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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, made before the granting
of the license, and directly related to 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 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;
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‘‘(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;
‘‘(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 to use or sell any
federally owned invention in the United States only to a
licensee who agrees that any products embodying the in-
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vention 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 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 rea-
sonable 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 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—
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‘‘(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 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 ex-
clusive license may be granted under this section unless
public notice of the intention to grant an exclusive or par-
tially exclusive license on a federally owned invention has
been provided in an appropriate manner at least 15 days
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before the license is granted, and the Federal agency has
considered all comments received in response to that pub-
lic notice. This subsection shall not apply to the licensing
of inventions made under a cooperative research and de-
velopment 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, com-
mercialization milestones, or both.
‘‘(g) NONDISCLOSURE OF CERTAIN INFORMATION.—
Any basic business plan, and revisions thereto, submitted
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
commercial and financial information obtained from a per-
son 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 fol-
lows:
‘‘209. Licensing federally owned inventions.’’.
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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 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
acquire 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 are acquired voluntarily enters into the trans-
action.’’; 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