I
105TH CONGRESS
2D SESSION
H. R. 4859
To improve the ability of Federal agencies to license federally owned
inventions.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 20, 1998
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
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 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:
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—
(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
‘‘, if the inventor’s or coinventor’s rights are as-
signed to the United States’’ after ‘‘inventor or
coinventors’’;
(B) in subsection (a)(1)(B), by striking
‘‘succeeding fiscal year’’ and inserting ‘‘2 suc-
ceeding fiscal years’’; and
(C) 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. 6. 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-
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
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.
SEC. 7. 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. 8. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN
SUPPORT OF BIOTECHNOLOGY PATENTS.
(a) IN GENERAL.—Not later than 6 months after the
date of the enactment of this Act, the General Accounting
Office, in consultation with the United States Patent and
Trademark Office, shall conduct a study and submit a re-
port to Congress on the potential risks to the United
States biotechnology industry relating to biological depos-
its in support of biotechnology patents.
(b) CONTENTS.—The study conducted under this sec-
tion shall include—
(1) an examination of the risk of export and the
risk of third-party transfer of biological deposits,
and the risks posed by the change to 18-month pub-
lication requirements;
(2) an analysis of comparative legal and regu-
latory regimes; and
(3) any related recommendations.
(c) CONSIDERATION OF REPORT.—In drafting regu-
lations affecting biological deposits (including any modi-
fication of 37 Code of Federal Regulations 1.801 et seq.),
the United States Patent and Trademark Office shall con-
sider the recommendations of the study conducted under
this section.
SEC. 9. PROVISIONAL APPLICATIONS.
(a) ABANDONMENT.—Section 111(b)(5) of title 35,
United States Code, is amended to read as follows:
‘‘(5) ABANDONMENT.—Notwithstanding the ab-
sence of a claim, upon timely request and as pre-
scribed by the Commissioner, a provisional applica-
tion may be treated as an application filed under
subsection (a). Subject to section 119(e)(3) of this
title, if no such request is made, the provisional ap-
plication shall be regarded as abandoned 12 months
after the filing date of such application and shall not
be subject to revival thereafter.’’.
(b) TECHNICAL AMENDMENT RELATING TO WEEK-
ENDS AND HOLIDAYS.—Section 119(e) of title 35, United
States Code, is amended by adding at the end the follow-
ing:
‘‘(3) If the day that is 12 months after the filing date
of a provisional application falls on a Saturday, Sunday,
or Federal holiday within the District of Columbia, the
period of pendency of the provisional application shall be
extended to the next succeeding secular or business day.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to a provisional application filed
on or after June 8, 1995.
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