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.
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 inven-
tion which is federally owned, for which a patent applica-
tion was filed before the granting of the license, and di-
rectly within the scope of the work under the agreement,’’
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:
‘‘§ 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 utili-
zation, 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, which time may be extended by the
agency upon the applicant’s request and the appli-
cant’s demonstration that the refusal of such exten-
sion 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.
‘‘(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.
Such terms and conditions 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; 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 utilization of the
invention, including commitments contained in
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 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,
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
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 and/
or marketing of the invention, except that any such plan
may be treated by the Federal agency as commercial and
financial information obtained from a person and privi-
leged 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. 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 co-
inventor of any invention made with a nonprofit organiza-
tion or small business firm, 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 or small business firm in accordance with
the provisions of this chapter; or
‘‘(2) acquire any rights in the subject invention
from the nonprofit organization or small business
firm, 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 acquisition.’’; and
(2) in section 207(a)—
(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 the Federal Government in any in-
vention, but only to the extent the party from
whom the rights are acquired voluntarily enters
into the transaction, to facilitate the licensing
of a federally owned invention’’ after ‘‘or
through contract’’ in paragraph (3).
SEC. 5. 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’’;
(4) in section 9 (15 U.S.C. 3707), by—