52.227-11 Patent Rights-Ownership by the

Contractor.

As prescribed in 27.303(b)(1), insert the following clause:

Patent Rights-Ownership by the Contractor (May 2014)

(a) As used in this clauseInvention means any invention or discovery that is or may be patentable or otherwise protectable

under title 35 of the U.S. Code, or any variety of plant that is or may be protectable under the Plant

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

Made means-

(1) When used in relation to any invention other than a plant variety, the conception or first actual

reduction to practice of the invention; or

(2) When used in relation to a plant variety, that the Contractor has at least tentatively determined

that the variety has been reproduced with recognized characteristics.

Nonprofit organization means a university or other institution of higher education or an organization

of the type described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c))

and exempt from taxation under section 501(a) of the Internal Revenue Code (26 U.S.C. 501(a)), or

any nonprofit scientific or educational organization qualified under a State nonprofit organization

statute.

"Practical application" means to manufacture, in the case of a composition of product; to practice, in

the case of a process or method; or to operate, in the case of a machine or system; and, in each case,

under such conditions as to establish that the invention is being utilized and that its benefits are, to

the extent permitted by law or Government regulations, available to the public on reasonable terms.

Subject invention means any invention of the Contractor made in the performance of work under

this contract.

(b) Contractor’s rights.

(1) Ownership. The Contractor may 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 extends

to any domestic subsidiaries and affiliates within the corporate structure of which the Contractor is

a part, and includes the right to grant sublicenses to the extent the Contractor was legally obligated

to do so at contract award. The license is transferable only with the written 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 Contractor’s license may be revoked or modified by the agency to the extent necessary to

achieve expeditious practical application of the subject invention in a particular country in

accordance with the procedures in FAR 27.302(i)(2) and 27.304-1(f).

(c) Contractor’s obligations.

(1) The Contractor shall 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. The disclosure shall identify the inventor(s) and this contract under which the subject

invention was made. It shall be sufficiently complete in technical detail to convey a clear

understanding of the subject invention. The disclosure shall also identify any publication, on sale

(i.e., sale or offer for sale), or public use of the subject invention, or whether a manuscript

describing the subject invention has been submitted for publication and, if so, whether it has been

accepted for publication. In addition, after disclosure to the agency, the Contractor shall promptly

notify the Contracting Officer of the acceptance of any manuscript describing the subject invention

for publication and 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 within 2 years of disclosure to the agency. 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 period for election of title may be

shortened by the agency to a date that is no more than 60 days prior to the end of the statutory

period.

(3) The Contractor shall file either a provisional or a nonprovisional patent application or a Plant

Variety Protection Application on an elected subject invention within 1 year after election. However,

in any case where a 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 Contractor shall file

the application prior to the end of that statutory period. If the Contractor files a provisional

application, it shall file a nonprovisional application within 10 months of the filing of the provisional

application. The Contractor shall 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 permission is granted by the Commissioner of Patents 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), (c)(2), and (c)(3) of this clause.

(d) Government’s rights-

(1) Ownership. The Contractor shall assign to the agency, on written request, title to any subject

invention-

(i) If the Contractor fails to disclose or elect ownership to the subject invention within the times

specified in paragraph (c) of this clause, or elects not to retain ownership; provided, that the agency

may request title only within 60 days after learning of the Contractor's failure to disclose or elect

within the specified times.
(ii) In those countries in which the Contractor fails to file patent applications within the times

specified in paragraph (c) of this clause; provided, however, that if the Contractor has filed a patent

application in a country after the times specified in paragraph (c) of this clause, but prior to its

receipt of the written request of the agency, the Contractor shall continue to retain ownership in

that country.

(iii) 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

its behalf, 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) of this clause and to enable the

Government to obtain patent protection and plant variety protection for that subject invention in any

country.

(2) The Contractor shall require, by written agreement, its employees, other than clerical and

nontechnical employees, to disclose promptly in writing to personnel identified as responsible for the

administration of patent matters and in the Contractor's format, each subject invention in order that

the Contractor can comply with the disclosure provisions of paragraph (c) of this clause, and to

execute all papers necessary to file patent applications on subject inventions and to establish the

Government's rights in the subject inventions. The disclosure format should require, as a minimum,

the information required by paragraph (c)(1) of this clause. The Contractor shall instruct such

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 foreign statutory bars.

(3) The Contractor shall notify the Contracting Officer of any decisions not to file a nonprovisional

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

or plant variety protection application and any patent or plant variety protection certificate 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 the invention."

(f) Reporting on utilization of subject inventions. The Contractor shall submit, on request, periodic

reports no more frequently than annually on the utilization of a subject invention or on efforts at

obtaining utilization of the subject invention that are being made by the Contractor or its licensees

or assignees. The reports shall include information regarding the status of development, date of first
commercial sale or use, gross royalties received by the Contractor, and other data and information

as the agency may reasonably specify. The Contractor also shall provide additional reports as may

be requested by the agency in connection with any march-in proceeding undertaken by the agency

in accordance with paragraph (h) of this clause. The Contractor also shall mark any utilization report

as confidential/proprietary to help prevent inadvertent release outside the Government. As required

by 35 U.S.C. 202(c)(5), the agency will not disclose that information to persons outside the

Government without the Contractor’s permission.

(g) Preference for United States industry. Notwithstanding any other provision of this clause, 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 requirement for an agreement

may be waived by the agency upon a showing by the Contractor or its assignee that reasonable but

unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that

would be likely to manufacture substantially in the United States, or that under the circumstances

domestic manufacture is not commercially feasible.

(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), and in accordance with the procedures in 37 CFR 401.6 and any supplemental

regulations of the agency in effect on the date of contract award.

(i) Special provisions for contracts with nonprofit organizations. If the Contractor is a nonprofit

organization, it shall-

(1) Not assign rights to a subject invention in the United States without the written approval of the

agency, except where an assignment is made to an organization that has as one of its primary

functions the management of inventions, provided, that the assignee shall be subject to the same

provisions as the Contractor;

(2) Share royalties collected on a subject invention with the inventor, including Federal employee coinventors (but through their agency if the agency deems it appropriate) when the subject invention

is assigned in accordance with 35U.S.C.202(e) and 37 CFR 401.10;

(3) Use the balance of any royalties or income earned by the Contractor with respect to subject

inventions, after payment of expenses (including payments to inventors) incidental to the

administration of subject inventions for the support of scientific research or education; and

(4) Make efforts that are reasonable under the circumstances to attract licensees of subject

inventions that are small business concerns, and give a preference to a small business concern when

licensing a subject invention if the Contractor determines that the small business concern has a plan

or proposal for marketing the invention which, if executed, is equally as likely to bring the invention

to practical application as any plans or proposals from applicants that are not small business

concerns; provided, that the Contractor is also satisfied that the small business concern has the

capability and resources to carry out its plan or proposal. The decision whether to give a preference

in any specific case will be at the discretion of the Contractor.

(5) Allow the Secretary of Commerce to review the Contractor’s licensing program and decisions

regarding small business applicants, and negotiate changes to its licensing policies, procedures, or

practices with the Secretary of Commerce when the Secretary’s review discloses that the Contractor

could take reasonable steps to more effectively implement the requirements of paragraph (i)(4) of
this clause.

(j) Communications. [Complete according to agency instructions.]

(k) Subcontracts.

(1) The Contractor shall include the substance of this clause, including this paragraph (k), in all

subcontracts for experimental, developmental, or research work to be performed by a small business

concern or nonprofit organization.

(2) The Contractor shall include in all other subcontracts for experimental, developmental, or

research work the substance of the patent rights clause required by FAR subpart 27.3.

(3) At all tiers, the patent rights clause must be modified to identify the parties as follows:

references to the Government are not changed, and the subcontractor has all rights and obligations

of the Contractor in the clause. The Contractor shall not, as part of the consideration for awarding

the subcontract, obtain rights in the subcontractor’s subject inventions.

(4) In subcontracts, at any tier, the agency, the subcontractor, and the Contractor agree that the

mutual obligations of the parties created by this clause constitute a contract between the

subcontractor and the agency with respect to the matters covered by the clause; provided, however,

that nothing in this paragraph is intended to confer any jurisdiction under the Contract Disputes

statute in connection with proceedings under paragraph (h) of this clause.

(End of clause)

Alternate I (Jun 1989). As prescribed in 27.303 (b)(3), add the following sentence at the end of

paragraph (d)(2) of the basic clause:

The license shall include the right of the Government to sublicense foreign governments, their

nationals and international organizations pursuant to the following treaties or international

agreements: _______*

[*Contracting Officer complete with the names of applicable existing treaties or international

agreements. The above language 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 (Dec 2007). As prescribed in 27.303 (b)(4), add the following sentence at the end of

paragraph (d)(2) of the basic clause:

The agency reserves the right to unilaterally amend this contract to identify specific treaties or

international agreements entered into by the Government before or after the effective date of the

contract and effectuate those license or other rights that are necessary for the Government to meet

its obligations to foreign governments, their nationals, and international organizations under the

treaties or international agreements with respect to subject inventions made after the date of the

amendment.

Alternate III (Jun 1989). As prescribed in 27.303 (b)(5), substitute the following paragraph (i)(3) in

place of paragraph (i)(3) of the basic clause:

(3) After payment of patenting costs, licensing costs, payments to inventors, and other expenses
incidental to the administration of subject inventions, the balance of any royalties or income earned

and retained by the Contractor during any fiscal year on subject inventions under this or any

successor contract containing the same requirement, up to any amount equal to 5 percent of the

budget of the facility for that fiscal year, shall be used by the Contractor for the scientific research,

development, and education consistent with the research and development mission and objectives of

the facility, including activities that increase the licensing potential of other inventions of the facility.

If the balance exceeds 5 percent, 75 percent of the excess above 5 percent shall be paid by the

Contractor to the Treasury of the United States and the remaining 25 percent shall be used by the

Contractor only for the same purposes as described above. To the extent it provides the most

effective technology transfer, the licensing of subject inventions shall be administered by Contractor

employees on location at the facility.

Alternate IV (Jun 1989). As prescribed in 27.303 (b)(6), include the following paragraph (e)(5) in

paragraph (e) of the basic clause:

(5) The Contractor shall establish and maintain active and effective procedures to ensure that

subject inventions are promptly identified and timely disclosed, and shall submit a description of the

procedures to the Contracting Officer so that the Contracting Officer may evaluate and determine

their effectiveness.

Alternate V (Dec 2007). As prescribed in 27.303 (b)(7), include the following paragraph (d)(3) in

paragraph (d) of the basic clause:

(d)(3) CRADA licensing. If the Contractor performs services at a Government owned and operated

laboratory or at a Government owned and Contractor operated laboratory directed by the

Government to fulfill the Government’s obligations under a Cooperative Research and Development

Agreement (CRADA) authorized by 15 U.S.C. 3710a, the Government may require the Contractor to

negotiate an agreement with the CRADA collaborating party or parties regarding the allocation of

rights to any subject invention the Contractor makes, solely or jointly, under the CRADA. The

agreement shall be negotiated prior to the Contractor undertaking the CRADA work or, with the

permission of the Government, upon the identification of a subject invention. In the absence of such

an agreement, the Contractor agrees to grant the collaborating party or parties an option for a

license in its inventions of the same scope and terms set forth in the CRADA for inventions made by

the Government.

Parent topic: 52.227 [Reserved]