68932 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

percent of the applicant’s (or licensee’s)

total equity must be held in qualifying

investors, and that the remaining 15

percent of the applicant’s (or licensee’s)

total equity may be held by qualifying

investors, or noncontrolling existing

investors in such control group member

or individuals that are members of the

applicant’s (or licensee’s) management.

These restrictions on the identity of the

holder(s) of the remaining 15 percent of

the licensee’s total equity no longer

apply after termination of the three-year

period specified in paragraph (b)(5)(i) of

this section.

* * * * *

[FR Doc. 00–29323 Filed 11–14–00; 8:45 am]

BILLING CODE 6712–01–M

DEPARTMENT OF ENERGY

48 CFR Parts 927 and 970

RIN: 1991–AB55

Acquisition Regulations: Revision of

Patent Regulations Relating to DOE

Management and Operating Contracts

AGENCY: Department of Energy.

ACTION: Interim final rule and

opportunity for public comment.

SUMMARY: The Department of Energy

(DOE) is amending the Department of

Energy Acquisition Regulation (DEAR)

to improve the patent coverage relating

to management and operating contracts.

The clauses contained herein generally

reflect the clauses used in such DOE

contracts over the last five years. The

changes made pursuant to this rule

adapt patent related clauses to

subcontracting under management and

operating contracts, will result in

clauses stated in ‘‘plain language,’’ and

will provide a complete set of patent

clauses for all varieties of management

and operating contract.

DATES: This rule is effective December

15, 2000. Comments on the interim final

rule should be submitted by January 16,

2001.

ADDRESSES: Comments (3 copies) should

be addressed to: Robert M. Webb, U.S.

Department of Energy, Office of

Procurement and Assistance

Management, 1000 Independence

Avenue, SW., Washington, D.C. 20585.

FOR FURTHER INFORMATION CONTACT:

Robert M. Webb at (202) 586–8264.

SUPPLEMENTARY INFORMATION:

I. Background.

II. Explanation of Changes in the Patent

Rights Clauses.

III. Procedural Requirements.

A. Review Under Executive Order 12866.

B. Review Under Executive Order 12988.

C. Review Under the Regulatory Flexibility

Act.

D. Review Under the Paperwork Reduction

Act.

E. Review Under the National

Environmental Policy Act.

F. Review Under Executive Order 13132.

G. Review Under the Unfunded Mandates

Reform Act of 1995.

H. Review Under the Treasury and General

Government Appropriations Act, 1999.

I. Congressional Review.

I. Background

The Department of Energy (DOE or

Department) last revised its patent

regulations covering management and

operating contracts on March 2, 1995 at

60 FR 11824. That rule created two

patent rights clauses, one for nonprofit

contractors and a second for profitmaking contractors. The former adapted

the Bayh-Dole clause, granting title to

inventions first conceived or reduced to

practice under the contract to the

contractor, for use in management and

operating (M&O) contracts. The second

clause retained title to those inventions

in the United States. In the interim it

has become apparent that the clauses

could be designed to more effectively

deal with the realities of performance

under DOE management and operating

contracts. There is a need to modify the

specified clauses to reflect additional

statutory requirements and the special

treatment of exceptional circumstances

in defense related activities. This

interim final rule fulfills those needs.

This rulemaking establishes three

clauses, one for nonprofit contractors,

one for profit-making contractors where

their contracts do not provide for

technology transfer responsibilities, and

a third for large profit-making

contractors where their contracts do

provide for technology transfer

activities. The terms of the third clause

reflect DOE’s probable issuance of an

advance waiver under which large

profit-making management and

operating contractors with a technology

transfer mission will receive title to

inventions. The individual class waiver

that is likely to be granted may cause

the actual terms of the patent clause

used to vary from the model published

here.

This interim final rule also adapts

customary ancillary patent clauses to

the special circumstances of DOE’s

management and operating contracts.

The clause normally used to authorize

and give consent to a contractor to use

or manufacture an invention has been

modified to allow a contractor to request

and DOE to authorize copying

copyrighted work. It also reflects that if

a subcontractor is employed under a

management and operating contract to

perform research and development, the

clause flowed down should use

paragraph (a) as in the Federal

Acquisition Regulation (FAR) Alternate

1, as opposed to the basic clause as is

called for under paragraph (b) of the

FAR clause.

The interim final rule limits the

notice and assistance clause to

subcontracts valued at $25,000 or more.

The FAR clause limit for flowdown is

the simplified acquisition threshold of

$100,000.

The interim final rule establishes a

flowdown for patent indemnity. In the

area of royalties, the interim final rule

provides for the contractor to provide to

DOE information bearing on any royalty

proposed to be paid after contract

award. The relevant FAR provision does

not foresee long term contracting with

the variety of royalty activities that the

Department is currently experiencing

under its management and operating

contracts.

This interim final rule also makes

small changes to clauses for notice of

right to request patent waiver and rights

to proposal data, resulting from their

being drafted in ‘‘plain language.’’

Additionally, a change has been made to

DEAR Part 927 to assure that the

facilities license contained in the three

M&O patent clauses is used in

appropriate contracts not subject to Part

970.

II. Explanation of Changes in the Patent

Rights Clauses

A. Plain Language

All clauses in this interim final rule,

except the nonprofit clause at 970.5204–

101, were rewritten from former clauses

to incorporate suggested language and

sentence structure for clarifying and

simplifying contract provisions. For

example, the clause language is written

in the present tense and exceptions are

generally stated at the beginning of

regulatory provisions. Italicized

headings were added to all

subparagraphs. At such time as the FAR

is revised to reflect ‘‘plain language,’’

particularly with regard to the BayhDole clause at FAR 52.227–11 (the core

of the clause at 970.5204–101), which is

overseen by the Department of

Commerce, these regulations will be

reviewed and revised as appropriate.

B. Organization of Clause Provisions

Modest changes were made to the

organization of each of the patent rights

clauses, so that like topics and

provisions appear in a similar order in

all of the clauses, as shown by the

index. Also, if the same provision

appeared in more than one clause, an

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68933

effort was made to maintain similar

paragraph lettering and text.

C. Allocation of Principal Rights:

Exceptional Circumstance Subject

Inventions, Inventions Related to

National Security, and Treaties and

International Agreements

The Allocation of Principal Rights

paragraph (b) in each of the patent rights

clauses is drafted according to the

statutory disposition of rights in

inventions depending on contractor

type. In addition, paragraph (b) of

clauses at 970.5204–101 and –103

include new subparagraphs addressing

exceptional circumstance subject

inventions and the disposition of rights

controlled by treaties and international

agreements (see 970.5204–101–

(b)(3)&(4); –103–(b)(5)&(6)). Alternate 1

also provides for the allocation of rights

in subject inventions related to weapons

and national security, respectively, to be

inserted under paragraph (b). These new

provisions are located under allocation

of principal rights because they affect

the contractor’s ability to take title.

D. Allocation of Principal Rights:

Requests for Greater Rights by the

Contractor and Contractor Employeeinventors, and the Assignment of

Government Rights of Government

Employee-inventors

The Allocation of Principal Rights

paragraph (b) in each of the patent rights

clauses includes provisions for the

contractor and contractor employeeinventor to request greater rights in

inventions, and for the Government to

assign to the contractor the rights

acquired from a Government employeeinventor (see 970.5204–101(b)(4)(5)&(6);

–102(b)(2); –103(b)(7)(8)&(9)).

E. Subject Invention Disclosures

All of the patent rights clauses

include a modified list of information

required in a subject invention

disclosure. The list provides DOE with

sufficient information to oversee

invention reporting.

F. Efficient Administration of Subject

Inventions

Provisions appear in one or more of

the patent rights clauses and address

procedures for ensuring that all subject

inventions are promptly reported by

inventors to the contractor and by the

contractor to DOE.

G. DOE Decisions Concerning Federally

Funded Inventions

The clauses at 970.5204–101 and –103

that provide the contractor with the

right to retain title to subject inventions,

either by statute or under an advance

class waiver, include a new provision

which confirms that it is at DOE’s sole

discretion to accept or refuse the return

of rights to a subject invention that had

been previously elected by the

contractor (see 970.5204–101(d)(4);

–103(d)(1)).

The patent rights clause at 970.5204–

102 does not contemplate the

contractor’s retention of rights in

inventions, and, therefore, if such a

restriction on the return of title should

apply to a large business contractor

whose contract has no technology

transfer mission, it must be included in

the terms and conditions of the

instrument granting rights in the

invention, e.g., identified waiver. In

addition, DOE’s discretion to grant or

refuse requests by the contractor for

greater rights or for a contractor license

is more clearly stated in all of the patent

rights clauses, such that there is no

confusion that a contractor does not

automatically receive such rights simply

by requesting them, but rather DOE may

grant or refuse to grant such rights,

ensuring Government missions and

objectives are considered (see patent

rights clauses 970.5204–101(b)(5)(6)&(7)

and (e)(1); 970.5204–102(b)(2) and

(d)(1)(i)); and 970.5204–103(b)(7)(8)&(9)

and (e)(1)).

H. Withholding of Payment

The provision entitled Withholding of

payment from former clause 48 CFR

970.5204–72 has been deleted from the

for-profit clauses (970.5204–102 and

–103). While the provision is applicable

to prime contractors generally, such

withholding is not a practice employed

by the Contracting Officer with respect

to M&O contracts.

I. Royalty Sharing and Balance of

Royalties Provisions in the For-Profit,

Advance Class Waiver Clause

The former nonprofit clause, 48 CFR

970.5204–71, includes royalty sharing

and balance of royalties provisions

under paragraph (k) entitled Special

provisions for contracts with nonprofit

organizations. Since this subject matter

is addressed in the accompanying

Technology Transfer Mission clause,

these provisions clauses have been

deleted from the nonprofit clause

(970.5204–101), and omitted from the

for-profit, advance class waiver clause

(970.5204–103).

J. Rights Governed by Other Agreements

A provision specifying that rights to

inventions made under certain third

party agreements are governed by DOE

approved provisions is omitted from the

for-profit, advance waiver clause

because it is covered in the Technology

Transfer Mission clause, paragraph

(n)(4), which must accompany the forprofit, advance waiver clause

(970.5204–103) in an M&O contract.

K. Reports

The interim and final reports required

by various provisions are collectively

organized under a single paragraph,

Reports, for each of the patent clauses

(see 970.5204–101(m); 970.5204–102(k);

970.5204–103(m)).

L. Classified Inventions

The Classified Inventions provision

from 10 CFR 600.27 has been modified

and included in all of the clauses (see

970.5204–101(q); –102(m); –103(p)). The

provision was included and not

presented as an alternate because almost

all of the DOE laboratories have the

potential for engaging in research

involving classified subject matter. The

provision may be deleted if this is

absolutely not the case, by approval of

DOE patent counsel at the time of

contracting.

M. Patent Functions

This new provision, already in most

management and operating contracts, is

included in each all the clauses (see

970.5204–101(r); –102(n); –103(r)). It

requires the contractor to assist patent

counsel with patent related functions.

N. Educational Awards Subject to 35

U.S.C. 212

This new provision, also already in

most management and operating

contracts, is included in two of the

clauses (see 970.5204–101(s); –103(s)). It

protects Government rights in research

related to excepted areas of technology

from possible allocation to students

under 35 U.S.C. 212.

O. Annual Appraisal by Patent Counsel

This new provision, also already in

most management and operating

contracts, is included in all of the

clauses (see 970.5204–101(t); –102(p);

–103(t)). It allows, but does not require,

DOE patent counsel to conduct annual

appraisals to evaluate the contractor’s

effectiveness in identifying and

protecting inventions.

P. Weapons Related Subject Inventions

Alternate 1 entitled Weapons Related

Subject Inventions is available for the

nonprofit clause and the for-profit,

advance class waiver clause.

Q. Transfer of a Contractor License

DOE must approve the transfer of a

contractor license in a subject invention.

The former clause 48 CFR 970.5204–

71(e)(1) (last sentence) provided for an

68934 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

exception: ‘‘except when transferred to

the successor of that part of the

Contractor’s business to which the

invention pertains.’’

R. Two Year Election Period for ForProfit Contractors Retaining Title Under

an Advance Class Waiver

A two (2) year period for election to

retain title has been included in

subparagraph (c)(3) of the for-profit,

advance class waiver, patent rights

clause at 970.5204–103.

III. Procedural Requirements

A. Review Under Executive Order 12866

Today’s regulatory action has been

determined not to be a ‘‘significant

regulatory action’’ under Executive

Order 12866, ‘‘Regulatory Planning and

Review,’’ (58 FR 51735, October 4,

1993). Accordingly, this interim final

rule is not subject to review under that

Executive Order by the Office of

Information and Regulatory Affairs of

the Office of Management and Budget

(OMB).

B. Review Under Executive Order 12988

With respect to the review of existing

regulations and the promulgation of

new regulations, section 3(a) of

Executive Order 12988, ‘‘Civil Justice

Reform,’’ 61 FR 4729 (February 7, 1996),

imposes on Executive agencies the

general duty to adhere to the following

requirements: (1) Eliminate drafting

errors and ambiguity; (2) write

regulations to minimize litigation; and

(3) provide a clear legal standard for

affected conduct rather than a general

standard and promote simplification

and burden reduction. With regard to

the review required by section 3(a),

section 3(b) of Executive Order 12988

specifically requires that Executive

agencies make every reasonable effort to

ensure that the regulation: (1) Clearly

specifies the preemptive effect, if any;

(2) clearly specifies any effect on

existing Federal law or regulation; (3)

provides a clear legal standard for

affected conduct while promoting

simplification and burden reduction; (4)

specifies the retroactive effect, if any; (5)

adequately defines key terms; and (6)

addresses other important issues

affecting clarity and general

draftsmanship under any guidelines

issued by the Attorney General. Section

3(c) of Executive Order 12988 requires

Executive agencies to review regulations

in light of applicable standards in

section 3(a) and section 3(b) to

determine whether they are met or it is

unreasonable to meet one or more of

them. DOE has completed the required

review and determined that, to the

extent permitted by law, this interim

final regulation meets the relevant

standards of Executive Order 12988.

C. Review Under the Regulatory

Flexibility Act

The Regulatory Flexibility Act, 5

U.S.C. 601 et seq., requires preparation

of an initial regulatory flexibility

analysis for any rule that must be

proposed for public comment and that

is likely to have significant economic

impact on a substantial number of small

entities. There is no legal requirement to

propose today’s rule for public

comment, and, therefore, the Regulatory

Flexiblility Act does not apply to this

rulemaking proceeding.

D. Review Under the Paperwork

Reduction Act.

This interim final rule does not

contain information collection

requirements that require approval by

the Office of Management and Budget

under the Paperwork Reduction Act (44

U.S.C. 3507 et. seq.).

E. Review Under the National

Environmental Policy Act

DOE has concluded that promulgation

of this interim final rule falls into a class

of actions which would not individually

or cumulatively have significant impact

on the human environment, as

determined by DOE’s regulations (10

CFR Part 1021, subpart D) implementing

the National Environmental Policy Act

of 1969 (NEPA) (42 U.S.C. 4321 et seq.).

Specifically, this interim rule is

categorically excluded from NEPA

review because the amendments to the

DEAR would be strictly procedural

(categorical exclusion A6). Therefore,

this interim final rule does not require

an environmental impact statement or

environmental assessment pursuant to

NEPA.

F. Review Under Executive Order 13132

Executive Order 13132 (64 FR 43255,

August 4, 1999) requires that regulations

or rules be reviewed for any substantial

direct effects on States, on the

relationship between the national

government and the States, or in the

distribution of power and

responsibilities among the various

levels of Government. If there are

sufficient substantial direct effects, then

Executive Order 13132 requires agencies

to engage in intergovernmental

consultation and take other steps before

promulgating such a regulation or rule.

This interim final rule merely provides

for the Department a single set of

clauses to govern patent rights in its

contracts for the management and

operation of major DOE sites and

facilities. The action does not involve

any substantial direct effects on States

or other considerations stated in

Executive Order 13132.

G. Review Under the Unfunded

Mandates Reform Act of 1995

The Unfunded Mandates Reform Act

of 1995 (Pub. L. 104–4) generally

requires a Federal agency to perform a

detailed assessment of costs and

benefits of any rule imposing a Federal

Mandate with costs to State, local or

tribal governments, or to the private

sector, of $100 million or more. This

interim final rulemaking would only

affect private sector entities, and the

impact is less than $100 million.

H. Review Under the Treasury and

General Government Appropriations

Act, 1999

Section 654 of the Treasury and

General Government Appropriations

Act, 1999 (Pub. L. 105–277), requires

Federal agencies to issue a Family

Policymaking Assessment for any

proposed rule or policy that may affect

family well-being. This interim final

rule would not affect the family.

I. Congressional Notification

Consistent with the Small Business

Regulatory Enforcement Fairness Act of

1996 (5 U.S.C. Secs. 801, 804), DOE will

submit to Congress a report regarding

the issuance of today’s interim final rule

prior to the effective date set forth at the

outset of this notice. The report will

note the Office of Management and

Budget’s determination that this rule

does not constitute a ‘‘major rule’’ under

that Act.

List of Subjects in 48 CFR Parts 927 and

970

Government procurement.

Issued in Washington, D.C. on October 6,

2000.

T.J. Glauthier,

Deputy Secretary, Department of Energy.

For the reasons set out in the

preamble, Chapter 9 of Title 48 of the

Code of Federal Regulations is amended

as set forth below.

PART 927—PATENTS, DATA, AND

COPYRIGHTS

1. The authority citation for Part 927

is revised to read as follows:

Authority: Atomic Energy Act of 1954, as

amended (42 U.S.C. 2168, 2182, 2201);

Federal Nonnuclear Energy Research and

Development Act of 1974 (42 U.S.C. 5908);

Department of Energy National Security and

Military Applications of Nuclear Energy

Authorization Act of 1987 (42 U.S.C. 7261a.);

Department of Energy Organization Act (42

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68935

U.S.C. 7101 et seq.); National Nuclear

Security Administration Act (50 U.S.C. 4201

et seq.)

2. Section 927.303(c) is added to read

as follows:

927.303 Contract clauses.

* * * * *

(c) Any contract that has as a purpose

the design, construction, operation, or

management integration of a collection

of contracts for the same purpose, of a

Government-owned research,

development, demonstration or

production facility must accord the

Government certain rights with respect

to further use of the facility by or on

behalf of the Government upon

termination of the contract. The patent

rights clause in such contracts must

include the following facilities license

paragraph:

[Insert appropriate paragraph no.] Facilities

License. In addition to the rights of the

parties with respect to inventions or

discoveries conceived or first actually

reduced to practice in the course of or under

this contract, the Contractor agrees to and

does hereby grant to the Government an

irrevocable, nonexclusive, paid-up license in

and to any inventions or discoveries

regardless of when conceived or actually

reduced to practice or acquired by the

Contractor at any time through completion of

this contract and which are incorporated or

embodied in the construction of the facility

or which are utilized in the operation of the

facility or which cover articles, materials, or

products manufactured at the facility (1) to

practice or have practiced by or for the

Government at the facility, and (2) to transfer

such license with the transfer of that facility.

Notwithstanding the acceptance or exercise

by the Government of these rights, the

Government may contest at any time the

enforceability, validity or scope of, title to,

any rights or patents herein licensed.

(End of paragraph)

PART 970—DOE MANAGEMENT AND

OPERATING CONTRACTS

3. The authority citation for Part 970

continues to read as follows:

Authority: Atomic Energy Act of 1954 (42

U.S.C. 2201); Department of Energy

Organization Act (42 U.S.C. 7101 et seq.);

National Nuclear Security Administration

Act (50 U.S.C. 2401 et seq.).

4. Sections 970.2701 through

970.2704 are revised and 970.2702–1

through 970.2702–6 are added to read as

follows:

970.2701 General.

This subpart applies to negotiation of

patent rights, rights in technical data

provisions and other related provisions

for the Department of Energy contracts

for the management and operation of

DOE’s major sites or facilities, including

the conduct of research and

development and nuclear weapons

production, and contracts which

involve major, long-term or continuing

activities conducted at a DOE site.

970.2702 Patent related clauses.

970.2702–1 Authorization and consent.

Contracting officers must use the

clause at 970.5204–94, Authorization

and Consent, instead of the clause at 48

CFR 52.227–2.

970.2702–2 Notice and assistance

regarding patent and copyright

infringement.

Contracting officers must use the

clause at 970.5204–95, Notice and

Assistance Regarding Patent and

Copyright Infringement, instead of the

clause at 48 CFR 52.227–2.

970.2702–3 Patent indemnity.

(a) Contracting officers must use the

clause at 970.5204–96, Patent

Indemnity-Subcontracts to assure that

subcontracts appropriately address

patent indemnity.

(b) Normally, the clause at 48 CFR

52.227–3 would not be appropriate for

an M&O contract; however, if there is a

question, such as when the mission of

the contractor involves production, the

contracting officer must consult with

local patent counsel and use the clause

where appropriate.

970.2702–4 Royalties.

Contracting officers must use the

solicitation provision at 970.5204–97,

Royalty Information, and the clause at

970.5204–98, Refund of Royalties

instead of the provision at 48 CFR

52.227–8 and the clause at 48 CFR

52.227–9, respectively.

970.2702–5 Rights to proposal data.

Contracting officers must include the

clause at 48 CFR 52.227–23, Rights to

Proposal Data, in all solicitations and

contracts for the management and

operation of DOE sites and facilities.

970.2702–6 Notice of right to request

patent waiver.

Contracting officers must include the

provision at 970.5204–100 in all

solicitations for contracts for the

management and operation of DOE sites

or facilities.

970.2703 Purposes of patent rights

clauses.

(a) DOE sites and facilities are

managed and operated on behalf of the

Department of Energy by a contractor,

pursuant to management and operating

contracts that are generally awarded for

a five (5) year term, with the possibility

for renewal. Special provisions relating

to patent rights are appropriately

incorporated into an M&O contract

because of the unique circumstances

and responsibilities of managing and

operating a Government-owned facility,

as compared to other federally funded

research and development contracts.

(b)(1) Technology transfer mission

clause. In accordance with Public Law

101–189, section 3133(d), DOE may

grant technology transfer authority to

M&O contractors operating a DOE

facility. Generally, M&O contractors

have the right to elect to retain title to

inventions made under the contract,

whether a nonprofit or educational

organizations, as a result of 35 U.S.C.

200 et seq. (Bayh-Dole Act), or a large

business, as a result of a class patent

waiver issued pursuant to 10 CFR part

784. Under such contracts, the M&O

contractor assumes responsibilities for

commercializing retained inventions, in

accordance with the Technology

Transfer Mission clause provided at

970.5204–40. That clause also governs

such activities as the distribution of

royalties earned from inventions made

under the contract and the transfer of

patent rights in inventions made under

the contract to successor contractors.

(2) If the M&O contractor is a

nonprofit organization or small business

firm having technology transfer

authority, the following clauses are

inserted into the M&O contract:

970.5204–40 and 970.5204–101.

(3) If the M&O contract has

technology transfer as mission and is to

be performed by a for-profit, large

business firm that has been granted an

advance class waiver, the following

clauses are inserted into the M&O

contract: 970.5204–40 and 970.5204–

103. The terms of the clause at

970.5204–103 are subject to

modification to conform to the terms of

the class waiver.

(4) If the M&O contract does not have

a technology transfer mission and is to

be performed by a for-profit, large

business firm and does not have

advance class waiver under 10 CFR part

784, the patent rights clause at

970.5204–102 is inserted into the M&O

contract, and the Technology Transfer

Mission clause is inapplicable.

(5) If the contractor is an educational

institution, a non-profit organization or

a small business firm and is conducting

privately funded technology transfer

activities, involving the use of private

funds to conduct licensing and

marketing activities related to

inventions made under the contract in

accordance with the Bayh-Dole Act,

DOE may modify the patent rights

clause (970.5204–101) to address issues

such as the disposition of royalties

68936 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

earned under the privately funded

technology transfer program, the

transfer of patent rights to a successor

contractor, allowable cost restrictions

concerning privately funded technology

transfer activities, and the Government’s

freedom from any liability related to

licensing under the contractor’s

privately funded technology transfer

program.

(c) Contracting officers must consult

with DOE patent counsel assisting the

contracting activity or the Assistant

General Counsel for Technology

Transfer and Intellectual Property for

assistance in selecting for use in the

solicitation, negotiating, or approving

appropriate patent rights clauses for a

M&O contract. It may be appropriate to

include more than one patent rights

clause in a solicitation if the successful

contractor could, for instance, be either

an educational or a large business. If a

large business may be selected for

performance of a contract that will

include a technology transfer clause, the

solicitation must include the clause at

970.5204–103 to reflect the waiver that

will likely be granted. If the solicitation

includes more than one patent clause, it

must include an explanation of the

circumstances under which the

appropriate clause will be used. The

final award must contain only one

patent rights clause.

970.2704 Patent rights clause provisions

for management and operating contractors.

(a) Allocation of principal rights:

Bayh-Dole provisions. If the

management and operating contractor is

an educational institution or nonprofit

organization, the patent rights clause

provided at 970.5204–101 must be

inserted into the M&O contract. Such

entities are beneficiaries of Bayh-Dole

Act, including the paramount right of

the contractor to elect to retain title to

inventions conceived or first actually

reduced to practice in performance of

work under the contract, except in DOEexempted areas of technology or in

operation of DOE facilities primarily

dedicated to naval nuclear propulsion

or weapons related programs.

(b) Allocation of principal rights:

Government title. (1) The patent rights

clause provided at 970.5204–102 must

be incorporated into the M&O contract

if the contractor is a for-profit, large

business firm and the contract does not

have a technology transfer mission or if,

without regard to the type of contractor,

the contract is for the operation of a

DOE facility primarily dedicated to

naval nuclear propulsion or weapons

related programs. That clause provides

for DOE’s statutory obligation to take

title to inventions conceived or first

actually reduced to practice in the

course of or under an M&O contract,

and does not contemplate an advance

class waiver of Government rights in

inventions, or participation by the

contractor in technology transfer

activities.

(2) While only in rare circumstances

does a for-profit large business

contractor whose contract contains no

technology transfer mission receive

rights in or title to inventions made

under the contract, the contractor does

have the right to request a license or

foreign patent rights in inventions made

under the contract, and may petition for

a waiver of Government rights in

identified inventions. The patent rights

clause 970.5204–102 does not include

many of the provisions of patent rights

clauses 970.5204–101 and 970.5204–

103, related to the filing of patent

applications by the contractor, the

granting of rights in inventions by the

contractor to third parties (preference

for United States industry), and

conditions allowing the Government to

grant licenses to third parties in

inventions retained by the contractor

(march-in rights). Any instrument

granting rights in inventions made

under a contract governed by patent

rights clause 970.5204–102 must

include these additional provisions

within its terms and conditions.

(c) Allocation of principal rights:

Contractor right to elect title under an

advance class waiver. If the M&O

contractor is a for-profit, large business

firm and the Government has granted an

advance class waiver of Government

rights in inventions made in the course

of or under the M&O contract, under the

authority of the Atomic Energy Act of

1954 (42 U.S.C. 2182) and the Federal

Nonnuclear Energy Act of 1974 (42

U.S.C. 5908(c)), the patent rights clause

provided at 970.5204–103 must be

inserted into the M&O contract, unless

the terms and conditions of such an

approved waiver alter or replace the

patent rights clause provisions pursuant

to 10 CFR part 784.

(d) Extensions of time—DOE

discretion. The patent rights clauses for

M&O contracts require the contractor to

take certain actions within prescribed

time periods to comply with the

contract and preserve its rights in

inventions. The M&O contractor may

request extensions of time in which to

take such actions by submitting written

justification to DOE, and DOE may grant

the contractor’s requests, on a case-bycase basis. If the time period expired

due to negligence by the contractor,

DOE may grant a request for an

extension of time upon a showing by the

contractor that corrective procedures are

in place to avoid such negligence in the

future. If a contractor is requesting an

extension of time in which to elect to

retain title to an invention, DOE may

grant the request if the extension allows

the contractor to conduct further

experimentation, market research, or

other analysis helpful to determine

contractor interest in electing title to the

invention, among other considerations.

Generally, the extensions of time are for

periods of between six (6) months to one

(1) year.

(e) Facilities license. These include

the rights to make, use, transfer, or

otherwise dispose of all articles,

materials, products, or processes

embodying inventions or discoveries

used or embodied in the facility

regardless of whether or not conceived

or first actually reduced to practice

under or in the course of such a

contract. The patent rights clauses,

970.5204–101, 970.5204–102, and

970.5204–103, each contain a provision

granting the Government this facilities

license.

(f) Deletion of classified inventions

provision. If DOE determines that the

research, development, demonstration

or production work to be performed

during the course of a management and

operating contract most probably will

not involve classified subject matter or

result in any inventions that require

security classification, DOE patent

counsel may advise the contracting

officer to delete the patent rights clause

provision entitled, ‘‘Classified

Inventions’’ from the M&O contract.

(g) Alternate 1—Weapons related

research or production. If DOE grants

technology transfer authority to a DOE

facility, pursuant to Public Law 101–189

section 3133(d), and the DOE owned

facility is involved in weapons related

research and development, or

production, then Alternate 1 of the

patent rights clauses must be inserted

into the M&O contract. Alternate 1

defines weapons related subject

inventions and restricts the contractor’s

rights with respect to such inventions.

970.5204–71 and 970.5204–72 [Removed]

5. Sections 970.5204–71 and

970.5204–72 are removed and reserved.

6. Sections 970.5204–94 through

970.5204–98 and 970.5204–100 through

970.5204–103 are added to read as

follows:

970.5204–94 Authorization and consent.

Insert the following clause in

solicitations and contracts in

accordance with 970.2702–1:

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68937

Authorization and Consent (Nov. 2000)

(a) The Government authorizes and

consents to all use and manufacture of any

invention described in and covered by a

United States patent in the performance of

this contract or any subcontract at any tier.

(b) If the Contractor is sued for copyright

infringement or anticipates the filing of such

a lawsuit, the Contractor may request

authorization and consent to copy a

copyrighted work from the contracting

officer. Programmatic necessity is a major

consideration for DOE in determining

whether to grant such request.

(c) The Contractor agrees to include, and

require inclusion of, the Authorization and

Consent clause at 52.227–1, without

Alternate 1, but suitably modified to identify

the parties, in all subcontracts at any tier for

supplies or services (including construction,

architect-engineer services, and materials,

supplies, models, samples, and design or

testing services expected to exceed $25,000).

(d) The Contractor agrees to include, and

require inclusion of, paragraph (a) of this

Authorization and Consent clause, suitably

modified to identify the parties, in all

subcontracts at any tier for research and

development activities. Omission of an

authorization and consent clause from any

subcontract, including those valued less than

$25,000 does not affect this authorization and

consent.

(End of clause)

970.5204–95 Notice and assistance

regarding patent and copyright

infringement.

Insert the following clause in solicitations

and contracts in accordance with 970.2702–

2:

Notice and Assistance Regarding Patent and

Copyright Infringement (Nov. 2000)

(a) The Contractor shall report to the

Contracting Officer promptly and in

reasonable written detail, each notice or

claim of patent or copyright infringement

based on the performance of this contract of

which the Contractor has knowledge.

(b) If any person files a claim or suit

against the Government on account of any

alleged patent or copyright infringement

arising out of the performance of this contract

or out of the use of any supplies furnished

or work or services performed hereunder, the

Contractor shall furnish to the Government,

when requested by the Contracting Officer,

all evidence and information in possession of

the Contractor pertaining to such suit or

claim. Except where the Contractor has

agreed to indemnify the Government, the

Contractor shall furnish such evidence and

information at the expense of the

Government.

(c) The Contractor agrees to include, and

require inclusion of, this clause suitably

modified to identify the parties, in all

subcontracts at any tier expected to exceed

$25,000.

(End of clause)

970.5204–96 Patent indemnity—

subcontracts.

Insert the following clause in

solicitations and contracts in

accordance with 970.2702–3:

Patent Indemnity—Subcontracts (Nov. 2000)

Except as otherwise authorized by the

Contracting Officer, the Contractor shall

obtain indemnification of the Government

and its officers, agents, and employees

against liability, including costs, for

infringement of any United States patent

(except a patent issued upon an application

that is now or may hereafter be withheld

from issue pursuant to a secrecy order by the

Government) from Contractor’s

subcontractors for any contract work

subcontracted in accordance with FAR 48

CFR 52.227–3.

(End of clause)

970.5204–97 Royalty information.

Insert the following provision in

solicitations in accordance with

970.2702–4:

Royalty Information (Nov. 2000)

(a) Cost or charges for royalties. If the

response to this solicitation contains costs or

charges for royalties totaling more than $250,

the following information shall be included

in the response relating to each separate item

of royalty or license fee:

(1) Name and address of licensor;

(2) Date of license agreement;

(3) Patent numbers, patent application

serial numbers, or other basis on which the

royalty is payable;

(4) Brief description, including any part or

model numbers of each contract item or

component on which the royalty is payable;

(5) Percentage or dollar rate of royalty per

unit;

(6) Unit price of contract item;

(7) Number of units; and

(8) Total dollar amount of royalties.

(b) Copies of current licenses. In addition,

if specifically requested by the Contracting

Officer before execution of the contract, the

offeror shall furnish a copy of the current

license agreement and an identification of

applicable claims of specific patents or other

basis upon which the royalty may be payable.

(End of provision)

970.5204–98 Refund of royalties.

Insert the following clause in

solicitations and contracts in

accordance with 970.2702–4:

Refund of Royalties (Nov 2000)

(a) The contract price includes certain

amounts for royalties, payable by the

Contractor or subcontractors or both,

reported to the Contracting Officer in

accordance with the Royalty Information

provision of the solicitation.

(b) During performance of this contract, if

any additional royalty payments are

proposed to be charged to the Government as

costs under the contract that were not

included in the original contract price, the

Contractor agrees to submit for approval of

the Contracting Officer prior to the execution

of any licensing agreement the following

information relating to each separate item of

royalty or license fee:

(1) Name and address of licensor;

(2) Date of license agreement;

(3) Patent numbers, patent application

serial numbers, or other basis on which the

royalty is payable;

(4) Brief description, including any part or

model numbers of each contract item or

component on which the royalty is payable;

(5) Percentage or dollar rate of royalty per

unit;

(6) Unit price of contract item;

(7) Number of units; and

(8) Total dollar amount of royalties.

(9) In addition, if specifically requested by

the Contracting Officer, the contractor shall

furnish a copy of the current license

agreement and an identification of applicable

claims of specific patents.

(c) The term ‘‘royalties’’ as used in this

clause refers to any costs or charges in the

nature of royalties, license fees, patent or

license amortization costs, or the like, for the

use of or for rights in patents and patent

applications in connection with performing

this contract or any subcontract hereunder.

The term also includes any costs or charges

associated with the access to, use of, or other

right pertaining to data that is represented to

be proprietary and is related to the

performance of this contract or subcontracts,

or the copying of such data or data that is

copyrighted.

(d) The Contractor shall furnish to the

Contracting Officer, before final payment

under this contract, a statement of royalties

paid or required to be paid in connection

with performing this contract and

subcontracts hereunder.

(e) The Contractor is compensated for any

royalties reported under paragraph (b) of this

clause only to the extent that such royalties

were included in the contract price and are

determined by the Contracting Officer to be

properly chargeable to the Government and

allocable to the contract.

(f) The Contracting Officer shall reduce the

contract price to the extent any royalties that

are included in the contract price are not, in

fact, paid by the Contractor or are determined

by the Contracting Officer not to be properly

chargeable to the Government and allocable

to the contract. The Contractor agrees to

repay or credit the Government accordingly,

as the Contracting Officer directs. Regardless

of prior DOE approval of any individual

payments or royalties, DOE may contest at

any time the enforceability, validity, scope

of, or title to, a patent or the proprietary

nature of data pursuant to which DOE makes

a royalty or other payment.

(g) If at any time within 3 years after final

payment under this contract, the Contractor

for any reason is relieved in whole or in part

from the payment of the royalties included in

the final contract price as adjusted pursuant

to paragraph (f) of this clause, the Contractor

shall promptly notify the Contracting Office

of that fact and shall promptly reimburse the

Government in a corresponding amount.

(h) The Contractor agrees to include, and

require inclusion of, this clause, including

this paragraph (h), suitably modified to

68938 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

identify the parties in any subcontract at any

tier in which the amount of royalties reported

during negotiation of the subcontract exceeds

$250.

(End of clause)

970.5204–100 Notice of right to request

patent waiver.

Insert the following provision in

solicitations in accordance with

970.2704–6:

Notice of Right To Request Patent Waiver

(Nov. 2000)

Offerors have the right to request a waiver

of all or any part of the rights of the United

States in inventions conceived or first

actually reduced to practice in performance

of the contract, in advance of or within 30

days after the effective date of contracting. If

such advance waiver is not requested or the

request is denied, the Contractor has a

continuing right under the contract to request

a waiver of the rights of the Government in

identified inventions, i.e., individual

inventions conceived or first actually

reduced to practice in performance of the

contract. Contractors that are domestic small

businesses and domestic nonprofit

organizations may not need a waiver and will

have included in their contracts a patent

clause reflecting their right to elect title to

subject inventions pursuant to the Bayh-Dole

Act (35 U.S.C. 200 et seq.).

(End of provision)

970.5204–101 Patent rights—management

and operating contracts, nonprofit

organization or small business firm

contractor.

As prescribed in 970.2703(c), insert

the following clause:

Patent Rights—Management and Operating

Contracts, Nonprofit Organization or Small

Business Firm Contractor (Nov. 2000)

(a) Definitions.

(1) DOE licensing regulations means the

Department of Energy patent licensing

regulations at 10 CFR part 781.

(2) Exceptional circumstance subject

invention means any subject invention in a

technical field or related to a task determined

by the Department of Energy to be subject to

an exceptional circumstance under 35 U.S.C.

202(a)(ii) and in accordance with 37 CFR

401.3(e).

(3) Invention means any invention or

discovery which is or may be patentable or

otherwise protectable under Title 35 of the

United States Code, or any novel variety of

plant which is or may be protected under the

Plant Variety Protection Act (7 U.S.C. 2321

et seq.).

(4) Made when used in relation to any

invention means the conception or first

actual reduction to practice of such

invention.

(5) 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.

(6) Patent Counsel means the Department

of Energy (DOE) Patent Counsel assisting the

DOE contracting activity.

(7) Practical application means to

manufacture, in the case of a composition or

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.

(8) Small business firm means a small

business concern as defined at section 2 of

Pub. L. 85–536 (15 U.S.C. 632) and

implementing regulations of the

Administrator of the Small Business

Administration. For the purpose of this

clause, the size standards for small business

concerns involved in Government

procurement and subcontracting at 13 CFR

121.3–8 and 13 CFR 121.3–12, respectively,

are used.

(9) Subject invention means any invention

of the contractor conceived or first actually

reduced to practice in the performance of

work under this contract, provided that in

the case of a variety of plant, the date of

determination (as defined in section 41(d) of

the Plant Variety Protection Act, 7 U.S.C.

2401(d)) shall also occur during the period of

contract performance.

(b) Allocation of principal rights. (1)

Retention of title by the Contractor. Except

for exceptional circumstance subject

inventions, the contractor may retain the

entire right, title, and interest throughout the

world to each subject invention subject to the

provisions of this clause and 35 U.S.C. 203.

With respect to any subject invention in

which the Contractor retains title, the Federal

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.

(2) Exceptional circumstance subject

inventions. Except to the extent that rights

are retained by the Contractor in a

determination of exceptional circumstances

or granted to a contractor through a

determination of greater rights in accordance

with subparagraph (b)(4) of this clause, the

Contractor does not have a right to retain title

to any exceptional circumstance subject

inventions and agrees to assign to the

Government the entire right, title, and

interest, throughout the world, in and to any

exceptional circumstance subject inventions.

(i) Inventions within or relating to the

following fields of technology are exceptional

circumstance subject inventions:

(A) Uranium enrichment technology;

(B) Storage and disposal of civilian highlevel nuclear waste and spent fuel

technology; and

(C) National security technologies

classified or sensitive under Section 148 of

the Atomic Energy Act (42 U.S.C. 2168).

(ii) Inventions made under any agreement,

contract or subcontract related to the

following are exceptional circumstance

subject inventions:

(A) DOE Steel Initiative and Metals

Initiative;

(B) U.S. Advanced Battery Consortium; and

(C) Any funding agreement which is

funded in part by the Electric Power

Research Institute (EPRI) or the Gas Research

Institute (GRI).

(iii) DOE reserves the right to unilaterally

amend this contract to modify, by deletion or

insertion, technical fields, tasks, or other

classifications for the purpose of determining

DOE exceptional circumstance subject

inventions.

(3) Treaties and international agreements.

Any rights acquired by the Contractor in

subject inventions are subject to any

disposition of right, title, or interest in or to

subject inventions provided for in treaties or

international agreements identified at

Appendix [Insert Reference] to this contract.

DOE reserves the right to 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 to

effectuate those license or other rights which

are necessary for the Government to meet its

obligations to foreign governments, their

nationals and international organizations

under such treaties or international

agreements with respect to subject inventions

made after the date of the amendment.

(4) Contractor request for greater rights in

exceptional circumstance subject inventions.

The Contractor may request rights greater

than allowed by the exceptional

circumstance determination in an

exceptional circumstance subject invention

by submitting such a request in writing to

Patent Counsel at the time the exceptional

circumstance subject invention is disclosed

to DOE or within eight (8) months after

conception or first actual reduction to

practice of the exceptional circumstance

subject invention, whichever occurs first,

unless a longer period is authorized in

writing by the Patent Counsel for good cause

shown in writing by the Contractor. DOE

may, in its discretion, grant or refuse to grant

such a request by the Contractor.

(5) Contractor employee-inventor rights. If

the Contractor does not elect to retain title to

a subject invention or does not request

greater rights in an exceptional circumstance

subject invention, a Contractor employeeinventor, after consultation with the

Contractor and with written authorization

from the Contractor in accordance with 10

CFR 784.9(b)(4), may request greater rights,

including title, in the subject invention or the

exceptional circumstance invention from

DOE, and DOE may, in its discretion, grant

or refuse to grant such a request by the

Contractor employee-inventor.

(6) Government assignment of rights in

Government employees’ subject inventions. If

a Government employee is a joint inventor of

a subject invention or of an exceptional

circumstance subject invention to which the

Contractor has rights, the Government may

assign or refuse to assign to the Contractor

any rights in the subject invention or

exceptional circumstance subject invention

acquired by the Government from the

Government employee, in accordance with

48 CFR 27.304–1(d). The rights assigned to

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68939

the Contractor are subject to any provision of

this clause that is applicable to subject

inventions in which the Contractor retains

title, including reservation by the

Government of a nonexclusive,

nontransferable, irrevocable, paid-up license,

except that the Contractor shall file its initial

patent application claiming the subject

invention or exceptional circumstance

invention within one (1) year after the

assignment of such rights. The Contractor

shall share royalties collected for the

manufacture, use or sale of the subject

invention with the Government employee, as

DOE deems appropriate.

(c) Subject invention disclosure, election of

title and filing of patent application by

contractor. (1) Subject invention disclosure.

The contractor will disclose each subject

invention to the Patent Counsel within two

months after the inventor discloses it in

writing to contractor personnel responsible

for patent matters. The disclosure to the

agency shall be in the form of a written report

and shall identify the contract under which

the invention was made and the inventor(s)

and all sources of funding by B&R code for

the invention. It shall be sufficiently

complete in technical detail to convey a clear

understanding to the extent known at the

time of the disclosure, of the nature, purpose,

operation, and the physical, chemical,

biological or electrical characteristics of the

invention. The disclosure shall also identify

any publication, on 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 at the time of

disclosure. The disclosure shall include a

written statement as to whether the invention

falls within an exceptional circumstance

field. DOE will make a determination and

advise the Contractor within 30 days of

receipt of an invention disclosure as to

whether the invention is an exceptional

circumstance subject invention. In addition,

after disclosure to the Patent Counsel, the

Contractor will promptly notify the agency of

the acceptance of any manuscript describing

the invention for publication or of any on

sale or public use planned by the contractor.

The Contractor shall obtain approval from

Patent Counsel prior to any release or

publication of information concerning any

nonelectable subject invention such as an

exceptional circumstance subject invention

or any subject invention related to a treaty or

international agreement.

(2) Election by the Contractor. Except as

provided in paragraph (b)(2) of this clause,

the Contractor will elect in writing whether

or not to retain title to any such invention by

notifying the Federal agency within two

years of disclosure to the Federal agency.

However, in any case where publication, on

sale or public use has initiated the one year

statutory period wherein valid patent

protection can still 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) Filing of patent applications by the

Contractor. The Contractor will file its initial

patent application on a subject invention to

which it elects to retain title within one year

after election of title or, if earlier, or prior to

the end of any 1-year statutory period

wherein valid patent protection can be

obtained in the United States after a

publication, on sale, or public use. The

Contractor will file patent applications in

additional countries or international patent

offices within either ten months of the

corresponding initial patent application or

six months from the date permission is

granted by the Commissioner of Patents and

Trademarks to file foreign patent applications

where such filing has been prohibited by a

Secrecy Order.

(4) Contractor’s request for an extension of

time. Requests for an extension of the time

for disclosure, election, and filing under

subparagraphs (c)(1), (2) and (3) may, at the

discretion of Patent Counsel, be granted.

(5) Publication approval. During the course

of the work under this contract, the

Contractor or its employees may desire to

release or publish information regarding

scientific or technical developments

conceived or first actually reduced to

practice in the course of or under this

contract. In order that public disclosure of

such information will not adversely affect the

patent interest of DOE or the Contractor,

approval for release or publication shall be

secured from the Contractor personnel

responsible for patent matters prior to any

such release or publication. Where DOE’s

approval of publication is requested, DOE’s

response to such requests for approval shall

normally be provided within 90 days except

in circumstances in which a domestic patent

application must be filed in order to protect

foreign rights. In the case involving foreign

patent rights, DOE shall be granted an

additional 180 days with which to respond

to the request for approval, unless extended

by mutual agreement.

(d) Conditions when the Government may

obtain title. The Contractor will convey to the

DOE, upon written request, title to any

subject invention—

(1) If the Contractor fails to disclose or

elect title to the subject invention within the

times specified in paragraph (c) of this

clause, or elects not to retain title; provided,

that DOE may only request title within sixty

(60) days after learning of the failure of the

Contractor to disclose or to elect within the

specified times .

(2) In those countries in which the

Contractor fails to file a patent application

within the times specified in subparagraph

(c) above; provided, however, that if the

Contractor has filed a patent application in

a country after the times specified in

subparagraph (c) above, but prior to its

receipt of the written request of the DOE, the

Contractor shall continue to retain title in

that country.

(3) 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 a reexamination or

opposition proceeding on, a patent on a

subject invention.

(4) If the Contractor requests that DOE

acquire title or rights from the Contractor in

a subject invention to which the Contractor

had initially retained title or rights, or in an

exceptional circumstance subject invention

to which the Contractor was granted greater

rights, DOE may acquire such title or rights

from the Contractor, or DOE may decide

against acquiring such title or rights from the

Contractor, at DOE’s sole discretion.

(e) Minimum rights of the Contractor and

Protection of the Contractor’s right to file. (1)

Request for a Contractor license. The

Contractor may request the right to reserve a

revocable, nonexclusive, royalty-free license

throughout the world in each subject

invention to which the Government obtains

title, except if the Contractor fails to disclose

the invention within the times specified in

paragraph (c) of this clause. DOE may grant

or refuse to grant such a request by the

Contractor. When DOE approves such

reservation, the Contractor’s license will

normally extend to its domestic subsidiaries

and affiliates, if any, within the corporate

structure of which the Contractor is a party

and includes the right to grant sublicenses of

the same scope to the extent the Contractor

was legally obligated to do so at the time the

contract was awarded. The license is

transferable only with the approval of DOE,

except when transferred to the successor of

that part of the contractor’s business to which

the invention pertains.

(2) Revocation or modification of a

Contractor license. The Contractor’s domestic

license may be revoked or modified by DOE

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 applicable provisions at 37

CFR part 404 and DOE licensing regulations

at 10 CFR part 781. This license will not be

revoked in the field of use or the

geographical areas in which the Contractor

has achieved practical application and

continues to make the benefits of the subject

invention reasonably accessible to the public.

The license in any foreign country may be

revoked or modified at the discretion of DOE

to the extent the Contractor, its licensees, or

the domestic subsidiaries or affiliates have

failed to achieve practical application of the

subject invention in that foreign country.

(3) Notice of revocation of modification of

a Contractor license. Before revocation or

modification of the license, DOE will furnish

the Contractor a written notice of its

intention to revoke or modify the license, and

the Contractor will be allowed thirty days (or

such other time as may be authorized by DOE

for good cause shown by the Contractor) after

the notice to show cause why the license

should not be revoked or modified. The

Contractor has the right to appeal, in

accordance with applicable regulations in 37

CFR part 404 and DOE licensing regulations

at 10 CFR part 781 concerning the licensing

of Government owned inventions, any

decision concerning the revocation or

modification of the license.

(f) Contractor action to protect the

Government’s interest.

(1) Execution of delivery of title or license

instruments. The Contractor agrees to execute

or to have executed, and promptly deliver to

the Patent Counsel all instruments necessary

to accomplish the following actions:

(i) Establish or confirm the rights the

Government has throughout the world in

68940 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

those subject inventions to which the

Contractor elects to retain title, and

(ii) Convey title to DOE when requested

under subparagraphs (b) or paragraph (d) of

this clause and to enable the Government to

obtain patent protection throughout the

world in that subject invention.

(2) Contractor employee agreements. The

Contractor agrees to require, by written

agreement, its employees, other than clerical

and nontechnical employees, to disclose

promptly in writing to Contractor personnel

identified as responsible for the

administration of patent matters and in a

format suggested by the Contractor, each

subject invention made under this contract 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. This disclosure format should

require, as a minimum, the information

required by subparagraph (c)(1) of this

clause. The Contractor shall instruct such

employees, through employee agreements or

other suitable educational programs, on the

importance of reporting inventions in

sufficient time to permit the filing of patent

applications prior to U.S. or foreign statutory

bars.

(3) Notification of discontinuation of

patent protection. The contractor will notify

the Patent Counsel of any decision not to

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

thirty days before the expiration of the

response period required by the relevant

patent office.

(4) Notification of Government rights. The

contractor agrees to include, within the

specification of any United States patent

applications 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 Federal

agency). The government has certain rights in

the invention.’’

(5) Invention identification procedures.

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

written description of such procedures to the

Contracting Officer so that the Contracting

Officer may evaluate and determine their

effectiveness.

(6) Invention filing documentation. If the

Contractor files a domestic or foreign patent

application claiming a subject invention, the

Contractor shall promptly submit to Patent

Counsel, upon request, the following

information and documents:

(i) The filing date, serial number, title, and

a copy of the patent application (including an

English-language version if filed in a

language other than English);

(ii) An executed and approved instrument

fully confirmatory of all Government rights

in the subject invention; and

(iii) The patent number, issue date, and a

copy of any issued patent claiming the

subject invention.

(7) Duplication and disclosure of

documents. The Government may duplicate

and disclose subject invention disclosures

and all other reports and papers furnished or

required to be furnished pursuant to this

clause; provided, however, that any such

duplication or disclosure by the Government

is subject to the confidentiality provision at

35 U.S.C. 205 and 37 CFR part 40.

(g) Subcontracts. (1) Subcontractor subject

inventions. The Contractor shall not obtain

rights in the subcontractor’s subject

inventions as part of the consideration for

awarding a subcontract.

(2) Inclusion of patent rights clause—nonprofit organization or small business firm

subcontractors. Unless otherwise authorized

or directed by the Contracting Officer, the

Contractor shall include the patent rights

clause at 48 CFR 952.227–11, suitably

modified to identify the parties, in all

subcontracts, at any tier, for experimental,

developmental, demonstration or research

work to be performed by a small business

firm or domestic nonprofit organization,

except subcontracts which are subject to

exceptional circumstances in accordance

with 35 U.S.C. 202 and subparagraph (b)(2)

of this clause. The subcontractor retains all

rights provided for the contractor in the

patent rights clause at 48 CFR 952.227–11.

(3) Inclusion of patent rights clause—

subcontractors other than non-profit

organizations and small business firms.

Except for the subcontracts described in

subparagraph (g)(2) of this clause, the

Contractor shall include the patent rights

clause at 48 CFR 952.227–13, suitably

modified to identify the parties, in any

contract for experimental, developmental,

demonstration or research work. For

subcontracts subject to exceptional

circumstances, the contractor must consult

with DOE patent counsel with respect to the

appropriate patent clause.

(4) DOE and subcontractor contract. With

respect to subcontracts at any tier, DOE, the

subcontractor, and the Contractor agree that

the mutual obligations of the parties created

by this clause constitute a contract between

the subcontractor and DOE 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 Act in connection with

proceedings under paragraph (j) of this

clause.

(5) Subcontractor refusal to accept terms of

patent clause. If a prospective subcontractor

refuses to accept the terms of a patent rights

clause, the Contractor shall promptly submit

a written notice to the Contracting Officer

stating the subcontractor’s reasons for such a

refusal, including any relevant information

for expediting disposition of the matter, and

the Contractor shall not proceed with the

subcontract without the written authorization

of the Contracting Officer.

(6) Notification of award of subcontract.

Upon the award of any subcontract at any tier

containing a patent rights clause, the

Contractor shall promptly notify the

Contracting Officer in writing and identify

the subcontractor, the applicable patent

rights clause, the work to be performed under

the subcontract, and the dates of award and

estimated completion. Upon request of the

Contracting Officer, the Contractor shall

furnish a copy of a subcontract.

(7) Identification of subcontractor subject

inventions. If the Contractor in the

performance of this contract becomes aware

of a subject invention made under a

subcontract, the Contractor shall promptly

notify Patent Counsel and identify the subject

invention.

(h) Reporting on utilization of subject

inventions. The Contractor agrees to submit

to DOE on request, periodic reports, no more

frequently than annually, on the utilization

of a subject invention or on efforts at

obtaining such utilization that are being

made by the Contractor or its licensees or

assignees. Such reports shall include

information regarding the status of

development, date of first commercial sale or

use, gross royalties received by the

Contractor, and such other data and

information as DOE may reasonably specify.

The Contractor also agrees to provide

additional reports as may be requested by

DOE in connection with any march-in

proceeding undertaken by DOE in

accordance with paragraph (j) of this clause.

As required by 35 U.S.C. 202(c)(5), DOE

agrees it will not disclose such information

to persons outside the Government without

permission of the Contractor.

(i) Preference for United States industry.

Notwithstanding any other provision of this

clause, the Contractor agrees that neither it

nor any assignee will grant to any person the

exclusive right to use or sell any subject

invention in the United States unless such

person agrees that any product 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 such an agreement may be

waived by DOE 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.

(j) March-in rights. The Contractor agrees

that, with respect to any subject invention in

which it has acquired title, DOE has the right

in accordance with the procedures in 37 CFR

401.6 and any DOE supplemental regulations

to require the Contractor, an assignee or

exclusive licensee of a subject invention to

grant a nonexclusive, partially exclusive, or

exclusive license in any field of use to a

responsible applicant or applicants, upon

terms that are reasonable under the

circumstances, and, if the Contractor,

assignee or exclusive licensee refuses such a

request, DOE has the right to grant such a

license itself if DOE determines that—

(1) Such action is necessary because the

Contractor or assignee has not taken, or is not

expected to take within a reasonable time,

effective steps to achieve practical

application of the subject invention in such

field of use;

(2) Such action is necessary to alleviate

health or safety needs which are not

reasonably satisfied by the Contractor,

assignee, or their licensees;

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68941

(3) Such action is necessary to meet

requirements for public use specified by

Federal regulations and such requirements

are not reasonably satisfied by the Contractor,

assignee, or licensees; or

(4) Such action is necessary because the

agreement required by paragraph (i) of this

clause has not been obtained or waived, or

because a licensee of the exclusive right to

use or sell any subject invention in the

United States is in breach of such agreement.

(k) Special provisions for contracts with

nonprofit organizations.

If the Contractor is a nonprofit

organization, it agrees that—

(1) DOE approval of assignment of rights.

Rights to a subject invention in the United

States may not be assigned by the Contractor

without the approval of DOE, except where

such assignment is made to an organization

which has as one of its primary functions the

management of inventions; provided, that

such assignee will be subject to the same

provisions of this clause as the Contractor.

(2) Small business firm licensees. It will

make efforts that are reasonable under the

circumstances to attract licensees of subject

inventions that are small business firms, and

that it will give a preference to a small

business firm when licensing a subject

invention if the Contractor determines that

the small business firm 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 firms; provided, that the

Contractor is also satisfied that the small

business firm 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. However, the Contractor

agrees that the Secretary of Commerce may

review the Contractor’s licensing program

and decisions regarding small business firm

applicants, and the Contractor will negotiate

changes to its licensing policies, procedures,

or practices with the Secretary of Commerce

when that Secretary’s review discloses that

the Contractor could take reasonable steps to

more effectively implement the requirements

of this subparagraph (k)(2).

(3) Contractor licensing of subject

inventions. To the extent that it provides the

most effective technology transfer, licensing

of subject inventions shall be administered

by Contractor employees on location at the

facility.

(l) Communications. The Contractor shall

direct any notification, disclosure or request

provided for in this clause to the Patent

Counsel assisting the DOE contracting

activity.

(m) Reports. (1) Interim reports. Upon

DOE’s request, the Contractor shall submit to

DOE, no more frequently than annually, a list

of subject inventions disclosed to DOE

during a specified period, or a statement that

no subject inventions were made during the

specified period; and a list of subcontracts

containing a patent clause and awarded by

the Contractor during a specified period, or

a statement that no such subcontracts were

awarded during the specified period.

(2) Final reports. Upon DOE’s request, the

Contractor shall submit to DOE, prior to

closeout of the contract, a list of all subject

inventions disclosed during the performance

period of the contract, or a statement that no

subject inventions were made during the

contract performance period; and a list of all

subcontracts containing a patent clause and

awarded by the Contractor during the

contract performance period, or a statement

that no such subcontracts were awarded

during the contract performance period.

(n) Examination of Records Relating to

Subject Inventions. (1) Contractor

compliance. Until the expiration of three (3)

years after final payment under this contract,

the Contracting Officer or any authorized

representative may examine any books

(including laboratory notebooks), records,

documents, and other supporting data of the

Contractor, which the Contracting Officer or

authorized representative deems reasonably

pertinent to the discovery or identification of

subject inventions, including exceptional

circumstance subject inventions, or to

determine Contractor compliance with any

requirement of this clause.

(2) Unreported inventions. If the

Contracting Officer is aware of an invention

that is not disclosed by the Contractor to

DOE, and the Contracting Officer believes the

unreported invention may be a subject

invention, including exceptional

circumstance subject inventions, DOE may

require the Contractor to submit to DOE a

disclosure of the invention for a

determination of ownership rights.

(3) Confidentiality. Any examination of

records under this paragraph is subject to

appropriate conditions to protect the

confidentiality of the information involved.

(4) Power of inspection. With respect to a

subject invention for which the Contractor

has responsibility for patent prosecution, the

Contractor shall furnish the Government,

upon request by DOE, an irrevocable power

to inspect and make copies of a prosecution

file for any patent application claiming the

subject invention.

(o) Facilities License. In addition to the

rights of the parties with respect to

inventions or discoveries conceived or first

actually reduced to practice in the course of

or under this contract, the Contractor agrees

to and does hereby grant to the Government

an irrevocable, nonexclusive, paid-up license

in and to any inventions or discoveries

regardless of when conceived or actually

reduced to practice or acquired by the

Contractor at any time through completion of

this contract and which are incorporated or

embodied in the construction of the facility

or which are utilized in the operation of the

facility or which cover articles, materials, or

product manufactured at the facility (1) to

practice or have practiced by or for the

Government at the facility, and (2) to transfer

such license with the transfer of that facility.

Notwithstanding the acceptance or exercise

by the Government of these rights, the

Government may contest at any time the

enforceability, validity or scope of, or title to,

any rights or patents herein licensed.

(p) Atomic Energy. (1) Pecuniary awards.

No claim for pecuniary award of

compensation under the provisions of the

Atomic Energy Act of 1954, as amended, may

be asserted with respect to any invention or

discovery made or conceived in the course of

or under this contract.

(2) Patent agreements. Except as otherwise

authorized in writing by the Contracting

Officer, the Contractor shall obtain patent

agreements to effectuate the provisions of

subparagraph (p)(1) of this clause from all

persons who perform any part of the work

under this contract, except nontechnical

personnel, such as clerical employees and

manual laborers.

(q) Classified Inventions. (1) Approval for

filing a foreign patent application. The

Contractor shall not file or cause to be filed

an application or registration for a patent

disclosing a subject invention related to

classified subject matter in any country other

than the United States without first obtaining

the written approval of the Contracting

Officer.

(2) Transmission of classified subject

matter. If in accordance with this clause the

Contractor files a patent application in the

United States disclosing a subject invention

that is classified for reasons of security, the

Contractor shall observe all applicable

security regulations covering the

transmission of classified subject matter. If

the Contractor transmits a patent application

disclosing a classified subject invention to

the United States Patent and Trademark

Office (USPTO), the Contractor shall submit

a separate letter to the USPTO identifying the

contract or contracts by agency and

agreement number that require security

classification markings to be placed on the

patent application.

(3) Inclusion of clause in subcontracts. The

Contractor agrees to include the substance of

this clause in subcontracts at any tier that

cover or are likely to cover subject matter

classified for reasons of security.

(r) Patent Functions. Upon the written

request of the Contracting Officer or Patent

Counsel, the Contractor agrees to make

reasonable efforts to support DOE in

accomplishing patent-related functions for

work arising out of the contract, including,

but not limited to, the prosecution of patent

applications, and the determination of

questions of novelty, patentability, and

inventorship.

(s) Educational Awards Subject to 35

U.S.C. 212. The Contractor shall notify the

Contracting Officer prior to the placement of

any person subject to 35 U.S.C. 212 in an area

of technology or task (1) related to

exceptional circumstance technology or (2)

which is subject to treaties or international

agreements as set forth in paragraph (b)(3) of

this clause or agreements other than funding

agreements. The Contracting Officer may

disapprove of any such placement.

(t) Annual Appraisal by Patent Counsel.

Patent Counsel may conduct an annual

appraisal to evaluate the Contractor’s

effectiveness in identifying and protecting

subject inventions in accordance with DOE

policy.

(End of clause)

Alternate 1: Weapons Related Subject

Inventions.

As prescribed at 970.2704–(k), insert the

following as subparagraphs (a)(10) and (b)(7),

respectively:

68942 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

(a) Definitions.

(10) Weapons related subject invention

means any subject invention conceived or

first actually reduced to practice in the

course of or under work funded by or

through defense programs, including

Department of Defense and intelligence

reimbursable work, or the Naval Nuclear

Propulsion Program of the Department of

Energy.

(b) Allocation of Principal Rights.

(7) Weapons related subject inventions.

Except to the extent that DOE is solely

satisfied that the Contractor meets certain

procedural requirements and DOE grants

rights to the Contractor in weapons related

subject inventions, the Contractor does not

have the right to retain title to any weapons

related subject inventions.

(End of Alternate)

970.5204–102 Patent rights—management

and operating contracts, for-profit

contractor, non-technology transfer.

Insert the following clause in

solicitations and contracts in

accordance with 970.2703(c):

Patent Rights—Management and Operating

Contracts, For-Profit Contractor, NonTechnology Transfer (Nov 2000)

(a) Definitions. (1) DOE licensing

regulations means the Department of Energy

patent licensing regulations at 10 CFR part

781.

(2) DOE patent waiver regulations means

the Department of Energy patent waiver

regulations at 10 CFR part 784.

(3) Invention means any invention or

discovery which is or may be patentable or

otherwise protectable under title 35 of the

United States Code, or any novel variety of

plant which is or may be protected under the

Plant Variety Protection Act (7 U.S.C. 2321,

et seq.).

(4) Made when used in relation to any

invention means the conception or first

actual reduction to practice of such

invention.

(5) Patent Counsel means DOE Patent

Counsel assisting the contracting activity.

(6) Practical application means to

manufacture, in the case of a composition or

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.

(7) Subject Invention means any invention

of the contractor conceived or first actually

reduced to practice in the course of or under

this contract, provided that in the case of a

variety of plant, the date of determination (as

defined in section 41(d) of the Plant Variety

Protection Act, 7 U.S.C. 2401(d)) shall also

occur during the period of contract

performance.

(b) Allocation of Principal Rights. (1)

Assignment to the Government. Except to the

extent that rights are retained by the

Contractor by a determination of greater

rights in accordance with subparagraph (b)(2)

of this clause or by a request for foreign

patent rights in accordance with

subparagraph (d)(2) of this clause, the

Contractor agrees to assign to the

Government the entire right, title, and

interest throughout the world in and to each

subject invention.

(2) Greater rights determinations. The

Contractor, or an Contractor employeeinventor after consultation with the

Contractor and with the written authorization

of the Contractor in accordance with DOE

patent waiver regulations, may request

greater rights, including title, in an identified

subject invention than the nonexclusive

license and the foreign patent rights provided

for in paragraph (d) of this clause, in

accordance with the DOE patent waiver

regulations. Such a request shall be

submitted in writing to Patent Counsel with

a copy to the Contracting Officer at the time

the subject invention is first disclosed to DOE

in accordance with subparagraph (c)(2) of

this clause, or not later than eight (8) months

after such disclosure, unless a longer period

is authorized in writing by the Contracting

Officer for good cause shown in writing by

the Contractor. DOE may grant or refuse to

grant such a request by the Contractor or

Contractor employee-inventor. Unless

otherwise provided in the greater rights

determination, any rights in a subject

invention obtained by the Contractor

pursuant to a determination of greater rights

are subject to a nonexclusive,

nontransferable, irrevocable, paid-up license

to the Government to practice or have

practiced the subject invention throughout

the world by or on behalf of the Government

of the United States (including any

Government agency), and to any reservations

and conditions deemed appropriate by the

Secretary of Energy or designee.

(c) Subject Invention Disclosures. (1)

Contractor procedures for reporting subject

inventions to Contractor personnel. Subject

inventions shall be reported to Contractor

personnel responsible for patent matters

within six (6) months of conception and/or

first actual reduction to practice, whichever

occurs first in the performance of work under

this contract. Accordingly, the Contractor

shall establish and maintain effective

procedures for ensuring such prompt

identification and timely disclosure of

subject inventions to Contractor personnel

responsible for patent matters, and the

procedures shall include the maintenance of

laboratory notebooks, or equivalent records,

and other records that are reasonably

necessary to document the conception and/

or the first actual reduction to practice of

subject inventions, and the maintenance of

records demonstrating compliance with such

procedures. The Contractor shall submit a

written description of such procedures to the

Contracting Officer, upon request, for

evaluation of the effectiveness of such

procedures by the Contracting Officer.

(2) Subject invention disclosure. The

Contractor shall disclose each subject

invention to Patent Counsel with a copy to

the Contracting Officer within two (2)

months after the subject invention is reported

to Contractor personnel responsible for

patent matters, in accordance with

subparagraph (c)(1) of this clause, or, if

earlier, within six (6) months after the

Contractor has knowledge of the subject

invention, but in any event before any on

sale, public use, or publication of the subject

invention. The disclosure to DOE shall be in

the form of a written report and shall

include:

(i) The contract number under which the

subject invention was made;

(ii) The inventor(s) of the subject

invention;

(iii) A description of the subject invention

in sufficient technical detail to convey a clear

understanding of the nature, purpose and

operation of the subject invention, and of the

physical, chemical, biological or electrical

characteristics of the subject invention, to the

extent known by the Contractor at the time

of the disclosure;

(iv) The date and identification of any

publication, on sale or public use of the

invention;

(v) The date and identification of any

submissions for publication of any

manuscripts describing the invention, and a

statement of whether the manuscript is

accepted for publication, to the extent known

by the Contractor at the time of the

disclosure;

(vi) A statement indicating whether the

subject invention concerns exceptional

circumstances pursuant to 35 U.S.C. 202(ii),

related to national security, or subject to a

treaty or an international agreement, to the

extent known or believed by Contractor at the

time of the disclosure;

(vii) All sources of funding by Budget and

Resources (B&R) code; and

(viii) The identification of any agreement

relating to the subject invention, including

Cooperative Research and Development

Agreements and Work-for-Others agreements.

Unless the Contractor contends otherwise

in writing at the time the invention is

disclosed, inventions disclosed to DOE under

this paragraph are deemed made in the

manner specified in Sections (a)(1) and (a)(2)

of 42 U.S.C. 5908.

(3) Publication after disclosure. After

disclosure of the subject invention to the

DOE, the Contractor shall promptly notify

Patent Counsel of the acceptance for

publication of any manuscript describing the

subject invention or of any expected or on

sale or public use of the subject invention,

known by the Contractor.

(4) Contractor employee agreements. The

Contractor agrees to require, by written

agreement, its employees, other than clerical

and nontechnical employees, to disclose

promptly in writing to Contractor personnel

identified as responsible for the

administration of patent matters and in a

format suggested by the Contractor, each

subject invention made under this contract,

and to execute all papers necessary to file

patent applications claiming subject

inventions or to establish the Government’s

rights in the subject inventions. This

disclosure format shall at a minimum include

the information required by subparagraph

(c)(2) of this clause. The Contractor shall

instruct such employees, through employee

agreements or other suitable educational

programs, on the importance of reporting

inventions in sufficient time to permit the

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68943

filing of patent applications prior to U.S. or

foreign statutory bars.

(5) Contractor procedures for reporting

subject inventions to DOE. The Contractor

agrees to establish and maintain effective

procedures for ensuring the prompt

identification and timely disclosure of

subject inventions to DOE. The Contractor

shall submit a written description of such

procedures to the Contracting Officer, upon

request, for evaluation of the effectiveness of

such procedures by the Contracting Officer.

(6) Duplication and disclosure of

documents. The Government may duplicate

and disclose subject invention disclosures

and all other reports and papers furnished or

required to be furnished pursuant to this

clause; provided, however, that any such

duplication or disclosure by the Government

is subject to 35 U.S.C. 205 and 37 CFR

401.13.

(d) Minimum rights of the Contractor. (1)

Contractor License.

(i) Request for a Contractor license. Except

for subject inventions that the Contractor

fails to disclose within the time periods

specified at subparagraph (c)(2) of this

clause, the Contractor may request a

revocable, nonexclusive, royalty-free license

in each patent application filed in any

country claiming a subject invention and any

resulting patent in which the Government

obtains title, and DOE may grant or refuse to

grant such a request by the Contractor. If DOE

grants the Contractor’s request for a license,

the Contractor’s license extends to its

domestic subsidiaries and affiliates, if any,

within the corporate structure of which the

Contractor is a party and includes the right

to grant sublicenses of the same scope to the

extent the Contractor was legally obligated to

do so at the time the contract was awarded.

(ii) Transfer of a Contractor license. DOE

shall approve any transfer of the Contractor’s

license in a subject invention, and DOE may

determine the Contractor’s license is nontransferrable, on a case-by-case basis.

(iii) Revocation or modification of a

Contractor license. DOE 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

applicable provisions in 37 CFR part 404 and

DOE licensing regulations. DOE may not

revoke the Contractor’s domestic license in

that field of use or the geographical areas in

which the Contractor, its licensee, or its

domestic subsidiaries or affiliates achieved

practical applications and continues to make

the benefits of the invention reasonably

accessible to the public. DOE may revoke or

modify the Contractor’s license in any foreign

country to the extent the Contractor, its

licensees, or its domestic subsidiaries or

affiliates failed to achieve practical

application in that foreign country.

(iv) Notice of revocation or modification of

a Contractor license. Before revocation or

modification of the license, DOE shall

furnish the Contractor a written notice of its

intention to revoke or modify the license, and

the Contractor shall be allowed thirty (30)

days from the date of the notice (or such

other time as may be authorized by DOE for

good cause shown by the Contractor) to show

cause why the license should not be revoked

or modified. The Contractor has the right to

appeal any decision concerning the

revocation or modification of its license, in

accordance with applicable regulations in 37

CFR part 404 and DOE licensing regulations.

(2) Contractor’s right to request foreign

patent rights. If the Government has title to

a subject invention and the Government

decides against securing patent rights in a

foreign country for the subject invention, the

Contractor may request such foreign patent

rights from DOE, and DOE may grant the

Contractor’s request, subject to a

nonexclusive, nontransferable, irrevocable,

paid-up license to the Government to

practice or have practiced the subject

invention in the foreign country, and any

reservations and conditions deemed

appropriate by the Secretary of Energy or

designee. Such a request shall be submitted

in writing to the Patent Counsel as part of the

disclosure required by subparagraph (c)(2) of

this clause, with a copy to the DOE

Contracting Officer, unless a longer period is

authorized in writing by the Contracting

Officer for good cause shown in writing by

the Contractor. DOE may grant or refuse to

grant such a request, and may consider

whether granting the Contractor’s request

best serves the interests of the United States.

(e) Examination of records relating to

inventions. (1) Contractor compliance. Until

the expiration of three (3) years after final

payment under this contract, the Contracting

Officer or any authorized representative may

examine any books (including laboratory

notebooks), records, and documents and

other supporting data of the Contractor,

which the Contracting Officer or authorized

representative deems reasonably pertinent to

the discovery or identification of subject

inventions, or to determine Contractor (and

inventor) compliance with the requirements

of this clause, including proper identification

and disclosure of subject inventions, and

establishment and maintenance of invention

disclosure procedures.

(2) Unreported inventions. If the

Contracting Officer is aware of an invention

that is not disclosed by the Contractor to

DOE, and the Contracting Officer believes the

unreported invention may be a subject

invention, DOE may require the Contractor to

submit to DOE a disclosure of the invention

for a determination of ownership rights.

(3) Confidentiality. Any examination of

records under this paragraph is subject to

appropriate conditions to protect the

confidentiality of the information involved.

(f) Subcontracts. (1) Subcontractor subject

inventions. The Contractor shall not obtain

rights in the subcontractor’s subject

inventions as part of the consideration for

awarding a subcontract.

(2) Inclusion of patent rights clause—nonprofit organization or small business firm

subcontractors. Unless otherwise authorized

or directed by the Contracting Officer, the

Contractor shall include the patent rights

clause at 48 CFR 952.227–11, suitably

modified to identify the parties in all

subcontracts, at any tier, for experimental,

developmental, demonstration or research

work to be performed by a small business

firm or domestic nonprofit organization,

except subcontracts which are subject to

exceptional circumstances in accordance

with 35 U.S.C. 202(a)(ii).

(3) Inclusion of patent rights clause—

subcontractors other than non-profit

organizations and small business firms.

Except for the subcontracts described in

subparagraph (f)(2) of this clause, the

Contractor shall include the patent rights

clause at 48 CFR 952.227–13, suitably

modified to identify the parties, in any

contract for experimental, developmental,

demonstration or research work.

(4) DOE and subcontractor contract. With

respect to subcontracts at any tier, DOE, the

subcontractor, and the Contractor agree that

the mutual obligations of the parties created

by this clause constitute a contract between

the subcontractor and DOE with respect to

those matters covered by this clause.

(5) Subcontractor refusal to accept terms of

patent rights clause. If a prospective

subcontractor refuses to accept the terms of

a patent rights clause, the Contractor shall

promptly submit a written notice to the

Contracting Officer stating the

subcontractor’s reasons for such a refusal,

including any relevant information for

expediting disposition of the matter, and the

Contractor shall not proceed with the

subcontract without the written authorization

of the Contracting Officer.

(6) Notification of award of subcontract.

Upon the award of any subcontract at any tier

containing a patent rights clause, the

Contractor shall promptly notify the

Contracting Officer in writing and identify

the subcontractor, the applicable patent

rights clause, the work to be performed under

the subcontract, and the dates of award and

estimated completion. Upon request of the

Contracting Officer, the Contractor shall

furnish a copy of a subcontract.

(7) Identification of subcontractor subject

inventions. If the Contractor in the

performance of this contract becomes aware

of a subject invention made under a

subcontract, the Contractor shall promptly

notify Patent Counsel and identify the subject

invention, with a copy of the notification and

identification to the Contracting Officer.

(g) Atomic Energy. (1) Pecuniary awards.

No claim for pecuniary award of

compensation under the provisions of the

Atomic Energy Act of 1954, as amended, may

be asserted with respect to any invention or

discovery made or conceived in the course of

or under this contract.

(2) Patent agreements. Except as otherwise

authorized in writing by the Contracting

Officer, the Contractor shall obtain patent

agreements to effectuate the provisions of

subparagraph (g)(1) of this clause from all

persons who perform any part of the work

under this contract, except nontechnical

personnel, such as clerical employees and

manual laborers.

(h) Publication. The Contractor shall

receive approval from Patent Counsel prior to

releasing or publishing information regarding

scientific or technical developments

conceived or first actually reduced to

practice in the course of or under this

contract, to ensure such release or

publication does not adversely affect the

patent interests of DOE or the Contractor.

68944 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

(i) Communications. The Contractor shall

direct any notification, disclosure, or request

provided for in this clause to the Patent

Counsel assisting the DOE contracting

activity, with a copy of the communication

to the Contracting Officer.

(j) Reports. (1) Interim reports. Upon DOE’s

request, the Contractor shall submit to DOE,

no more frequently than annually, a list of

subject inventions disclosed to DOE during a

specified period, or a statement that no

subject inventions were made during the

specified period; and/or a list of subcontracts

containing a patent clause and awarded by

the Contractor during a specified period, or

a statement that no such subcontracts were

awarded during the specified period. The

interim report shall state whether the

Contractor’s invention disclosures were

submitted to DOE in accordance with the

requirements of subparagraphs (c)(1) and

(c)(5) of this clause.

(2) Final reports. Upon DOE’s request, the

Contractor shall submit to DOE, prior to

closeout of the contract or within three (3)

months of the date of completion of the

contracted work, a list of all subject

inventions disclosed during the performance

period of the contract, or a statement that no

subject inventions were made during the

contract performance period; and/or a list of

all subcontracts containing a patent clause

and awarded by the Contractor during the

contract performance period, or a statement

that no such subcontracts were awarded

during the contract performance period.

(k) Facilities license. In addition to the

rights of the parties with respect to

inventions or discoveries conceived or first

actually reduced to practice in the course of

or under this contract, the Contractor agrees

to and does hereby grant to the Government

an irrevocable, nonexclusive, paid-up license

in and to any inventions or discoveries

regardless of when conceived or actually

reduced to practice or acquired by the

contractor at any time through completion of

this contract and which are incorporated or

embodied in the construction of the facility

or which are utilized in the operation of the

facility or which cover articles, materials, or

products manufactured at the facility (1) to

practice or have practiced by or for the

Government at the facility, and (2) to transfer

such license with the transfer of that facility.

Notwithstanding the acceptance or exercise

by the Government of these rights, the

Government may contest at any time the

enforceability, validity or scope of, or title to,

any rights or patents herein licensed.

(l) Classified inventions. (1) Approval for

filing a foreign patent application. The

Contractor shall not file or cause to be filed

an application or registration for a patent

disclosing a subject invention related to

classified subject matter in any country other

than the United States without first obtaining

the written approval of the Contracting

Officer.

(2) Transmission of classified subject

matter. If in accordance with this clause the

Contractor files a patent application in the

United States disclosing a subject invention

that is classified for reasons of security, the

Contractor shall observe all applicable

security regulations covering the

transmission of classified subject matter. If

the Contractor transmits a patent application

disclosing a classified subject invention to

the United States Patent and Trademark

Office (USPTO), the Contractor shall submit

a separate letter to the USPTO identifying the

contract or contracts by agency and

agreement number that require security

classification markings to be placed on the

patent application.

(3) Inclusion of clause in subcontracts. The

Contractor agrees to include the substance of

this clause in subcontracts at any tier that

cover or are likely to cover subject matter

classified for reasons of security.

(m) Patent functions. Upon the written

request of the Contracting Officer or Patent

Counsel, the Contractor agrees to make

reasonable efforts to support DOE in

accomplishing patent-related functions for

work arising out of the contract, including,

but not limited to, the prosecution of patent

applications, and the determination of

questions of novelty, patentability, and

inventorship.

(n) Annual appraisal by Patent Counsel.

Patent Counsel may conduct an annual

appraisal to evaluate the Contractor’s

effectiveness in identifying and protecting

subject inventions in accordance with DOE

policy.

970.5204–103 Patent rights—management

and operating contracts, for-profit

contractor, advance class waiver.

Insert the following clause in

solicitations and contracts in

accordance with 970.2703(c):

Patent Rights-Management and Operating

Contracts, For-Profit Contractor, Advance

Class Waiver (Nov. 2000)

(a) Definitions. (1) DOE licensing

regulations means the Department of Energy

patent licensing regulations at 10 CFR part

781.

(2) DOE patent waiver regulations means

the Department of Energy patent waiver

regulations at 10 CFR part 784.

(3) Exceptional Circumstance Subject

Invention means any subject invention in a

technical field or related to a task determined

by the Department of Energy to be subject to

an exceptional circumstance under 35 U.S.C.

202(a)(ii), and in accordance with 37 CFR

401.3(e).

(4) Invention means any invention or

discovery which is or may be patentable or

otherwise protectable under title 35 of the

United States Code, or any novel variety of

plant which is or may be protected under the

Plant Variety Protection Act (7 U.S.C. 2321,

et seq.).

(5) Made when used in relation to any

invention means the conception or first

actual reduction to practice of such

invention.

(6) Patent Counsel means DOE Patent

Counsel assisting the contracting activity.

(7) Practical application means to

manufacture, in the case of a composition or

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.

(8) Subject Invention means any invention

of the contractor conceived or first actually

reduced to practice in the course of or under

this contract, provided that in the case of a

variety of plant, the date of determination (as

defined in section 41(d) of the Plant Variety

Protection Act, 7 U.S.C. 2401(d)) shall also

occur during the period of contract

performance.

(b) Allocation of Principal Rights. (1)

Assignment to the Government. Except to the

extent that rights are retained by the

Contractor by the granting of an advance

class waiver pursuant to subparagraph (b)(2)

of this clause or a determination of greater

rights pursuant to subparagraph (b)(7) of this

clause, the Contractor agrees to assign to the

Government the entire right, title, and

interest throughout the world in and to each

subject invention.

(2) Advance class waiver of Government

rights to the Contractor. DOE may grant to

the Contractor an advance class waiver of

Government rights in any or all subject

inventions, at the time of execution of the

contract, such that the Contractor may elect

to retain the entire right, title and interest

throughout the world to such waived subject

inventions, in accordance with the terms and

conditions of the advance class waiver.

Unless otherwise provided by the terms of

the advance class waiver, any rights in a

subject invention retained by the Contractor

under an advance class waiver are subject to

35 U.S.C. 203 and the provisions of this

clause, including the Government license

provided for in subparagraph (b)(3) of this

clause, and any reservations and conditions

deemed appropriate by the Secretary of

Energy or designee.

(3) Government license. With respect to

any subject invention to which the

Contractor retains title, either under an

advance class waiver pursuant to

subparagraph (b)(2) or a determination of

greater rights pursuant to subparagraph (b)(7)

of this clause, the Government has 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.

(4) Foreign patent rights. If the Government

has title to a subject invention and the

Government decides against securing patent

rights in a foreign country for the subject

invention, the Contractor may request such

foreign patent rights from DOE, and DOE may

grant the Contractor’s request, subject to 35

U.S.C. 203 and the provisions of this clause,

including the Government license provided

for in subparagraph (b)(3) of this clause, and

any reservations and conditions deemed

appropriate by the Secretary of Energy or

designee.

(5) Exceptional circumstance subject

inventions. Except to the extent that rights

are retained by the Contractor by a

determination of greater rights in accordance

with subparagraph (b)(7) of this clause, the

Contractor does not have the right to retain

title to any exceptional circumstance subject

inventions and agrees to assign to the

Government the entire right, title, and

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68945

interest, throughout the world, in and to any

exceptional circumstance subject inventions.

(i) Inventions within or relating to the

following fields of technology are exceptional

circumstance subject inventions:

(A) Uranium enrichment technology;

(B) Storage and disposal of civilian highlevel nuclear waste and spent fuel

technology; and

(C) National security technologies

classified or sensitive under Section 148 of

the Atomic Energy Act (42 U.S.C. 2168).

(ii) Inventions made under any agreement,

contract or subcontract related to the

following initiatives or programs are

exceptional circumstance subject inventions:

(A) DOE Steel Initiative and Metals

Initiative;

(B) U.S. Advanced Battery Consortium; and

(C) Any funding agreement which is

funded in part by the Electric Power

Research Institute (EPRI) or the Gas Research

Institute (GRI).

(iii) DOE reserves the right to unilaterally

amend this contract to modify, by deletion or

insertion, technical fields, programs,

initiatives, and/or other classifications for the

purpose of defining DOE exceptional

circumstance subject inventions.

(6) Treaties and international agreements.

Any rights acquired by the Contractor in

subject inventions are subject to any

disposition of right, title, or interest in or to

subject inventions provided for in treaties or

international agreements identified at

Appendix [Insert Reference], to this contract.

DOE reserves the right to 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 to

effectuate those license or other rights which

are necessary for the Government to meet its

obligations to foreign governments, their

nationals and international organizations

under such treaties or international

agreements with respect to subject inventions

made after the date of the amendment.

(7) Contractor request for greater rights.

The Contractor may request greater rights in

an identified subject invention, including an

exceptional circumstance subject invention,

to which the Contractor does not have the

right to elect to retain title, in accordance

with the DOE patent waiver regulations, by

submitting a such a request in writing to

Patent Counsel with a copy to the

Contracting Officer at the time the subject

invention is first disclosed to DOE pursuant

to subparagraph (c)(1) of this clause, or not

later than eight (8) months after such

disclosure, unless a longer period is

authorized in writing by the Contracting

Officer for good cause shown in writing by

the Contractor. DOE may grant or refuse to

grant such a request by the Contractor.

Unless otherwise provided in the greater

rights determination, any rights in a subject

invention obtained by the Contractor under

a determination of greater rights is subject to

35 U.S.C. 203 and the provisions of this

clause, including the Government license

provided for in subparagraph (b)(3) of this

clause, and to any reservations and

conditions deemed appropriate by the

Secretary of Energy or designee.

(8) Contractor employee-inventor rights. If

the Contractor does not elect to retain title to

a subject invention or does not request

greater rights in a subject invention,

including an exceptional circumstance

subject invention, to which the Contractor

does not have the right to elect to retain title,

a Contractor employee-inventor, after

consultation with the Contractor and with

written authorization from the Contractor in

accordance with 10 CFR 784.9(b)(4), may

request greater rights, including title, in the

subject invention or the exceptional

circumstance invention from DOE, and DOE

may grant or refuse to grant such a request

by the Contractor employee-inventor.

(9) Government assignment of rights in

Government employees’ subject inventions. If

a DOE employee is a joint inventor of a

subject invention to which the Contractor has

rights, DOE may assign or refuse to assign

any rights in the subject invention acquired

by the Government from the DOE employee

to the Contractor, consistent with 48 CFR

27.304–1(d). Unless otherwise provided in

the assignment, the rights assigned to the

Contractor are subject to the Government

license provided for in subparagraph (b)(3) of

this clause, and to any provision of this

clause applicable to subject inventions in

which rights are retained by the Contractor,

and to any reservations and conditions

deemed appropriate by the Secretary of

Energy or designee. The Contractor shall

share royalties collected for the manufacture,

use or sale of the subject invention with the

DOE employee, as DOE deems appropriate.

(c) Subject invention disclosure, election of

title, and filing of patent application by

contractor. (1) Subject invention disclosure.

The Contractor shall disclose each subject

invention to Patent Counsel with a copy to

the Contracting Officer within two (2)

months after an inventor discloses it in

writing to Contractor personnel responsible

for patent matters or, if earlier, within six (6)

months after the Contractor has knowledge of

the subject invention, but in any event before

any on sale, public use, or publication of the

subject invention. The disclosure to DOE

shall be in the form of a written report and

shall include:

(i) The contract number under which the

subject invention was made;

(ii) The inventor(s) of the subject

invention;

(iii) A description of the subject invention

in sufficient technical detail to convey a clear

understanding of the nature, purpose and

operation of the subject invention, and of the

physical, chemical, biological or electrical

characteristics of the subject invention, to the

extent known by the Contractor at the time

of the disclosure;

(iv) The date and identification of any

publication, on sale or public use of the

invention;

(v) The date and identification of any

submissions for publication of any

manuscripts describing the invention, and a

statement of whether the manuscript is

accepted for publication, to the extent known

by the Contractor at the time of the

disclosure;

(vi) A statement indicating whether the

subject invention is an exceptional

circumstance subject invention, related to

national security, or subject to a treaty or an

international agreement, to the extent known

or believed by Contractor at the time of the

disclosure;

(vii) All sources of funding by Budget and

Resources (B&R) code; and

(viii) The identification of any agreement

relating to the subject invention, including

Cooperative Research and Development

Agreements and Work-for-Others agreements.

Unless the Contractor contends otherwise

in writing at the time the invention is

disclosed, inventions disclosed to DOE under

this paragraph are deemed made in the

manner specified in sections (a)(1) and (a)(2)

of 42 U.S.C. 5908.

(2) Publication after disclosure. After

disclosure of the subject invention to the

DOE, the Contractor shall promptly notify

Patent Counsel of the acceptance for

publication of any manuscript describing the

subject invention or of any expected or on

sale or public use of the subject invention,

known by the Contractor. The Contractor

shall obtain approval from Patent Counsel

prior to any release or publication of

information concerning an exceptional

circumstance subject invention or any subject

invention related to a treaty or international

agreement.

(3) Election by the Contractor under an

advance class waiver. If the Contractor has

the right to elect to retain title to subject

inventions under an advance class waiver

granted in accordance with subparagraph

(b)(2) of this clause, and unless otherwise

provided for by the terms of the advance

class waiver, the Contractor shall elect in

writing whether or not to retain title to any

subject invention by notifying DOE within

two (2) years of the date of the disclosure of

the subject invention to DOE, in accordance

with subparagraph (c)(1) of this clause. The

notification shall identify the advance class

waiver, state the countries, including the

United States, in which rights are retained,

and certify that the subject invention is not

an exceptional circumstance subject

invention or subject to a treaty or

international agreement. If a publication, on

sale or public use of the subject invention has

initiated the 1-year statutory period under 35

U.S.C. 102(b), the period for election may be

shortened by DOE to a date that is no more

than sixty (60) days prior to the end of the

1-year statutory period.

(4) Filing of patent applications by the

Contractor under an advance class waiver. If

the Contractor has the right to retain title to

a subject invention in accordance with an

advance class waiver pursuant to

subparagraph (b)(2) of this clause or a

determination of greater rights pursuant to

paragraph (b)(7) of this clause, and unless

otherwise provided for by the terms of the

advance class waiver or greater rights

determination, the Contractor shall file an

initial patent application claiming the subject

invention to which it retains title either

within one (1) year after the Contractor’s

election to retain or grant of title to the

subject invention or prior to the end of any

1-year statutory period under 35 U.S.C.

102(b), whichever occurs first. Any patent

applications filed by the Contractor in foreign

68946 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

countries or international patent offices shall

be filed within either ten (10) months of the

corresponding initial patent application or, if

such filing has been prohibited by a Secrecy

Order, within six (6) months from the date

permission is granted by the Commissioner

of Patents and Trademarks to file foreign

patent applications.

(5) Submission of patent information and

documents. If the Contractor files a domestic

or foreign patent application claiming a

subject invention, the Contractor shall

promptly submit to Patent Counsel the

following information and documents:

(i) The filing date, serial number, title, and

a copy of the patent application (including an

English-language version if filed in a

language other than English);

(ii) An executed and approved instrument

fully confirmatory of all Government rights

in the subject invention; and

(iii) The patent number, issue date, and a

copy of any issued patent claiming the

subject invention.

(6) Contractor’s request for an extension of

time. Requests for an extension of the time

to disclose a subject invention, to elect to

retain title to a subject invention, or to file

a patent application under subparagraphs

(c)(1), (3), and (4) of this clause may be

granted at the discretion of Patent Counsel or

DOE.

(7) Duplication and disclosure of

documents. The Government may duplicate

and disclose subject invention disclosures

and all other reports and papers furnished or

required to be furnished pursuant to this

clause; provided, however, that any such

duplication or disclosure by the Government

is subject to 35 U.S.C. 205 and 37 CFR part

40.

(d) Conditions when the Government may

obtain title notwithstanding an advance class

waiver. (1) Return of title to a subject

invention. If the Contractor requests that DOE

acquire title or rights from the Contractor in

a subject invention, including an exceptional

circumstance subject invention, to which the

Contractor retained title or rights under

subparagraph (b)(2) or subparagraph (b)(7) of

this clause, DOE may acquire such title or

rights from the Contractor, or DOE may

decide against acquiring such title or rights

from the Contractor, at DOE’s sole discretion.

(2) Failure to disclose or elect to retain

title. Title vests in DOE and DOE may

request, in writing, a formal assignment of

title to a subject invention from the

Contractor, and the Contractor shall convey

title to the subject invention to DOE, if the

Contractor elects not to retain title to the

subject invention under an advance class

waiver, or the Contractor fails to disclose or

fails to elect to retain title to the subject

invention within the times specified in

subparagraphs (c)(1) and (c)(3) of this clause.

(3) Failure to file domestic or foreign

patent applications. In those countries in

which the Contractor fails to file a patent

application within the times specified in

subparagraph (c)(4) of this clause, DOE may

request, in writing, title to the subject

invention from the Contractor, and the

Contractor shall convey title to the subject

invention to DOE; provided, however, that if

the Contractor has filed a patent application

in any country after the times specified in

subparagraph (c)(4) of this clause, but prior

to its receipt of DOE’s written request for

title, the Contractor continues to retain title

in that country.

(4) Discontinuation of patent protection by

the Contractor. If the Contractor decides to

discontinue the prosecution of a patent

application, the payment of maintenance

fees, or the defense of a subject invention in

a reexamination or opposition proceeding, in

any country, DOE may request, in writing,

title to the subject invention from the

Contractor, and the Contractor shall convey

title to the subject invention to DOE.

(5) Termination of advance class waiver.

DOE may request, in writing, title to any

subject inventions from the Contractor, and

the Contractor shall convey title to the

subject inventions to DOE, if the advance

class waiver granted under subparagraph

(b)(2) of this clause is terminated under

paragraph (u) of this clause.

(e) Minimum rights of the Contractor. (1)

Request for a Contractor license. Except for

subject inventions that the Contractor fails to

disclose within the time periods specified at

subparagraph (c)(1) of this clause, the

Contractor may request a revocable,

nonexclusive, royalty-free license in each

patent application filed in any country

claiming a subject invention and any

resulting patent in which the Government

obtains title, and DOE may grant or refuse to

grant such a request by the Contractor. If DOE

grants the Contractor’s request for a license,

the Contractor’s license extends to its

domestic subsidiaries and affiliates, if any,

within the corporate structure of which the

Contractor is a party and includes the right

to grant sublicenses of the same scope to the

extent the Contractor was legally obligated to

do so at the time the contract was awarded.

(2) Transfer of a Contractor license. DOE

shall approve any transfer of the Contractor’s

license in a subject invention, and DOE may

determine that the Contractor’s license is

non-transferrable, on a case-by-case basis.

(3) Revocation or modification of a

Contractor license. DOE 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

applicable provisions in 37 CFR part 404 and

DOE licensing regulations. DOE may not

revoke the Contractor’s domestic license in

that field of use or the geographical areas in

which the Contractor, its licensees or its

domestic subsidiaries or affiliates have

achieved practical applications and

continues to make the benefits of the

invention reasonably accessible to the public.

DOE may revoke or modify the Contractor’s

license in any foreign country to the extent

the Contractor, its licensees, or its domestic

subsidiaries or affiliates failed to achieve

practical application in that foreign country.

(4) Notice of revocation or modification of

a Contractor license. Before revocation or

modification of the license, DOE shall

furnish the Contractor a written notice of its

intention to revoke or modify the license, and

the Contractor shall be allowed thirty (30)

days from the date of the notice (or such

other time as may be authorized by DOE for

good cause shown by the Contractor) to show

cause why the license should not be revoked

or modified. The Contractor has the right to

appeal any decision concerning the

revocation or modification of its license, in

accordance with applicable regulations in 37

CFR part 404 and DOE licensing regulations.

(f) Contractor action to protect the

Government’s interest. (1) Execution and

delivery of title or license instruments. The

Contractor agrees to execute or have

executed, and to deliver promptly to DOE all

instruments necessary to accomplish the

following actions:

(i) Establish or confirm the Government’s

rights throughout the world in subject

inventions to which the Contractor elects to

retain title;

(ii) Convey title in a subject invention to

DOE pursuant to subparagraph (b)(5) and

paragraph (d) of this clause; or

(iii) Enable the Government to obtain

patent protection throughout the world in a

subject invention to which the Government

has title.

(2) Contractor employee agreements. The

Contractor agrees to require, by written

agreement, its employees, other than clerical

and nontechnical employees, to disclose

promptly in writing to Contractor personnel

identified as responsible for the

administration of patent matters and in a

format suggested by the Contractor, each

subject invention made under this contract,

and to execute all papers necessary to file

patent applications claiming subject

inventions or to establish the Government’s

rights in the subject inventions. This

disclosure format shall at a minimum include

the information required by subparagraph

(c)(1) of this clause. The Contractor shall

instruct such employees, through employee

agreements or other suitable educational

programs, on the importance of reporting

inventions in sufficient time to permit the

filing of patent applications prior to U.S. or

foreign statutory bars.

(3) Contractor procedures for reporting

subject inventions to DOE. The Contractor

agrees to establish and maintain effective

procedures for ensuring the prompt

identification and timely disclosure of

subject inventions to DOE. The Contractor

shall submit a written description of such

procedures to the Contracting Officer, upon

request, for evaluation and approval of the

effectiveness of such procedures by the

Contracting Officer.

(4) Notification of discontinuation of

patent protection. With respect to any subject

invention for which the Contractor has

responsibility for patent prosecution, the

Contractor shall notify Patent Counsel of any

decision to discontinue the prosecution of a

patent application, payment of maintenance

fees, or defense of a subject invention in a

reexamination or opposition proceeding, in

any country, not less than thirty (30) days

before the expiration of the response period

for any action required by the corresponding

patent office.

(5) Notification of Government rights. With

respect to any subject invention to which the

Contractor has title, the Contractor agrees to

include, within the specification of any

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68947

United States patent application and within

any patent issuing thereon claiming a subject

invention, the following statement, ‘‘This

invention was made with Government

support under (identify the contract)

awarded by the United States Department of

Energy. The Government has certain rights in

the invention.’’

(6) Avoidance of royalty charges. If the

Contractor licenses a subject invention, the

Contractor agrees to avoid royalty charges on

acquisitions involving Government funds,

including funds derived through a Military

Assistance Program of the Government or

otherwise derived through the Government,

to refund any amounts received as royalty

charges on a subject invention in acquisitions

for, or on behalf of, the Government, and to

provide for such refund in any instrument

transferring rights in the subject invention to

any party.

(7) DOE approval of assignment of rights.

Rights in a subject invention in the United

States may not be assigned by the Contractor

without the approval of DOE.

(8) Small business firm licensees. The

Contractor shall make efforts that are

reasonable under the circumstances to attract

licensees of subject inventions that are small

business firms, and may give a preference to

a small business firm when licensing a

subject invention if the Contractor

determines that the small business firm 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 firms;

provided, the Contractor is also satisfied that

the small business firm has the capability

and resources to carry out its plan or

proposal. The decision as to whether to give

a preference in any specific case is at the

discretion of the Contractor.

(9) Contractor licensing of subject

inventions. To the extent that it provides the

most effective technology transfer, licensing

of subject inventions shall be administered

by Contractor employees on location at the

facility.

(g) Subcontracts. (1) Subcontractor subject

inventions. The Contractor shall not obtain

rights in the subcontractor’s subject

inventions as part of the consideration for

awarding a subcontract.

(2) Inclusion of patent rights clause—nonprofit organization or small business firm

subcontractors. Unless otherwise authorized

or directed by the Contracting Officer, the

Contractor shall include the patent rights

clause at 48 CFR 952.227–11, suitably

modified to identify the parties, in all

subcontracts, at any tier, for experimental,

developmental, demonstration or research

work to be performed by a small business

firm or domestic nonprofit organization,

except subcontracts which are subject to

exceptional circumstances in accordance

with 35 U.S.C. 202 and subparagraph (b)(5)

of this clause.

(3) Inclusion of patent rights clause—

subcontractors other than non-profit

organizations or small business firms. Except

for the subcontracts described in

subparagraph (g)(2) of this clause, the

Contractor shall include the patent rights

clause at 48 CFR 952.227–13, suitably

modified to identify the parties and any

applicable exceptional circumstance, in any

contract for experimental, developmental,

demonstration or research work.

(4) DOE and subcontractor contract. With

respect to subcontracts at any tier, DOE, the

subcontractor and Contractor agree that the

mutual obligations of the parties created by

this clause constitute a contract between the

subcontractor and DOE with respect to those

matters covered by this clause; provided,

however, that nothing in this paragraph is

intended to confer any jurisdiction under the

Contract Disputes Act in connection with

proceedings under paragraph (j) of this

clause.

(5) Subcontractor refusal to accept terms of

patent rights clause. If a prospective

subcontractor refuses to accept the terms of

a patent rights clause, the Contractor shall

promptly submit a written notice to the

Contracting Officer stating the

subcontractor’s reasons for such refusal and

including relevant information for expediting

disposition of the matter; and the Contractor

shall not proceed with the subcontract

without the written authorization of the

Contracting Officer.

(6) Notification of award of subcontract.

Upon the award of any subcontract at any tier

containing a patent rights clause, the

Contractor shall promptly notify the

Contracting Officer in writing and identify

the subcontractor, the applicable patent

rights clause, the work to be performed under

the subcontract, and the dates of award and

estimated completion. Upon request of the

Contracting Officer, the Contractor shall

furnish a copy of a subcontract.

(7) Identification of subcontractor subject

inventions. If the Contractor in the

performance of this contract becomes aware

of a subject invention made under a

subcontract, the Contractor shall promptly

notify Patent Counsel and identify the subject

invention, with a copy of the notification and

identification to the Contracting Officer.

(h) Reporting on utilization of subject

inventions. Upon request by DOE, the

Contractor agrees to submit periodic reports,

no more frequently than annually, describing

the utilization of a subject invention or

efforts made by the Contractor or its licensees

or assignees to obtain utilization of the

subject invention. 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

reasonably specified by DOE. Upon request

by DOE, the Contractor also agrees to provide

reports in connection with any march-in

proceedings undertaken by DOE, in

accordance with paragraph (j) of this clause.

If any data or information reported by the

Contractor in accordance with this provision

is considered privileged and confidential by

the Contractor, its licensee, or assignee and

the Contractor properly marks the data or

information privileged or confidential, DOE

agrees not to disclose such information to

persons outside the Government, to the

extent permitted by law.

(i) Preference for United States industry.

Notwithstanding any other provision of this

clause the Contractor agrees that with respect

to any subject invention in which it retains

title, neither it nor any assignee may grant to

any person the exclusive right to use or sell

any subject invention in the United States

unless such 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, DOE

may waive the requirement for such an

agreement 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.

(j) March-in rights. With respect to any

subject invention to which the Contractor has

elected to retain or is granted title, DOE may,

in accordance with the procedures in the

DOE patent waiver regulations, require the

Contractor, an assignee or exclusive licensee

of a subject invention to grant a

nonexclusive, partially exclusive or exclusive

license in any field of use to a responsible

applicant or applicants, upon terms that are

reasonable under the circumstances. If the

Contractor, assignee or exclusive licensee

refuses such a request, DOE has the right to

grant such a license itself if DOE determines

that—

(1) Such action is necessary because the

Contractor or assignee has not taken, or is not

expected to take within a reasonable time,

effective steps to achieve practical

application of the subject invention in such

field of use;

(2) Such action is necessary to alleviate

health or safety needs that are not reasonably

satisfied by the Contractor, assignee, or their

licensees;

(3) Such action is necessary to meet

requirements for public use specified by

government regulations and such

requirements are not reasonably satisfied by

the Contractor, assignee, or licensees; or

(4) Such action is necessary because the

agreement to substantially manufacture in

the United States and required by paragraph

(i) of this clause has neither been obtained

nor waived or because a licensee of the

exclusive right to use or sell any subject

invention in the United States is in breach of

such agreement.

(k) Communications. The Contractor shall

direct any notification, disclosure, or request

provided for in this clause to the Patent

Counsel identified in the contract .

(l) Reports. (1) Interim reports. Upon DOE’s

request, the Contractor shall submit to DOE,

no more frequently than annually, a list of

subject inventions disclosed to DOE during a

specified period, or a statement that no

subject inventions were made during the

specified period; and/or a list of subcontracts

containing a patent clause and awarded by

the Contractor during a specified period, or

a statement that no such subcontracts were

awarded during the specified period. The

interim report shall state whether the

Contractor’s invention disclosures were

submitted to DOE in accordance with the

requirements of subparagraphs (f)(3) and

(f)(4) of this clause.

68948 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

(2) Final reports. Upon DOE’s request, the

Contractor shall submit to DOE, prior to

closeout of the contract or within three (3)

months of the date of completion of the

contracted work, a list of all subject

inventions disclosed during the performance

period of the contract, or a statement that no

subject inventions were made during the

contract performance period; and/or a list of

all subcontracts containing a patent clause

and awarded by the Contractor during the

contract performance period, or a statement

that no such subcontracts were awarded

during the contract performance period.

(m) Facilities license. In addition to the

rights of the parties with respect to

inventions or discoveries conceived or first

actually reduced to practice in the course of

or under this contract, the Contractor agrees

to and does hereby grant to the Government

an irrevocable, nonexclusive, paid-up license

in and to any inventions or discoveries

regardless of when conceived or actually

reduced to practice or acquired by the

contractor at any time through completion of

this contract and which are incorporated or

embodied in the construction of the facility

or which are utilized in the operation of the

facility or which cover articles, materials, or

products manufactured at the facility (1) to

practice or have practiced by or for the

Government at the facility, and (2) to transfer

such license with the transfer of that facility.

Notwithstanding the acceptance or exercise

by the Government of these rights, the

Government may contest at any time the

enforceability, validity or scope of, or title to,

any rights or patents herein licensed.

(n) Atomic energy. (1) Pecuniary awards.

No claim for pecuniary award of

compensation under the provisions of the

Atomic Energy Act of 1954, as amended, may

be asserted with respect to any invention or

discovery made or conceived in the course of

or under this contract.

(2) Patent agreements. Except as otherwise

authorized in writing by the Contracting

Officer, the Contractor shall obtain patent

agreements to effectuate the provisions of

subparagraph (o)(1) of this clause from all

persons who perform any part of the work

under this contract, except nontechnical

personnel, such as clerical employees and

manual laborers.

(o) Classified inventions. (1) Approval for

filing a foreign patent application. The

Contractor shall not file or cause to be filed

an application or registration for a patent

disclosing a subject invention related to

classified subject matter in any country other

than the United States without first obtaining

the written approval of the Contracting

Officer.

(2) Transmission of classified subject

matter. If in accordance with this clause the

Contractor files a patent application in the

United States disclosing a subject invention

that is classified for reasons of security, the

Contractor shall observe all applicable

security regulations covering the

transmission of classified subject matter. If

the Contractor transmits a patent application

disclosing a classified subject invention to

the United States Patent and Trademark

Office (USPTO), the Contractor shall submit

a separate letter to the USPTO identifying the

contract or contracts by agency and

agreement number that require security

classification markings to be placed on the

patent application.

(3) Inclusion of clause in subcontracts. The

Contractor agrees to include the substance of

this clause in subcontracts at any tier that

cover or are likely to cover subject matter

classified for reasons of security.

(p) Examination of records relating to

inventions. (1) Contractor compliance. Until

the expiration of three (3) years after final

payment under this contract, the Contracting

Officer or any authorized representative may

examine any books (including laboratory

notebooks), records, and documents and

other supporting data of the Contractor,

which the Contracting Officer or authorized

representative deems reasonably pertinent to

the discovery or identification of subject

inventions, including exceptional

circumstance subject inventions, or to

determine Contractor (and inventor)

compliance with the requirements of this

clause, including proper identification and

disclosure of subject inventions, and

establishment and maintenance of invention

disclosure procedures.

(2) Unreported inventions. If the

Contracting Officer is aware of an invention

that is not disclosed by the Contractor to

DOE, and the Contracting Officer believes the

unreported invention may be a subject

invention, DOE may require the Contractor to

submit to DOE a disclosure of the invention

for a determination of ownership rights.

(3) Confidentiality. Any examination of

records under this paragraph is subject to

appropriate conditions to protect the

confidentiality of the information involved.

(4) Power of inspection. With respect to a

subject invention for which the Contractor

has responsibility for patent prosecution, the

Contractor shall furnish the Government,

upon request by DOE, an irrevocable power

to inspect and make copies of a prosecution

file for any patent application claiming the

subject invention.

(q) Patent functions. Upon the written

request of the Contracting Officer or Patent

Counsel, the Contractor agrees to make

reasonable efforts to support DOE in

accomplishing patent-related functions for

work arising out of the contract, including,

but not limited to, the prosecution of patent

applications, and the determination of

questions of novelty, patentability, and

inventorship.

(r) Educational awards subject to 35 U.S.C.

212. The Contractor shall notify the

Contracting Officer prior to the placement of

any person subject to 35 U.S.C. 212 in an area

of technology or task (1) related to

exceptional circumstance technology or (2)

any person who is subject to treaties or

international agreements as set forth in

paragraph (b)(6) of this clause or to

agreements other than funding agreements.

The Contracting Officer may disapprove of

any such placement.

(s) Annual appraisal by Patent Counsel.

Patent Counsel may conduct an annual

appraisal to evaluate the Contractor’s

effectiveness in identifying and protecting

subject inventions in accordance with DOE

policy.

(t) Publication. The Contractor shall

receive approval from Patent Counsel prior to

releasing or publishing information regarding

scientific or technical developments

conceived or first actually reduced to

practice in the course of or under this

contract, to ensure such release or

publication does not adversely affect the

patent rights of DOE or the Contractor.

(u) Termination of Contractor’s advance

class waiver. If a request by the Contractor for

an advance class waiver pursuant to

subparagraph (b)(2) of this clause or a

determination of greater rights pursuant to

paragraph (c) of this clause contains false

material statements or fails to disclose

material facts, and DOE relies on the false

statements or omissions in granting the

Contractor’s request, the waiver or grant of

any Government rights (in whole or in part)

to the subject invention(s) may be terminated

at the discretion of the Secretary of Energy

or designee. Prior to termination, DOE shall

provide the Contractor with written

notification of the termination, including a

statement of facts in support of the

termination, and the Contractor shall be

allowed thirty (30) days, or a longer period

authorized by the Secretary of Energy or

designee for good cause shown in writing by

the Contractor, to show cause for not

terminating the waiver or grant. Any

termination of an advance class waiver or a

determination of greater rights is subject to

the Contractor’s license as provided for in

paragraph (f) of this clause.

(End of Clause)

Alternate 1—Weapons Related Subject

Inventions

As prescribed at 970.2704–(k), insert

the following as subparagraphs (a)(10)

and (b)(8), respectively:

(a) Definitions.

(10) Weapons Related Subject Invention

means any subject invention conceived or

first actually reduced to practice in the

course of or under work funded by or

through defense programs , including

Department of Defense and intelligence

reimbursable work, or the Naval Nuclear

Propulsion Program of the Department of

Energy.

(b) Allocation of Principal Rights.

(10) Weapons related subject inventions.

Except to the extent that DOE is solely

satisfied that the Contractor meets certain

procedural requirements and DOE grants

rights to the Contractor in weapons related

subject inventions, the Contractor does not

have a right to retain title to any weapons

related subject inventions.

(End of Alternate)

[FR Doc. 00–28629 Filed 11–14–00; 8:45 am]

BILLING CODE 6450–01–P