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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 999 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                 S. 999

  To amend chapter 18 of title 35, United States Code, to improve the 
   ability of Federal agencies to patent and license federally owned 
                  inventions, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 11, 1999

   Mr. Hatch introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

 
  To amend chapter 18 of title 35, United States Code, to improve the 
   ability of Federal agencies to patent and license federally owned 
                  inventions, and for other purposes.

    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 Act of 1999''.

SEC. 2. LICENSING FEDERALLY OWNED OR PATENTED INVENTIONS.

    (a) In General.--Section 209 of title 35, United States Code, is 
amended to read as follows:
``Sec. 209. Licensing federally patented or owned inventions
    ``(a) Authority.--A Federal agency may grant an exclusive or 
partially exclusive license on a federally owned invention under 
section 207(a)(2) only if--
            ``(1) granting the license is a reasonable and necessary 
        incentive to--
                    ``(A) call forth the investment capital and 
                expenditures needed to bring the invention to practical 
                application; or
                    ``(B) otherwise promote the invention's utilization 
                by the public;
            ``(2) the Federal agency finds that the public will be 
        served by the granting of the license, as indicated by the 
        applicant's intentions, plans, and ability to bring the 
        invention to practical application or otherwise promote the 
        invention's utilization by the public, and that the proposed 
        scope of exclusivity is not greater than reasonably necessary 
        to provide the incentive for bringing the invention to 
        practical utilization, as proposed by the applicant, or 
        otherwise to promote the invention's utilization by the public;
            ``(3) the applicant makes a commitment to achieve practical 
        utilization of the invention within a reasonable time, which 
        time may be extended by the agency upon the applicant's request 
        and the applicant's demonstration that the refusal of such 
        extension would be unreasonable;
            ``(4) granting the license will not tend to substantially 
        lessen competition or create or maintain a violation of the 
        Federal antitrust laws; and
            ``(5) in the case of an invention covered by a foreign 
        patent application or patent, the interests of the Federal 
        Government or United States industry in foreign commerce will 
        be enhanced.
    ``(b) Manufacture in United States.--A Federal agency shall 
normally grant a license under section 207(a)(2) to use or sell any 
federally owned invention in the United States only to a licensee who 
agrees that any products embodying the invention or produced through 
the use of the invention will be manufactured substantially in the 
United States.
    ``(c) Small Business.--First preference for the granting of any 
exclusive or partially exclusive licenses under section 207(a)(2) shall 
be given to small business firms having equal or greater likelihood as 
other applicants to bring the invention to practical application within 
a reasonable time.
    ``(d) Terms and Conditions.--Any licenses granted under section 
207(a)(2) shall contain such terms and conditions as the granting 
agency considers appropriate. Such terms and conditions shall include 
provisions--
            ``(1) retaining a nontransferable, irrevocable, paid-up 
        license for any Federal agency to practice the invention or 
        have the invention practiced throughout the world by or on 
        behalf of the Government of the United States;
            ``(2) requiring periodic reporting on utilization of the 
        invention, and utilization efforts, by the licensee, but only 
        to the extent necessary to enable the Federal agency to 
        determine whether the terms of the license are being complied 
        with; and
            ``(3) empowering the Federal agency to terminate the 
        license in whole or in part if the agency determines that--
                    ``(A) the licensee is not executing its commitment 
                to achieve practical utilization of the invention, 
                including commitments contained in any plan submitted 
                in support of its request for a license, and the 
                licensee cannot otherwise demonstrate to the 
                satisfaction of the Federal agency that it has taken, 
                or can be expected to take within a reasonable time, 
                effective steps to achieve practical utilization of the 
                invention;
                    ``(B) the licensee is in breach of an agreement 
                described in subsection (b);
                    ``(C) termination is necessary to meet requirements 
                for public use specified by Federal regulations issued 
                after the date of the license, and such requirements 
                are not reasonably satisfied by the licensee; or
                    ``(D) the licensee has been found by a court of 
                competent jurisdiction to have violated the Federal 
                antitrust laws in connection with its performance under 
                the license agreement.
    ``(e) Treatment of Report Information.--Any report required under 
subsection (d)(2) shall be treated by the Federal agency as commercial 
and financial information obtained from a person and is privileged and 
confidential and not subject to disclosure under section 552 of title 
5.
    ``(f) 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).
    ``(g) 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.''.
    (b) Amendments to Chapter 18 of Title 35, United States Code.--
Chapter 18 of title 35, United States Code, is amended--
            (1) in section 200 by inserting ``without unduly 
        encumbering future research and discovery'' after ``free 
        competition and enterprise;'';
            (2) 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, 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 
        sections 200 through 204 (including this section); 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
            (3) in section 207(a)--
                    (A) in paragraph (2), by striking ``patent 
                applications, patents, or other forms of protection 
                obtained'' and inserting ``inventions''; and
                    (B) in paragraph (3), 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''.
    (c) 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 patented or owned inventions.''.
                                 <all>
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