Union Calendar No. 70
106TH CONGRESS
1ST SESSION
H. R. 209
[Report No. 106–129, Part I]
A BILL
To improve the ability of Federal agencies to
license federally owned inventions.
MAY 6, 1999
Reported from the Committee on Science with an
amendment
MAY 6, 1999
Referral to the Committee on the Judiciary extended for
a period not later than May 6, 1999
MAY 6, 1999
The 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. 70
106TH CONGRESS
1ST SESSION
H. R. 209
[Report No. 106–129, Part I]
To improve the ability of Federal agencies to license federally owned
inventions.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1999
Mrs. MORELLA (for herself and Mr. BROWN of California) introduced the fol-
lowing bill; which was referred to the Committee on Science, and in addi-
tion to the Committee on the Judiciary, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned
MAY 6, 1999
Reported from the Committee on Science with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
MAY 6, 1999
Referral to the Committee on the Judiciary extended for a period not later
than May 6, 1999
MAY 6, 1999
The Committee on the Judiciary discharged; committed to the Committee of
the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on January 6, 1999]
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 1999’’.
SEC. 2. FINDINGS.
The Congress finds that—
(1) the importance of linking our unparalleled
network of over 700 Federal laboratories and our Na-
tion’s universities with United States industry con-
tinues to hold great promise for our future economic
prosperity;
(2) the enactment of the Bayh-Dole Act in 1980
was a landmark change in United States technology
policy, and its success provides a framework for re-
moving bureaucratic barriers and for simplifying 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 trans-
fer from our Federal laboratories and to promoting
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 research
and development—government, industry, and univer-
sities; and improved the quality of life for the Amer-
ican people, from medicine to materials;
(5) the technology transfer process must be made
‘‘industry friendly’’ for companies to be willing to in-
vest the significant time and resources needed to de-
velop 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 developing government
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 invention which is
federally owned, for which a patent application was filed
before the signing of the agreement, and directly within the
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, which time may be extended by the
agency upon the applicant’s request and the appli-
cant’s demonstration that the refusal of such extension
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 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 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 grant-
ing of any exclusive or partially exclusive licenses under
section 207(a)(2) shall be given to small business firms hav-
ing equal or greater likelihood as other applicants to bring
the invention to practical application within a reasonable
time.
‘‘(d) TERMS AND CONDITIONS.—Any licenses granted
under section 207(a)(2) shall contain such terms and condi-
tions 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 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, except that any such
report shall be treated by the Federal agency as com-
mercial and financial information obtained from a
person and privileged and confidential and not sub-
ject to disclosure under section 552 of title 5 of the
United States Code; 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,
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 exclu-
sive license may be granted under section 207(a)(2) 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
before the license is granted, and the Federal agency has
considered all comments received before the end of the com-
ment period in response to that public notice. This sub-
section 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 Tech-
nology Innovation Act of 1980 (15 U.S.C. 3710a).
‘‘(f) PLAN.—No Federal agency shall grant any license
under a patent or patent application on a federally owned
invention unless the person requesting the license has sup-
plied 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 financial infor-
mation obtained from a person and privileged and con-
fidential 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 follows:
‘‘209. Licensing federally owned inventions.’’.
SEC. 5. 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, for a non-Federal inventor, the
Federal agency employing such coinventor may, for the
purpose of consolidating rights in the invention or if it
finds that it would expedite the development of the
invention—
‘‘(1) license or assign whatever rights it may ac-
quire in the subject invention to the nonprofit organi-
zation, small business firm, or non-Federal inventor
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)—
(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 transaction,
to facilitate the licensing of a federally owned in-
vention’’ after ‘‘or through contract’’ in para-
graph (3).
SEC. 6. 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 strik-
ing ‘‘section 6 or section 8’’ and inserting ‘‘section 7
or 9’’;
(2) in section 4(6) (15 U.S.C. 3703(6)), by strik-
ing ‘‘section 6 or section 8’’ and inserting ‘‘section 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—
(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 inserting
‘‘section 7(c)(3)’’;
(5) in section 11(e)(1) (15 U.S.C. 3710(e)(1)), by
striking ‘‘in cooperation with Federal Laboratories’’
and inserting ‘‘in cooperation with Federal labora-
tories’’;
(6) in section 11(i) (15 U.S.C. 3710(i)), by strik-
ing ‘‘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’’;
(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’’; 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. 7. REVIEW OF COOPERATIVE RESEARCH AND DEVEL-
OPMENT AGREEMENT PROCEDURES.
(a) REVIEW.—Within 90 days after the date of the en-
actment of this Act, each Federal agency with a federally
funded laboratory that has in effect on that date of enact-
ment one or more cooperative research and development
agreements under section 12 of the Stevenson-Wydler Tech-
nology Innovation Act of 1980 (15 U.S.C. 3710a) shall re-
port 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 gath-
er and consider the views of other agencies on—
(1) joint work statements under section 12(c)(5)
(C) or (D) of the Stevenson-Wydler Technology Inno-
vation 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 Technology
Innovation Act of 1980 (15 U.S.C. 3710a(d)(2)(A)),
cooperative research and development agreements
under such section 12,
with respect to major proposed cooperative research and de-
velopment agreements that involve critical national security
technology or may have a significant impact on domestic
or international competitiveness.
(b) PROCEDURES.—Within one year after the date of
the enactment of this Act, the Committee on National Secu-
rity 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 de-
velopment agreements described in subsection (a); and
(2) establish and distribute to appropriate Fed-
eral agencies—
(A) specific criteria to indicate the necessity
for gathering and considering the views of other
agencies on joint work statements or cooperative
research and development agreements as de-
scribed in subsection (a); and
(B) additional procedures, if any, for car-
rying out such gathering and considering of
agency views with respect to cooperative research
and development agreements described in sub-
section (a).
Procedures established under this subsection shall be de-
signed to the extent possible to use or modify existing proce-
dures, to minimize burdens on Federal agencies, to encour-
age industrial partnerships with national laboratories, and
to minimize delay in the approval or disapproval of joint
work statements and cooperative research and development
agreements.
(c) LIMITATION.—Nothing in this Act, nor any proce-
dures established under this section shall provide to the Of-
fice of Science and Technology Policy, the National Science
and Technology Council, or any Federal agency the author-
ity to disapprove a cooperative research and development
agreement or joint work statement, under section 12 of the
Stevenson-Wydler Technology Innovation Act of 1980 (15
U.S.C. 3710a), of another Federal agency.
SEC. 8. 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’’.