the Contractor Jailsto-

(i) Establish. maintain. and followeffeclive procedures for identifying anddisclosing subject inventions pursuant tosubparagraph (f)(5) above: