Technology Transfer Commercialization Act of 1998

Summary: Technology Transfer Commercialization Act of 1998 - Amends the Stevenson-Wydler Technology Innovation Act of 1980 (Stevenson-Wydler Act) to revise requirements regarding enumerated authority under a cooperative research and development (R&D) agreement to permit Government laboratories to grant licenses to federally owned inventions for which a patent application was filed before the granting of the license, and directly within the scope of work under such agreement. 
(Sec. 3) Rewrites Federal restrictions on the licensing of federally owned inventions.  Requires a license applicant to make a commitment to achieve practical utilization of the invention within a reasonable time.  Requires such a license to include provisions:  (1) retaining a nontransferable, irrevocable, paid-up license for the Federal agency to practice the invention or have the invention practiced throughout the world by or on behalf of the U.S. Government; (2) requiring periodic reporting on use of the invention by the licensee only to the extent necessary to enable the Federal agency to determine whether the licensee is complying with license terms; and (3) empowering the Federal agency to terminate the license if the licensee has been found by a competent authority to have violated the Federal antitrust laws in connection with its performance under the license agreement.  Prohibits an agency from granting an exclusive or partially exclusive license on a federally-owned invention unless:  (1) it has provided 15 days' public notice and considered all comments received; and (2) the person requesting the license has supplied to the agency a plan for development and-or marketing of the invention.  Exempts from these requirements the licensing of any inventions made under an R&D agreement. 
(Sec. 4) Makes certain technical amendments to:  (1) the Bayh-Dole Act with regard to Government acquisition of the rights of a private party to a federally owned invention; and (2) the Stevenson-Wydler Act relating to, among other things, the distribution of royalties received by Federal agencies. 
(Sec. 6) Requires each Federal agency with a federally funded laboratory that has one or more R&D agreements under the Stevenson-Wydler Act to report to the Committee on National Security of the National Science and Technology Council (Committee) and the Congress on the general policies and procedures that agency uses to gather and consider the views of other agencies on joint work statements, or R&D agreements in the case of certain laboratories, with respect to major proposed R&D agreements that involve critical national security technology or may have a significant impact on domestic or international competitiveness. 
Directs the Committee to:  (1) determine the adequacy of existing procedures and methods for interagency coordination and awareness with respect to R&D agreements; and (2) establish and distribute to appropriate Federal agencies specific criteria to indicate the necessity for gathering and considering agency views on such statements or agreements, as well as additional procedures, if any, for carrying out such gathering and considering. 
Amends the Stevenson-Wydler Act to provide for increased flexibility for Federal laboratory partnership intermediaries. 
Directs the General Accounting Office to study and report to the Congress on the potential risks to the U.S. biotechnology industry relating to biological deposits in support of biotechnology patents. Requires the U.S. Patent and Trademark Office to consider the recommendations of such study in drafting regulations affecting biological deposits. 
Revises Federal patent law to authorize, upon timely request, the treatment of a provisional application as a written application, notwithstanding the absence of a claim.  Applies current statutory abandonment treatment to a provisional application 12 months after the application filing date only if such a request is not made.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Technology Transfer 
Commercialization Act of 1998''.

SEC. 2. COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS.

    Section 12(b)(1) of the Stevenson-Wydler Technology Innovation Act 
of 1980 (15 U.S.C. 3710a(b)(1)) is amended by inserting ``or, subject 
to section 209 of title 35, United States Code, may grant a license to 
an invention which is federally owned, for which a patent application 
was filed before the granting of the license, and directly within the 
scope of the work under the agreement,'' after ``under the 
agreement,''.

SEC. 3. LICENSING FEDERALLY OWNED INVENTIONS.

    (a) Amendment.--Section 209 of title 35, United States Code, is 
amended to read as follows:
``Sec. 209. Licensing federally owned inventions
    ``(a) Authority.--A Federal agency may grant an exclusive or 
partially exclusive license on a federally owned invention under 
section 207(a)(2) only if--
            ``(1) granting the license is a reasonable and necessary 
        incentive to--
                    ``(A) call forth the investment capital and 
                expenditures needed to bring the invention to practical 
                application; or
                    ``(B) otherwise promote the invention's utilization 
                by the public;
            ``(2) the Federal agency finds that the public will be 
        served by the granting of the license, as indicated by the 
        applicant's intentions, plans, and ability to bring the 
        invention to practical application or otherwise promote the 
        invention's utilization by the public, and that the proposed 
        scope of exclusivity is not greater than reasonably necessary 
        to provide the incentive for bringing the invention to 
        practical utilization, as proposed by the applicant, or 
        otherwise to promote the invention's utilization by the public;
            ``(3) the applicant makes a commitment to achieve practical 
        utilization of the invention within a reasonable time, which 
        time may be extended by the agency upon the applicant's request 
        and the applicant's demonstration that the refusal of such 
        extension would be unreasonable;
            ``(4) granting the license will not tend to substantially 
        lessen competition or create or maintain a violation of the 
        Federal antitrust laws; and
            ``(5) in the case of an invention covered by a foreign 
        patent application or patent, the interests of the Federal 
        Government or United States industry in foreign commerce will 
        be enhanced.
    ``(b) Manufacture in United States.--A Federal agency shall 
normally grant a license under section 207(a)(2) to use or sell any 
federally owned invention in the United States only to a licensee who 
agrees that any products embodying the invention or produced through 
the use of the invention will be manufactured substantially in the 
United States.
    ``(c) Small Business.--First preference for the granting of any 
exclusive or partially exclusive licenses under section 207(a)(2) shall 
be given to small business firms having equal or greater likelihood as 
other applicants to bring the invention to practical application within 
a reasonable time.
    ``(d) Terms and Conditions.--Any licenses granted under section 
207(a)(2) shall contain such terms and conditions as the granting 
agency considers appropriate. Such terms and conditions shall include 
provisions--
            ``(1) retaining a nontransferrable, irrevocable, paid-up 
        license for any Federal agency to practice the invention or 
        have the invention practiced throughout the world by or on 
        behalf of the Government of the United States;
            ``(2) requiring periodic reporting on utilization of the 
        invention, and utilization efforts, by the licensee, but only 
        to the extent necessary to enable the Federal agency to 
        determine whether the terms of the license are being complied 
        with; and
            ``(3) empowering the Federal agency to terminate the 
        license in whole or in part if the agency determines that--
                    ``(A) the licensee is not executing its commitment 
                to achieve practical utilization of the invention, 
                including commitments contained in any plan submitted 
                in support of its request for a license, and the 
                licensee cannot otherwise demonstrate to the 
                satisfaction of the Federal agency that it has taken, 
                or can be expected to take within a reasonable time, 
                effective steps to achieve practical utilization of the 
                invention;
                    ``(B) the licensee is in breach of an agreement 
                described in subsection (b);
                    ``(C) termination is necessary to meet requirements 
                for public use specified by Federal regulations issued 
                after the date of the license, and such requirements 
                are not reasonably satisfied by the licensee; or
                    ``(D) the licensee has been found by a court of 
                competent jurisdiction to have violated the Federal 
                antitrust laws in connection with its performance under 
                the license agreement.
    ``(e) Public Notice.--No exclusive or partially exclusive license 
may be granted under section 207(a)(2) unless public notice of the 
intention to grant an exclusive or partially exclusive license on a 
federally owned invention has been provided in an appropriate manner at 
least 15 days before the license is granted, and the Federal agency has 
considered all comments received before the end of the comment period 
in response to that public notice. This subsection shall not apply to 
the licensing of inventions made under a cooperative research and 
development agreement entered into under section 12 of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a).
    ``(f) Plan.--No Federal agency shall grant any license under a 
patent or patent application on a federally owned invention unless the 
person requesting the license has supplied the agency with a plan for 
development and/or marketing of the invention, except that any such 
plan may be treated by the Federal agency as commercial and financial 
information obtained from a person and privileged and confidential and 
not subject to disclosure under section 552 of title 5 of the United 
States Code.''.
    (b) Conforming Amendment.--The item relating to section 209 in the 
table of sections for chapter 18 of title 35, United States Code, is 
amended to read as follows:

``209. Licensing federally owned inventions.''.

SEC. 4. TECHNICAL AMENDMENTS TO BAYH-DOLE ACT.

    Chapter 18 of title 35, United States Code (popularly known as the 
``Bayh-Dole Act''), is amended--
            (1) by amending section 202(e) to read as follows:
    ``(e) In any case when a Federal employee is a coinventor of any 
invention made with a nonprofit organization or small business firm, 
the Federal agency employing such coinventor may, for the purpose of 
consolidating rights in the invention and if it finds that it would 
expedite the development of the invention--
            ``(1) license or assign whatever rights it may acquire in 
        the subject invention to the nonprofit organization or small 
        business firm in accordance with the provisions of this 
        chapter; or
            ``(2) acquire any rights in the subject invention from the 
        nonprofit organization or small business firm, but only to the 
        extent the party from whom the rights are acquired voluntarily 
        enters into the transaction and no other transaction under this 
        chapter is conditioned on such acquisition.''; and
            (2) in section 207(a)--
                    (A) by striking ``patent applications, patents, or 
                other forms of protection obtained'' and inserting 
                ``inventions'' in paragraph (2); and
                    (B) by inserting ``, including acquiring rights for 
                the Federal Government in any invention, but only to 
                the extent the party from whom the rights are acquired 
                voluntarily enters into the transaction, to facilitate 
                the licensing of a federally owned invention'' after 
                ``or through contract'' in paragraph (3).

SEC. 5. TECHNICAL AMENDMENTS TO THE STEVENSON-WYDLER TECHNOLOGY 
              INNOVATION ACT OF 1980.

    The Stevenson-Wydler Technology Innovation Act of 1980 is amended--
            (1) in section 4(4) (15 U.S.C. 3703(4)), by striking 
        ``section 6 or section 8'' and inserting ``section 7 or 9'';
            (2) in section 4(6) (15 U.S.C. 3703(6)), by striking 
        ``section 6 or section 8'' and inserting ``section 7 or 9'';
            (3) in section 5(c)(11) (15 U.S.C. 3704(c)(11)), by 
        striking ``State of local governments'' and inserting ``State 
        or local governments'';
            (4) in section 9 (15 U.S.C. 3707), by--
                    (A) striking ``section 6(a)'' and inserting 
                ``section 7(a)'';
                    (B) striking ``section 6(b)'' and inserting 
                ``section 7(b)''; and
                    (C) striking ``section 6(c)(3)'' and inserting 
                ``section 7(c)(3)'';
            (5) in section 11(e)(1) (15 U.S.C. 3710(e)(1)), by striking 
        ``in cooperation with Federal Laboratories'' and inserting ``in 
        cooperation with Federal laboratories'';
            (6) in section 11(i) (15 U.S.C. 3710(i)), by striking ``a 
        gift under the section'' and inserting ``a gift under this 
        section'';
            (7) in section 14 (15 U.S.C. 3710c)--
                    (A) in subsection (a)(1)(A)(i), by inserting ``, if 
                the inventor's or coinventor's rights are assigned to 
                the United States'' after ``inventor or coinventors'';
                    (B) in subsection (a)(1)(B), by striking 
                ``succeeding fiscal year'' and inserting ``2 succeeding 
                fiscal years''; and
                    (C) in subsection (b)(2), by striking ``inventon'' 
                and inserting ``invention''; and
            (8) in section 22 (15 U.S.C. 3714), by striking ``sections 
        11, 12, and 13'' and inserting ''sections 12, 13, and 14''.

SEC. 6. REVIEW OF COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT 
              PROCEDURES.

    (a) Review.--Within 90 days after the date of the enactment of this 
Act, each Federal agency with a Federally funded laboratory that has in 
effect on that date of enactment one or more cooperative research and 
development agreements under section 12 of the Stevenson-Wydler 
Technology Innovation Act of 1980 (15 U.S.C. 3710a) shall report to the 
Committee on National Security of the National Science and Technology 
Council and the Congress on the general policies and procedures used by 
that agency to gather and consider the views of other agencies on--
            (1) joint work statements under section 12(c)(5)(C) or (D) 
        of the Stevenson-Wydler Technology Innovation Act of 1980 (15 
        U.S.C. 3710a(c)(5)(C) or (D)); or
            (2) in the case of laboratories described in section 
        12(d)(2)(A) of the Stevenson-Wydler Technology Innovation Act 
        of 1980 (15 U.S.C. 3710a(d)(2)(A)), cooperative research and 
        development agreements under such section 12,
with respect to major proposed cooperative research and development 
agreements that involve critical national security technology or may 
have a significant impact on domestic or international competitiveness.
    (b) Procedures.--Within one year after the date of the enactment of 
this Act, the Committee on National Security of the National Science 
and Technology Council, in conjunction with relevant Federal agencies 
and national laboratories, shall--
            (1) determine the adequacy of existing procedures and 
        methods for interagency coordination and awareness with respect 
        to cooperative research and development agreements described in 
        subsection (a); and
            (2) establish and distribute to appropriate Federal 
        agencies--
                    (A) specific criteria to indicate the necessity for 
                gathering and considering the views of other agencies 
                on joint work statements or cooperative research and 
                development agreements as described in subsection (a); 
                and
                    (B) additional procedures, if any, for carrying out 
                such gathering and considering of agency views with 
                respect to cooperative research and development 
                agreements described in subsection (a).
Procedures established under this subsection shall be designed to the 
extent possible to use or modify existing procedures, to minimize 
burdens on Federal agencies, to encourage industrial partnerships with 
national laboratories, and to minimize delay in the approval or 
disapproval of joint work statements and cooperative research and 
development agreements.
    (c) Limitation.--Nothing in this Act, nor any procedures 
established under this section shall provide to the Office of Science 
and Technology Policy, the National Science and Technology Council, or 
any Federal agency the authority to disapprove a cooperative research 
and development agreement or joint work statement, under section 12 of 
the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
3710a), of another Federal agency.

SEC. 7. INCREASED FLEXIBILITY FOR FEDERAL LABORATORY PARTNERSHIP 
              INTERMEDIARIES.

    Section 23 of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3715) is amended--
            (1) in subsection (a)(1) by inserting ``, institutions of 
        higher education as defined in section 1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a)), or educational 
        institutions within the meaning of section 2194 of title 10, 
        United States Code'' after ``small business firms''; and
            (2) in subsection (c) by inserting ``, institutions of 
        higher education as defined in section 1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a)), or educational 
        institutions within the meaning of section 2194 of title 10, 
        United States Code,'' after ``small business firms''.

SEC. 8. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN SUPPORT OF 
              BIOTECHNOLOGY PATENTS.

    (a) In General.--Not later than 6 months after the date of the 
enactment of this Act, the General Accounting Office, in consultation 
with the United States Patent and Trademark Office, shall conduct a 
study and submit a report to Congress on the potential risks to the 
United States biotechnology industry relating to biological deposits in 
support of biotechnology patents.
    (b) Contents.--The study conducted under this section shall 
include--
            (1) an examination of the risk of export and the risk of 
        third-party transfer of biological deposits, and the risks 
        posed by the change to 18-month publication requirements;
            (2) an analysis of comparative legal and regulatory 
        regimes; and
            (3) any related recommendations.
    (c) Consideration of Report.--In drafting regulations affecting 
biological deposits (including any modification of 37 Code of Federal 
Regulations 1.801 et seq.), the United States Patent and Trademark 
Office shall consider the recommendations of the study conducted under 
this section.

SEC. 9. PROVISIONAL APPLICATIONS.

    (a) Abandonment.--Section 111(b)(5) of title 35, United States 
Code, is amended to read as follows:
            ``(5) Abandonment.--Notwithstanding the absence of a claim, 
        upon timely request and as prescribed by the Commissioner, a 
        provisional application may be treated as an application filed 
        under subsection (a). Subject to section 119(e)(3) of this 
        title, if no such request is made, the provisional application 
        shall be regarded as abandoned 12 months after the filing date 
        of such application and shall not be subject to revival 
        thereafter.''.
    (b) Technical Amendment Relating to Weekends and Holidays.--Section 
119(e) of title 35, United States Code, is amended by adding at the end 
the following:
    ``(3) If the day that is 12 months after the filing date of a 
provisional application falls on a Saturday, Sunday, or Federal holiday 
within the District of Columbia, the period of pendency of the 
provisional application shall be extended to the next succeeding 
secular or business day.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to a provisional application filed on or after June 8, 1995.

            Passed the House of Representatives October 20, 1998.

            Attest:

                                                                 Clerk.