PUBLIC LAW 106–404—NOV. 1, 2000

TECHNOLOGY TRANSFER

COMMERCIALIZATION ACT OF 2000

114 STAT. 1742 PUBLIC LAW 106–404—NOV. 1, 2000

Public Law 106–404

106th Congress

An Act

To improve the ability of Federal agencies to license federally owned inventions.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Technology Transfer Commercialization Act of 2000’’.

SEC. 2. FINDINGS.

The Congress finds that—

(1) the importance of linking our unparalleled network

of over 700 Federal laboratories and our Nation’s universities

with United States industry continues to hold great promise

for our future economic prosperity;

(2) the enactment of the Bayh-Dole Act in 1980 was a

landmark change in United States technology policy, and its

success provides a framework for removing bureaucratic barriers and for simplifying the granting of licenses for inventions

that are now in the Federal Government’s patent portfolio;

(3) Congress has demonstrated a commitment over the

past 2 decades to fostering technology transfer from our Federal

laboratories and to promoting public/private sector partnerships to enhance our international competitiveness;

(4) Federal technology transfer activities have strengthened

the ability of United States industry to compete in the global

marketplace; developed a new paradigm for greater collaboration among the scientific enterprises that conduct our Nation’s

research and development—government, industry, and universities; and improved the quality of life for the American people,

from medicine to materials;

(5) the technology transfer process must be made ‘‘industry

friendly’’ for companies to be willing to invest the significant

time and resources needed to develop new products, processes,

and jobs using federally funded inventions; and

(6) Federal technology licensing procedures should balance

the public policy needs of adequately protecting the rights

of the public, encouraging companies to develop existing government inventions, and making the entire system of licensing

government technologies more consistent and simple.

SEC. 3. 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

15 USC 3701

note.

15 USC 3701

note.

Technology

Transfer

Commercialization Act of 2000.

Nov. 1, 2000

[H.R. 209]

PUBLIC LAW 106–404—NOV. 1, 2000 114 STAT. 1743

a license to an invention which is federally owned, for which a

patent application was filed before the signing of the agreement,

and directly within the scope of the work under the agreement,’’

after ‘‘under the agreement,’’.

SEC. 4. LICENSING FEDERALLY OWNED INVENTIONS.

(a) AMENDMENT.—Section 209 of title 35, United States Code,

is amended to read as follows:

‘‘§ 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 application, 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

application 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, and shall include

provisions—

‘‘(1) retaining a nontransferrable, irrevocable, paid-up

license for any Federal agency to practice the invention or

114 STAT. 1744 PUBLIC LAW 106–404—NOV. 1, 2000

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,

except that any such report shall 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; 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 application 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 application 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 or marketing of the invention, except that

any such plan shall 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.’’.

PUBLIC LAW 106–404—NOV. 1, 2000 114 STAT. 1745

SEC. 5. MODIFICATION OF STATEMENT OF POLICY AND OBJECTIVES

FOR CHAPTER 18 OF TITLE 35, UNITED STATES CODE.

Section 200 of title 35, United States Code, is amended by

striking ‘‘enterprise;’’ and inserting ‘‘enterprise without unduly

encumbering future research and discovery;’’.

SEC. 6. 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, a small business firm, or a non-Federal inventor, 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, small business firm, or non-Federal inventor in accordance with the provisions of this chapter; or

‘‘(2) acquire any rights in the subject invention from the

nonprofit organization, small business firm, or non-Federal

inventor, 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 and

administering royalties to 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. 7. 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’’;

114 STAT. 1746 PUBLIC LAW 106–404—NOV. 1, 2000

(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 ‘‘, other than

payments of patent costs as delineated by a license or

assignment agreement,’’ after ‘‘or other payments’’;

(B) 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’’;

(C) in subsection (a)(1)(B), by striking ‘‘succeeding fiscal

year’’ and inserting ‘‘2 succeeding fiscal years’’;

(D) in subsection (a)(2), by striking ‘‘Government-operated laboratories of the’’; and

(E) 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. 8. 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 the 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 1 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

Deadline.

Deadline.

15 USC 3701a

note.

PUBLIC LAW 106–404—NOV. 1, 2000 114 STAT. 1747

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. 9. 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. 10. REPORTS ON UTILIZATION OF FEDERAL TECHNOLOGY.

(a) AGENCY ACTIVITIES.—Section 11 of the Stevenson-Wydler

Technology Innovation Act of 1980 (15 U.S.C. 3710) is amended—

(1) by striking the last sentence of subsection (b);

(2) by inserting after subsection (e) the following:

‘‘(f ) AGENCY REPORTS ON UTILIZATION.— ‘‘(1) IN GENERAL.—Each Federal agency which operates

or directs one or more Federal laboratories or which conducts

activities under sections 207 and 209 of title 35, United States

Code, shall report annually to the Office of Management and

Budget, as part of the agency’s annual budget submission,

on the activities performed by that agency and its Federal

laboratories under the provisions of this section and of sections

207 and 209 of title 35, United States Code.

‘‘(2) CONTENTS.—The report shall include—

‘‘(A) an explanation of the agency’s technology transfer

program for the preceding fiscal year and the agency’s

plans for conducting its technology transfer function,

including its plans for securing intellectual property rights

in laboratory innovations with commercial promise and

plans for managing its intellectual property so as to

advance the agency’s mission and benefit the competitiveness of United States industry; and

‘‘(B) information on technology transfer activities for

the preceding fiscal year, including—

‘‘(i) the number of patent applications filed;

‘‘(ii) the number of patents received;

114 STAT. 1748 PUBLIC LAW 106–404—NOV. 1, 2000

‘‘(iii) the number of fully-executed licenses which

received royalty income in the preceding fiscal year,

categorized by whether they are exclusive, partiallyexclusive, or non-exclusive, and the time elapsed from

the date on which the license was requested by the

licensee in writing to the date the license was executed;

‘‘(iv) the total earned royalty income including such

statistical information as the total earned royalty

income, of the top 1 percent, 5 percent, and 20 percent

of the licenses, the range of royalty income, and the

median, except where disclosure of such information

would reveal the amount of royalty income associated

with an individual license or licensee;

‘‘(v) what disposition was made of the income

described in clause (iv);

‘‘(vi) the number of licenses terminated for cause;

and

‘‘(vii) any other parameters or discussion that the

agency deems relevant or unique to its practice of

technology transfer.

‘‘(3) COPY TO SECRETARY; ATTORNEY GENERAL; CONGRESS.—

The agency shall transmit a copy of the report to the Secretary

of Commerce and the Attorney General for inclusion in the

annual report to Congress and the President required by subsection (g)(2).

‘‘(4) PUBLIC AVAILABILITY.—Each Federal agency reporting

under this subsection is also strongly encouraged to make the

information contained in such report available to the public

through Internet sites or other electronic means.’’;

(3) by striking subsection (g)(2) and inserting the following:

‘‘(2) REPORTS.—

‘‘(A) ANNUAL REPORT REQUIRED.—The Secretary, in consultation with the Attorney General and the Commissioner

of Patents and Trademarks, shall submit each fiscal year,

beginning 1 year after the enactment of the Technology

Transfer Commercialization Act of 2000, a summary report

to the President, the United States Trade Representative,

and the Congress on the use by Federal agencies and

the Secretary of the technology transfer authorities specified in this Act and in sections 207 and 209 of title 35,

United States Code.

‘‘(B) CONTENT.—The report shall—

‘‘(i) draw upon the reports prepared by the agencies

under subsection (f );

‘‘(ii) discuss technology transfer best practices and

effective approaches in the licensing and transfer of

technology in the context of the agencies’ missions;

and

‘‘(iii) discuss the progress made toward development of additional useful measures of the outcomes

of technology transfer programs of Federal agencies.

‘‘(C) PUBLIC AVAILABILITY.—The Secretary shall make

the report available to the public through Internet sites

or other electronic means.’’; and

(4) by inserting after subsection (g) the following:

‘‘(h) DUPLICATION OF REPORTING.—The reporting obligations

imposed by this section—

PUBLIC LAW 106–404—NOV. 1, 2000 114 STAT. 1749

‘‘(1) are not intended to impose requirements that duplicate

requirements imposed by the Government Performance and

Results Act of 1993 (31 U.S.C. 1101 note);

‘‘(2) are to be implemented in coordination with the

implementation of that Act; and

‘‘(3) are satisfied if an agency provided the information

concerning technology transfer activities described in this section in its annual submission under the Government Performance and Results Act of 1993 (31 U.S.C. 1101 note).’’.

(b) ROYALTIES.—Section 14(c) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710c(c)) is amended

to read as follows:

‘‘(c) REPORTS.—The Comptroller General shall transmit a report

to the appropriate committees of the Senate and House of Representatives on the effectiveness of Federal technology transfer

programs, including findings, conclusions, and recommendations

for improvements in such programs. The report shall be integrated

with, and submitted at the same time as, the report required

by section 202(b)(3) of title 35, United States Code.’’.

SEC. 11. TECHNOLOGY PARTNERSHIPS OMBUDSMAN.

(a) APPOINTMENT OF OMBUDSMAN.—The Secretary of Energy

shall direct the director of each national laboratory of the Department of Energy, and may direct the director of each facility under

the jurisdiction of the Department of Energy, to appoint a technology partnership ombudsman to hear and help resolve complaints

from outside organizations regarding the policies and actions of

each such laboratory or facility with respect to technology partnerships (including cooperative research and development agreements),

patents, and technology licensing.

(b) QUALIFICATIONS.—An ombudsman appointed under subsection (a) shall be a senior official of the national laboratory

or facility who is not involved in day-to-day technology partnerships,

patents, or technology licensing, or, if appointed from outside the

laboratory or facility, function as such a senior official.

(c) DUTIES.—Each ombudsman appointed under subsection (a)

shall—

(1) serve as the focal point for assisting the public and

industry in resolving complaints and disputes with the national

laboratory or facility regarding technology partnerships, patents, and technology licensing;

(2) promote the use of collaborative alternative dispute

resolution techniques such as mediation to facilitate the speedy

and low-cost resolution of complaints and disputes, when appropriate; and

(3) report quarterly on the number and nature of complaints and disputes raised, along with the ombudsman’s

assessment of their resolution, consistent with the protection

of confidential and sensitive information, to—

(A) the Secretary;

(B) the Administrator for Nuclear Security;

(C) the Director of the Office of Dispute Resolution

of the Department of Energy; and

(D) the employees of the Department responsible for

the administration of the contract for the operation of

each national laboratory or facility that is a subject of

42 USC 7261c.

114 STAT. 1750 PUBLIC LAW 106–404—NOV. 1, 2000

LEGISLATIVE HISTORY—H.R. 209:

HOUSE REPORTS: No. 106–129, Pt. 1 (Comm. on Science).

CONGRESSIONAL RECORD:

Vol. 145 (1999): May 11, considered and passed House.

Vol. 146 (2000): Oct. 5, considered and passed Senate, amended.

Oct. 17, House concurred in Senate amendment.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 36 (2000):

Nov. 1, Presidential statement.

Æ

the report, for consideration in the administration and

review of that contract.

Approved November 1, 2000.