105TH CONGRESS

2D SESSION H. R. 4859

AN ACT

To improve the ability of Federal agencies to

license federally owned inventions.
105TH CONGRESS

2D SESSION H. R. 4859

AN ACT

To improve the ability of Federal agencies to license federally

owned inventions.

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

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

3 Commercialization Act of 1998’’.

4 SEC. 2. COOPERATIVE RESEARCH AND DEVELOPMENT

5 AGREEMENTS.

6 Section 12(b)(1) of the Stevenson-Wydler Technology

7 Innovation Act of 1980 (15 U.S.C. 3710a(b)(1)) is

8 amended by inserting ‘‘or, subject to section 209 of title

9 35, United States Code, may grant a license to an inven10 tion which is federally owned, for which a patent applica11 tion was filed before the granting of the license, and di12 rectly within the scope of the work under the agreement,’’

13 after ‘‘under the agreement,’’.

14 SEC. 3. LICENSING FEDERALLY OWNED INVENTIONS.

15 (a) AMENDMENT.—Section 209 of title 35, United

16 States Code, is amended to read as follows:

17 ‘‘§ 209. Licensing federally owned inventions

18 ‘‘(a) AUTHORITY.—A Federal agency may grant an

19 exclusive or partially exclusive license on a federally owned

20 invention under section 207(a)(2) only if—

21 ‘‘(1) granting the license is a reasonable and

22 necessary incentive to—

23 ‘‘(A) call forth the investment capital and

24 expenditures needed to bring the invention to

25 practical application; or
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1 ‘‘(B) otherwise promote the invention’s uti2 lization by the public;

3 ‘‘(2) the Federal agency finds that the public

4 will be served by the granting of the license, as indi5 cated by the applicant’s intentions, plans, and ability

6 to bring the invention to practical application or oth7 erwise promote the invention’s utilization by the

8 public, and that the proposed scope of exclusivity is

9 not greater than reasonably necessary to provide the

10 incentive for bringing the invention to practical utili11 zation, as proposed by the applicant, or otherwise to

12 promote the invention’s utilization by the public;

13 ‘‘(3) the applicant makes a commitment to

14 achieve practical utilization of the invention within a

15 reasonable time, which time may be extended by the

16 agency upon the applicant’s request and the appli17 cant’s demonstration that the refusal of such exten18 sion would be unreasonable;

19 ‘‘(4) granting the license will not tend to sub20 stantially lessen competition or create or maintain a

21 violation of the Federal antitrust laws; and

22 ‘‘(5) in the case of an invention covered by a

23 foreign patent application or patent, the interests of

24 the Federal Government or United States industry

25 in foreign commerce will be enhanced.
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1 ‘‘(b) MANUFACTURE IN UNITED STATES.—A Federal

2 agency shall normally grant a license under section

3 207(a)(2) to use or sell any federally owned invention in

4 the United States only to a licensee who agrees that any

5 products embodying the invention or produced through the

6 use of the invention will be manufactured substantially in

7 the United States.

8 ‘‘(c) SMALL BUSINESS.—First preference for the

9 granting of any exclusive or partially exclusive licenses

10 under section 207(a)(2) shall be given to small business

11 firms having equal or greater likelihood as other appli12 cants to bring the invention to practical application within

13 a reasonable time.

14 ‘‘(d) TERMS AND CONDITIONS.—Any licenses grant15 ed under section 207(a)(2) shall contain such terms and

16 conditions as the granting agency considers appropriate.

17 Such terms and conditions shall include provisions—

18 ‘‘(1) retaining a nontransferrable, irrevocable,

19 paid-up license for any Federal agency to practice

20 the invention or have the invention practiced

21 throughout the world by or on behalf of the Govern22 ment of the United States;

23 ‘‘(2) requiring periodic reporting on utilization

24 of the invention, and utilization efforts, by the li25 censee, but only to the extent necessary to enable
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1 the Federal agency to determine whether the terms

2 of the license are being complied with; and

3 ‘‘(3) empowering the Federal agency to termi4 nate the license in whole or in part if the agency de5 termines that—

6 ‘‘(A) the licensee is not executing its com7 mitment to achieve practical utilization of the

8 invention, including commitments contained in

9 any plan submitted in support of its request for

10 a license, and the licensee cannot otherwise

11 demonstrate to the satisfaction of the Federal

12 agency that it has taken, or can be expected to

13 take within a reasonable time, effective steps to

14 achieve practical utilization of the invention;

15 ‘‘(B) the licensee is in breach of an agree16 ment described in subsection (b);

17 ‘‘(C) termination is necessary to meet re18 quirements for public use specified by Federal

19 regulations issued after the date of the license,

20 and such requirements are not reasonably satis21 fied by the licensee; or

22 ‘‘(D) the licensee has been found by a

23 court of competent jurisdiction to have violated

24 the Federal antitrust laws in connection with

25 its performance under the license agreement.
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1 ‘‘(e) PUBLIC NOTICE.—No exclusive or partially ex2 clusive license may be granted under section 207(a)(2) un3 less public notice of the intention to grant an exclusive

4 or partially exclusive license on a federally owned invention

5 has been provided in an appropriate manner at least 15

6 days before the license is granted, and the Federal agency

7 has considered all comments received before the end of

8 the comment period in response to that public notice. This

9 subsection shall not apply to the licensing of inventions

10 made under a cooperative research and development

11 agreement entered into under section 12 of the Stevenson12 Wydler Technology Innovation Act of 1980 (15 U.S.C.

13 3710a).

14 ‘‘(f) PLAN.—No Federal agency shall grant any li15 cense under a patent or patent application on a federally

16 owned invention unless the person requesting the license

17 has supplied the agency with a plan for development and/

18 or marketing of the invention, except that any such plan

19 may be treated by the Federal agency as commercial and

20 financial information obtained from a person and privi21 leged and confidential and not subject to disclosure under

22 section 552 of title 5 of the United States Code.’’.

23 (b) CONFORMING AMENDMENT.—The item relating

24 to section 209 in the table of sections for chapter 18 of
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1 title 35, United States Code, is amended to read as fol2 lows:

‘‘209. Licensing federally owned inventions.’’.

3 SEC. 4. TECHNICAL AMENDMENTS TO BAYH-DOLE ACT.

4 Chapter 18 of title 35, United States Code (popularly

5 known as the ‘‘Bayh-Dole Act’’), is amended—

6 (1) by amending section 202(e) to read as fol7 lows:

8 ‘‘(e) In any case when a Federal employee is a co9 inventor of any invention made with a nonprofit organiza10 tion or small business firm, the Federal agency employing

11 such coinventor may, for the purpose of consolidating

12 rights in the invention and if it finds that it would expedite

13 the development of the invention—

14 ‘‘(1) license or assign whatever rights it may

15 acquire in the subject invention to the nonprofit or16 ganization or small business firm in accordance with

17 the provisions of this chapter; or

18 ‘‘(2) acquire any rights in the subject invention

19 from the nonprofit organization or small business

20 firm, but only to the extent the party from whom

21 the rights are acquired voluntarily enters into the

22 transaction and no other transaction under this

23 chapter is conditioned on such acquisition.’’; and

24 (2) in section 207(a)—
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1 (A) by striking ‘‘patent applications, pat2 ents, or other forms of protection obtained’’ and

3 inserting ‘‘inventions’’ in paragraph (2); and

4 (B) by inserting ‘‘, including acquiring

5 rights for the Federal Government in any in6 vention, but only to the extent the party from

7 whom the rights are acquired voluntarily enters

8 into the transaction, to facilitate the licensing

9 of a federally owned invention’’ after ‘‘or

10 through contract’’ in paragraph (3).

11 SEC. 5. TECHNICAL AMENDMENTS TO THE STEVENSON12 WYDLER TECHNOLOGY INNOVATION ACT OF

13 1980.

14 The Stevenson-Wydler Technology Innovation Act of

15 1980 is amended—

16 (1) in section 4(4) (15 U.S.C. 3703(4)), by

17 striking ‘‘section 6 or section 8’’ and inserting ‘‘sec18 tion 7 or 9’’;

19 (2) in section 4(6) (15 U.S.C. 3703(6)), by

20 striking ‘‘section 6 or section 8’’ and inserting ‘‘sec21 tion 7 or 9’’;

22 (3) in section 5(c)(11) (15 U.S.C. 3704(c)(11)),

23 by striking ‘‘State of local governments’’ and insert24 ing ‘‘State or local governments’’;

25 (4) in section 9 (15 U.S.C. 3707), by—
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1 (A) striking ‘‘section 6(a)’’ and inserting

2 ‘‘section 7(a)’’;

3 (B) striking ‘‘section 6(b)’’ and inserting

4 ‘‘section 7(b)’’; and

5 (C) striking ‘‘section 6(c)(3)’’ and insert6 ing ‘‘section 7(c)(3)’’;

7 (5) in section 11(e)(1) (15 U.S.C. 3710(e)(1)),

8 by striking ‘‘in cooperation with Federal Labora9 tories’’ and inserting ‘‘in cooperation with Federal

10 laboratories’’;

11 (6) in section 11(i) (15 U.S.C. 3710(i)), by

12 striking ‘‘a gift under the section’’ and inserting ‘‘a

13 gift under this section’’;

14 (7) in section 14 (15 U.S.C. 3710c)—

15 (A) in subsection (a)(1)(A)(i), by inserting

16 ‘‘, if the inventor’s or coinventor’s rights are as17 signed to the United States’’ after ‘‘inventor or

18 coinventors’’;

19 (B) in subsection (a)(1)(B), by striking

20 ‘‘succeeding fiscal year’’ and inserting ‘‘2 suc21 ceeding fiscal years’’; and

22 (C) in subsection (b)(2), by striking

23 ‘‘inventon’’ and inserting ‘‘invention’’; and
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1 (8) in section 22 (15 U.S.C. 3714), by striking

2 ‘‘sections 11, 12, and 13’’ and inserting ’’sections

3 12, 13, and 14’’.

4 SEC. 6. REVIEW OF COOPERATIVE RESEARCH AND DEVEL5 OPMENT AGREEMENT PROCEDURES.

6 (a) REVIEW.—Within 90 days after the date of the

7 enactment of this Act, each Federal agency with a Feder8 ally funded laboratory that has in effect on that date of

9 enactment one or more cooperative research and develop10 ment agreements under section 12 of the Stevenson11 Wydler Technology Innovation Act of 1980 (15 U.S.C.

12 3710a) shall report to the Committee on National Security

13 of the National Science and Technology Council and the

14 Congress on the general policies and procedures used by

15 that agency to gather and consider the views of other

16 agencies on—

17 (1) joint work statements under section

18 12(c)(5)(C) or (D) of the Stevenson-Wydler Tech19 nology Innovation Act of 1980 (15 U.S.C.

20 3710a(c)(5)(C) or (D)); or

21 (2) in the case of laboratories described in sec22 tion 12(d)(2)(A) of the Stevenson-Wydler Tech23 nology Innovation Act of 1980 (15 U.S.C.

24 3710a(d)(2)(A)), cooperative research and develop25 ment agreements under such section 12,
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1 with respect to major proposed cooperative research and

2 development agreements that involve critical national se3 curity technology or may have a significant impact on do4 mestic or international competitiveness.

5 (b) PROCEDURES.—Within one year after the date of

6 the enactment of this Act, the Committee on National Se7 curity of the National Science and Technology Council, in

8 conjunction with relevant Federal agencies and national

9 laboratories, shall—

10 (1) determine the adequacy of existing proce11 dures and methods for interagency coordination and

12 awareness with respect to cooperative research and

13 development agreements described in subsection (a);

14 and

15 (2) establish and distribute to appropriate Fed16 eral agencies—

17 (A) specific criteria to indicate the neces18 sity for gathering and considering the views of

19 other agencies on joint work statements or co20 operative research and development agreements

21 as described in subsection (a); and

22 (B) additional procedures, if any, for car23 rying out such gathering and considering of

24 agency views with respect to cooperative re-
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1 search and development agreements described

2 in subsection (a).

3 Procedures established under this subsection shall be de4 signed to the extent possible to use or modify existing pro5 cedures, to minimize burdens on Federal agencies, to en6 courage industrial partnerships with national laboratories,

7 and to minimize delay in the approval or disapproval of

8 joint work statements and cooperative research and devel9 opment agreements.

10 (c) LIMITATION.—Nothing in this Act, nor any proce11 dures established under this section shall provide to the

12 Office of Science and Technology Policy, the National

13 Science and Technology Council, or any Federal agency

14 the authority to disapprove a cooperative research and de15 velopment agreement or joint work statement, under sec16 tion 12 of the Stevenson-Wydler Technology Innovation

17 Act of 1980 (15 U.S.C. 3710a), of another Federal agen18 cy.

19 SEC. 7. INCREASED FLEXIBILITY FOR FEDERAL LABORA20 TORY PARTNERSHIP INTERMEDIARIES.

21 Section 23 of the Stevenson-Wydler Technology Inno22 vation Act of 1980 (15 U.S.C. 3715) is amended—

23 (1) in subsection (a)(1) by inserting ‘‘, institu24 tions of higher education as defined in section

25 1201(a) of the Higher Education Act of 1965 (20
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1 U.S.C. 1141(a)), or educational institutions within

2 the meaning of section 2194 of title 10, United

3 States Code’’ after ‘‘small business firms’’; and

4 (2) in subsection (c) by inserting ‘‘, institutions

5 of higher education as defined in section 1201(a) of

6 the Higher Education Act of 1965 (20 U.S.C.

7 1141(a)), or educational institutions within the

8 meaning of section 2194 of title 10, United States

9 Code,’’ after ‘‘small business firms’’.

10 SEC. 8. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN

11 SUPPORT OF BIOTECHNOLOGY PATENTS.

12 (a) IN GENERAL.—Not later than 6 months after the

13 date of the enactment of this Act, the General Accounting

14 Office, in consultation with the United States Patent and

15 Trademark Office, shall conduct a study and submit a re16 port to Congress on the potential risks to the United

17 States biotechnology industry relating to biological depos18 its in support of biotechnology patents.

19 (b) CONTENTS.—The study conducted under this sec20 tion shall include—

21 (1) an examination of the risk of export and the

22 risk of third-party transfer of biological deposits,

23 and the risks posed by the change to 18-month pub24 lication requirements;
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1 (2) an analysis of comparative legal and regu2 latory regimes; and

3 (3) any related recommendations.

4 (c) CONSIDERATION OF REPORT.—In drafting regu5 lations affecting biological deposits (including any modi6 fication of 37 Code of Federal Regulations 1.801 et seq.),

7 the United States Patent and Trademark Office shall con8 sider the recommendations of the study conducted under

9 this section.

10 SEC. 9. PROVISIONAL APPLICATIONS.

11 (a) ABANDONMENT.—Section 111(b)(5) of title 35,

12 United States Code, is amended to read as follows:

13 ‘‘(5) ABANDONMENT.—Notwithstanding the ab14 sence of a claim, upon timely request and as pre15 scribed by the Commissioner, a provisional applica16 tion may be treated as an application filed under

17 subsection (a). Subject to section 119(e)(3) of this

18 title, if no such request is made, the provisional ap19 plication shall be regarded as abandoned 12 months

20 after the filing date of such application and shall not

21 be subject to revival thereafter.’’.

22 (b) TECHNICAL AMENDMENT RELATING TO WEEK23 ENDS AND HOLIDAYS.—Section 119(e) of title 35, United

24 States Code, is amended by adding at the end the follow25 ing:
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1 ‘‘(3) If the day that is 12 months after the filing date

2 of a provisional application falls on a Saturday, Sunday,

3 or Federal holiday within the District of Columbia, the

4 period of pendency of the provisional application shall be

5 extended to the next succeeding secular or business day.’’.

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to a provisional application filed

8 on or after June 8, 1995.

Passed the House of Representatives October 20,

1998.

Attest:

Clerk.