**5. Inventions and Patents**

**A. Background**

Patenting and licensing of intellectual property are key components of
virtually any successful marketing program whether it is conducted by
the Federal Government or by private industry. The rights to
intellectual property can be bought and sold, leased or rented, or
otherwise transferred between parties in much the same way that real
property or other personal property can be transferred.

Intellectual property is often a substantial component of the technology
transfer process. It must be protected in the transfer of technology to
ensure the commercial viability of the technology. Intellectual property
is most often transferred through contracts or licenses. Some of the
ways to protect intellectual property rights in the United States are
through patents, copyrights, trade secrets, trademarks and trade names.
Definitions for these terms are provided in Appendix A of this handbook.

Both the Department of the Interior and the USGS encourage innovative
activity by their employees and promote the commercialization of
employee inventions through patents and licensing. Both promote
technology transfer of inventions through Cooperative Research and
Development Agreements (CRADAs). Policy and procedures for reporting
inventions and seeking patents are covered in the DOI Manual Chapter 453
DM 1 and the USGS Manual Chapter 453.1 (Appendix B).

**B. Rights in Inventions**

The Government's position regarding employee-developed inventions is
fully set forth in Department of the Interior (DOI) Manual Chapter 453
DM 1, but is here summarized:

o The Government is entitled to the right, title and interest of
government inventions which bear a direct relation to or are made in
connection with an employee's official duty. The exception to this will
be in CRADAs where the title and interest can be modified by contract.

o When the invention does not pertain to the employee's direct duties,
but is conceived during working hours, or built or tested using
government property, the Government is entitled to a non-exclusive,
irrevocable, royalty free license in the invention with the power to
grant sublicenses, and the inventor may also retain title to and
interest in the patent.

o If the patent was developed independent of government time and money
and is not related to the Agency's objectives, the employee may retain
the entire right and title to the invention. When the Government is not
entitled to the invention, the employee can request that USGS file the
patent application on the invention in return for a license to the
Government. The USGS may agree to do so when it appears to be in the
Government's interest to do so (e.g., government procures large
quantities of a device or product or material made by practicing the
invention.)

o If an invention is assignable to the Government, it may be protected
by patenting in the United States and in selected foreign countries; by
patenting in the United States only; or by publishing a description of
the invention. The degree of protection sought is dependent upon the
interest of the Government and the public in the invention.

o Patents held in the name of any DOI employee-inventor belong to the
Department but are managed by the Bureau of the employee-inventor. This
is why the patent-seeking process involves both the USGS and the DOI
Office of the Solicitor.

o DOI's policy is to seek patents protecting inventions made by
employees when it is found to be necessary to preserve government
interests in inventions resulting from the Department's programs and
activities, and to provide for maximum benefits to the public for such
inventions.

**C. Types of Patents**

There are three types of patents under U.S. law: utility patents, design
patents, and plant patents. Utility patents cover inventions; design
patents protect certain designs for manufacture; and plant patents are
for new varieties of asexually reproducing plants.

Persons inventing or discovering any new and useful process, machine,
manufacture or composition of matter, or any new and useful improvement
thereof, may apply for patent. There are two caveats to this: 1) the
inventor must be able to characterize the invention as a process,
machine, manufacture, or composition of matter and 2) the invention must
be new or novel and useful. There are a few exceptions to patentability.
Items that cannot be patented include:

laws of nature

natural forces

basic principles

mere chemical formulas

business methods

systems of bookkeeping

methods of calculation

mental steps

ideas

**D. Basic Responsibility**

If you are an employee who has invented something related to your work,
which you and your supervisor consider patentable, you are expected to
make a report of invention.

Even if an invention was conceived and developed on the employee's own
time, the employee must report it if it relates to the employee's work.
Generally, when an invention is conceived and developed on the
employee's time, the employee is eligible to claim and receive the
patent rights.

**E. Patent Application Process**

The following process is in place for patent preparation (see SM Chapter
453.1):

o Employees are responsible for keeping appropriate records on their
inventions and for preparing a timely invention report on Form DI-1215.
A copy is included as Form 9 in the previous section of this handbook.

o Supervisors are responsible for:

> a\. Instructing their employees to record their inventions and report
> them promptly;
>
> b\. Making sure each invention report (DI-1215) is complete and all
> inventors are represented; and
>
> c\. Initiating a Discipline review of the invention and preparing a
> report of that review. Included within that report is a discussion of
> the potential commercial value of the invention as well as its utility
> to the Federal Government and a Discipline recommendation to either
> seek or not seek a patent for the invention.
>
> d\. Understanding that if the Discipline requests the pursuit of a
> patent, the Discipline is responsible for paying the DOI mandated
> awards to each inventor named on the DI-1215 that is within that
> Discipline.

o Discipline chiefs are responsible for:

> a\. Establishing a prompt and effective procedure for reviewing the
> inventor's completed DI-1215 and preparing a report of that review;
>
> b\. Sending each DI-1215 and the accompanying report of review to the
> Business Development Branch.
>
> c\. Ensuring that each site has and follows a system that reviews any
> articles, papers or electronic releases for information about devices,
> processes or materials that might contain new and non-obvious features
> for potential patents.
>
> d\. Ensuring that a system is in place within the Discipline to
> rapidly compensate Discipline inventors for the DOI mandated awards
> when notification reaches the Discipline that such awards are due.

o Contracting Officers' Technical Representatives are responsible for
reporting to the Discipline Chief all inventions made under contracts
funded by that USGS Discipline.

o The Business Development Branch is responsible for reviewing the
commercial viability of an invention and recommending to the USGS
Business Enterprise Council (BEC) whether a patent should be pursued.

o The BEC decides if a patent should be pursued for DOI or if the rights
to the invention should be assigned to the inventors. If a decision is
made to pursue a patent, the DI-1215 is forwarded to the Patent
Counsel/Solicitor's Office.

o The Solicitor's Office registers the DI-1215 for the Department and
instructs the Business Development Branch to hire an approved law firm
to prepare a patent application. Once the application has been prepared,
the Solicitor's Office will review the document and file it with the
Patent Office.

o The Business Development Branch is responsible for coordinating with
the Solicitor's Office, overseeing the application preparation, and
maintaining a final copy of the patent when issued. Subsequently, the
Business Development Branch will seek licenses on each patent.

o If the BEC decides not to pursue a patent, the patent rights are
usually returned to the inventor(s) with the DOI retaining a
Government-use license if the invention is patented. The inventor(s) may
then pursue a patent using their own time and resources if the
inventor(s) so desire. Federal employees awarded patent rights may not
seek a patent on that invention during their federally paid work hours
or utilize any other Federal resources for their private gain.

**F. Awards and Royalties**

The Department of the Interior\'s patent policy includes rewarding
inventors. Inventors are awarded \$500 each by their agency when their
patent application is filed. If the invention is patented, inventors are
awarded \$800 by their agency. Within the USGS, these awards are to be
paid by each Discipline from their own funds to inventors within that
Discipline.

If an inventor\'s patent or intellectual property is licensed by the
Department for use, manufacture or sale, a licensing agreement will be
developed between the owner of the patent (the Government) and the
licensee (usually a private company). The licensing agreement will
outline royalty payments to be made by the licensee to the Department.
Inventors are entitled to the first \$2,000 and a minimum of 15% of the
royalties collected per year by the agency to a maximum of \$150,000.
These royalties will flow to the inventors through the Business
Development Branch.

**G. Invention Disclosure**

***Patent law requires inventors to apply for a patent within one year
from the time an invention is first disclosed, put into public use, or
offered for sale. If this is not done within the specified time frame,
the inventor waives his/her right to a patent. It should be noted that
an inventor cannot file for foreign patent rights once a disclosure has
been made.*** Although the United States assigns patent rights on a
"first-to-invent" basis, many foreign countries use a "fast-to-file"
process, granting rights to whoever files for an invention first.

If at all possible, there should be no disclosure until after a patent
application has been filed. "Disclosure" means that enough information
about the invention has been publicly released by the inventor (orally,
in writing, and electronically by email or the Internet, through text,
drawings and/or sketches) that someone technically skilled in the
invention field could duplicate the invention based on the information
released. Appendix A includes a memorandum from the DOI Office of the
Solicitor that provides guidance on the definition of oral disclosure.

**H. Protecting Federal Inventions From Disclosure**

When ideas are prematurely disclosed, options related to protecting
intellectual property and technology transfer are reduced. With
disclosure of an invention, a statutory time clock requires a decision
to be made relative to patenting. In some cases, the idea or concept may
not be developed enough to allow an adequate patent application to be
prepared. Or all the preliminary work that might support a strong patent
application may not have been completed. Premature disclosure in these
cases often requires the preparation of an application in less than
ideal circumstances that might not ensure solid claims. ***Premature
disclosure, therefore, should be avoided, and disclosure in general
should be planned in advance***.

If any one of the following occurs more than one year before the filing
of a patent application with the U.S. Patent and Trademarks Office, a
disclosure will be made that results in the loss of patent rights for
the invention in the United States. Foreign rights are generally lost
with ***any*** published article.

o Publication, without the requirement of secrecy, of a detailed
description of the invention or how it works. Publications include
newspaper, magazine, and trade journal articles, publicly available
government reports, and Discipline summaries of experimental research
projects. A publication can also be electronic, oral or visual including
a presentation of view-graphs.

o Public use of the invention in the United States. Experimental uses of
an invention are generally an exception, but the definition of
experimental is often difficult to ascertain. Public use can include a
demonstration at a scientific meeting of a working prototype or
demonstrations to private companies for any purpose such as developing a
license, a CRADA, or a procurement.

The whole concept of premature disclosure of inventions will intensify
in the future as the United States moves toward the adoption of world
patent harmonization. In harmonization, the first person who \"files\" a
patent application becomes that invention\'s owner. This means that we
must be much more aware of the responsibilities related to invention
protection. Under harmonization, the United States' first-to-invent
policy will no longer be applicable. "First-to-invent" means that the
first person who "invented" the subject of a patent application becomes
that invention's owner. A decision to retain the \"first-to-invent\"
policy in the United States for the time being was made by the Secretary
of Commerce in 1994. However, the matter remains under consideration.

When for reasons, research or otherwise, it becomes necessary for a
Federal Government party to disclose confidential, sensitive, or
proprietary information to another party, it becomes necessary and in
the best interest of the Government to require the other party to sign
what is called a non-disclosure agreement. Under this agreement, the
party receiving confidential information agrees to protect this
information as proprietary. Inventors should complete and execute this
document before meetings or discussions with individual companies where
information pertaining to a new invention is disclosed. An example of
two forms for such an agreement can be found as Form 11a and b at the
end of this section.

In summary, to prevent possible disclosure and loss of a potential
patent, **DO NOT:**

> 1\) publish anything about your new idea, invention or process on
> paper or over your computer,
>
> 2\) give a presentation about the invention, idea or process,

3\) tell anyone outside your immediate workgroup about the idea,
invention or process,

until a patent application is filed.

***It is also important to note that once disclosure occurs, an inventor
has one year in which to file a patent application. This means that the
patent application must be filed at the U.S. Patent and Trademark Office
within one year.***

To avoid the loss of a patent because the one-year limitation has been
exceeded, DOI regulations require that inventions be reported promptly.
The USGS has interpreted this instruction to state that reports of
invention (DI-1215) should be submitted by the inventors to their
appropriate supervisor within 60 days of invention.

**I. Record Keeping**

From a Record keeping standpoint, invention and development records that
have been kept in a permanently bound notebook have the strongest
evidentiary value if challenges to authorship are presented. In such a
system the significant worksheets or pages should be witnessed, dated,
and signed. In order for a co-worker to serve as witness to an invention
he/she must have a general understanding of the invention. The inventor
may incorporate certain items by reference and certain routine matters
need not be explained in detail.

Notebooks should be dated and kept indefinitely in case reference
questions should arise at a later date.

The conception of an invention should be recorded by describing the
invention as completely as possible in the bound notebooks. The record
should be followed by chronological entries in the notebook describing
the steps taken to reduce the invention to practice. These should be
signed, dated and witnessed as described above.

If the invention is reduced to practice, the test setup, procedures and
data should be described as completely as possible in the bound
notebook. Separate chart recordings, photographs, etc., should be
labeled, dated and pasted or otherwise referenced in the notebook. Two
disinterested witnesses (not co-inventors) should observe or preferably
participate in, the testing and or recording of the data. These
witnesses to the record of reduction should be able to state that they
witnessed and understood the testing.