Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Proposed Rules 58377

proposes to approve a State rule 

implementing a Federal standard, and 

does not alter the relationship or the 

distribution of power and 

responsibilities established in the Clean 

Air Act. This proposed rule also is not 

subject to Executive Order 13045 

‘‘Protection of Children from 

Environmental Health Risks and Safety 

Risks’’ (62 FR 19885, April 23, 1997), 

because it is not economically 

significant. 

In reviewing SIP submissions, EPA’s 

role is to approve State choices, 

provided that they meet the criteria of 

the Clean Air Act. In this context, in the 

absence of a prior existing requirement 

for the State to use voluntary consensus 

standards (VCS), EPA has no authority 

to disapprove a SIP submission for 

failure to use VCS. It would thus be 

inconsistent with applicable law for 

EPA, when it reviews a SIP submission, 

to use VCS in place of a SIP submission 

that otherwise satisfies the provisions of 

the Clean Air Act. Thus, the 

requirements of section 12(d) of the 

National Technology Transfer and 

Advancement Act of 1995 (15 U.S.C. 

272 note) do not apply. This proposed 

rule does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Intergovernmental 

relations, Ozone, Reporting and 

recordkeeping requirements, Volatile 

organic compound.

Authority: 42 U.S.C. 7401 et seq.

Dated: September 10, 2004. 

Laura Yoshii, 

Acting Regional Administrator, Region IX.

[FR Doc. 04–21825 Filed 9–29–04; 8:45 am] 

BILLING CODE 6560–50–P

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[RME Docket Number R08–OAR–2004–CO–

0003; FRL–7822–4] 

Approval and Promulgation of Air 

Quality Implementation Plans; State of 

Colorado; Longmont Revised Carbon 

Monoxide Maintenance Plan

AGENCY: Environmental Protection 

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: EPA is proposing to take 

direct final action approving a State 

Implementation Plan (SIP) revision 

submitted by the State of Colorado. On 

April 12, 2004, the Governor of 

Colorado submitted a revised 

maintenance plan for the Longmont 

carbon monoxide (CO) maintenance 

area for the CO National Ambient Air 

Quality Standard (NAAQS). The revised 

maintenance plan contains revised 

transportation conformity motor vehicle 

emission budgets for the years 2010 

through 2014 and 2015 and beyond. 

EPA is proposing approval of the 

Longmont CO revised maintenance plan 

and the revised transportation 

conformity motor vehicle emission 

budgets. This action is being taken 

under section 110 of the Clean Air Act. 

In the ‘‘Rules and Regulations’’ section 

of this Federal Register, EPA is 

approving the State’s SIP revision as a 

direct final rule without prior proposal 

because the Agency views this as a 

noncontroversial SIP revision and 

anticipates no adverse comments. A 

detailed rationale for the approval is set 

forth in the preamble to the direct final 

rule. If EPA receives no adverse 

comments, EPA will not take further 

action on this proposed rule. If EPA 

receives adverse comments, EPA will 

withdraw the direct final rule and it will 

not take effect. EPA will address all 

public comments in a subsequent final 

rule based on this proposed rule. EPA 

will not institute a second comment 

period on this action. Any parties 

interested in commenting must do so at 

this time. Please note that if EPA 

receives adverse comment on an 

amendment, paragraph, or section of 

this rule and if that provision may be 

severed from the remainder of the rule, 

EPA may adopt as final those provisions 

of the rule that are not the subject of an 

adverse comment.

DATES: Written comments must be 

received on or before November 1, 2004.

ADDRESSES: Submit your comments, 

identified by RME Docket Number R08–

OAR–200_–CO–000_, by one of the 

following methods: 

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the on-line 

instructions for submitting comments. 

• Agency Web site: http://

docket.epa.gov/rmepub/index.jsp.

Regional Materials in EDOCKET (RME), 

EPA’s electronic public docket and 

comment system for regional actions, is 

EPA’s preferred method for receiving 

comments. Follow the on-line 

instructions for submitting comments. 

• E-mail: long.richard@epa.gov and 

russ.tim@epa.gov.

• Fax: (303) 312–6064 (please alert 

the individual listed in the FOR FURTHER

INFORMATION CONTACT if you are faxing 

comments). 

• Mail: Richard R. Long, Director, Air 

and Radiation Program, Environmental 

Protection Agency (EPA), Region 8, 

Mailcode 8P–AR, 999 18th Street, Suite 

300, Denver, Colorado 80202–2466. 

• Hand Delivery: Richard R. Long, 

Director, Air and Radiation Program, 

Environmental Protection Agency 

(EPA), Region 8, Mailcode 8P–AR, 999 

18th Street, Suite 300, Denver, Colorado 

80202–2466. Such deliveries are only 

accepted Monday through Friday, 8 a.m. 

to 4:55 p.m., excluding Federal 

holidays. Special arrangements should 

be made for deliveries of boxed 

information. 

Please see the direct final rule which 

is located in the Rules section of this 

Federal Register for detailed 

instructions on how to submit 

comments.

FOR FURTHER INFORMATION CONTACT: Tim 

Russ, Air and Radiation Program, 

Environmental Protection Agency 

(EPA), Region 8, Mailcode 8P–AR, 999 

18th Street, Suite 300, Denver, Colorado 

80202–2466, phone (303) 312–6479, and 

e-mail at: russ.tim@epa.gov.

SUPPLEMENTARY INFORMATION: See the 

information provided in the Direct Final 

action of the same title which is located 

in the Rules and Regulations section of 

this Federal Register.

Authority: 42 U.S.C. 7401 et seq.

Dated: September 22, 2004. 

Kerrigan G. Clough, 

Acting Regional Administrator, Region VIII.

[FR Doc. 04–21927 Filed 9–29–04; 8:45 am] 

BILLING CODE 6560–50–P

DEPARTMENT OF DEFENSE

48 CFR Parts 227 and 252

[DFARS Case 2001–D015] 

Defense Federal Acquisition 

Regulation Supplement; Patent 

Rights—Ownership by the Contractor

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for 

comments. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to add 

a clause pertaining to patent rights 

under contracts awarded to large 

business concerns for experimental, 

developmental, or research work. The 

clause is substantially the same as a 

clause that is presently found in the 

Federal Acquisition Regulation (FAR), 

but has been proposed for removal from 

the FAR because it applies only to DoD.

58378 Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Proposed Rules 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

November 1, 2004, to be considered in 

the formation of the final rule.

ADDRESSES: You may submit comments, 

identified by DFARS Case 2001-D015, 

using any of the following methods: 

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Defense Acquisition Regulations 

Web Site: http://emissary.acq.osd.mil/

dar/dfars.nsf/pubcomm. Follow the 

instructions for submitting comments. 

• E-mail: dfars@osd.mil. Include 

DFARS Case 2001-D015 in the subject 

line of the message. 

• Fax: Primary: (703) 602–7887; 

Alternate: (703) 602–0350. 

• Mail: Defense Acquisition 

Regulations Council, Attn: Ms. Amy 

Williams, OUSD (AT&L) DPAP (DAR), 

IMD 3C132, 3062 Defense Pentagon, 

Washington, DC 20301–3062. 

• Hand Delivery/Courier: Defense 

Acquisition Regulations Council, 

Crystal Square 4, Suite 200A, 241 18th 

Street, Arlington, VA 22202–3402. 

All comments received will be posted 

to http://emissary.acq.osd.mil/dar/

dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, (703) 602–0328.

SUPPLEMENTARY INFORMATION: 

A. Background 

The proposed FAR rule published at 

68 FR 31790 on May 28, 2003, under 

FAR Case 1999–402, included changes 

that would remove the clause presently 

found at FAR 52.227–12, Patent 

Rights—Retention by the Contractor 

(Long Form), as DoD is the only agency 

that uses the clause. The clause is 

included in contracts awarded to large 

business concerns for experimental, 

developmental, or research work. 

This proposed DFARS rule contains a 

clause that is substantially the same as 

the clause at FAR 52.227–12, but 

contains changes for consistency with 

current statutory provisions and the 

FAR changes proposed under FAR Case 

1999–402. 

• The definitions of ‘‘made’’ and 

‘‘subject invention’’ in paragraph (a) of 

the clause have been revised to reflect 

that the term ‘‘date of determination’’ is 

no longer defined in Title 7 of the 

United States Code. The substance of 

the previously codified definition has 

been incorporated into the definition of 

‘‘made,’’ and the obsolete statutory 

reference ‘‘7 U.S.C. 2401(d)’’ has been 

removed from the definition of ‘‘subject 

invention.’’

• ‘‘Domestic university’’ has been 

changed to ‘‘university’’ in the 

definition of ‘‘nonprofit organization’’ in 

paragraph (a) of the clause. The modifier 

‘‘domestic’’ does not appear in the 

statutory definition at 35 U.S.C. 201(i), 

the implementing Department of 

Commerce regulations at 37 CFR 

401.2(h), or the clause at FAR 52.227–

11. The term ‘‘nonprofit organization’’ is 

used in the proposed DFARS clause 

only to refer to the application of the 

clause at FAR 52.227–11, which is not 

limited to domestic nonprofit 

organizations. 

• The term ‘‘small business concern’’

has been excluded from the definitions 

in paragraph (a) of the clause. The 

proposed FAR changes under FAR Case 

1999–402 move the definition of ‘‘small 

business concern’’ from FAR Part 19 to 

Part 2, since the term is used in Part 19 

and Part 27. Accordingly, this definition 

will be made applicable throughout the 

FAR and DFARS via FAR 2.101 and the 

clause at FAR 52.202–1 and is 

unnecessary for inclusion in this 

DFARS clause. 

• In paragraph (b)(1) of the clause, the 

reference to 35 U.S.C. 203 has been 

excluded, consistent with the proposed 

changes to FAR 52.227–11(b)(1) under 

FAR Case 1999–402. Paragraph (b)(1) of 

the proposed DFARS clause provides 

that the contractor may retain 

ownership of a subject invention in 

accordance with the provisions of the 

clause. 35 U.S.C. 203 is referenced in 

paragraph (h) of the proposed clause; 

therefore, there is no need to restate this 

reference in paragraph (b) of the clause. 

• In paragraph (c) of the clause, the 

terms ‘‘provisional’’ and 

‘‘nonprovisional’’ have been used to 

describe a patent application to be filed, 

instead of the term ‘‘initial,’’ which is 

presently used in paragraph (c)(3) of the 

clause at FAR 52.227–12. The terms 

‘‘provisional’’ and ‘‘nonprovisional’’

have been used by the U.S. Patent and 

Trademark Office (see 35 U.S.C. 111) 

since 1995 (previously, there was no 

such thing as a ‘‘provisional’’

application). They are used in this 

clause to avoid any misunderstanding as 

to whether the term ‘‘initial’’ refers to 

either one or both of these types of 

filing. This change is consistent with the 

proposed change to paragraph (c)(3) of 

the clause at FAR 52.227–11 under FAR 

Case 1999–402. 

• In paragraph (d) of the clause, the 

term ‘‘convey’’ has been replaced with 

the term ‘‘assign’’ with regard to transfer 

of title to a subject invention. The term 

‘‘assign’’ is more technically accurate to 

describe the legal instrument used to 

transfer title or ownership. 

A prescription for the DFARS clause 

has been added at 227.303(2). The 

references to FAR 27.303(c) and (e), in 

the text at 227.303(2)(i)(B), correspond 

to the proposed FAR changes published 

on May 28, 2003, under FAR Case 1999–

402. 

This rule was not subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

DoD does not expect this rule to have 

a significant economic impact on a 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq., 

because the clause proposed for 

addition to the DFARS applies only to 

contracts with large business concerns 

and is substantially the same as a FAR 

clause that DoD is presently using. 

Therefore, DoD has not performed an 

initial regulatory flexibility analysis. 

DoD invites comments from small 

businesses and other interested parties. 

DoD also will consider comments from 

small entities concerning the affected 

DFARS subparts in accordance with 5 

U.S.C. 610. Such comments should be 

submitted separately and should cite 

DFARS Case 2001-D015. 

C. Paperwork Reduction Act

The Paperwork Reduction Act (44 

U.S.C. Chapter 35) applies, because this 

rule contains information collection 

requirements proposed for addition to 

the hours approved under Office of 

Management and Budget (OMB) Control 

Number 0704–0369. OMB approval for 

the additional hours will be obtained 

prior to publication of the final rule. 

1. Comments: DoD invites comments 

on: 

a. Whether the collection of 

information is necessary for the proper 

performance of the functions of DoD, 

including whether the information will 

have practical utility; 

b. The accuracy of the estimate of the 

burden of the proposed information 

collection; 

c. Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; and 

d. Ways to minimize the burden of the 

information collection on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. 

2. Title and OMB Number: Defense 

Federal Acquisition Regulation 

Supplement (DFARS) Part 227, Patents, 

Data, and Copyrights, and related 

provisions and clauses at DFARS 

252.227; OMB Control Number 0704–

0369. 

3. Needs and Uses: DoD needs this 

information to comply with 35 U.S.C. 

Chapter 18, Patent Rights in Inventions 

Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Proposed Rules 58379

Made with Federal Assistance. The 

information will enable the Government 

to promote the commercialization of 

patentable results of Federally funded 

research by granting contractors the title 

to patents made in whole or in part with 

Federal funds, in exchange for royaltyfree use by or on behalf of the 

Government. 

4. Affected Public: Large businesses. 

5. Annual Burden Hours: 1,266. 

6. Number of Respondents: 360. 

7. Responses Per Respondent:

Approximately 3. 

8. Annual Responses: 1,055. 

9. Average Burden Per Response: 1.2 

hours. 

10. Frequency: On occasion. 

11. Summary of Information 

Collection: The clause at DFARS 

252.227–70XX requires the contractor 

to—

a. Establish and maintain effective 

procedures for identifying and 

disclosing subject inventions; 

b. Disclose, in writing, all subject 

inventions to the contracting officer, 

and identify any publication, on sale, or 

public use of the inventions; 

c. Require its employees, by written 

agreement, to disclose subject 

inventions; 

d. Submit interim and final reports 

listing subject inventions; 

e. Report, upon request, on the 

utilization of subject inventions; and 

f. Notify the contracting officer, in 

writing, of the award of any subcontract 

containing a patents right clause.

List of Subjects in 48 CFR Parts 227 and 

252 

Government procurement.

Michele P. Peterson, 

Executive Editor, Defense Acquisition 

Regulations Council.

Therefore, DoD proposes to amend 48 

CFR Parts 227 and 252 as follows: 

1. The authority citation for 48 CFR 

Parts 227 and 252 continues to read as 

follows:

Authority: 41 U.S.C. 421 and 48 CFR 

Chapter 1.

PART 227—PATENTS, DATA, AND 

COPYRIGHTS 

2. Section 227.303 is revised to read 

as follows:

227.303 Contract clauses. 

(1) Use the following clauses in 

solicitations and contracts containing 

the clause at FAR 52.227–11, Patent 

Rights—Ownership by the Contractor: 

(i) 252.227–7034, Patents—

Subcontracts. 

(ii) 252.227–7039, Patents—Reporting 

of Subject Inventions. 

(2)(i) Use the clause at 252.227–70XX, 

Patent Rights—Ownership by the 

Contractor (Large Business), instead of 

the clause at FAR 52.227–11, in 

solicitations and contracts for 

experimental, developmental, or 

research work if—

(A) The contractor is other than a 

small business concern or nonprofit 

organization; and

(B) No alternative patent rights clause 

is used in accordance with FAR 

27.303(c) or (e). 

(ii) Use the clause with its Alternate 

I if—

(A) The acquisition of patent rights for 

the benefit of a foreign government is 

required under a treaty or executive 

agreement; 

(B) The agency head determines at the 

time of award that it would be in the 

national interest to acquire the right to 

sublicense foreign governments or 

international organizations pursuant to 

any existing or future treaty or 

agreement; or 

(C) Other rights are necessary to effect 

a treaty or agreement, in which case 

Alternate I may be appropriately 

modified. 

(iii) Use the clause with its Alternate 

II in long term contracts if necessary to 

effect treaty or agreements to be entered 

into.

227.304–4 [Removed]. 

3. Section 227.304–4 is removed.

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

4. Section 252.227–7034 is amended 

by revising the introductory text to read 

as follows:

252.227–7034 Patents—Subcontracts. 

As prescribed in 227.303(1)(i), use the 

following clause:

* * * * *

5. Section 252.227–70XX is added to 

read as follows:

252.227–70XX Patent Rights—Ownership 

by the Contractor (Large Business). 

As prescribed in 227.303(2), use the 

following clause:

PATENT RIGHTS—OWNERSHIP BY THE 

CONTRACTOR (LARGE BUSINESS) (XXX 

2004) 

(a) Definitions. As used in this clause—

Invention means—

(1) Any invention or discovery that is or 

may be patentable or otherwise protectable 

under Title 35 of the United States Code; or 

(2) Any variety of plant that is or may be 

protectable under the Plant Variety 

Protection Act (7 U.S.C. 2321, et seq.). 

Made—

(1) When used in relation to any invention 

other than a plant variety, means the 

conception or first actual reduction to 

practice of the invention; or 

(2) When used in relation to a plant 

variety, means that the Contractor has at least 

tentatively determined that the variety has 

been reproduced with recognized 

characteristics. 

Nonprofit organization means—

(1) A university or other institution of 

higher education; 

(2) An organization of the type described 

in the Internal Revenue Code at 26 U.S.C. 

501(c)(3) and exempt from taxation under 26 

U.S.C. 501(a); or 

(3) Any nonprofit scientific or educational 

organization qualified under a State 

nonprofit organization statute. 

Practical application means—

(1)(i) To manufacture, in the case of a 

composition or product; 

(ii) To practice, in the case of a process or 

method; or 

(iii) To operate, in the case of a machine 

or system; and 

(2) In each case, under such conditions as 

to establish that—

(i) The invention is being utilized; and 

(ii) The benefits of the invention are, to the 

extent permitted by law or Government 

regulations, available to the public on 

reasonable terms. 

Subject invention means any invention of 

the Contractor made in the performance of 

work under this contract. 

(b) Contractor’s rights.

(1) Ownership. The Contractor may elect to 

retain ownership of each subject invention 

throughout the world in accordance with the 

provisions of this clause. 

(2) License.

(i) The Contractor shall retain a 

nonexclusive royalty-free license throughout 

the world in each subject invention to which 

the Government obtains title, unless the 

Contractor fails to disclose the invention 

within the times specified in paragraph (c) of 

this clause. The Contractor’s license—

(A) Extends to any domestic subsidiaries 

and affiliates within the corporate structure 

of which the Contractor is a part; 

(B) Includes the right to grant sublicenses 

to the extent the Contractor was legally 

obligated to do so at the time of contract 

award; and 

(C) Is transferable only with the approval 

of the agency, except when transferred to the 

successor of that part of the Contractor’s 

business to which the invention pertains. 

(ii) The agency—

(A) May revoke or modify the Contractor’s 

domestic license to the extent necessary to 

achieve expeditious practical application of 

the subject invention pursuant to an 

application for an exclusive license 

submitted in accordance with 37 CFR Part 

404 and agency licensing regulations; 

(B) Will not revoke the license in that field 

of use or the geographical areas in which the 

Contractor has achieved practical application 

and continues to make the benefits of the 

invention reasonably accessible to the public; 

and 

(C) May revoke or modify the license in 

any foreign country to the extent the 

Contractor, its licensees, or the domestic 

subsidiaries or affiliates have failed to 

58380 Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Proposed Rules 

achieve practical application in that foreign 

country. 

(iii) Before revoking or modifying the 

license, the agency—

(A) Will furnish the Contractor a written 

notice of its intention to revoke or modify the 

license; and 

(B) Will allow the Contractor 30 days (or 

such other time as the funding agency may 

authorize for good cause shown by the 

Contractor) after the notice to show cause 

why the license should not be revoked or 

modified. 

(iv) The Contractor has the right to appeal, 

in accordance with 37 CFR Part 404 and 

agency regulations, concerning the licensing 

of Government-owned inventions, any 

decision concerning the revocation or 

modification of the license. 

(c) Contractor’s obligations.

(1) The Contractor shall—

(i) Disclose, in writing, each subject 

invention to the Contracting Officer within 2 

months after the inventor discloses it in 

writing to Contractor personnel responsible 

for patent matters, or within 6 months after 

the Contractor first becomes aware that a 

subject invention has been made, whichever 

is earlier; 

(ii) Include in the disclosure—

(A) The inventor(s) and the contract under 

which the invention was made; 

(B) Sufficient technical detail to convey a 

clear understanding of the invention; and 

(C) Any publication, on sale (i.e., sale or 

offer for sale), or public use of the invention 

and whether a manuscript describing the 

invention has been submitted for publication 

and, if so, whether it has been accepted for 

publication; and

(iii) After submission of the disclosure, 

promptly notify the Contracting Officer of the 

acceptance of any manuscript describing the 

invention for publication and of any on sale 

or public use. 

(2) The Contractor shall elect in writing 

whether or not to retain ownership of any 

subject invention by notifying the 

Contracting Officer at the time of disclosure 

or within 8 months of disclosure, as to those 

countries (including the United States) in 

which the Contractor will retain ownership. 

However, in any case where publication, on 

sale, or public use has initiated the 1-year 

statutory period during which valid patent 

protection can be obtained in the United 

States, the agency may shorten the period of 

election of title to a date that is no more than 

60 days prior to the end of the statutory 

period. 

(3) The Contractor shall—

(i) File either a provisional or a 

nonprovisional patent application on an 

elected subject invention within 1 year after 

election, provided that in all cases the 

application is filed prior to the end of any 

statutory period wherein valid patent 

protection can be obtained in the United 

States after a publication, on sale, or public 

use; 

(ii) File a nonprovisional application 

within 10 months of the filing of any 

provisional application; and 

(iii) File patent applications in additional 

countries or international patent offices 

within either 10 months of the first filed 

patent application (whether provisional or 

nonprovisional) or 6 months from the date 

the Commissioner of Patents grants 

permission to file foreign patent applications 

where such filing has been prohibited by a 

Secrecy Order. 

(4) The Contractor may request extensions 

of time for disclosure, election, or filing 

under paragraphs (c)(1), (2), and (3) of this 

clause. The Contracting Officer will normally 

grant the extension unless there is reason to 

believe the extension would prejudice the 

Government’s interests. 

(d) Government’s rights.

(1) Ownership. The Contractor shall assign 

to the agency, upon written request, title to 

any subject invention—

(i) If the Contractor elects not to retain title 

to a subject invention; 

(ii) If the Contractor fails to disclose or 

elect the subject invention within the times 

specified in paragraph (c) of this clause and 

the agency requests title within 60 days after 

learning of the Contractor’s failure to report 

or elect within the specified times; 

(iii) In those countries in which the 

Contractor fails to file patent applications 

within the times specified in paragraph (c) of 

this clause, provided that, if the Contractor 

has filed a patent application in a country 

after the times specified in paragraph (c) of 

this clause, but prior to its receipt of the 

written request of the agency, the Contractor 

shall continue to retain ownership in that 

country; and 

(iv) In any country in which the Contractor 

decides not to continue the prosecution of 

any application for, to pay the maintenance 

fees on, or defend in reexamination or 

opposition proceeding on, a patent on a 

subject invention. 

(2) License. If the Contractor retains 

ownership of any subject invention, the 

Government shall have a nonexclusive, 

nontransferable, irrevocable, paid-up license 

to practice, or have practiced for or on behalf 

of the United States, the subject invention 

throughout the world. 

(e) Contractor action to protect the 

Government’s interest.

(1) The Contractor shall execute or have 

executed and promptly deliver to the agency 

all instruments necessary to—

(i) Establish or confirm the rights the 

Government has throughout the world in 

those subject inventions in which the 

Contractor elects to retain ownership; and 

(ii) Assign title to the agency when 

requested under paragraph (d)(1) of this 

clause and enable the Government to obtain 

patent protection for that subject invention in 

any country. 

(2) The Contractor shall—

(i) Require, by written agreement, its 

employees, other than clerical and 

nontechnical employees, to—

(A) Disclose each subject invention 

promptly in writing to personnel identified 

as responsible for the administration of 

patent matters, so that the Contractor can 

comply with the disclosure provisions in 

paragraph (c) of this clause; and 

(B) Provide the disclosure in the 

Contractor’s format, which should require, as 

a minimum, the information required by 

paragraph (c)(1) of this clause; 

(ii) Instruct its employees, through 

employee agreements or other suitable 

educational programs, as to the importance of 

reporting inventions in sufficient time to 

permit the filing of patent applications prior 

to U.S. or statutory foreign bars; and 

(iii) Execute all papers necessary to file 

patent applications on subject inventions and 

to establish the Government’s rights in the 

subject inventions. 

(3) The Contractor shall notify the 

Contracting Officer of any decisions not to 

file a nonprovisonal patent application, 

continue the prosecution of a patent 

application, pay maintenance fees, or defend 

in a reexamination or opposition proceeding 

on a patent, in any country, not less than 30 

days before the expiration of the response or 

filing period required by the relevant patent 

office. 

(4) The Contractor shall include, within the 

specification of any United States 

nonprovisional patent application and any 

patent issuing thereon covering a subject 

invention, the following statement: ‘‘This 

invention was made with Government 

support under (identify the contract) 

awarded by (identify the agency). The 

Government has certain rights in this 

invention.’’

(5) The Contractor shall—

(i) Establish and maintain active and 

effective procedures to ensure that subject 

inventions are promptly identified and 

disclosed to Contractor personnel responsible 

for patent matters; 

(ii) Include in these procedures the 

maintenance of—

(A) Laboratory notebooks or equivalent 

records and other records as are reasonably 

necessary to document the conception and/

or the first actual reduction to practice of 

subject inventions; and 

(B) Records that show that the procedures 

for identifying and disclosing the inventions 

are followed; and 

(iii) Upon request, furnish the Contracting 

Officer a description of these procedures for 

evaluation and for determination as to their 

effectiveness. 

(6) The Contractor shall, when licensing a 

subject invention, arrange to—

(i) Avoid royalty charges on acquisitions 

involving Government funds, including 

funds derived through the Government’s 

Military Assistance Program or otherwise 

derived through the Government; 

(ii) Refund any amounts received as royalty 

charges on the subject inventions in 

acquisitions for, or on behalf of, the 

Government; and 

(iii) Provide for the refund in any 

instrument transferring rights in the 

invention to any party. 

(7) The Contractor shall furnish to the 

Contracting Officer the following: 

(i) Interim reports every 12 months (or any 

longer period as may be specified by the 

Contracting Officer) from the date of the 

contract, listing subject inventions during 

that period and stating that all subject 

inventions have been disclosed or that there 

are no subject inventions. 

(ii) A final report, within 3 months after 

completion of the contracted work, listing all 

subject inventions or stating that there were 

Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Proposed Rules 58381

no subject inventions, and listing all 

subcontracts at any tier containing a patent 

rights clause or stating that there were no 

subcontracts. 

(8)(i) The Contractor shall promptly notify 

the Contracting Officer in writing upon the 

award of any subcontract at any tier 

containing a patent rights clause by 

identifying—

(A) The subcontractor; 

(B) The applicable patent rights clause; 

(C) The work to be performed under the 

subcontract; and 

(D) The dates of award and estimated 

completion. 

(ii) The Contractor shall furnish, upon 

request, a copy of the subcontract, and no 

more frequently than annually, a listing of 

the subcontracts that have been awarded. 

(9) In the event of a refusal by a 

prospective subcontractor to accept one of 

the clauses specified in paragraph (l)(1) of 

this clause, the Contractor—

(i) Shall promptly submit a written notice 

to the Contracting Officer setting forth the 

subcontractor’s reasons for the refusal and 

other pertinent information that may 

expedite disposition of the matter; and 

(ii) Shall not proceed with that subcontract 

without the written authorization of the 

Contracting Officer. 

(10) The Contractor shall provide to the 

Contracting Officer, upon request, the 

following information for any subject 

invention for which the Contractor has 

retained ownership: 

(i) Filing date. 

(ii) Serial number and title. 

(iii) A copy of any patent application 

(including an English-language version if 

filed in a language other than English). 

(iv) Patent number and issue date. 

(11) The Contractor shall furnish to the 

Government, upon request, an irrevocable 

power to inspect and make copies of any 

patent application file. 

(f) Reporting on utilization of subject 

inventions.

(1) The Contractor shall—

(i) Submit upon request periodic reports no 

more frequently than annually on the 

utilization of a subject invention or on efforts 

in obtaining utilization of the subject 

invention that are being made by the 

Contractor or its licensees or assignees;

(ii) Include in the reports information 

regarding the status of development, date of 

first commercial sale or use, gross royalties 

received by the Contractor, and other 

information as the agency may reasonably 

specify; and 

(iii) Provide additional reports that the 

agency may request in connection with any 

march-in proceedings undertaken by the 

agency in accordance with paragraph (h) of 

this clause. 

(2) To the extent permitted by law, the 

agency shall not disclose the information 

provided under paragraph (f)(1) of this clause 

to persons outside the Government without 

the Contractor’s permission, if the data or 

information is considered by the Contractor 

or its licensee or assignee to be ‘‘privileged 

and confidential’’ (see 5 U.S.C. 552(b)(4)) and 

is so marked. 

(g) Preference for United States industry.

Notwithstanding any other provision of this 

clause, the Contractor agrees that neither the 

Contractor nor any assignee shall grant to any 

person the exclusive right to use or sell any 

subject invention in the United States unless 

the person agrees that any products 

embodying the subject invention or produced 

through the use of the subject invention will 

be manufactured substantially in the United 

States. However, in individual cases, the 

agency may waive the requirement for an 

exclusive license agreement upon a showing 

by the Contractor or its assignee that—

(1) Reasonable but unsuccessful efforts 

have been made to grant licenses on similar 

terms to potential licensees that would be 

likely to manufacture substantially in the 

United States; or 

(2) Under the circumstances, domestic 

manufacture is not commercially feasible. 

(h) March-in rights. The Contractor 

acknowledges that, with respect to any 

subject invention in which it has retained 

ownership, the agency has the right to 

require licensing pursuant to 35 U.S.C. 203 

and 210(c), 37 CFR 401.6, and any 

supplemental regulations of the agency in 

effect on the date of contract award. 

(i) Other inventions. Nothing contained in 

this clause shall be deemed to grant to the 

Government any rights with respect to any 

invention other than a subject invention. 

(j) Examination of records relating to 

inventions.

(1) The Contracting Officer or any 

authorized representative shall, until 3 years 

after final payment under this contract, have 

the right to examine any books (including 

laboratory notebooks), records, and 

documents of the Contractor relating to the 

conception or first reduction to practice of 

inventions in the same field of technology as 

the work under this contract to determine 

whether—

(i) Any inventions are subject inventions; 

(ii) The Contractor has established 

procedures required by paragraph (e)(5) of 

this clause; and 

(iii) The Contractor and its inventors have 

complied with the procedures. 

(2) If the Contracting Officer learns of an 

unreported Contractor invention that the 

Contracting Officer believes may be a subject 

invention, the Contractor shall be required to 

disclose the invention to the agency for a 

determination of ownership rights. 

(3) Any examination of records under this 

paragraph (j) shall be subject to appropriate 

conditions to protect the confidentiality of 

the information involved. 

(k) Withholding of payment (this 

paragraph does not apply to subcontracts).

(1) Any time before final payment under 

this contract, the Contracting Officer may, in 

the Government’s interest, withhold payment 

until a reserve not exceeding $50,000 or 5 

percent of the amount of the contract, 

whichever is less, is set aside if, in the 

Contracting Officer’s opinion, the Contractor 

fails to—

(i) Establish, maintain, and follow effective 

procedures for identifying and disclosing 

subject inventions pursuant to paragraph 

(e)(5) of this clause; 

(ii) Disclose any subject invention pursuant 

to paragraph (c)(1) of this clause; 

(iii) Deliver acceptable interim reports 

pursuant to paragraph (e)(7)(i) of this clause; 

or 

(iv) Provide the information regarding 

subcontracts pursuant to paragraph (e)(8) of 

this clause. 

(2) The reserve or balance shall be 

withheld until the Contracting Officer has 

determined that the Contractor has rectified 

whatever deficiencies exist and has delivered 

all reports, disclosures, and other 

information required by this clause.

(3) The Government will not make final 

payment under this contract before the 

Contractor delivers to the Contracting 

Officer—

(i) All disclosures of subject inventions 

required by paragraph (c)(1) of this clause; 

(ii) An acceptable final report pursuant to 

paragraph (e)(7)(ii) of this clause; and 

(iii) All past due confirmatory instruments. 

(4) The Contracting Officer may decrease or 

increase the sums withheld up to the 

maximum authorized in paragraph (k)(1) of 

this clause. No amount shall be withheld 

under this paragraph while the amount 

specified by this paragraph is being withheld 

under other provisions of the contract. The 

withholding of any amount or the subsequent 

payment thereof shall not be construed as a 

waiver of any Government right. 

(l) Subcontracts. 

(1) The Contractor—

(i) Shall include the substance of the Patent 

Rights—Ownership by the Contractor clause 

set forth at 52.227–11 of the Federal 

Acquisition Regulation (FAR), in all 

subcontracts for experimental, 

developmental, or research work to be 

performed by a small business concern or 

nonprofit organization; and 

(ii) Shall include the substance of this 

clause, including this paragraph (l), in all 

other subcontracts for experimental, 

developmental, or research work, unless a 

different patent rights clause is required by 

FAR 27.303. 

(2) For subcontracts at any tier—

(i) The patents rights clause included in 

the subcontract shall retain all references to 

the Government and shall provide to the 

subcontractor all the rights and obligations 

provided to the Contractor in the clause. The 

Contractor shall not, as consideration for 

awarding the subcontract, obtain rights in the 

subcontractor’s subject inventions; and 

(ii) The Government, the Contractor, and 

the subcontractor agree that the mutual 

obligations of the parties created by this 

clause constitute a contract between the 

subcontractor and the Government with 

respect to those matters covered by this 

clause. However, nothing in this paragraph is 

intended to confer any jurisdiction under the 

Contract Disputes Act in connection with 

proceedings under paragraph (h) of this 

clause.

(End of clause)

ALTERNATE I (XXX 2004) 

As prescribed in 227.303(2)(ii), add the 

following paragraph (b)(2)(v) to the basic 

clause: 

(v) The license shall include the right of 

the Government to sublicense foreign 

governments, their nationals, and 

58382 Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Proposed Rules 

international organizations pursuant to the 

following treaties or international 

agreements: lll

[* Contracting Officer to complete with the 

names of applicable existing treaties or 

international agreements. This paragraph is 

not intended to apply to treaties or 

agreements that are in effect on the date of 

the award but are not listed.]

ALTERNATE II (XXX 2004) 

As prescribed in 227.303(2)(iii), add the 

following paragraph (b)(2)(v) to the basic 

clause: 

(v) The agency reserves the right to—

(A) Unilaterally amend this contract to 

identify specific treaties or international 

agreements entered into or to be entered into 

by the Government after the effective date of 

this contract; and 

(B) Exercise those license or other rights 

that are necessary for the Government to 

meet its obligations to foreign governments, 

their nationals, and international 

organizations under any treaties or 

international agreement with respect to 

subject inventions made after the date of the 

amendment.

6. Section 252.227–7039 is amended 

by revising the introductory text to read 

as follows:

252.227–7039 Patents—Reporting of 

Subject Inventions. 

As prescribed in 227.303(1)(ii), use 

the following clause:

* * * * *

[FR Doc. 04–21853 Filed 9–29–04; 8:45 am] 

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