Union Calendar No. 347
105TH CONGRESS
2D SESSION
H. R. 2544
[Report No. 105–620, Part I]
A BILL
To improve the ability of Federal agencies to
license federally owned inventions.
JULY 14, 1998
Referral to the Committee on the Judiciary extended for
a period ending not later than July 14, 1998
JULY 14, 1998
Committee on the Judiciary discharged; committed to the
Committee of the Whole House on the State of the
Union and ordered to be printed
IB
Union Calendar No. 347
105TH CONGRESS
2D SESSION
H. R. 2544
[Report No. 105–620, Part I]
To improve the ability of Federal agencies to license federally owned
inventions.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 25, 1997
Mrs. MORELLA introduced the following bill; which was referred to the Com-
mittee on Science, and in addition to the Committee on the Judiciary,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
JULY 14, 1998
Reported from the Committee on Science with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
JULY 14, 1998
Referral to the Committee on the Judiciary extended for a period ending not
later than July 14, 1998
JULY 14, 1998
Additional sponsors: Mr. SENSENBRENNER, Mr. BROWN of California, Mr.
BARCIA, Mrs. TAUSCHER, and Mr. COOK
JULY 14, 1998
Committee on the Judiciary discharged; committed to the Committee of the
Whole House on the State of the Union and ordered to be printed
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[For text of introduced bill, see copy of bill as introduced on September 25, 1997]
A BILL
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,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Technology Transfer
Commercialization Act of 1998’’.
SEC. 2. 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 invention which is
federally owned, made before the granting of the license, and
directly related to the scope of the work under the agree-
ment,’’ after ‘‘under the agreement,’’.
SEC. 3. LICENSING FEDERALLY OWNED INVENTIONS.
(a) AMENDMENT.—Section 209 of title 35, United
States Code, is amended to read as follows:
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‘‘§ 209. Licensing federally owned inventions
‘‘(a) AUTHORITY.—A Federal agency may grant an
exclusive or partially exclusive license on a federally owned
invention only if—
‘‘(1) granting the license is a reasonable and nec-
essary 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 indicated
by the applicant’s intentions, plans, and ability to
bring the invention to practical application or other-
wise promote the invention’s utilization by the public,
and that the proposed scope of exclusivity is not
greater than reasonably necessary to provide the in-
centive for bringing the invention to practical utiliza-
tion, 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 utilization of the invention within a
reasonable time;
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‘‘(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 for-
eign patent application or patent, the interests of the
Federal Government or United States industry in for-
eign commerce will be enhanced.
‘‘(b) MANUFACTURE IN UNITED STATES.—A Federal
agency shall normally grant a license to use or sell any
federally owned invention in the United States only to a
licensee who agrees that any products embodying the inven-
tion or produced through the use of the invention will be
manufactured substantially in the United States.
‘‘(c) SMALL BUSINESS.—First preference for the grant-
ing of any exclusive or partially exclusive licenses under
this section shall be given to small business firms having
equal or greater likelihood as other applicants to bring the
invention to practical application within a reasonable time.
‘‘(d) TERMS
AND
CONDITIONS.—Licenses granted
under this section shall contain such terms and conditions
as the granting agency considers appropriate. Such terms
and conditions shall include provisions—
‘‘(1) retaining a nontransferrable, irrevocable,
paid-up license for the Federal agency to practice the
invention or have the invention practiced throughout
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the world by or on behalf of the Government 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; and
‘‘(3) empowering the Federal agency to terminate
the license in whole or in part if the agency deter-
mines that—
‘‘(A) the licensee is not executing its com-
mitment to achieve practical utilization of the
invention, including commitments contained in
any plan submitted in support of its request for
a license, and the licensee cannot otherwise dem-
onstrate 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 utilization 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,
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and such requirements are not reasonably satis-
fied by the licensee; or
‘‘(D) the licensee has been found by a com-
petent authority to have violated the Federal
antitrust laws in connection with its perform-
ance under the license agreement.
‘‘(e) PUBLIC NOTICE.—No exclusive or partially exclu-
sive license may be granted under this section unless 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 consid-
ered all comments received in response to that public notice.
This subsection shall not apply to the licensing of inven-
tions 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) BASIC BUSINESS PLAN.—A Federal agency may
grant a license on a federally owned invention only if the
person requesting the license has supplied to the agency a
basic business plan with development milestones, commer-
cialization milestones, or both.
‘‘(g) NONDISCLOSURE OF CERTAIN INFORMATION.—
Any basic business plan, and revisions thereto, submitted
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by an applicant for a license, and any report on the utiliza-
tion or utilization efforts of a licensed invention submitted
by a licensee, shall be treated by the Federal agency as com-
mercial and financial information obtained from a person
and not subject to disclosure under section 552 of title 5,
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 follows:
‘‘209. Licensing federally owned inventions.’’.
SEC. 4. 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 coinven-
tor of any invention made under a funding agreement with
a nonprofit organization or small business firm, the Federal
agency employing such coinventor may, for the purpose of
consolidating rights in the invention—
‘‘(1) license or assign whatever rights it may ac-
quire in the subject invention from its employee to the
nonprofit organization or small business firm; or
‘‘(2) acquire any rights in the subject invention,
but only to the extent the party from whom the rights