Notice of Proposed 

Rulemaking: Regulatory 

Updates to 37 CFR 401 and 404

Courtney Silverthorn, PhD

Acting Director, Technology Partnerships Office

February 25, 2021 1
Agenda

• Background

• Proposed Regulatory Changes – 37 CFR 401

• Proposed Regulatory Changes – 37 CFR 404

• How to Submit Comments

• Public Statements (23 requests received by NIST)

Today’s webinar is being recorded and will be made available in approximately one week at 

https://www.nist.gov/tpo/bayh-dole
NPRM a Goal Under Lab-to-Market

• L2M an ongoing interagency effort since 2014

• Currently led by National Science and Technology Council’s Lab-to-Market 

subcommittee (26 agencies/sub-agencies)

• Subcommittee workplan includes strategic objective to “Reduce regulatory 

impediments and administrative barriers in Federal technology transfer 

policies and practices”

• Deliverables include regulatory and legislative proposals, SBIR improvements, 

and improved intramural/extramural invention reporting

• NPRM presented today a result of nearly two years of effort, including 

extensive L2M interagency discussions beginning in October 2019
NIST’s Technology Transfer Leadership

NIST has a unique role in 

promoting and reporting 

on the overall strength 

of federal technology 

transfer efforts

Policy coordination and 

promulgation of 

technology transfer 

regulation

Lead for Interagency 

Workgroup for 

Technology Transfer (11 

agencies) and 

Interagency Workgroup 

for Bayh-Dole

Annual reports for the 

President, the Congress, 

and OMB on technology 

transfer across federal 

agencies

Co-Chair Lab-to-Market 

NSTC Subcommittee and 

led Cross Agency Priority 

Goal Efforts x2

Host Agency for the 

Federal Laboratory 

Consortium for 

Technology Transfer
ROI-to-Rule Timeline
Return on Investment Initiative

Forums to hear directly 

from stakeholders; Search 

of 80 terms (e.g., CRADA); 

analysis of results to code 

responses and ID common 

threads for discussion

RFI Inputs

Working groups provided 

inputs and developed 

options for ROI focus 

Agency Inputs

Reviewed 50+ scholarly 

articles and reports to 

identify actionable 

recommendations

Existing 

Research

Produced by NIST, 

IAWGTT, and STPI; public 

release Dec. 6, 2018

Draft Green 

Paper
 Green Paper published April 24, 2019 

as NIST Special Publication 1234

 Based on extensive stakeholder 

inputs via open, inclusive process— and closely coordinated with 

interagency working groups 

 15 key findings to inform actions that 

will help remove unwarranted 

impediments to innovation at the 

public private sector interface, and 

streamline and accelerate transfer of 

technology from Lab-to-Market

 Used to develop milestones for cross- agency implementation

ROI Green Paper

Sources of Information: https://www.nist.gov/unleashing-american-innovation/roi-sources-information

Final Green Paper: https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.1234.pdf
Changes Color-Coded Throughout Presentation

• Changes intended to streamline and/or remove outdated material are 

presented in BLACK

• Technical corrections are presented in BLUE

• Minor revisions and clarifications are presented in PURPLE

• Substantial changes are presented in GREEN

*Please contact courtney.silverthorn@nist.gov if you would like to receive a colorblind-friendly version of this presentation. 
Proposed Regulatory Changes –

37 CFR 401
§ 401.1 - Scope

• Streamlines section by removing unnecessary or outdated language 

from:

• Paragraph (a) – language does not provide any regulatory instructions

• Paragraphs (c), (d), and (f) – describe applicability of regulations at the time the 

regulation was first implemented, outdated and no longer needed

• Paragraph (e) – eliminates “three copies” submission requirement for agencies

• Adds additional clarification to applicability of Bayh-Dole to large 

businesses in Paragraph (b) when agency vesting statutes supersede EO 

12591
§ 401.2 - Definitions

• Updates definitions of electronically filed and electronic submission

• Expands definitions of patent application and initial patent application to 

include PCT applications designating the United States and Plant Variety 

Protection certificates

• Revises definition of statutory period to clarify that it refers to “...the 

one-year period before the effective filing date of a claimed invention in 

a patent application...”
§ 401.3 - Use of the standard clauses

• Makes technical corrections to:

• A reference to § 401.5 in Paragraph (c)(3)

• A reference to “Secretary” in Paragraph (f)

• Removes an outdated agency submission previously required under OMB 

Circular A-124 in Paragraph (g)
§ 401.4 - Contractor appeals of exceptions

• Makes technical corrections to: 

• A reference to 35 U.S.C. 202 in Paragraph (a)

• The title of the “United States Court of Federal Claims” in paragraph (b)
§ 401.5 - Modification and tailoring of clauses

• Makes a technical correction to references to § 401.14 in Paragraphs (a) 

and (g)

• Revises the language in Paragraph (b) to eliminate ambiguity of 

“instructions” to the agency versus “instructions” to the contractor 

• Moves additional reporting at the discretion of the agency in Paragraph 

(f) to § 401.14(c)(1) and (c)(3)
§ 401.6 - Exercise of march-in rights

• Restructures existing Paragraphs (b)-(h) as subparagraphs under “procedures [that] shall govern the exercise of march-in rights”

• Provides agencies with increased time to review information submitted by a 

contractor (60 days --> 120 days)

• Clarifies that agencies may disclose information obtained during a march-in 

proceeding when authorized by the contractor (assignee or licensee) “or otherwise 

required by law”

• Provides additional guidance to agencies that, consistent with the Policy and 

Objective of Bayh-Dole in 35 U.S.C. 200, the price of goods and services arising from the practical application of the invention shall not be the sole basis for the exercise of 

march-in rights

• Corrects a reference to 35 U.S.C. 202 in current Paragraph (j)
§ 401.7 - Removed and Reserved

• As part of the overall streamlining effort in this proposed rule, the 

provisions of § 401.7 “Small business preference” have been 

substantially re-incorporated into § 401.14 paragraph (k) 
§ 401.8 - Removed and Reserved

• As part of the overall streamlining effort in this proposed rule, § 401.8 

“Reporting on utilization of subject inventions” was identified as 

redundant and unnecessary – reporting procedures are already 

identified in § 401.14 and agencies are required by law to comply with 

the Paperwork Reduction Act
§ 401.9 - Contractor and contractor employee 

inventor requests for rights in inventions

• Section has been renamed from “Retention of rights by contractor 

employee inventor”

• Consolidates provisions from § 401.15 regarding the process by which a 

contractor subject to a determination of exceptional circumstances may 

request greater rights to an invention in Paragraph (a) and provisions 

from § 401.9 regarding the flow-down of applicable requirements in 

§ 401.14 when an invention is waived to a contractor employee inventor
§ 401.11 - Appeals

• Removes outdated references to superseded OMB Circulars in 

Paragraphs (a) and (b)(5)

• Makes technical corrections to: 

• The reference to the “standard clause” in Paragraphs (b)(1)-(4) and Paragraph (d)

• References to § 401.6

• Internal references to this section
§ 401.13 - Confidentiality of contractor submissions

• Section has been renamed from “Administration of patent rights clauses”

• Provision in Paragraph (a) regarding designating a lead agency for an invention 

funded by two or more agencies has been moved to § 401.14(c)

• Removes outdated references to superseded OMB Circulars in Paragraph (b)

• Paragraph (c) rewritten for clarity while retaining confidentiality provisions 

pursuant to 35 U.S.C. 202 and 205 of:

• Information disclosing an invention while an initial patent application may still be filed

• Patent applications filed by the contractor which have not been disclosed by the USPTO 

or a foreign patent office

• Copies of documents that contain disclosures of a subject invention where publication 

would create a statutory bar to patenting
§ 401.14 - Standard patent rights clauses (1/3)

• Definition of subject invention included in error – had previously intended to incorporate a provision of § 401.1(a)(2)

• Replicates revised definition of statutory period from § 401.2

• Incorporates additional reporting at the discretion of the agency from 

§ 401.5(f) to:

• Paragraph (c)(1) – annual listings of subject inventions (§ 401.5(f)(3)) and close out report (§ 401.5(f)(1)) 

• Paragraph (c)(3) – patent application and issued patent information (§ 401.5(f)(2))

• Provides additional clarifications in Paragraph (c)(3) on the filing of serial 

provisional applications on the same subject invention – must be approved by agency, and subsequent provisional application(s) must contain information 

not previously disclosed in a prior application 
§ 401.14 - Standard patent rights clauses (2/3)

• Provision from § 401.13(a) regarding designating a lead agency for an 

invention funded by two or more agencies added as Paragraph (c)(6)

• Paragraph (d) restructured – current conditions unchanged in (d)(1)

• New provision added in Paragraph (d)(2) to permit an agency, at their 

discretion, to explicitly waive the requirement for a contractor to convey title 

to a subject invention (e.g., if corrective actions have been taken to an 

agency’s satisfaction)

• Clarification added to Paragraph (f)(3) that the contractor’s requirement to 

notify an agency of decisions regarding patent prosecution must be 60 days 

prior to a statutory bar or 60 days prior to the end of an extended time period 

granted by the agency
§ 401.14 - Standard patent rights clauses (3/3)

• Small business considerations from § 401.7 incorporated into 

§ 401.14(k):

• Contractors must make efforts to attract small business licensees and give 

preference to small businesses in licensing (§ 401.7(a))

• Agencies may review contractors’ licensing programs and negotiate 

improvements to the contractors’ policies, procedures and practices to more 

effectively implement small business preference, and 

• Small business may present concerns to the agency in order to facilitate review of 

a contractor’s licensing program (§ 401.7(b))

• Electronic filing provisions from § 401.16 moved to § 401.14(m)
§ 401.15 - Removed and Reserved

• As part of the overall streamlining effort in this proposed rule, the 

provisions of § 401.15 “Deferred determinations” have been 

substantially re-incorporated into § 401.9 Paragraph (a) 
§ 401.16 - Federal agency reporting requirements

• Section has been renamed from “Electronic filing”

• As part of the overall streamlining effort in this proposed rule, the provisions 

of § 401.16 “Electronic filing” have been substantially re-incorporated into 

§ 401.14 paragraph (m) 

• New requirement for agencies to report annually on Bayh-Dole metrics:

• Number of subject inventions reported to agency

• Number of patent applications filed on reported subject inventions

• Number of issued patents on reported subject inventions

• Number of time extensions requested and granted by agency

• Number of subject inventions conveyed to government

• Number of US manufacturing waivers requested and granted

• Number of requests for assignments
§ 401.17 - Submissions and inquiries

• Makes a technical correction to contact information provided in the 

regulation; future contact information will be updated on the iEdison 

website
Proposed Regulatory Changes –

37 CFR 404
§ 404.1 - Scope of part

• Section restructured – current provisions regarding applicability 

unchanged in Paragraph (a)

• New Paragraph (b) provides clarification that licensing revenues are not 

alternatives to appropriated funds or alternate funding mechanisms
§ 404.2 - Policy and objective

• Policy and objective re-written to clarify the purpose of royalties 

collected by the government*

:

• For promoting the practical application of a subject invention

• A method to ensure commercialization by the licensee 

* In the 2018 Government Accountability Office Report “Additional Actions Needed to Improve Licensing of Patented Laboratory Inventions” the GAO 

recommended: “The Secretary of Commerce should instruct NIST to clarify the link between establishing patent license financial terms and the goal of 

promoting commercial use, through appropriate means, such as the upcoming rule-making process and updating relevant guidance. (Recommendation 2)”
§ 404.4 - Removed and Reserved

• As part of the overall streamlining effort in this proposed rule, § 404.4 

“Authority to grant licenses” was identified as redundant and 

unnecessary – agencies are already authorized to grant licenses in 35 

U.S.C. 207, and language addressing immunity from antitrust laws and 

patent misuse charges is repeated in § 404.5
§ 404.5 - Restrictions and conditions on all 

licenses granted under this part

• Makes a technical correction to Paragraph (b)(8)(iv) by citing to statute 

(35 U.S.C. 209(b))
§ 404.7 - Exclusive, co-exclusive, and partially 

exclusive licenses (1/2)

• Paragraph (a) regarding “domestic licenses” and Paragraph (b) regarding 

“foreign licenses” largely duplicative, and the domestic vs foreign 

distinction is undefined and subject to confusing interpretations – Paragraphs (a)(1) and (b)(1) revised into a single paragraph detailing 

processes and considerations for granting all exclusive, co-exclusive, or 

partially exclusive licenses aligned with statutory requirements in 35 

U.S.C. 209:

• Public notice of intent to grant license and agency review of objections

• Determination that the licensee has adequate plans and ability to bring the 

invention to practical application/public utilization, the exclusive license is 

necessary, and the scope of exclusivity is appropriate

• Granting the license does not lessen competition or violate anti-trust laws

• Small business preferences have been considered

• In the case of an invention covered by a foreign patent application or patent, US 

interests in foreign commerce will be enhanced
§ 404.7 - Exclusive, co-exclusive, and partially 

exclusive licenses (2/2)

• Paragraph (a)(2) regarding additional provisions for “domestic licenses” 

and Paragraph (b)(2) regarding additional provisions for “foreign 

licenses” largely duplicative – have been revised into a single paragraph 

detailing additional terms and conditions applicable to all exclusive 

licenses:

• Subject to government use rights

• Agency rights to require sub-licenses when necessary to fulfill health or safety 

needs

• Subject to any licenses in force at the time

• May grant licensee to take necessary actions to protect the IP on behalf of the 

government
§ 404.10 - Modification and termination of licenses

• Requires licensees (not the agency) to inform their sublicensees of a 

notice of intention to modify or terminate a license
§ 404.11 - Appeals

• Provides additional clarification that, consistent with the Policy and 

Objective of Bayh-Dole in 35 U.S.C. 200, appeals other than by the 

licensee should be related to “being denied the opportunity to promote 

the commercialization of the invention”

• Requires agencies to establish procedures for considering appeals
§ 404.14 - Confidentiality of information

• Makes technical corrections to the citations:

• Revises initial reference to 35 U.S.C. 209 to identify correct Paragraph

• § 404.8(h)  § 404.8(a)(8)

• § 404.5(b)(6)  35 U.S.C. 209 (d)(2)
How to submit comments

• Public statements given today will become part of the record

• Written comments are strongly encouraged through the Federal eRulemaking Portal (http://www.regulations.gov) under Docket ID 

Number 201207-0327

• Specific proposed changes presented in the Notice of Proposed Rulemaking

• Suggestions for regulatory changes that would further accelerate the transfer of 

federally funded research and technology to entrepreneurs

• Suggestions for regulatory language that could help clarify the existing statutory 

scope of the Government Use License

• Regulatory provisions that may be inconsistent with the America Invents Act

Comments must be received no later than April 5, 2021
Public Statements

* 3 minutes per person

* 23 requests received

* Called in order request was received
Charmayne Bair

Grants and Contracts Administrator, 

Office of Technology Management

Penn State
Joe Allen

President

Allen & Associates
Steve Susalka

Chief Executive Officer

AUTM
Kelly Morron

Patent Attorney/IP Professional 

Principle

Law Offices of Kelly L. Morron
Robert Schmidt

National Co-Chairman

Small Business Technology Council
Kevin Burns

National Co-Chairman

Small Business Technology Council

President

Precision Combustion
Robin Ore

Owner

FemtoBeam, LLC
Benjamin H. Wu

President and CEO

Montgomery County Economic 

Development Corporation
Patrick Kilbride

Senior Vice President

Global Innovation Policy Center,

US Chamber of Commerce 
Kent Kaiser

Executive Director

Trade Alliance to Promote Prosperity
Karen Kerrigan

President and CEO

Small Business & Entrepreneurship 

Council
Timothy Lee

Senior Vice President of Legal and 

Public Affairs

Center for Individual Freedom
James Edwards

Executive Director

Conservatives for Property Rights

Patent Policy Advisor

Eagle Forum Education and Legal 

Defense Fund
Sean O’Connor

Professor of Law & Executive Director

Center for the Protection of IP

George Mason University
Christopher Holman

Professor of Law

University of Missouri Kansas City
John Stanford

Executive Director

Incubate Coalition
Stephen Ezell

Vice President, Global Innovation Policy

Information Technology & Innovation 

Foundation
Chulsung Bae

Inventor, Founder, & CEO

Orion Polymer
Charles Sauer

President

Market Institute
Jamie Love

Director

Knowledge Ecology International
Steve Knievel

Advocate

PublicCitizen
Robert Sachs

Member of the Public
Fred Reinhart

Senior Advisor for Technology Transfer

UMass Amherst

Past President

AUTM