66510 Federal Register / Vol. 60, No. 246 / Friday, December 22, 1995 / Rules and Regulations

(vi) Total apportioned deduction for research and experimentation: ..................................................................................................... $100,000

(vii) Amount apportioned to the residual grouping ($50,000+$38,961): ................................................................................................ $88,961

(viii) Amount apportioned to the statutory grouping of sources within countries Y and Z: ................................................................ $11,039

(2) Tentative Apportionment on Gross Income Basis

(i) Exclusive apportionment of research and experimental expense to the residual grouping of gross income ($100,000×25 percent): ........................................................................................................................................................................................................ $25,000

(ii) Apportionment of research and experimental expense to the residual grouping of gross income ($75,000×$479,000/

$500,000): ................................................................................................................................................................................................ $71,850

(iii) Apportionment of research and experimental expense to the statutory grouping of gross income ($75,000×$9,000+$12,000/

$500,000): ................................................................................................................................................................................................ $3,150

(iv) Amount apportioned to the residual grouping: ................................................................................................................................. $96,850

(v) Amount apportioned to the statutory grouping of general limitation income from sources without the United States: .............. $3,150

(B) Since X has elected to use the optional gross income methods of apportionment and its apportionment on the basis of gross

income to the statutory grouping, $3,150, is less than 50 percent of its apportionment on the basis of sales to the statutory grouping,

$11,039, it must use Option two of paragraph (d)(3) of this section and apportion $5,520 (50 percent of $11,039) to the statutory

grouping.

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved: December 13, 1995.

Leslie Samuels,

Assistant Secretary of the Treasury.

[FR Doc. 95–30901 Filed 12–21–95; 8:45 am]

BILLING CODE 4830–01–U

DEPARTMENT OF ENERGY

48 CFR Part 970

RIN 1991–AA63

Acquisition Regulation; Technology

Transfer Activities of Department of

Energy (DOE) Management and

Operating Contractors

AGENCY: Department of Energy.

ACTION: Final rule.

SUMMARY: The Department of Energy

(DOE) amends the Department of Energy

Acquisiton Regulation (DEAR) to codify

DOE’s implementation of its technology

transfer mission for DOE laboratories

(including weapon production facilities)

operated by management and operating

contractors.

EFFECTIVE DATE: January 22, 1996.

FOR FURTHER INFORMATION CONTACT:

Howard K. Mitchell, Policy Analyst,

Office of Policy (HR–51), Office of the

Deputy Assistant Secretary for

Procurement and Assistance

Management, Washington, D.C., 20585,

(202) 586–8190.

SUPPLEMENTARY INFORMATION:

I. Background

II. Disposition of comments

III. Procedural Requirements

A. Regulatory Review Under Executive

Order 12866

B. Review Under Executive Order 12612

C. Review Under Executive Order 12778

D. Review Under the Regulatory Flexibility

Act

E. Review Under the Paperwork Reduction

Act

F. Review Under the National

Environmental Policy Act (NEPA)

I. Background

The proposed rule was published on

May 22, 1995, at 60 FR 27069 (1995). It

was intended to amend the Department

of Energy Acquisition Regulation

(DEAR) to codify DOE’s implementation

of its technology transfer mission for

DOE laboratories and weapon

production facilities operated by

management and operating contractors.

This mission was established by The

National Competitiveness Technology

Transfer Act of 1989, as amended by

Sections 3134 and 3160 of the National

Defense Authorization Act for Fiscal

Year 1994.

II. Disposition of Comments

DOE received formal comments from

only one entity. This commenter is a

current Departmental non-profit

Management and Operating Laboratory

contractor. The commenter noted the

need for inclusion in the proposed

definition of bailment the term,

Laboratory Tangible Research Product.

This term would encompass tangible

material results of research which (i) are

provided to permit replication,

reproduction, evaluation or

confirmation of the research effort, or to

evaluate its potential commercial utility,

(ii) are not materials generally

commercially available, and (iii) were

made under the contract by Laboratory

employees or through the use of

Laboratory research facilities. The

definition of bailment has been

modified to incorporate this new term.

The commenter also expressed concern

that the current definition of allowable

costs only encompassed costs ‘‘through

an ORTA’’, with the implication that the

activities and costs associated with

autonomous Laboratory organizations

such as finance, procurement, legal and

other offices involved in technology

transfer would be excluded. DOE agrees

that such Laboratory organizations may

be ‘‘appropriate organizational elements

consistent with the requirements for an

Office of Research and Technology

Applications’’ and that the costs

associated with supporting technology

transfer at these Laboratory

organizations would be allowable

subject to other provisions of the M&O

contract. One of the organizational

examples cited by the commenter,

however, falls under the definition of a

home or corporate office general and

administrative (G&A) expense. DEAR

970.3102–1 indicates that, in its fee

allowance, DOE provides appropriate

compensation for home office G&A

expense. DOE policy also recognizes

that the circumstances and the need for

such home office involvement vary

considerably from site to site. Therefore,

home office G&A (including technology

transfer related expenses) would

normally be considered in the

individual negotiation of the fee for the

contract. When the fee amount is

believed to be insufficient to cover the

extent of such offsite involvement,

however, DEAR 970.3102–1 also

permits separate treatment of such a

home office expense. Therefore, no

change in the language of the rule is

believed necessary.

The commenter further suggested

adding language under Conflicts of

Interest to reflect that other persons

working at the Laboratory participating

in Laboratory research or technology
Federal Register / Vol. 60, No. 246 / Friday, December 22, 1995 / Rules and Regulations 66511

transfer activities should also be

considered when implementing

procedures to avoid conflicts of interest.

Such other persons would most likely

be long term visitors, job-shop

subcontractors, guest scientists, no-pay

appointees, post doctoral fellows,

industrial exchange participants,

academic sabbaticals and other nonLaboratory personnel. DOE agrees and

appropriate language to address this

comment has been included under

Conflicts of Interest—Technology

Transfer. The commenter also

recommended deleting the requirement

under (d)(10) which requires contractors

to notify DOE prior to evaluating a

proposal by a third party or DOE when

the subject matter of the proposal

involves an elected or waived subject

invention or one in which the

Contractor intends to elect to retain title.

The commenter believes that (d)(10) is

burdensome for Contractors that manage

and operate several private and DOE

facilities because it requires Contractors

to search for inventions unrelated to the

contract. DOE has inserted language

under (d)(10) to clarify that the

notification requirement applies when

the subject matter of the proposal

involves an elected or waived subject

invention under the contract or one in

which the Contractor intends to elect to

retain title under the contract.

The commenter recommended adding

language to indicate that the U.S.

Industrial Competitiveness

requirements apply to intellectual

property where the Laboratory obtains

rights during the period the Contractor

is operating the Laboratory and would

not apply to intellectual property owned

by the parent organization/company.

Language was added to reflect that the

U.S. Industrial Competitiveness

requirements solely apply in licensing

and assignment decisions involving

Laboratory intellectual property where

the Laboratory obtains rights during the

course of the Contractor’s operation of

the Laboratory under the contract. The

U.S. Industrial Competitiveness

requirements would not apply in

licensing and assignment decisions

involving the Contractor’s other

intellectual property.

Three comments were made objecting

to three separate provisions of the

Indemnity-Product Liability paragraph

which might, in the commenter’s view,

result in the contractor being subjected

to undue financial/legal risks and

administrative burden. Specifically, the

commenter objected to language that

limited the indemnification in licensing

to only personal injury or property

injury and which also excluded from

the indemnity protection any liability

based upon negligence of the

Contractor. The Indemnity—Product

Liability provisions as written are

minimally acceptable to DOE and

therefore, no change is being made to

the language. However, the Department

emphasizes that the Contractor is

permitted to negotiate language that is

deemed more beneficial to both the

Contractor and the Department. With

respect to the commenter’s objection to

the requirement to identify and obtain

the approval of the Contracting Officer

for any proposed exceptions to the

Participant providing indemnification,

the Department believes that overall,

this requirement is beneficial to the

Contractor. This requirement provides a

mechanism by which the Contractor is

able to obtain exceptions to the

indemnification provision and,

therefore, no change is believed

necessary.

In the Disposition of Income

provisions, the commenter made three

suggestions. Under subparagraph (h)(1),

the first suggestion was to modify the

language to reflect that the amount of

royalties or other income earned or

retained by the Contractor was to be that

amount remaining after payment of

patenting costs, licensing costs,

payments to inventors and other

expenses incidental to the

administration of Subject Inventions.

This language parallels that which

appears in 35 U.S.C. 202(c)(7)(E)(i) and

has been adopted.

The second comment submitted

regarding the Disposition of Income

provision was to add the text of 35

U.S.C. 202 (c)(7)(E)(ii) which would

allow the licensing of Subject

Inventions to be administered by

Contractor employees on location at the

facility. This suggestion was not

adopted in that 35 U.S.C. 202

(c)(7)(E)(ii) is already contained in the

patent clause of the M&O contract. The

third comment objected to the proposed

coverage on inventor award and royalty

sharing being subject to the approval of

the Contracting Officer. Changing the

requirement to obtain Contracting

Officer approval with respect to policies

for inventor award and royalty sharing,

as proposed in this comment, would

result in a major change to a long

standing Departmental policy and has

not been adopted.

Under the Transfer to Successor

Contractor provision, the commentor

requested that additional assurance be

provided in requiring a successor

contractor to accept transfer of title and

accounts subject to the rights and

obligations which the previous operator

had to its inventors, its licensees and to

its parent organization/company. No

change is believed necessary because

the intent of the suggestion is implicit

in the current language.

In the Technology Transfer Through

Cooperative Research and Development

Agreements, Withholding of Data

provision, the commenter suggests that

the likelihood of obtaining

commercially reasonable patent

protection be included as a standard in

determining whether a patent

application has to be filed. As provided

in the M&O contract’s patent clause, if

the Contractor does not file a patent

application on an invention disclosed to

the Government as a subject invention,

the Government may file. Disclosure of

subject inventions and the

Government’s right to file is a statutory

requirement.

III. Procedural Requirements

A. Regulatory 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, today’s action was

not subject to review under the

Executive Order by the Office of

Information and Regulatory Affairs.

B. Review Under Executive Order 12612

Executive Order 12612 (52 FR 41285,

October 30, 1987) requires that

regulations, rules, legislation, and any

other policy actions 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 various levels of

government. If there are sufficient

substantial direct effects, then the

Executive Order requires preparation of

a federalism assessment to be used in all

decisions involved in promulgating and

implementing a policy action.

Today’s final rule will revise certain

policy and procedural requirements.

However, DOE has determined that

none of the revisions will have a

substantial direct effect on the

institutional interests or traditional

functions of the States.

C. Review Under Executive Order 12778

Section 2 of Executive Order 12778

instructs each agency to adhere to

certain requirements in promulgating

new regulations and reviewing existing

regulations. These requirements, set

forth in sections 2(a) and (b)(2), include

eliminating drafting errors and needless

ambiguity, drafting the regulations to

minimize litigation, providing clear and
66512 Federal Register / Vol. 60, No. 246 / Friday, December 22, 1995 / Rules and Regulations

certain legal standards for affected

conduct, and promoting simplification

and burden reduction. Agencies are also

instructed to make every reasonable

effort to ensure that the regulation:

specifies clearly any preemptive effect,

effect on existing Federal law or

regulation, and retroactive effect;

describes any administrative

proceedings to be available prior to

judicial review and any provisions for

the exhaustion of such administrative

proceedings; and defines key terms.

Therefore, DOE certifies that this final

rule meets the requirements of sections

2(a) and (b) of Executive Order 12778.

D. Review Under the Regulatory

Flexibility Act

This final rule was reviewed under

the Regulatory Flexibility Act of 1980,

Pub. L. 96–354, which requires

preparation of a regulatory flexibility

analysis for any rule which is likely to

have significant economic impact on a

substantial number of small entities.

This final rule will have no impact on

interest rates, tax policies or liabilities,

the cost of goods or services, or other

direct economic factors. It will also not

have any indirect economic

consequences, such as changed

construction rates. DOE certifies that

this final rule will not have a significant

economic impact on a substantial

number of small entities and, therefore,

no regulatory flexibility analysis has

been prepared.

E. Review Under the Paperwork

Reduction Act

No new information collection or

recordkeeping requirements are

imposed by this final rulemaking.

Accordingly, no OMB clearance is

required under the Paperwork

Reduction Act of 1980 (44 U.S.C. 3501

et seq.).

F. Review Under the National

Environmental Policy Act (NEPA)

DOE has concluded that promulgation

of this rule falls into a class of actions

(categorical exclusion A5) that are

categorically excluded from NEPA

review because they would not

individually or cumulatively have

significant impact on the human

environment, as determined by the

Department’s regulations (10 CFR Part

1021, Subpart D) implementing the

National Environmental Policy Act of

1969 (42 U.S.C. 4321, 4331–4335, 4341–

4347 (1976)). Therefore, this rule does

not require an environmental impact

statement or an environmental

assessment pursuant to NEPA.

List of Subjects in 48 CFR Part 970

Government procurement.

Issued in Washington, DC on December 15,

1995.

Richard H. Hopf,

Deputy Assistant Secretary for Procurement

and Assistance Management.

PART 970–DOE MANAGEMENT AND

OPERATING CONTRACTS

1. The authority citation for Part 970

continues to read as follows:

Authority: Sec. 161 of the Atomic Energy

Act of 1954 (42 U.S.C. 2201), Sec. 644 of the

Department of Energy Organization Act, Pub.

L. 95–91 (42 U.S.C. 7254).

2. Section 970.5204–40, Technology

Transfer Mission, is added to read as

follows:

970.5204–40 Technology transfer mission.

As prescribed in 48 CFR 970.73, insert

the following clause:

Technology Transfer Mission (Jan. 1996)

This clause has as its purpose

implementation of the National

Competitiveness Technology Transfer Act of

1989 (Sections 3131, 3132, 3133, and 3157 of

Pub. L. 101–189 and as amended by Pub. L.

103–160, Sections 3134 and 3160). The

Contractor shall conduct technology transfer

activities with a purpose of providing benefit

from Federal research to U.S. industrial

competitiveness.

(a) Authority.

(1) In order to ensure the full use of the

results of research and development efforts

of, and the capabilities of, the Laboratory,

technology transfer, including Cooperative

Research and Development Agreements

(CRADAs), is established as a mission of the

Laboratory consistent with the policy,

principles and purposes of Sections 11(a)(1)

and 12(g) of the Stevenson-Wydler

Technology Innovation Act of 1980, as

amended (15 U.S.C. 3710a); Section 3132(b)

of Pub. L. 101–189, Sections 3134 and 3160

of P.L. 103–160, and of Chapter 38 of the

Patent Laws (35 U.S.C. 200 et seq.); Section

152 of the Atomic Energy Act of 1954, as

amended (42 U.S.C. 2182); Section 9 of the

Federal Nonnuclear Energy Research and

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

and Executive Order 12591 of April 10, 1987.

(2) In pursuing the technology transfer

mission, the Contractor is authorized to

conduct activities including but not limited

to: identifying and protecting Intellectual

Property made, created or acquired at or by

the Laboratory; negotiating licensing

agreements and assignments for Intellectual

Property made, created or acquired at or by

the Laboratory that the Contractor controls or

owns; bailments; negotiating all aspects of

and entering into CRADAs; providing

technical consulting and personnel

exchanges; conducting science education

activities and reimbursable Work for Others

(WFO); providing information exchanges;

and making available laboratory or weapon

production user facilities. It is fully expected

that the Contractor shall use all of the

mechanisms available to it to accomplish this

technology transfer mission, including, but

not limited to, CRADAs, user facilities, WFO,

science education activities, consulting,

personnel, assignments, and licensing in

accordance with this clause.

(b) Definitions.

(1) Contractor’s Laboratory Director means

the individual who has supervision over all

or substantially all of the Contractor’s

operations at the Laboratory.

(2) Intellectual Property means patents,

trademarks, copyrights, mask works,

protected CRADA information, and other

forms of comparable property rights

protected by Federal Law and other foreign

counterparts.

(3) Cooperative Research and Development

Agreement (CRADA) means any agreement

entered into between the Contractor as

operator of the Laboratory, and one or more

parties including at least one non-Federal

party under which the Government, through

its laboratory, provides personnel, services,

facilities, equipment, intellectual property, or

other resources with or without

reimbursement (but not funds to non-Federal

parties) and the non-Federal parties provide

funds, personnel, services, facilities,

equipment, intellectual property, or other

resources toward the conduct of specified

research or development efforts which are

consistent with the missions of the

Laboratory; except that such term does not

include a procurement contract, grant, or

cooperative agreement as those terms are

used in sections 6303, 6304, and 6305 of

Title 31 of the United States Code.

(4) Joint Work Statement (JWS) means a

proposal for a CRADA prepared by the

Contractor, signed by the Contractor’s

Laboratory Director or designee which

describes the following:

(i) Purpose;

(ii) Scope of Work which delineates the

rights and responsibilities of the

Government, the Contractor and Third

Parties, one of which must be a non-Federal

party;

(iii) Schedule for the work; and

(iv) Cost and resource contributions of the

parties associated with the work and the

schedule.

(5) Assignment means any agreement by

which the Contractor transfers ownership of

Laboratory Intellectual Property, subject to

the Government’s retained rights.

(6) Laboratory Biological Materials means

biological materials capable of replication or

reproduction, such as plasmids,

deoxyribonucleic acid molecules, ribonucleic

acid molecules, living organisms of any sort

and their progeny, including viruses,

prokaryote and eukaryote cell lines,

transgenic plants and animals, and any

derivatives or modifications thereof or

products produced through their use or

associated biological products, made under

this contract by Laboratory employees or

through the use of Laboratory research

facilities.

(7) Laboratory Tangible Research Product

means tangible material results of research

which

(i) are provided to permit replication,

reproduction, evaluation or confirmation of
Federal Register / Vol. 60, No. 246 / Friday, December 22, 1995 / Rules and Regulations 66513

the research effort, or to evaluate its potential

commercial utility;

(ii) are not materials generally

commercially available; and

(iii) were made under this contract by

Laboratory employees or through the use of

Laboratory research facilities.

(8) Bailment means any agreement in

which the Contractor permits the commercial

or non- commercial transfer of custody,

access or use of Laboratory Biological

Materials or Laboratory Tangible Research

Product for a specified purpose of technology

transfer or research and development,

including without limitation evaluation, and

without transferring ownership to the bailee.

(c) Allowable Costs.

(1) The Contractor shall establish and carry

out its technology transfer efforts through

appropriate organizational elements

consistent with the requirements for an

Office of Research and Technology

Applications (ORTA) pursuant to paragraphs

(b) and (c) of Section 11 of the StevensonWydler Technology Innovation Act of 1980,

as amended (15 U.S.C. 3710). The costs

associated with the conduct of technology

transfer through the ORTA including

activities associated with obtaining,

maintaining, licensing, and assigning

Intellectual Property rights, increasing the

potential for the transfer of technology, and

the widespread notice of technology transfer

opportunities, shall be deemed allowable

provided that such costs meet the other

requirements of the allowable costs

provisions of this Contract. In addition to any

separately designated funds, these costs in

any fiscal year shall not exceed an amount

equal to 0.5 percent of the operating funds

included in the Federal research and

development budget (including Work For

Others) of the Laboratory for that fiscal year

without written approval of the Contracting

Officer.

(2) The Contractor’s participation in

litigation to enforce or defend Intellectual

Property claims incurred in its technology

transfer efforts shall be as provided in the

clause entitled ‘‘Litigation and Claims’’ of

this Contract.

(d) Conflicts of Interest—Technology

Transfer. The Contractor shall have

implementing procedures that seek to avoid

employee and organizational conflicts of

interest, or the appearance of conflicts of

interest, in the conduct of its technology

transfer activities. These procedures shall

apply to other persons participating in

Laboratory research or related technology

transfer activities. Such implementing

procedures shall be provided to the

Contracting Officer for review and approval

within sixty (60) days after execution of this

contract. The Contracting Officer shall have

thirty (30) days thereafter to approve or

require specific changes to such procedures.

Such implementing procedures shall include

procedures to:

(1) Inform employees of and require

conformance with standards of conduct and

integrity in connection with the CRADA

activity in accordance with the provisions of

paragraph (n)(5) of this clause;

(2) Review and approve employee

activities so as to avoid conflicts of interest

arising from commercial utilization activities

relating to Contractor-developed Intellectual

Property;

(3) Conduct work performed using

royalties so as to avoid interference with or

adverse effects on ongoing DOE projects and

programs;

(4) Conduct activities relating to

commercial utilization of Contractordeveloped Intellectual Property so as to avoid

interference with or adverse effects on user

facility or WFO activities of the Contractor;

(5) Conduct DOE-funded projects and

programs so as to avoid the appearance of

conflicts of interest or actual conflicts of

interest with non-Government funded work;

(6) Notify the Contracting Officer with

respect to any new work to be performed or

proposed to be performed under the Contract

for DOE or other Federal agencies where the

new work or proposal involves Intellectual

Property in which the Contractor has

obtained or intends to request or elect title;

(7) Except as provided elsewhere in this

Contract, obtain the approval of the

Contracting Officer for any licensing of or

assignment of title to Intellectual Property

rights by the Contractor to any business or

corporate affiliate of the Contractor;

(8) Obtain the approval of the Contracting

Officer prior to any assignment, exclusive

licensing, or option for exclusive licensing, of

Intellectual Property to any person who has

been a Laboratory employee within the

previous two years or to the company in

which he or she is a principal; and

(9) Notify non-Federal sponsors of WFO

activities, or non-Federal users of user

facilities, of any relevant Intellectual

Property interest of the Contractor prior to

execution of WFOs or user agreements.

(10) Notify DOE prior to evaluating a

proposal by a third party or DOE, when the

subject matter of the proposal involves an

elected or waived subject invention under

this contract or one in which the Contractor

intends to elect to retain title under this

contract.

(e) Fairness of Opportunity. In conducting

its technology transfer activities, the

Contractor shall prepare procedures and take

all reasonable measures to ensure widespread

notice of availability of technologies suited

for transfer and opportunities for exclusive

licensing and joint research arrangements.

The requirement to widely disseminate the

availability of technology transfer

opportunities does not apply to a specific

application originated outside of the

Laboratory and by entities other than the

Contractor.

(f) U.S. Industrial Competitiveness.

(1) In the interest of enhancing U.S.

Industrial Competitiveness, the Contractor

shall, in its licensing and assignments of

Intellectual Property, give preference in such

a manner as to enhance the accrual of

economic and technological benefits to the

U.S. domestic economy. The Contractor shall

consider the following factors in all of its

licensing and assignment decisions involving

Laboratory intellectual property where the

Laboratory obtains rights during the course of

the Contractor’s operation of the Laboratory

under this contract:

(i) whether any resulting design and

development will be performed in the United

States and whether resulting products,

embodying parts, including components

thereof, will be substantially manufactured in

the United States; or

(ii) (A) whether the proposed licensee or

assignee has a business unit located in the

United States and whether significant

economic and technical benefits will flow to

the United States as a result of the license or

assignment agreement; and

(B) in licensing any entity subject to the

control of a foreign company or government,

whether such foreign government permits

United States agencies, organizations or other

persons to enter into cooperative research

and development agreements and licensing

agreements, and has policies to protect

United States Intellectual Property rights.

(2) If the Contractor determines that neither

of the conditions in paragraphs (f)(1)(i) or (ii)

of this clause are likely to be fulfilled, the

Contractor, prior to entering into such an

agreement, must obtain the approval of the

Contracting Officer. The Contracting Officer

shall act on any such requests for approval

within thirty (30) days.

(3) The Contractor agrees to be bound by

the provisions of 35 U.S.C. 204 (Preference

for United States industry).

(g) Indemnity—Product Liability. In

entering into written technology transfer

agreements, including but not limited to,

research and development agreements,

licenses, assignments and CRADAs, the

Contractor agrees to include in such

agreements a requirement that the U.S.

Government and the Contractor, except for

any negligent acts or omissions of the

Contractor, be indemnified for all damages,

costs, and expenses, including attorneys’

fees, arising from personal injury or property

damage occurring as a result of the making,

using or selling of a product, process or

service by or on behalf of the Participant, its

assignees or licensees which was derived

from the work performed under the

agreement. The Contractor shall identify and

obtain the approval of the Contracting Officer

for any proposed exceptions to this

requirement such as where State or local law

expressly prohibit the Participant from

providing indemnification or where the

research results will be placed in the public

domain.

(h) Disposition of Income.

(1) Royalties or other income earned or

retained by the Contractor as a result of

performance of authorized technology

transfer activities herein shall be used by the

Contractor for scientific research,

development, technology transfer, and

education at the Laboratory, consistent with

the research and development mission and

objectives of the Laboratory and subject to

Section 12(b)(5) of the Stevenson-Wydler

Technology Innovation Act of 1980, as

amended (15 U.S.C. 3710a(b)(5)) and Chapter

38 of the Patent Laws (35 U.S.C. 200 et seq.)

as amended through the effective date of this

contract award or modification. If the net

amounts of such royalties and income

received from patent licensing after payment

of patenting costs, licensing costs, payments

to inventors and other expenses incidental to

the administration of Subject Inventions

during any fiscal year exceed 5 percent of the
66514 Federal Register / Vol. 60, No. 246 / Friday, December 22, 1995 / Rules and Regulations

Laboratory’s budget for that fiscal year, 75

percent of such excess amounts shall be paid

to the Treasury of the United States, and the

remaining amount of such excess shall be

used by the Contractor for the purposes as

described above in this paragraph. Any

inventions arising out of such scientific

research and development activities shall be

deemed to be Subject Inventions under the

Contract.

(2) The Contractor shall include as a part

of its annual Laboratory Institutional Plan or

other such annual document a plan setting

out those uses to which royalties and other

income received as a result of performance of

authorized technology transfer activities

herein will be applied at the Laboratory, and

at the end of the year, provide a separate

accounting for how the funds were actually

used. Under no circumstances shall these

royalties and income be used for an illegal

augmentation of funds furnished by the U.S.

Government.

(3) The Contractor shall establish subject to

the approval of the Contracting Officer a

policy for making awards or sharing of

royalties with Contractor employees, other

coinventors and coauthors, including Federal

employee coinventors when deemed

appropriate by the Contracting Officer.

(i) Transfer to Successor Contractor. In the

event of termination or upon the expiration

of this Contract, any unexpended balance of

income received for use at the Laboratory

shall be transferred, at the Contracting

Officer’s request, to a successor contractor, or

in the absence of a successor contractor, to

such other entity as designated by the

Contracting Officer. The Contractor shall

transfer title, as one package, to the extent the

Contractor retains title, in all patents and

patent applications, licenses, accounts

containing royalty revenues from such

license agreements, including equity

positions in third party entities, and other

Intellectual Property rights which arose at the

Laboratory, to the successor contractor or to

the Government as directed by the

Contracting Officer.

(j) Technology Transfer Affecting the

National Security.

(1) The Contractor shall notify and obtain

the approval of the Contracting Officer, prior

to entering into any technology transfer

arrangement, when such technology or any

part of such technology is classified or

sensitive under Section 148 of the Atomic

Energy Act (42 U.S.C. 2168). Such

notification shall include sufficient

information to enable DOE to determine the

extent that commercialization of such

technology would enhance or diminish

security interests of the United States, or

diminish communications within DOE’s

nuclear weapon production complex. DOE

shall use its best efforts to complete its

determination within sixty (60) days of the

Contractor’s notification, and provision of

any supporting information, and DOE shall

promptly notify the Contractor as to whether

the technology is transferable.

(2) The Contractor shall include in all of

its technology transfer agreements with third

parties, including, but not limited to,

CRADAs, licensing agreements and

assignments, notice to such third parties that

the export of goods and/or Technical Data

from the United States may require some

form of export control license or other

authority from the U.S. Government and that

failure to obtain such export control license

may result in criminal liability under U.S.

laws.

(3) For other than fundamental research as

defined in National Security Decision

Directive 189, the Contractor is responsible to

conduct internal export control reviews and

assure that technology is transferred in

accordance with applicable law.

(k) Records. The Contractor shall maintain

records of its technology transfer activities in

a manner and to the extent satisfactory to the

DOE and specifically including, but not

limited to, the licensing agreements,

assignments and the records required to

implement the requirements of paragraphs

(e), (f), and (h) of this clause and shall

provide reports to the Contracting Officer to

enable DOE to maintain the reporting

requirements of Section 12(c)(6) of the

Stevenson-Wydler Technology Innovation

Act of 1980, as amended (15 U.S.C.

3710a(c)(6)). Such reports shall be made

annually in a format to be agreed upon

between the Contractor and DOE and in such

a format which will serve to adequately

inform DOE of the Contractor’s technology

transfer activities while protecting any data

not subject to disclosure under the Rights in

Technical Data clause and paragraph (n) of

this clause. Such records shall be made

available in accordance with the clauses of

this Contract pertaining to inspection, audit

and examination of records.

(l) Reports to Congress. To facilitate DOE’s

reporting to Congress, the Contractor is

required to submit annually to DOE a

technology transfer plan for conducting its

technology transfer function for the

upcoming year, including plans for securing

Intellectual Property rights in Laboratory

innovations with commercial promise and

plans for managing such innovations so as to

benefit the competitiveness of United States

industry. This plan shall be provided to the

Contracting Officer on or before October 1st

of each year.

(m) Oversight and Appraisal. The

Contractor is responsible for developing and

implementing effective internal controls for

all technology transfer activities consistent

with the audit and record requirements of

this Contract. Laboratory Contractor

performance in implementing the technology

transfer mission and the effectiveness of the

Contractor’s procedures will be evaluated by

the Contracting Officer as part of the annual

appraisal process, with input from the

cognizant Secretarial Officer or program

office.

(n) Technology Transfer Through

Cooperative Research and Development

Agreements. Upon approval of the

Contracting Officer and as provided in a DOE

approved Joint Work Statement (JWS), the

Laboratory Director or his designee may enter

into CRADAs on behalf of the DOE subject

to the requirements set forth in this

paragraph.

(1) Review and Approval of CRADAs

(i) Except as otherwise directed in writing

by the Contracting Officer, each JWS shall be

submitted to the Contracting Officer for

approval. The Contractor’s Laboratory

Director or designee shall provide a program

mission impact statement and shall include

an impact statement regarding related

Intellectual Property rights known by the

Contractor to be owned by the Government

to assist the Contracting Officer in his

approval determination.

(ii) The Contractor shall also include

(specific to the proposed CRADA), a

statement of compliance with the Fairness of

Opportunity requirements of paragraph (e) of

this clause.

(iii) Within ninety (90) days after

submission of a JWS, the Contracting Officer

shall approve, disapprove or request

modification to the JWS. If a modification is

required, the Contracting Officer shall

approve or disapprove any resubmission of

the JWS within thirty (30) days of its

resubmission, or ninety (90) days from the

date of the original submission, whichever is

later. The Contracting Officer shall provide a

written explanation to the Contractor’s

Laboratory Director or designee of any

disapproval or requirement for modification

of a JWS.

(iv) Upon approval of a JWS, the

Contractor’s Laboratory Director or designee

may submit a CRADA, based upon the

approved JWS, to the Contracting Officer.

The Contracting Officer, within thirty (30)

days of receipt of the CRADA, shall approve

or request modification of the CRADA. If the

Contracting Officer requests a modification of

the CRADA, an explanation of such request

shall be provided to the Laboratory Director

or designee.

(v) Except as otherwise directed in writing

by the Contracting Officer, the Contractor

shall not enter into, or begin work under, a

CRADA until approval of the CRADA has

been granted by the Contracting Officer. The

Contractor may submit its proposed CRADA

to the Contracting Officer at the time of

submitting its proposed JWS or any time

thereafter. However, the Contracting Officer

is not obligated to respond under paragraph

(n)(1)(iv) of this clause until within thirty

(30) days after approval of the JWS or thirty

(30) days after submittal of the CRADA,

whichever is later.

(2) Selection of Participants The

Contractor’s Laboratory Director or designee

in deciding what CRADA to enter into shall:

(i) Give special consideration to small

business firms, and consortia involving small

business firms;

(ii) Give preference to business units

located in the United States which agree that

products or processes embodying Intellectual

Property will be substantially manufactured

or practiced in the United States and, in the

case of any industrial organization or other

person subject to the control of a foreign

company or government, take into

consideration whether or not such foreign

government permits United States agencies,

organizations, or other persons to enter into

cooperative research and development

agreements and licensing agreements;

(iii) Provide Fairness of Opportunity in

accordance with the requirements of

paragraph (e) of this clause; and
Federal Register / Vol. 60, No. 246 / Friday, December 22, 1995 / Rules and Regulations 66515

(iv) Give consideration to the Conflicts of

Interest requirements of paragraph (d) of this

clause.

(3) Withholding of Data

(i) Data that is first produced as a result of

research and development activities

conducted under a CRADA and that would

be a trade secret or commercial or financial

data that would be privileged or confidential,

if such data had been obtained from a nonFederal third party, may be protected from

disclosure under the Freedom of Information

Act as provided in the Stevenson- Wydler

Technology Innovation Act of 1980, as

amended (15 U.S.C. 3710a(c)(7)) for a period

as agreed in the CRADA of up to five (5)

years from the time the data is first produced.

The DOE shall cooperate with the Contractor

in protecting such data.

(ii) Unless otherwise expressly approved

by the Contracting Officer in advance for a

specific CRADA, the Contractor agrees, at the

request of the Contracting Officer, to transmit

such data to other DOE facilities for use by

DOE or its Contractors by or on behalf of the

Government. When data protected pursuant

to paragraph (n)(3)(i) of this clause is so

transferred, the Contractor shall clearly mark

the data with a legend setting out the

restrictions against private use and further

dissemination, along with the expiration date

of such restrictions.

(iii) In addition to its authority to license

Intellectual Property, the Contractor may

enter into licensing agreements with third

parties for data developed by the Contractor

under a CRADA subject to other provisions

of this Contract. However, the Contractor

shall neither use the protection against

dissemination nor the licensing of data as an

alternative to the submittal of invention

disclosures which include data protected

pursuant to paragraph (n)(3)(i) of this clause.

(4) Work For Others and User Facility

Programs

(i) WFO and User Facility Agreements

(UFAs) are not CRADAs and will be available

for use by the Contractor in addition to

CRADAs for achieving utilization of

employee expertise and unique facilities for

maximizing technology transfer. The

Contractor agrees to inform prospective

CRADA participants, which are intending to

substantially pay full cost recovery for the

effort under a proposed CRADA, of the

availability of alternative forms of

agreements, i.e., WFO and UFA, and of the

Class Patent Waiver provisions associated

therewith.

(ii) Where the Contractor believes that the

transfer of technology to the U. S. domestic

economy will benefit from, or other equity

considerations dictate, an arrangement other

than the Class Waiver of patent rights to the

sponsor in WFO and UFAs, a request may be

made to the Contracting Officer for an

exception to the Class Waivers.

(iii) Rights to inventions made under

agreements other than funding agreements

with third parties shall be governed by the

appropriate provisions incorporated, with

DOE approval, in such agreements, and the

provisions in such agreements take

precedence over any disposition of rights

contained in this Contract. Disposition of

rights under any such agreement shall be in

accordance with any DOE class waiver

(including Work for Others and User Class

Waivers) or individually negotiated waiver

which applies to the agreement.

(5) Conflicts of Interest

(i) Except as provided in paragraph

(n)(5)(iii) of this clause, the Contractor shall

assure that no employee of the Contractor

shall have a substantial role (including an

advisory role) in the preparation, negotiation,

or approval of a CRADA, if, to such

employee’s knowledge:

(A) Such employee, or the spouse, child,

parent, sibling, or partner of such employee,

or an organization (other than the Contractor)

in which such employee serves as an officer,

director, trustee, partner, or employee—

(1) holds financial interest in any entity,

other than the Contractor, that has a

substantial interest in the preparation,

negotiation, or approval of the CRADA;

(2) receives a gift or gratuity from any

entity, other than the Contractor, that has a

substantial interest in the preparation,

negotiation, or approval of the CRADA; or

(B) A financial interest in any entity, other

than the Contractor, that has a substantial

interest in the preparation, negotiation, or

approval of the CRADA, is held by any

person or organization with whom such

employee is negotiating or has any

arrangement concerning prospective

employment.

(ii) The Contractor shall require that each

employee of the Contractor who has a

substantial role (including an advisory role)

in the preparation, negotiation, or approval of

a CRADA certify through the Contractor to

the Contracting Officer that the

circumstances described in paragraph

(n)(5)(i) of this clause do not apply to that

employee.

(iii) The requirements of paragraphs

(n)(5)(i) and (n)(5)(ii) of this clause shall not

apply in a case where the Contracting Officer

is advised by the Contractor in advance of the

participation of an employee described in

those paragraphs in the preparation,

negotiation or approval of a CRADA of the

nature of and extent of any financial interest

described in paragraph (n)(5)(i) of this clause,

and the Contracting Officer determines that

such financial interest is not so substantial as

to be considered likely to affect the integrity

of the Contractor employee’s participation in

the process of preparing, negotiating, or

approving the CRADA.

(o) Technology Transfer in Other CostSharing Agreements. In conducting research

and development activities in cost-shared

agreements not covered by paragraph (n) of

this clause, the Contractor, with prior written

permission of the Contracting Officer, may

provide for the withholding of data produced

thereunder in accordance with the applicable

provisions of paragraph (n)(3) of this clause.

(End of clause)

Alternate I (Jan 1996). As prescribed in

970.7330(b), add the following definition

under paragraph (b) and new paragraph (p):

(b)(8) Privately funded technology transfer

means the prosecuting, maintaining,

licensing, and marketing of inventions which

are not owned by the Government (and not

related to CRADAs) when such activities are

conducted entirely without the use of

Government funds.

(p) Nothing in paragraphs (c) Allowable

Costs, (e) Fairness of Opportunity, (f) U.S.

Industrial Competitiveness, (g) Indemnity -

Product Liability, (h) Disposition of Income,

and (i) Transfer to Successor Contractor of

this clause are intended to apply to the

contractor’s privately funded technology

transfer activities if such privately funded

activities are addressed elsewhere in the

contract.

Alternate II (Jan 1996). As prescribed in

970.7330(c), the phrase ‘‘weapon production

facility’’ may be substituted wherever the

word ‘‘laboratory’’ appears in the clause.

3. A new subpart 970.73, Technology

Transfer, consisting of sections

970.7310, 970.7320, and 970.7330, is

added to read as follows:

Subpart 970.73 Technology Transfer

Secs.

970.7310 General.

970.7320 Policy.

970.7330 Contract Clause.

Subpart 970.73–Technology Transfer

970.7310 General.

This subpart prescribes policies and

procedures for implementing the

National Competitiveness Technology

Transfer Act of 1989. The Act required

that technology transfer be established

as a mission of each Government-owned

laboratory operated under contract by a

non-Federal entity. The National

Defense Authorization Act for Fiscal

Year 1994 expanded the definition of

laboratory to include weapon

production facilities that are operated

for national security purposes and are

engaged in the production,

maintenance, testing, or dismantlement

of a nuclear weapon or its components.

970.7320 Policy.

All new awards for or extensions of

existing DOE laboratory or weapon

production facility management and

operating contracts shall have

technology transfer, including

authorization to award Cooperative

Research and Development Agreements

(CRADAs), as a laboratory or facility

mission under Section 11(a)(1) of the

Stevenson-Wydler Technology

Innovation Act of 1980, as amended. A

management and operating contractor

for a facility not deemed to be a

laboratory or weapon production facility

may be authorized on a case-by-case

basis to support the DOE technology

transfer mission including, but not

limited to, participating in CRADAs

awarded by DOE laboratories and

weapon production facilities.

970.7330 Contract clause.

(a) The contracting officer shall insert

the clause at 970.5204–40, Technology
66516 Federal Register / Vol. 60, No. 246 / Friday, December 22, 1995 / Rules and Regulations

transfer mission, in each solicitation for

a new or an extension of an existing

laboratory or weapon production facility

management and operating contract.

(b) If the contractor is a nonprofit

organization or small business eligible

under 35 U.S.C. 200 et seq., to receive

title to any inventions under the

contract and proposes to fund at private

expense the maintaining, licensing, and

marketing of the inventions, the

contracting officer shall use the basic

clause with its Alternate I.

(c) The contracting officer may

substitute the Alternate II phrase

‘‘weapon production facility’’ wherever

the word ‘‘laboratory’’ appears in the

clause where the facility is operated for

national security purposes and engaged

in the production, maintenance, testing,

or dismantlement of a nuclear weapon

or its components.

[FR Doc. 95–31187 Filed 12–21–95; 8:45 am]

BILLING CODE 6450–01–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 675

[I.D. 121295B]

Groundfish of the Bering Sea and

Aleutian Islands Area; Approval of

Community Development Plans

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Allocation of Community

Development Quota of pollock for 1996–

98.

SUMMARY: NMFS announces the

approval of recommendations made by

the Governor of the State of Alaska

(Governor) for Community Development

Plans (CDPs) during the calendar years

1996–98 under authority of the

Community Development Quota (CDQ)

program. This action announces the

decision of NMFS to approve the

Governor’s recommended CDPs,

including the pollock CDQs for each

subarea or district, and the availability

of findings underlying the decision.

EFFECTIVE DATE: Effective January 1,

1996.

ADDRESSES: Copies of the findings made

by NMFS in approving the Governor’s

recommendations may be obtained from

the Alaska Region, National Marine

Fisheries Service, P.O. Box 21668,

Juneau, AK 99802, Attn: Lori Gravel.

FOR FURTHER INFORMATION CONTACT:

David C. Ham, 907–586–7228.

SUPPLEMENTARY INFORMATION: The

pollock CDQ program originally was

developed by the North Pacific Fishery

Management Council (Council) and

submitted as part of Amendment 18 to

the Fishery Management Plan (FMP) for

the Groundfish Fishery of the Bering

Sea and Aleutian Islands Area, which

was approved in part by the Secretary

of Commerce (57 FR 23321, June 3,

1992). Initial Federal regulations

implementing the CDQ program became

effective on November 18, 1992 (57 FR

54936, November 23, 1992) and expire

on December 31, 1995. The Council

proposed re-authorizing the CDQ

program for an additional 3 years as part

of Amendment 38 to the FMP. NMFS

approved this amendment on November

28, 1995. Regulations implementing the

pollock CDQ program for 1996, 1997,

and 1998, were published on December

12, 1995 (60 FR 63654), and will be

effective on January 1, 1996.

Eligible western Alaska communities

submitted six proposed CDPs requesting

CDQs to the Governor under § 675.27.

The State of Alaska conducted a public

hearing on September 23, 1995, in

Seattle, WA, during which all interested

persons had an opportunity to be heard.

The hearing covered the substance and

content of the proposed CDPs in such a

manner that the general public, and

particularly the affected parties, had a

reasonable opportunity to understand

the impact of each proposed CDP. The

Governor made available for public

review all State of Alaska materials

pertinent to the hearing at the time the

hearing was announced. The public

hearing held by the State of Alaska

satisfied the requirements of § 675.27(a).

The Governor consulted the Council

concerning the proposed CDPs during

the Council’s September 1995 meeting.

The Council reviewed copies of the CDP

executive summaries, summary sheets,

and the Governor’s recommended

allocations and unanimously concurred

in the Governor’s recommendations.

Upon receiving the Governor’s

recommendations on November 1, 1995,

NMFS commenced a review of the

record to determine whether the

community eligibility criteria and the

evaluation criteria set forth in

regulations implementing the CDQ

program have been met. NMFS has

found that the Governor’s

recommendations for approval of

proposed CDPs are consistent with the

community eligibility conditions and

evaluation criteria and other applicable

provisions of the regulations.

As required by § 675.27(c)(1), NMFS

publishes this announcement of

approval of the Governor’s

recommendations, including the CDQ

allocated to each CDP (see table below)

and the availability of the findings

regarding this decision (see ADDRESSES).

CDQ recipient

CDQ for

1996,

1997,

and

1998

(percent)

Aleutian Pribilof Island Community

Development Association ........... 16

Bristol Bay Economic Development

Corporation ................................. 20

Central Bering Sea Fishermen’s

Association .................................. 04

Coastal Villages Fishing Cooperative ............................................... 25

Norton Sound Economic Development Corporation ........................ 22

Yukon Delta Fisheries Development Corporation ........................ 13

Authority: This action is taken under 50

CFR 675.27.

Dated: December 14, 1995.

Gary Matlock,

Program Management Officer, National

Marine Fisheries Service.

[FR Doc. 95–31182 Filed 12–21–95; 8:45 am]

BILLING CODE 3510–22–W