II

103D CONGRESS

1ST SESSION S. 1537

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

IN THE SENATE OF THE UNITED STATES

OCTOBER 7 (legislative day, SEPTEMBER 27), 1993

Mr. ROCKEFELLER (for himself and Mr. DECONCINI) introduced the following

bill; which was read twice and referred to the Committee on Commerce,

Science, and Transportation

A BILL

To amend the Stevenson-Wydler Technology Innovation Act

of 1980.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Technology Commer5 cialization Act of 1993’’.

6 SEC. 2. FINDINGS.

7 The Congress finds and declares the following:

8 (1) The commercialization of technology and in9 dustrial innovation are central to the economic, envi-
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1 ronmental, and social well-being of citizens of the

2 United States.

3 (2) The Government can help United States

4 business to speed the development of new products

5 and processes by entering into Cooperative Research

6 and Development Agreements which make available

7 the assistance of the Federal laboratories to the pri8 vate sector, but the commercialization of technology

9 and industrial innovation in the United States de10 pends largely upon actions by business.

11 (3) Government action to claim a right of own12 ership to any invention or other intellectual property

13 developed under a Cooperative Research and Devel14 opment Agreement can inhibit the establishment of

15 such agreements with business and can prevent the

16 commercialization of technology and industrial inno17 vation by business.

18 (4) The commercialization of technology and in19 dustrial innovation in the United States will be en20 hanced if the ownership of any invention or other in21 tellectual property developed under a Cooperative

22 Research and Development Agreement belongs to a

23 company or companies incorporated in the United

24 States.
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1 SEC. 3. TITLE TO INTELLECTUAL PROPERTY ARISING

2 FROM COOPERATIVE RESEARCH AND DEVEL3 OPMENT AGREEMENTS.

4 Section 12 of the Stevenson-Wydler Technology Inno5 vation Act of 1980 (15 U.S.C. 3710a) is amended as

6 follows:

7 (1) In the text of subsection (b) immediately

8 preceding paragraph (1), strike ‘‘Government-oper9 ated Federal laboratory, and to the extent provided

10 in an agency-approved joint work statement, a Gov11 ernment-owned contractor-operated laboratory, may’’

12 and insert ‘‘Federal laboratory shall ensure that title

13 to any intellectual property arising from the agree14 ment, except intellectual property developed in whole

15 by a laboratory employee, is assigned to the collabo16 rating party or parties to the agreement in exchange

17 for reasonable compensation to the laboratory, and

18 may’’.

19 (2) In subsection (b)(2), strike ‘‘or in part’’.

20 (3) Amend subsection (b)(3) to read as follows:

21 ‘‘(3) retain a nonexclusive, nontransferable, ir22 revocable, paid-up license from the collaborating

23 party or parties for any intellectual property arising

24 from the agreement, and have such license practiced

25 throughout the world by or on behalf of the Govern26 ment, but shall not, in the exercise of such license,
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1 publicly disclose proprietary information related to

2 the license;’’.

3 (4) Amend subsection (b)(4) to read as follows:

4 ‘‘(4) retain the right, in accordance with proce5 dures provided in regulations promulgated under

6 this section, to require a collaborating party to grant

7 to a responsible applicant or applicants a

8 nonexclusive, partially exclusive, or exclusive license

9 to use the subject intellectual property in any field

10 of use, on terms that are reasonable under the cir11 cumstances, or if the collaborating party fails to

12 grant such a license, to grant the license itself if the

13 laboratory finds that—

14 ‘‘(A) the collaborating party has not taken,

15 and is not expected to take within a reasonable

16 time, effective steps to achieve practical applica17 tion of the subject intellectual property in the

18 field of use;

19 ‘‘(B) such action is necessary to meet

20 health or safety needs that are not reasonably

21 satisfied by the collaborating party;

22 ‘‘(C) such action is necessary to meet re23 quirements for public use specified by Federal

24 regulations and such requirements are not rea25 sonably satisfied by the collaborating party; or
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1 ‘‘(D) the collaborating party has not en2 tered into or is in breach of an agreement made

3 pursuant to subsection (c)(4)(B).’’.

4 (5) In subsection (d)(2), strike ‘‘and’’ at the

5 end;

6 (6) In subsection (d)(3), strike the period at the

7 end and insert ‘‘; and’’.

8 (7) At the end of subsection (d), insert the fol9 lowing new paragraph:

10 ‘‘(4) the term ‘intellectual property rights’

11 means—

12 ‘‘(A) in the case of government-owned,

13 government-operated Federal laboratories, pat14 ents; and

15 ‘‘(B) in the case of government-owned,

16 contractor-operated Federal laboratories, pat17 ents, copyrights, and computer chip mask work

18 registrations.’’.

19 SEC. 4. DISTRIBUTION OF INCOME FROM INTELLECTUAL

20 PROPERTY RECEIVED BY FEDERAL LABORA21 TORIES.

22 Section 14 of the Stevenson-Wydler Technology Inno23 vation Act of 1980 (15 U.S.C. 3710c) is amended to read

24 as follows:
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1 ‘‘SEC. 14. DISTRIBUTION OF INCOME FROM INTELLECTUAL

2 PROPERTY RECEIVED BY FEDERAL AGEN3 CIES OR LABORATORIES.

4 ‘‘(a) IN GENERAL.—

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

6 (4), any income received by a Federal agency or lab7 oratory from the licensing or assignment of intellec8 tual property under agreements entered into by Fed9 eral laboratories under section 12, and intellectual

10 property of Federal agencies or laboratories licensed

11 under section 207 of title 35, United States Code,

12 or under any other provision of law, shall be re13 tained by the agency or laboratory and shall be dis14 posed of as follows:

15 ‘‘(A)(i) The head of the agency or labora16 tory or his designee shall pay to the laboratory

17 employee or employees who have assigned their

18 rights in the intellectual property to the United

19 States, to the laboratory operator, or to a col20 laborating party or parties to a research agree21 ment an amount equal to the sum of—

22 ‘‘(I) the first $10,000 received by the

23 agency or laboratory from the intellectual

24 property; and

25 ‘‘(II) 15 percent of any income re26 ceived by the agency or laboratory from
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1 the intellectual property in excess of the

2 sum of the amount paid pursuant to item

3 (I) and the value of unreimbursed research

4 and development resources provided by the

5 laboratory under the terms of the agree6 ment.

7 ‘‘(ii) An agency or laboratory may provide

8 appropriate incentives from royalties to labora9 tory employees who contribute substantially to

10 the technical development of licensed or as11 signed intellectual property between the time

12 that the intellectual property rights are legally

13 asserted and the time of the licensing or assign14 ing of the intellectual property rights.

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

16 the income received from intellectual property

17 until the agency or laboratory makes payments

18 to laboratory employees under clause (i) or (ii).

19 ‘‘(B) The balance of the income shall be

20 transferred to the agency’s laboratories, with

21 the majority share of the royalties or other in22 come going to the laboratory where the intellec23 tual property originated, and the income so

24 transferred to any such laboratory may be used

25 or obligated by that laboratory during the fiscal
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1 year in which it is received or during the suc2 ceeding fiscal year—

3 ‘‘(i) for payment of not more than 15

4 percent of such income for expenses inci5 dental to the administration and licensing

6 of intellectual property by the agency or

7 laboratory with respect to intellectual prop8 erty which originated at that laboratory,

9 including the fees or other costs for the

10 services of other agencies, persons, or or11 ganizations for intellectual property man12 agement and licensing services;

13 ‘‘(ii) to reward scientific, engineering,

14 and technical employees of the laboratory,

15 including developers of sensitive or classi16 fied technology, regardless of whether the

17 technology has commercial applications;

18 ‘‘(iii) to further scientific exchange

19 among the laboratories of the agency; or

20 ‘‘(iv) for education and training of

21 employees consistent with the research and

22 development mission and objectives of the

23 agency or laboratory, and for other activi24 ties that increase the potential for transfer
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1 of the technology of the laboratories of the

2 agency.

3 All income retained by the agency or laboratory

4 after payments have been made pursuant to sub5 paragraphs (A) and (B) that is unobligated and un6 expended at the end of the fiscal year succeeding the

7 fiscal year in which the income was received shall be

8 paid into the United States Treasury.

9 ‘‘(2) If, after payments to employees under

10 paragraph (1), the intellectual property income re11 ceived by an agency and its laboratories in any fiscal

12 year exceeds 5 percent of the budget of the labora13 tories of the agency for that year, 75 percent of such

14 excess shall be paid to the United States Treasury

15 and the remaining 25 percent may be used or obli16 gated for the purposes described in clauses (i)

17 through (iv) of paragraph (1)(B) during that fiscal

18 year or the succeeding fiscal year. Any income not

19 so used or obligated shall be paid into the United

20 States Treasury.

21 ‘‘(3) Any payment made to an employee under

22 this section shall be in addition to the regular pay

23 of the employee and to any other awards made to

24 the employee, and shall not affect the entitlement of

25 the employee to any regular pay, annuity, or award
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1 to which the employee is otherwise entitled or for

2 which the employee is otherwise eligible, or limit the

3 amount thereof. Any payment made under this sec4 tion to any employee shall continue after the em5 ployee leaves the employment of the laboratory or

6 agency.

7 ‘‘(4) A Federal agency receiving income as a re8 sult of intellectual property management services

9 performed for another Federal agency or laboratory

10 under section 207 of title 35, United States Code,

11 may retain such income to the extent required to

12 offset the payment of income from intellectual prop13 erty under paragraph (1)(A)(i), and costs and ex14 penses incurred under paragraph (1)(B)(i), includ15 ing the cost of foreign protection of the intellectual

16 property of the other agency. All income remaining

17 after payment of the income, costs, and expenses de18 scribed in the preceding sentence shall be trans19 ferred to the agency for which the services were per20 formed, for distribution in accordance with clauses

21 (i) through (iv) of paragraph (1)(B).

22 ‘‘(b) CERTAIN ASSIGNMENTS.—If the intellectual

23 property from which the income is derived was assigned

24 to the Federal agency—
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1 ‘‘(1) by a contractor, grantee, or participant in

2 a cooperative agreement with the agency; or

3 ‘‘(2) by an employee of the agency who was not

4 working in the laboratory at the time the intellectual

5 property was originated;

6 the agency unit that was involved in such assignment shall

7 be considered to be a laboratory for purposes of this sec8 tion.

9 ‘‘(c) REPORTS.—

10 ‘‘(1) In making its annual submission to the

11 Congress, each Federal agency shall submit, to the

12 appropriate authorization and appropriations com13 mittee of both Houses of the Congress, a summary

14 of the amount of income received from intellectual

15 property and expenditures made (including employee

16 awards) under this section.

17 ‘‘(2) Not later than October 1, 1996, the Comp18 troller General shall review the effectiveness of the

19 various income-sharing programs established under

20 this section and report to the appropriate commit21 tees of the House of Representatives and the Senate,

22 in a timely manner, the Comptroller General’s find23 ings, conclusions, and recommendations for improve24 ments in such programs.’’.
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1 SEC. 5. AMENDMENT TO BAYH-DOLE ACT.

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

3 amended by inserting ‘‘and the Technology Commer4 cialization Act of 1993’’ after ‘‘Federal Technology Trans5 fer Act of 1986’’.

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