IIB
106TH CONGRESS
1ST SESSION
H. R. 209
IN THE SENATE OF THE UNITED STATES
MAY 12, 1999
Received
SEPTEMBER 29, 1999
Read twice and referred to the Committee on Commerce, Science, and
Transportation
AN ACT
To improve the ability of Federal agencies to license federally
owned inventions.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Technology Transfer
Commercialization Act of 1999’’.
SEC. 2. FINDINGS.
The Congress finds that—
(1) the importance of linking our unparalleled
network of over 700 Federal laboratories and our
Nation’s universities with United States industry
continues to hold great promise for our future eco-
nomic prosperity;
(2) the enactment of the Bayh-Dole Act in
1980 was a landmark change in United States tech-
nology policy, and its success provides a framework
for removing bureaucratic barriers and for simpli-
fying the granting of licenses for inventions that are
now in the Federal Government’s patent portfolio;
(3) Congress has demonstrated a commitment
over the past 2 decades to fostering technology
transfer from our Federal laboratories and to pro-
moting public/private sector partnerships to enhance
our international competitiveness;
(4) Federal technology transfer activities have
strengthened the ability of United States industry to
compete in the global marketplace; developed a new
paradigm for greater collaboration among the sci-
entific enterprises that conduct our Nation’s re-
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search and development—government, industry, and
universities; and improved the quality of life for the
American people, from medicine to materials;
(5) the technology transfer process must be
made ‘‘industry friendly’’ for companies to be willing
to invest the significant time and resources needed
to develop new products, processes, and jobs using
federally funded inventions; and
(6) Federal technology licensing procedures
should balance the public policy needs of adequately
protecting the rights of the public, encouraging com-
panies to develop existing government inventions,
and making the entire system of licensing govern-
ment technologies more consistent and simple.
SEC. 3. COOPERATIVE RESEARCH AND DEVELOPMENT
AGREEMENTS.
Section 12(b)(1) of the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3710a(b)(1)) is
amended by inserting ‘‘or, subject to section 209 of title
35, United States Code, may grant a license to an inven-
tion which is federally owned, for which a patent applica-
tion was filed before the signing of the agreement, and
directly within the scope of the work under the agree-
ment,’’ after ‘‘under the agreement,’’.
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SEC. 4. LICENSING FEDERALLY OWNED INVENTIONS.
(a) AMENDMENT.—Section 209 of title 35, United
States Code, is amended to read as follows:
‘‘§ 209. Licensing federally owned inventions
‘‘(a) AUTHORITY.—A Federal agency may grant an
exclusive or partially exclusive license on a federally owned
invention under section 207(a)(2) only if—
‘‘(1) granting the license is a reasonable and
necessary incentive to—
‘‘(A) call forth the investment capital and
expenditures needed to bring the invention to
practical application; or
‘‘(B) otherwise promote the invention’s uti-
lization by the public;
‘‘(2) the Federal agency finds that the public
will be served by the granting of the license, as indi-
cated by the applicant’s intentions, plans, and ability
to bring the invention to practical application or oth-
erwise promote the invention’s utilization by the
public, and that the proposed scope of exclusivity is
not greater than reasonably necessary to provide the
incentive for bringing the invention to practical ap-
plication, as proposed by the applicant, or otherwise
to promote the invention’s utilization by the public;
‘‘(3) the applicant makes a commitment to
achieve practical application of the invention within
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a reasonable time, which time may be extended by
the agency upon the applicant’s request and the ap-
plicant’s demonstration that the refusal of such ex-
tension would be unreasonable;
‘‘(4) granting the license will not tend to sub-
stantially lessen competition or create or maintain a
violation of the Federal antitrust laws; and
‘‘(5) in the case of an invention covered by a
foreign patent application or patent, the interests of
the Federal Government or United States industry
in foreign commerce will be enhanced.
‘‘(b) MANUFACTURE IN UNITED STATES.—A Federal
agency shall normally grant a license under section
207(a)(2) to use or sell any federally owned invention in
the United States only to a licensee who agrees that any
products embodying the invention or produced through the
use of the invention will be manufactured substantially in
the United States.
‘‘(c) SMALL BUSINESS.—First preference for the
granting of any exclusive or partially exclusive licenses
under section 207(a)(2) shall be given to small business
firms having equal or greater likelihood as other appli-
cants to bring the invention to practical application within
a reasonable time.
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‘‘(d) TERMS AND CONDITIONS.—Any licenses grant-
ed under section 207(a)(2) shall contain such terms and
conditions as the granting agency considers appropriate,
and shall include provisions—
‘‘(1) retaining a nontransferrable, irrevocable,
paid-up license for any Federal agency to practice
the invention or have the invention practiced
throughout the world by or on behalf of the Govern-
ment of the United States;
‘‘(2) requiring periodic reporting on utilization
of the invention, and utilization efforts, by the li-
censee, but only to the extent necessary to enable
the Federal agency to determine whether the terms
of the license are being complied with, except that
any such report shall be treated by the Federal
agency as commercial and financial information ob-
tained from a person and privileged and confidential
and not subject to disclosure under section 552 of
title 5 of the United States Code; and
‘‘(3) empowering the Federal agency to termi-
nate the license in whole or in part if the agency de-
termines that—
‘‘(A) the licensee is not executing its com-
mitment to achieve practical application of the
invention, including commitments contained in
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any plan submitted in support of its request for
a license, and the licensee cannot otherwise
demonstrate to the satisfaction of the Federal
agency that it has taken, or can be expected to
take within a reasonable time, effective steps to
achieve practical application of the invention;
‘‘(B) the licensee is in breach of an agree-
ment described in subsection (b);
‘‘(C) termination is necessary to meet re-
quirements for public use specified by Federal
regulations issued after the date of the license,
and such requirements are not reasonably satis-
fied by the licensee; or
‘‘(D) the licensee has been found by a
court of competent jurisdiction to have violated
the Federal antitrust laws in connection with
its performance under the license agreement.
‘‘(e) PUBLIC NOTICE.—No exclusive or partially ex-
clusive license may be granted under section 207(a)(2) un-
less public notice of the intention to grant an exclusive
or partially exclusive license on a federally owned invention
has been provided in an appropriate manner at least 15
days before the license is granted, and the Federal agency
has considered all comments received before the end of
the comment period in response to that public notice. This
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subsection shall not apply to the licensing of inventions
made under a cooperative research and development
agreement entered into under section 12 of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710a).
‘‘(f) PLAN.—No Federal agency shall grant any li-
cense under a patent or patent application on a federally
owned invention unless the person requesting the license
has supplied the agency with a plan for development or
marketing of the invention, except that any such plan shall
be treated by the Federal agency as commercial and finan-
cial information obtained from a person and privileged and
confidential and not subject to disclosure under section
552 of title 5 of the United States Code.’’.
(b) CONFORMING AMENDMENT.—The item relating
to section 209 in the table of sections for chapter 18 of
title 35, United States Code, is amended to read as fol-
lows:
‘‘209. Licensing federally owned inventions.’’.
SEC. 5. MODIFICATION OF STATEMENT OF POLICY AND OB-
JECTIVES FOR CHAPTER 18 OF TITLE 35,
UNITED STATES CODE.
Section 200 of title 35, United States Code, is
amended by striking ‘‘enterprise;’’ and inserting ‘‘enter-
prise without unduly encumbering future research and dis-
covery;’’.
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SEC. 6. TECHNICAL AMENDMENTS TO BAYH-DOLE ACT.
Chapter 18 of title 35, United States Code (popularly
known as the ‘‘Bayh-Dole Act’’), is amended—
(1) by amending section 202(e) to read as fol-
lows:
‘‘(e) In any case when a Federal employee is a co-
inventor of any invention made with a nonprofit organiza-
tion, a small business firm, or a non-Federal inventor, the
Federal agency employing such coinventor may, for the
purpose of consolidating rights in the invention and if it
finds that it would expedite the development of the
invention—
‘‘(1) license or assign whatever rights it may
acquire in the subject invention to the nonprofit or-
ganization, small business firm, or non-Federal in-
ventor in accordance with the provisions of this
chapter; or
‘‘(2) acquire any rights in the subject invention
from the nonprofit organization, small business firm,
or non-Federal inventor, but only to the extent the
party from whom the rights are acquired voluntarily
enters into the transaction and no other transaction
under this chapter is conditioned on such acquisi-
tion.’’; and
(2) in section 207(a)—
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(A) by striking ‘‘patent applications, pat-
ents, or other forms of protection obtained’’ and
inserting ‘‘inventions’’ in paragraph (2); and
(B) by inserting ‘‘, including acquiring
rights for and administering royalties to the
Federal Government in any invention, but only
to the extent the party from whom the rights
are acquired voluntarily enters into the trans-
action, to facilitate the licensing of a federally
owned invention’’ after ‘‘or through contract’’
in paragraph (3).
SEC. 7. TECHNICAL AMENDMENTS TO THE STEVENSON-
WYDLER TECHNOLOGY INNOVATION ACT OF
1980.
The Stevenson-Wydler Technology Innovation Act of
1980 is amended—
(1) in section 4(4) (15 U.S.C. 3703(4)), by
striking ‘‘section 6 or section 8’’ and inserting ‘‘sec-
tion 7 or 9’’;
(2) in section 4(6) (15 U.S.C. 3703(6)), by
striking ‘‘section 6 or section 8’’ and inserting ‘‘sec-
tion 7 or 9’’;
(3) in section 5(c)(11) (15 U.S.C. 3704(c)(11)),
by striking ‘‘State of local governments’’ and insert-
ing ‘‘State or local governments’’;
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(4) in section 9 (15 U.S.C. 3707), by—
(A) striking ‘‘section 6(a)’’ and inserting
‘‘section 7(a)’’;
(B) striking ‘‘section 6(b)’’ and inserting
‘‘section 7(b)’’; and
(C) striking ‘‘section 6(c)(3)’’ and insert-
ing ‘‘section 7(c)(3)’’;
(5) in section 11(e)(1) (15 U.S.C. 3710(e)(1)),
by striking ‘‘in cooperation with Federal Labora-
tories’’ and inserting ‘‘in cooperation with Federal
laboratories’’;
(6) in section 11(i) (15 U.S.C. 3710(i)), by
striking ‘‘a gift under the section’’ and inserting ‘‘a
gift under this section’’;
(7) in section 14 (15 U.S.C. 3710c)—
(A) in subsection (a)(1)(A)(i), by inserting
‘‘, other than payments of patent costs as delin-
eated by a license or assignment agreement,’’
after ‘‘or other payments’’;
(B) in subsection (a)(1)(A)(i), by inserting
‘‘, if the inventor’s or coinventor’s rights are as-
signed to the United States’’ after ‘‘inventor or
coinventors’’;
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(C) in subsection (a)(1)(B), by striking
‘‘succeeding fiscal year’’ and inserting ‘‘2 suc-
ceeding fiscal years’’;
(D) in subsection (a)(2), by striking ‘‘Gov-
ernment-operated laboratories of the’’; and
(E) in subsection (b)(2), by striking
‘‘inventon’’ and inserting ‘‘invention’’; and
(8) in section 22 (15 U.S.C. 3714), by striking
‘‘sections 11, 12, and 13’’ and inserting ‘‘sections
12, 13, and 14’’.
SEC. 8. REVIEW OF COOPERATIVE RESEARCH AND DEVEL-
OPMENT AGREEMENT PROCEDURES.
(a) REVIEW.—Within 90 days after the date of the
enactment of this Act, each Federal agency with a feder-
ally funded laboratory that has in effect on that date of
enactment one or more cooperative research and develop-
ment agreements under section 12 of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710a) shall report to the Committee on National Security
of the National Science and Technology Council and the
Congress on the general policies and procedures used by
that agency to gather and consider the views of other
agencies on—
(1) joint work statements under section
12(c)(5) (C) or (D) of the Stevenson-Wydler Tech-
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nology 
Innovation 
Act 
of 
1980 
(15 
U.S.C.
3710a(c)(5)(C) or (D)); or
(2) in the case of laboratories described in sec-
tion 12(d)(2)(A) of the Stevenson-Wydler Tech-
nology 
Innovation 
Act 
of 
1980 
(15 
U.S.C.
3710a(d)(2)(A)), cooperative research and develop-
ment agreements under such section 12,
with respect to major proposed cooperative research and
development agreements that involve critical national se-
curity technology or may have a significant impact on do-
mestic or international competitiveness.
(b) PROCEDURES.—Within one year after the date of
the enactment of this Act, the Committee on National Se-
curity of the National Science and Technology Council, in
conjunction with relevant Federal agencies and national
laboratories, shall—
(1) determine the adequacy of existing proce-
dures and methods for interagency coordination and
awareness with respect to cooperative research and
development agreements described in subsection (a);
and
(2) establish and distribute to appropriate Fed-
eral agencies—
(A) specific criteria to indicate the neces-
sity for gathering and considering the views of
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other agencies on joint work statements or co-
operative research and development agreements
as described in subsection (a); and
(B) additional procedures, if any, for car-
rying out such gathering and considering of
agency views with respect to cooperative re-
search and development agreements described
in subsection (a).
Procedures established under this subsection shall be de-
signed to the extent possible to use or modify existing pro-
cedures, to minimize burdens on Federal agencies, to en-
courage industrial partnerships with national laboratories,
and to minimize delay in the approval or disapproval of
joint work statements and cooperative research and devel-
opment agreements.
(c) LIMITATION.—Nothing in this Act, nor any proce-
dures established under this section shall provide to the
Office of Science and Technology Policy, the National
Science and Technology Council, or any Federal agency
the authority to disapprove a cooperative research and de-
velopment agreement or joint work statement, under sec-
tion 12 of the Stevenson-Wydler Technology Innovation
Act of 1980 (15 U.S.C. 3710a), of another Federal agen-
cy.
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SEC. 9. INCREASED FLEXIBILITY FOR FEDERAL LABORA-
TORY PARTNERSHIP INTERMEDIARIES.
Section 23 of the Stevenson-Wydler Technology Inno-
vation Act of 1980 (15 U.S.C. 3715) is amended—
(1) in subsection (a)(1) by inserting ‘‘, institu-
tions of higher education as defined in section
1201(a) of the Higher Education Act of 1965 (20
U.S.C. 1141(a)), or educational institutions within
the meaning of section 2194 of title 10, United
States Code’’ after ‘‘small business firms’’; and
(2) in subsection (c) by inserting ‘‘, institutions
of higher education as defined in section 1201(a) of
the Higher Education Act of 1965 (20 U.S.C.
1141(a)), or educational institutions within the
meaning of section 2194 of title 10, United States
Code,’’ after ‘‘small business firms’’.
SEC. 10. REPORTS ON UTILIZATION OF FEDERAL TECH-
NOLOGY.
(a) AGENCY ACTIVITIES.—Section 11 of the Steven-
son-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710) is amended—
(1) by striking the last sentence of subsection
(b);
(2) by inserting after subsection (e) the fol-
lowing:
‘‘(f) AGENCY REPORTS ON UTILIZATION.—
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‘‘(1) IN GENERAL.—Each Federal agency which
operates or directs one or more Federal laboratories
or which conducts activities under sections 207 and
209 of title 35, United States Code, shall report an-
nually to the Office of Management and Budget, as
part of the agency’s annual budget submission, on
the activities performed by that agency and its Fed-
eral laboratories under the provisions of this section
and of sections 207 and 209 of title 35, United
States Code.
‘‘(2) CONTENTS.—The report shall include—
‘‘(A) an explanation of the agency’s tech-
nology transfer program for the preceding fiscal
year and the agency’s plans for conducting its
technology transfer function, including its plans
for securing intellectual property rights in lab-
oratory innovations with commercial promise
and plans for managing its intellectual property
so as to advance the agency’s mission and ben-
efit the competitiveness of United States indus-
try; and
‘‘(B) information on technology transfer
activities 
for 
the 
preceding 
fiscal 
year,
including—
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‘‘(i) the number of patent applications
filed;
‘‘(ii) the number of patents received;
‘‘(iii) the number of fully-executed li-
censes which received royalty income in the
preceding 
fiscal 
year, 
categorized 
by
whether they are exclusive, partially-exclu-
sive, or non-exclusive, and the time elapsed
from the date on which the license was re-
quested by the licensee in writing to the
date the license was executed;
‘‘(iv) the total earned royalty income
including such statistical information as
the total earned royalty income, of the top
1 percent, 5 percent, and 20 percent of the
licenses, the range of royalty income, and
the median, except where disclosure of
such information would reveal the amount
of royalty income associated with an indi-
vidual license or licensee;
‘‘(v) what disposition was made of the
income described in clause (iv);
‘‘(vi) the number of licenses termi-
nated for cause; and
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‘‘(vii) any other parameters or discus-
sion that the agency deems relevant or
unique to its practice of technology trans-
fer.
‘‘(3) COPY
TO
SECRETARY; ATTORNEY
GEN-
ERAL; CONGRESS.—The agency shall transmit a
copy of the report to the Secretary of Commerce and
the Attorney General for inclusion in the annual re-
port to Congress and the President required by sub-
section (g)(2).
‘‘(4) PUBLIC
AVAILABILITY.—Each Federal
agency reporting under this subsection is also
strongly encouraged to make the information con-
tained in such report available to the public through
Internet sites or other electronic means.’’;
(3) by striking subsection (g)(2) and inserting
the following:
‘‘(2) REPORTS.—
‘‘(A) ANNUAL
REPORT
REQUIRED.—The
Secretary, in consultation with the Attorney
General and the Commissioner of Patents and
Trademarks, shall submit each fiscal year, be-
ginning one year after enactment of the Tech-
nology Transfer Commercialization Act of 1999,
a summary report to the President, the United
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States Trade Representative, and the Congress
on the use by Federal agencies and the Sec-
retary of the technology transfer authorities
specified in this Act and in sections 207 and
209 of title 35, United States Code.
‘‘(B) CONTENT.—The report shall—
‘‘(i) draw upon the reports prepared
by the agencies under subsection (f);
‘‘(ii) discuss technology transfer best
practices and effective approaches in the li-
censing and transfer of technology in the
context of the agencies’ missions; and
‘‘(iii) discuss the progress made to-
ward development of additional useful
measures of the outcomes of technology
transfer programs of Federal agencies.
‘‘(C) PUBLIC
AVAILABILITY.—The Sec-
retary shall make the report available to the
public through Internet sites or other electronic
means.’’; and
(4) by inserting after subsection (g) the fol-
lowing:
‘‘(h) DUPLICATION OF REPORTING.—The reporting
obligations imposed by this section—