I

104TH CONGRESS

1ST SESSION H. R. 2196

To amend the Stevenson-Wydler Technology Innovation Act of 1980 with

respect to inventions made under cooperative research and development

agreements, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 4, 1995

Mrs. MORELLA (for herself, Mr. WALKER, Mr. BROWN of California, and Mr.

TANNER) introduced the following bill; which was referred to the Committee on Science

A BILL

To amend the Stevenson-Wydler Technology Innovation Act

of 1980 with respect to inventions made under cooperative research and development agreements, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Technology Transfer

5 Improvements Act of 1995’’.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:
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1 (1) Bringing technology and industrial innova2 tion to the marketplace is central to the economic,

3 environmental, and social well-being of the people of

4 the United States.

5 (2) The Federal Government can help United

6 States business to speed the development of new

7 products and processes by entering into cooperative

8 research and development agreements which make

9 available the assistance of Federal laboratories to

10 the private sector, but the commercialization of tech11 nology and industrial innovation in the United

12 States depends upon actions by business.

13 (3) The commercialization of technology and in14 dustrial innovation in the United States will be en15 hanced if companies, in return for reasonable com16 pensation to the Federal Government, can more eas17 ily obtain exclusive licenses to inventions which de18 velop as a result of cooperative research with sci19 entists employed by Federal laboratories.

20 SEC. 3. USE OF FEDERAL TECHNOLOGY.

21 Subparagraph (B) of section 11(e)(7) of the Steven22 son-Wydler Technology Innovation Act of 1980 (15 U.S.C.

23 3710(e)(7)(B)) is amended to read as follows:

24 ‘‘(B) A transfer shall be made by any Federal agency

25 under subparagraph (A), for any fiscal year, only if the
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1 amount so transferred by that agency (as determined

2 under such subparagraph) would exceed $10,000.’’.

3 SEC. 4. TITLE TO INTELLECTUAL PROPERTY ARISING

4 FROM COOPERATIVE RESEARCH AND DEVEL5 OPMENT AGREEMENTS.

6 Subsection (b) of section 12 of the Stevenson-Wydler

7 Technology Innovation Act of 1980 (15 U.S.C. 3710a(b))

8 is amended to read as follows:

9 ‘‘(b) ENUMERATED AUTHORITY.—(1) Under an

10 agreement entered into pursuant to subsection (a)(1), the

11 laboratory may grant, or agree to grant in advance, to

12 a collaborating party patent licenses or assignments, or

13 options thereto, in any invention made in whole or in part

14 by a laboratory employee under the agreement, for reason15 able compensation when appropriate. The laboratory shall

16 ensure that the collaborating party has the option to

17 choose an exclusive license for a field of use for any such

18 invention under the agreement or, if there is more than

19 one collaborating party, that the collaborating parties are

20 offered the option to hold licensing rights that collectively

21 encompass the rights that would be held under such an

22 exclusive license by one party. In consideration for the

23 Government’s contribution under the agreement, grants

24 under this paragraph shall be subject to the following ex25 plicit conditions:
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1 ‘‘(A) A nonexclusive, nontransferable, irrev2 ocable, paid-up license from the collaborating party

3 to the laboratory to practice the invention or have

4 the invention practiced throughout the world by or

5 on behalf of the Government. In the exercise of such

6 license, the Government shall not publicly disclose

7 trade secrets or commercial or financial information

8 that is privileged or confidential within the meaning

9 of section 552(b)(4) of title 5, United States Code,

10 or which would be considered as such if it had been

11 obtained from a non-Federal party.

12 ‘‘(B) If a laboratory assigns title or grants an

13 exclusive license to such an invention, the Govern14 ment shall retain the right—

15 ‘‘(i) to require the collaborating party to

16 grant to a responsible applicant a nonexclusive,

17 partially exclusive, or exclusive license to use

18 the invention in the applicant’s licensed field of

19 use, on terms that are reasonable under the cir20 cumstances; or

21 ‘‘(ii) if the collaborating party fails to

22 grant such a license, to grant the license itself.

23 ‘‘(C) The Government may exercise its right re24 tained under subparagraphs (B) (ii) and (iii) only if

25 the Government finds that—
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1 ‘‘(i) the action is necessary to meet health

2 or safety needs that are not reasonable satisfied

3 by the collaborating party;

4 ‘‘(ii) the action is necessary to meet re5 quirements for public use specified by Federal

6 regulations, and such requirements are not rea7 sonably satisfied by the collaborating party; or

8 ‘‘(iii) the collaborating party has failed to

9 comply with an agreement containing provisions

10 described in subsection (c)(4)(B).

11 ‘‘(2) Under agreements entered into pursuant to sub12 section (a)(1), the laboratory shall ensure that a collabo13 rating party may retain title to any invention made solely

14 by its employee in exchange for normally granting the

15 Government a nonexclusive, nontransferable, irrevocable,

16 paid-up license to practice the invention or have the inven17 tion practiced throughout the world by or on behalf of the

18 Government for research or other Government purposes.

19 ‘‘(3) Under an agreement entered into pursuant to

20 subsection (a)(1), a laboratory may—

21 ‘‘(A) accept, retain, and use funds, personnel,

22 services, and property from a collaborating party

23 and provide personnel, services, and property to a

24 collaborating party;
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1 ‘‘(B) use funds received from a collaborating

2 party in accordance with subparagraph (A) to hire

3 personnel to carry out the agreement who will not be

4 subject to full-time-equivalent restrictions of the

5 agency; and

6 ‘‘(C) to the extent consistent with any applica7 ble agency requirements or standards of conduct,

8 permit an employee or former employee of the lab9 oratory to participate in an effort to commercialize

10 an invention made by the employee or former em11 ployee while in the employment or service of the

12 Government.

13 ‘‘(4) A collaborating party in an exclusive license in

14 any invention made under an agreement entered into pur15 suant to subsection (a)(1) shall have the right of enforce16 ment under chapter 29 of title 35, United States Code.

17 ‘‘(5) A Government-owned, contractor-operated lab18 oratory that enters into a cooperative research and devel19 opment agreement pursuant to subsection (a)(1) may use

20 or obligate royalties or other income accruing to the lab21 oratory under such agreement with respect to any inven22 tion only—

23 ‘‘(A) for payments to inventors;

24 ‘‘(B) for a purposes described in clauses (i),

25 (iii), and (iv) of section 14(a)(1)(B); and
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1 ‘‘(C) for scientific research and development

2 consistent with the research and development mis3 sions and objectives of the laboratory.’’.

4 SEC. 5. DISTRIBUTION OF INCOME FROM INTELLECTUAL

5 PROPERTY RECEIVED BY FEDERAL LABORA6 TORIES.

7 Section 14 of the Stevenson-Wydler Technology Inno8 vation Act of 1980 (15 U.S.C. 3710c) is amended—

9 (1) by amending subsection (a)(1) to read as

10 follows:

11 ‘‘(1) Except as provided in paragraphs (2) and

12 (4), any royalties or other payments received by a

13 Federal agency from the licensing and assignment of

14 inventions under agreements entered into by Federal

15 laboratories under section 12, and from the licensing

16 of inventions of Federal laboratories under section

17 207 of title 35, United States Code, or under any

18 other provision of law, shall be retained by the agen19 cy whose laboratory produced the invention and shall

20 be disposed of as follows:

21 ‘‘(A)(i) The head of the agency or labora22 tory, or such individual’s designee, shall pay

23 each year the first $2,000, and thereafter at

24 least 15 percent, of the royalties or other pay25 ments to the inventor or coinventors.
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1 ‘‘(ii) An agency or laboratory may provide

2 appropriate incentives, from royalties, or other

3 payments, to employees of a laboratory who

4 contribute substantially to the technical devel5 opment of licensed or assigned inventions be6 tween the time that the intellectual property

7 rights to such inventions are legally asserted

8 and the time of the licensing or assigning of the

9 inventions.

10 ‘‘(iii) The agency or laboratory shall retain

11 the royalties and other payments received from

12 an invention until the agency or laboratory

13 makes payments to employees of a laboratory

14 under clause (i) or (ii).

15 ‘‘(B) The balance of the royalties or other

16 payments shall be transferred by the agency to

17 its laboratories, with the majority share of the

18 royalties or other payments from any invention

19 going to the laboratory where the invention oc20 curred. The royalties or other payments so

21 transferred to any laboratory may be used or

22 obligated by that laboratory during the fiscal

23 year in which they are received or during the

24 succeeding fiscal year—
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1 ‘‘(i) to reward scientific, engineering,

2 and technical employees of the laboratory,

3 including developers of sensitive or classi4 fied technology, regardless of whether the

5 technology has commercial applications;

6 ‘‘(ii) to further scientific exchange

7 among the laboratories of the agency;

8 ‘‘(iii) for education and training of

9 employees consistent with the research and

10 development missions and objectives of the

11 agency or laboratory, and for other activi12 ties that increase the potential for transfer

13 of the technology of the laboratories of the

14 agency;

15 ‘‘(iv) for payment of expenses inciden16 tal to the administration and licensing of

17 intellectual property by the agency or lab18 oratory with respect to inventions made at

19 that laboratory, including the fees or other

20 costs for the services of other agencies,

21 persons, or organizations for intellectual

22 property management and licensing serv23 ices; or

24 ‘‘(v) for scientific research and devel25 opment consistent with the research and
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1 development missions and objectives of the

2 laboratory.

3 ‘‘(C) All royalties or other payments re4 tained by the agency or laboratory after pay5 ments have been made pursuant to subpara6 graphs (A) and (B) that is unobligated and un7 expended at the end of the second fiscal year

8 succeeding the fiscal year in which the royalties

9 and other payments were received shall be paid

10 into the Treasury.’’;

11 (2) in subsection (a)(2)—

12 (A) by inserting ‘‘or other payments’’ after

13 ‘‘royalties’’; and

14 (B) by striking ‘‘for the purposes described

15 in clauses (i) through (iv) of paragraph (1)(B)

16 during that fiscal year or the succeeding fiscal

17 year’’ and inserting in lieu thereof ‘‘under para18 graph (1)(B)’’;

19 (3) in subsection (a)(3), by striking ‘‘$100,000’’

20 both places it appears and inserting ‘‘$150,000’’;

21 (4) in subsection (a)(4)—

22 (A) by striking ‘‘income’’ each place it ap23 pears and inserting in lieu thereof ‘‘payments’’;

24 (B) by striking ‘‘the payment of royalties

25 to inventors’’ in the first sentence thereof and
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1 inserting in lieu thereof ‘‘payments to inven2 tors’’;

3 (C) by striking ‘‘clause (i) of paragraph

4 (1)(B)’’ and inserting in lieu thereof ‘‘clause

5 (iv) of paragraph (1)(B)’’;

6 (D) by striking ‘‘payment of the royalties,’’

7 in the second sentence thereof and inserting in

8 lieu thereof ‘‘offsetting the payments to inven9 tors,’’; and

10 (E) by striking ‘‘clauses (i) through (iv)

11 of’’; and

12 (5) by amending paragraph (1) of subsection

13 (b) to read as follows:

14 ‘‘(1) by a contractor, grantee, or participant, or

15 an employee of a contractor, grantee, or participant,

16 in an agreement or other arrangement with the

17 agency, or’’.

18 SEC. 6. EMPLOYEE ACTIVITIES.

19 Section 15(a) of the Stevenson-Wydler Technology

20 Innovation Act of 1980 (15 U.S.C. 3710d(a)) is amend21 ed—

22 (1) by striking ‘‘the right of ownership to an in23 vention under this Act’’ and inserting in lieu thereof

24 ‘‘ownership of or the right of ownership to an inven25 tion made by a Federal employee’’; and
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1 (2) by inserting ‘‘obtain or’’ after ‘‘the Govern2 ment, to’’.

3 SEC. 7. AMENDMENT TO BAYH–DOLE ACT.

4 Section 210(e) of title 35, United States Code, is

5 amended by striking ‘‘, as amended by the Federal Tech6 nology Transfer Act of 1986,’’.

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