An act to amend the patent and trademark laws.
PL 96-517 (H.R.6933), enacted 12/12/1980

PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3015 
Public Law 96-517 
96th Congress 
An Act 
To amend the patent and trademark laws. 
Dec. 12, 1980 
[H.R. 6933] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, That title 35 of the Patent and 
United States Code, entitled "Patents", is amended by adding after amenTment^"^^' 
chapter 29 the following new chapter 30: 
^"^®" "^®" ' 
"CHAPTER 30—PRIOR ART CITATIONS TO OFFICE AND 
REEXAMINATION OF PATENTS 
"Sec. 
"301. Citation of prior art. 
"302. Request for reexamination. 
"303. Determination of issue by Commissioner. 
"304. Reexamination order by Commissioner. 
"305. Conduct of reexamination proceedings. 
"306. Appeal. 
"307. Certificate of patentability, unpatentability, and claim cancellation. 
"§ 301. Citation of prior art 
35 use 301. 
"Any person at any time may cite to the Office in writing prior art 
consisting of patents or printed publications which that person 
believes to have a bearing on the patentability of any claim of a 
particular patent. If the person explains in writing the pertinency 
and manner of applying such prior art to at least one claim of the 
patent, the citation of such prior art and the explanation thereof will 
become a part of the official file of the patent. At the written request 
of the person citing the prior art, his or her identity will be excluded 
from the patent file and kept confidential. 
"§ 302. Request for reexamination 
35 use 302. 
"Any person at any time may file a request for reexamination by 
the Office of any claim of a patent on the basis of any prior art cited 
under the provisions of section 301 of this title. The request must be Fee. 
in writing and must be accompanied by payment of a reexamination 
fee established by the Commissioner of Patents pursuant to the 
provisions of section 41 of this title. The request must set forth the Post, p. 3017. 
pertinency and manner of applying cited prior art to every claim for 
which reexamination is requested. Unless the requesting person is 
the owner of the patent, the Commissioner promptly will send a copy 
of the request to the owner of record of the patent. 
"§ 303. Determination of issue by Commissioner 
35 use 303. 
"(a) Within three months following the filing of a request for 
reexamination under the provisions of section 302 of this title, the 
Commissioner will determine whether a substantial new question of 
patentability affecting any claim of the patent concerned is raised by 
the request, with or without consideration of other patents or printed 
publications. On his own initiative, and any time, the Commissioner 
may determine whether a substantial new question of patentability is 
94 STAT. 3016 
PUBLIC LAW 96-517—DEC. 12, 1980 
raised by patents and publications discovered by him or cited under 
the provisions of section 301 of this title. 
Record. 
"(b) A record of the Commissioner's determination under subsec-
tion (a) of this section will be placed in the official file of the patent, 
and a copy promptly will be given or mailed to the owner of record of 
the patent and to the person requesting reexamination, if any. 
"(c) A determination by the Commissioner pursuant to subsection 
(a) of this section that no substantial new question of patentability 
Refund. 
has been raised will be final and nonappealable. Upon such a 
determination, the Commissioner may refund a portion of the reex-
amination fee required under section 302 of this title. 
35 use 304. 
"§ 304. Reexamination order by Commissioner 
"If, in a determination made under the provisions of subsection 
303(a) of this title, the Commissioner finds that a substantial new 
question of patentability affecting any claim of a patent is raised, the 
determination will include an order for reexamination of the patent 
Filing period. 
for resolution of the question. The patent owner will be given a 
reasonable period, not less than two months from the date a copy of 
the determination is given or mailed to him, within which he may file 
a statement on such question, including any amendment to his patent 
and new claim or claims he may wish to propose, for consideration in 
the reexamination. If the patent owner files such a statement, he 
promptly will serve a copy of it on the person who has requested 
reexamination under the provisions of section 302 of this title. Within 
a period of two months from the date of service, that person may file 
and have considered in the reexamination a reply to any statement 
filed by the patent owner. That person promptly will serve on the 
patent owner a copy of any reply filed. 
35 use 305. 
"§ 305. Conduct of reexamination proceedings 
"After the times for filing the statement and reply provided for by 
section 304 of this title have expired, reexamination will be conducted 
according to the procedures established for initial examination under 
35 use 132,133. the provisions of sections 132 and 133 of this title. In any reexamina-
tion proceeding under this chapter, the patent owner will be permit-
ted to propose any amendment to his patent and a new claim or 
claims thereto, in order to distinguish the invention as claimed from 
the prior art cited under the provisions of section 301 of this title, or 
in response to a decision adverse to the patentability of a claim of a 
patent. No proposed amended or new claim enlarging the scope of a 
claim of the patent will be permitted in a reexamination proceeding 
under this chapter. All reexamination proceedings under this section, 
including any appeal to the Board of Appeals, will be conducted with 
special dispatch within the Office. 
35 use 306. 
"§306. Appeal 
"The patent owner involved in a reexamination proceeding under 
this chapter may appeal under the provisions of section 134 of this 
35 use 134. 
title, and may seek court review under the provisions of sections 141 
35 use 141-145. to 145 of this title, with respect to any decision adverse to the 
patentability of any original or proposed amended or new claim of the 
patent. 
35 use 307. 
"§ 307. Certificate of patentability, unpatentability, and claim can-
cellation 
"(a) In a reexamination proceeding under this chapter, when the 
time for appeal has expired or any appeal proceeding has terminated. 
PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3017 
the Commissioner will issue and publish a certificate canceling any 
claim of the patent finally determined to be unpatentable, confirming 
any claim of the patent determined to be patentable, and incorporat-
ing in the patent any proposed amended or new claim determined to 
be patentable. 
0^) Any proposed amended or new claim determined to be patent-
able and incorporated into a patent following a reexamination 
proceeding will have the same effect as that specified in section 252 of 
this title for reissued patents on the right of any person who made, 35 use 252. 
purchased, or used anything patented by such proposed amended or 
new claim, or who made substantial preparation for the same, prior 
to issuance of a certificate under the provisions of subsection (a) of 
this section.". 
SEC. 2. Section 41 of title 35, United States Code, is amended to read 
as follows: 
"§ 41. Patent fees 
35 use 4i. 
"(a) The Commissioner of Patents will establish fees for the 
processing of an application for a patent, from filing through disposi-
tion by issuance or abandonment, for maintaining a patent in force, 
and for providing all other services and materials related to patents. 
No fee will be established for maintaining a design patent in force. 
"(b) By the first day of the first fiscal year beginning on or after one 
calendar year after enactment of this Act, fees for the actual 
processing of an application for a patent, other than for a design 
patent, from filing through disposition by issuance or abandonment, 
will recover in aggregate 25 per centum of the estimated average cost 
to the Office of such processing. By the first day of the first fiscal year 
beginning on or after one calendar year after enactment, fees for the 
processing of an application for a design patent, from filing through 
disposition by issuance or abandonment, will recover in aggregate 50 
per centum of the estimated average cost to the Office of such 
processing. 
"(c) By the fifteenth fiscal year following the date of enactment of 
this Act, fees for maintaining patents in force will recover 25 per 
centum of the estimated cost to the Office, for the year in which such 
maintenance fees are received, of the actual processing all applica-
tions for patents, other than for design patents, from filing through 
disposition by issuance or abandonment. Fees for maintaining a 
patent in force will be due three years and six months, seven years 
and six months, and eleven years and six months after the grant of 
the patent. Unless payment of the applicable maintenance fee is 
received in the Patent and Trademark Office on or before the date the 
fee is due or within a grace period of six months thereafter, the patent 
will expire as of the end of such grace period. The Commissioner may 
require the payment of a surcharge as a condition of accepting within 
such six-month grace period the late payment of an applicable 
maintenance fee. 
"(d) By the first day of the first fiscal year beginning on or after one 
calendar year after enactment, fees for all other services or materials 
related to patents will recover the estimated average cost to the 
Office of performing the service or furnishing the m.aterial. The 
yearly fee for providing a library specified in section 13 of this title 35 use 13. 
with uncertified printed copies of the specifications and drawings for 
all patents issued in that year will be $50. 
' (e) The Commissioner may waive the payment of any fee for any Waiver. 
service or material related to patents in connection with an occa-
sional or incidental request made by a department or agency of the 
94 STAT. 3018 
PUBLIC LAW 96-517—DEC. 12, 1980 
35 u s e 132. 
Notice. 
35 u s e 42. 
Refund. 
Notice. 
Waiver. 
Indian products, 
exception. 
Government, or any officer thereof. The Commissioner may provide 
any applicant issued a notice under section 132 of this title with a 
copy of the specifications and drawings for all patents referred to in 
that notice without charge. 
"(f) Fees will be adjusted by the Commissioner to achieve the levels 
of recovery specified in this section; however, no patent application 
processing fee or fee for maintaining a patent in force will be adjusted 
more than once every three years. 
"(g) No fee established by the Commissioner under this section will 
take effect prior to sixty days following notice in the Federal 
Register.". 
SEC. 3. Section 42 of title 35, United States Code, is amended to read 
as follows: 
"§ 42. Patent and Trademark Office funding 
"(a) All fees for services performed by or materials furnished by the 
Patent and Trademark Office will be payable to the Commissioner. 
"(b) All fees paid to the Commissioner and all appropriations for 
defraying the costs of the activities of the Patent and Trademark 
Office will be credited to the Patent and Trademark Office Appropri-
ation Account in the Treasury of the United States, the provisions of 
section 725e of title 31, United States Code, notwithstanding. 
"(c) Revenues from fees will be available to the Commissioner of 
Patents to carry out, to the extent provided for in appropriation Acts, 
the activities of the Patent and Trademark Office. 
"(d) The Commissioner may refund any fee paid by mistake or any 
amount paid in excess of that required,". 
SEC. 4. Section 154 of title 35, United States Code, is amended by 
deleting the word "issue". 
SEC. 5. Section 31 of the Trademark Act of 1946, as amended (15 
U.S.C. 1113), is amended to read as follows: 
"§31. Fees 
"(a) The Commissioner of Patents will establish fees for the filing 
and processing of an application for the registration of a trademark 
or other mark and for all other services performed by and materials 
furnished by the Patent and Trademark Office related to trademarks 
and other marks. Fees will be set and adjusted by the Commissioner 
to recover in aggregate 50 per centum of the estimated average cost to 
the Office of such processing. Fees for all other services or materials 
related to trademarks and other marks will recover the estimated 
average cost to the Office of performing the service or furnishing the 
material. However, no fee for the filing or processing of an applica-
tion for the registration of a trademark or other mark or for the 
renewal or assignment of a trademark or other mark will be adjusted 
more than once every three years. No fee established under this 
section will take effect prior to sixty days following notice in the 
Federal Register. 
"(b) The Commissioner may waive the payment of any fee for any 
service or material related to trademarks or other marks in connec-
tion with an occasional request made by a department or agency of 
the Government, or any officer thereof. The Indian Arts and Crafts 
Board will not be charged any fee to register Government trademarks 
of genuineness and quality for Indian products or for products of 
particular Indian tribes and groups.". 
SEC. 6. (a) Title 35 of the United States Code, entitled "Patents", is 
amended by adding after chapter 37 the following new chapter 38: 
PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3019 
"CHAPTER 38—PATENT RIGHTS IN INVENTIONS MADE 
WITH FEDERAL ASSISTANCE 
"Sec. 
"200. Policy and objective. 
"201. Definitions. 
"202. Disposition of rights. 
"203. March-in rights. 
"204. Preference for United States industry. 
"205. Confidentiality. 
"206. Uniform clauses and regulations. 
"207. Domestic and foreign protection of federally owned inventions. 
"208. Regulations governing Federal licensing. 
"209. Restrictions on licensing of federally owned inventions. 
"210. Precedence of chapter. 
"211. Relationship to antitrust laws. 
"§ 200. Policy and objective 
35 use 200. 
"It is the policy and objective of the Congress to use the patent 
system to promote the utiUzation of inventions arising from federally 
supported research or development; to encourage maximum partici-
pation of small business firms in federally supported research and 
development efforts; to promote collaboration between commercial 
concerns and nonprofit organizations, including universities; to 
ensure that inventions made by nonprofit organizations and small 
business firms are used in a manner to promote free competition and 
enterprise; to promote the commercialization and public availability 
of inventions made in the United States by United States industry 
and labor; to ensure that the Government obtains sufficient rights in 
federally supported inventions to meet the needs of the Government 
and protect the public against nonuse or unreasonable use of inven-
tions; and to minimize the costs of administering policies in this area. 
"§ 201. Definitions 
35 use 201. 
"As used in this chapter— 
"(a) The term 'Federal agency' means any executive agency as 
defined in section 105 of title 5, United States Code, and the 
military departments as defined by section 102 of title 5, United 
States Code. 
"(b) The term 'funding agreement' means any contract, grant, 
or cooperative agreement entered into between any Federal 
agency, other than the Tennessee Valley Authority, and any 
contractor for the performance of experimental, developmental, 
or research work funded in whole or in part by the Federal 
Government. Such term includes any assignment, substitution of 
parties, or subcontract of any type entered into for the perform-
ance of experimental, developmental, or research work under a 
funding agreement as herein defined. 
"(c) The term 'contractor' means any person, small business 
firm, or nonprofit organization that is a party to a funding 
agreement. 
"(d) The term 'invention' means any invention or discovery 
which is or may be patentable or otherwise protectable under 
this title. 
"(e) The term 'subject invention' means any invention of the 
contractor conceived or first actually reduced to practice in the 
performance of work under a funding agreement. 
"(0 The term 'practical application' means to manufacture in 
the case of a composition or product, to practice in the case of a 
process or method, or to operate in the case of a machine or 
system; and, in each case, under such conditions as to establish 
94 STAT. 3020 
PUBLIC LAW 96-517—DEC. 12, 1980 
35 u s e 202. 
Funding 
agreement. 
Written 
determination. 
Copy to 
Comptroller 
General. 
Copy to SBA. 
Contrary agency 
determinations. 
Report to 
congressional 
committees. 
that the invention is being utilized and that its benefits are to the 
extent permitted by law or Government regulations available to 
the public on reasonable terms. 
"(g) The term 'made' when used in relation to any invention 
means the conception or first actual reduction to practice of such 
invention. 
"(h) The term 'small business firm' means a small business 
concern as defined at section 2 of Public Law 85-536 (15 U.S.C. 
632) and implementing regulations of the Administrator of the 
Small Business Administration. 
"(i) The term 'nonprofit organization' means universities and 
other institutions of higher education or an organization of the 
type described in section 501(c)(3) of the Internal Revenue Code of 
1954 (26 U.S.C. 501(c)) and exempt from taxation under section 
501(a) of the Internal Revenue Code (26 U.S.C. 501(a)) or any 
nonprofit scientific or educational organization qualified under a 
State nonprofit organization statute. 
"§ 202. Disposition of rights 
"(a) Each nonprofit organization or small business firm may, 
within a reasonable time after disclosure as required by paragraph 
(c)(1) of this section, elect to retain title to any subject invention: 
Provided, however, That a funding agreement may provide otherwise 
(i) when the funding agreement is for the operation of a Government-
owned research or production facility, (ii) in exceptional circum-
stances when it is determined by the agency that restriction or 
elimination of the right to retain title to any subject invention will 
better promote the policy and objectives of this chapter or (iii) when it 
is determined by a Government authority which is authorized by 
statute or Executive order to conduct foreign intelligence or counter-
intelligence activities that the restriction or elimination of the right 
to retain title to any subject invention is necessary to protect the 
security of such activities. The rights of the nonprofit organization or 
small business firm shall be subject to the provisions of paragraph (c) 
of this section and the other provisions of this chapter. 
"(b)(1) Any determination under (ii) of paragraph (a) of this section 
shall be in writing and accompanied by a written statement of facts 
justifying the determination. A copy of each such determination and 
justification shall be sent to the Comptroller General of the United 
States within thirty days after the award of the applicable funding 
agreement. In the case of determinations applicable to funding 
agreements with small business firms copies shall also be sent to the 
Chief Counsel for Advocacy of the Small Business Administration. 
"(2) If the Comptroller General believes that any pattern of 
determinations by a Federal agency is contrary to the policy and 
objectives of this chapter or that an agency's policies or practices are 
otherwise not in conformance with this chapter, the Comptroller 
General shall so advise the head of the agency. The head of the 
agency shall advise the Comptroller General in writing within one 
hundred and twenty days of what action, if any, the agency has taken 
or plans to take with respect to the matters raised by the Comptroller 
General. 
"(3) At least once each year, the Comptroller General shall trans-
mit a report to the Committees on the Judiciary of the Senate and 
House of Representatives on the manner in which this chapter is 
being implemented by the agencies and on such other aspects of 
Government patent policies and practices with respect to federally 
funded inventions as the Comptroller General believes appropriate. 
PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3021 
"(c) Each funding agreement with a small business firm or non-
profit organization shall contain appropriate provisions to effectuate 
the following: 
"(1) A requirement that the contractor disclose each subject 
invention to the Federal agency within a reasonable time after it 
is made and that the Federal Government may receive title to 
any subject invention not reported to it within such time. 
(2) A requirement that the contractor make an election to 
retain title to any subject invention within a reasonable time 
after disclosure and that the Federal Government may receive 
title to any subject invention in which the contractor does not 
elect to retain rights or fails to elect rights within such time. 
"(3) A requirement that a contractor electing rights file patent 
applications within reasonable times and that the Federal Gov-
ernment may receive title to any subject inventions in the 
United States or other countries in which the contractor has not 
filed patent applications on the subject invention within such 
times. 
"(4) With respect to any invention in which the contractor 
elects rights, the Federal agency shall have a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced for or on behalf of the United States any subject 
invention throughout the world, and may, if provided in the 
funding agreement, have additional rights to sublicense any 
foreign government or international organization pursuant to 
any existing or future treaty or agreement. 
'(5) The right of the Federal agency to require periodic 
reporting on the utilization or efforts at obtaining utilization 
that are being made by the contractor or his licensees or 
assignees: Provided, That any such information may be treated 
by the Federal agency as commercial and financial information 
obtained from a person and privileged and confidential and not 
subject to disclosure under section 552 of title 5 of the United 
States Code. 
"(6) An obligation on the part of the contractor, in the event a 
United States patent application is filed by or on its behalf or by 
any assignee of the contractor, to include within the specification 
of such application and any patent issuing thereon, a state-
ment specifying that the invention was made with Government 
support and that the Government has certain rights in the 
invention. 
"(7) In the case of a nonprofit organization, (A) a prohibition 
upon the assignment of rights to a subject invention in the 
United States without the approval of the Federal agency, except 
where such assignment is made to an organization which has as 
one of its primary functions the management of inventions and 
which is not, itself, engaged in or does not hold a substantial 
interest in other organizations engaged in the manufacture or 
sale of products or the use of processes that might utilize the 
invention or be in competition with embodiments of the inven-
tion (provided that such assignee shall be subject to the same 
provisions as the contractor); (B) a prohibition against the grant-
ing of exclusive licenses under United States Patents or Patent 
Applications in a subject invention by the contractor to persons 
other than small business firms for a period in excess of the 
earlier of five years from first commercial sale or use of the 
invention or eight years from the date of the exclusive license 
excepting that time before regulatory agencies necessary to 
Funding 
agreement 
requirements. 
94 STAT. 3022 
PUBLIC LAW 96-517—DEC. 12, 1980 
Rights, 
retention. 
Rights, transfer 
or assignment. 
Third-party 
licensing, 
prohibition. 
35 use 203. 
obtain premarket clearance unless, on a case-by-case basis, the 
Federal agency approves a longer exclusive license. If exclusive 
field of use licenses are granted, commercial sale or use in one 
field of use shall not be deemed commercial sale or use as to other 
fields of use, and a first commercial sale or use with respect to a 
product of the invention shall not be deemed to end the exclusive 
period to different subsequent products covered by the invention; 
(C) a requirement that the contractor share royalties with the 
inventor; and (D) a requirement that the balance of any royalties 
or income earned by the contractor with respect to subject 
inventions, after payment of expenses (including payments to-
inventors) incidental to the administration of subject inventions, 
be utilized for the support of scientific research or education. 
"(8) The requirements of sections 203 and 204 of this chapter. 
"(d) If a contractor does not elect to retain title to a subject 
invention in cases subject to this section, the Federal agency may 
consider and after consultation with the contractor grant requests for 
retention of rights by the inventor subject to the provisions of this Act 
and regulations promulgated hereunder. 
"(e) In any case when a Federal employee is a coinventor of any 
invention made under a funding agreement with a nonprofit organi-
zation or small business firm, the Federal agency employing such 
coinventor is authorized to transfer or assign whatever rights it may 
acquire in the subject invention from its employee to the contractor 
subject to the conditions set forth in this chapter. 
"(f)(1) No funding agreement with a small business firm or non-
profit organization shall contain a provision allowing a Federal 
agency to require the licensing to third parties of inventions owned 
by the contractor that are not subject inventions unless such provi-
sion has been approved by the head of the agency and a written 
justification has been signed by the head of the agency. Any such 
provision shall clearly state whether the licensing may be required in 
connection with the practice of a subject invention, a specifically 
identified work object, or both. The head of the agency may not 
delegate the authority to approve provisions or sign justifications 
required by this paragraph. 
' (2) A Federal agency shall not require the licensing of third 
parties under any such provision unless the head of the agency 
determines that the use of the invention by others is necessary for the 
practice of a subject invention or for the use of a work object of the 
funding agreement and that such action is necessary to achieve the 
practical application of the subject invention or work object. Any 
such determination shall be on the record after an opportunity for an 
agency hearing. Any action commenced for judicial review of such 
determination shall be brought within sixty days after notification of 
such determination. 
"§203. March-in rights 
"With respect to any subject invention in which a small business 
firm or nonprofit organization has acquired title under this chapter, 
the Federal agency under whose funding agreement the subject 
invention was made shall have the right, in accordance with such 
procedures as are provided in regulations promulgated hereunder to 
require the contractor, an assignee or exclusive licensee of a subject 
invention to grant a nonexclusive, partially exclusive, or exclusive 
license in any field of use to a responsible applicant or applicants, 
upon terms that are reasonable under the circumstances, and if the 
contractor, assignee, or exclusive licensee refuses such request, to 
PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3023 
grant such a license itself, if the Federal agency determines that 
such— 
"(a) action is necessary because the contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use; 
"(b) action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the contractor, assignee, or 
their licensees; 
"(c) action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the contractor, assignee, or licensees; or 
"(d) action is necessary because the agreement required by 
section 204 has not been obtained or waived or because a licensee 
of the exclusive right to use or sell any subject invention in the 
United States is in breach of its agreement obtained pursuant to 
section 204. 
"§ 204. Preference for United States industry 
35 USC 204. 
"Notwithstanding any other provision of this chapter, no small 
business firm or nonprofit organization which receives title to any 
subject invention and no assignee of any such small business firm or 
nonprofit organization shall grant to any person the exclusive right 
to use or sell any subject invention in the United States unless such 
person agrees that any products embodying the subject invention or 
produced through the use of the subject invention will be manufac-
tured substantially in the United States. However, in individual Waiver. 
cases, the requirement for such an agreement may be waived by the 
Federal agency under whose funding agreement the invention was 
made upon a showing by the small business firm, nonprofit organiza-
tion, or assignee that reasonable but unsuccessful efforts have been 
made to grant licenses on similar terms to potential licensees that 
would be likely to manufacture substantially in the United States or 
that under the circumstances domestic manufacture is not commer-
cially feasible. 
"§ 205. Confidentiality 
35 USC 205. 
"Federal agencies are authorized to withhold from disclosure to the 
public information disclosing any invention in which the Federal 
Government owns or may own a right, title, or interest (including a 
nonexclusive license) for a reasonable time in order for a patent 
application to be filed. Furthermore, Federal agencies shall not be 
required to release copies of any document which is part of an 
application for patent filed with the United States Patent and 
Trademark Office or with any foreign patent office. 
"§ 206. Uniform clauses and regulations 
35 use 206. 
"The Office of Federal Procurement Policy, after receiving recom-
mendations of the Office of Science and Technology Policy, may issue 
regulations which may be made applicable to Federal agencies 
implementing the provisions of sections 202 through 204 of this 
chapter and the Office of Federal Procurement Policy shall establish 
standard funding agreement provisions required under this chapter. 
"§ 207. Domestic and foreign protection of federally owned inven- 35 use 207. 
tions 
"Each Federal agency is authorized to— 
94 STAT. 3024 
PUBLIC LAW 96-517—DEC. 12, 1980 
35 use 281 et 
seq. 
35 use 208. 
35 use 209. 
Development or 
marketing plan. 
Manufacture in 
U.S. 
"(1) apply for, obtain, and maintain paitents or other forms of 
protection in the United States and in foreign countries on 
inventions in which the Federal Government owns a right, title, 
or interest; 
"(2) grant nonexclusive, exclusive, or partially exclusive 
licenses under federally owned patent applications, patents, or 
other forms of protection obtained, royalty-free or for royalties or 
other consideration, and on such terms and conditions, mcluding 
the grant to the licensee of the right of enforcement pursuant to 
the provisions of chapter 29 of this title as determined appropri-
ate in the public interest; 
"(3) undertake all other suitable and necessary steps to protect 
and administer rights to federally owned inventions on behalf of 
the Federal Government either directly or through contract; and 
"(4) transfer custody and administration, in whole or in part, to 
another Federal agency, of the right, title, or interest in any 
federally owned invention. 
"§ 208. Regulations governing Federal licensing 
"The Administrator of General Services is authorized to promul-
gate regulations specifying the terms and conditions upon which any 
federally owned invention, other than inventions owned by the 
Tennessee Valley Authority, may be licensed on a nonexclusive, 
partially exclusive, or exclusive basis. 
"§ 209. Restrictions on licensing of federally owned inventions 
"(a) 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 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 privileged and 
confidential and not subject to disclosure under section 552 of title 5 
of the United States Code. 
"(b) A Federal agency shall normally grant the right to use or sell 
any federally owned invention in the United States only to a licensee 
that agrees that any products embodying the invention or produced 
through the use of the invention will be manufactured substantially 
in the United States. 
"(c)(1) Each Federal agency may grant exclusive or partially 
exclusive licenses in any invention covered by a federally owned 
domestic patent or patent application only if, after public notice and 
opportunity for filing written objections, it is determined that— 
"(A) the interests of the Federal Government and the public 
will best be served by the proposed license, in view of the 
applicant's intentions, plans, and ability to bring the invention to 
practical application or otherwise promote the invention's utili-
zation by the public; 
"(B) the desired practical application has not been achieved, or 
is not likely expeditiously to be achieved, under any nonexclusive 
license which has been granted, or which may be granted, on the 
invention; 
"(C) exclusive or partially exclusive licensing is a reasonable 
and necessary incentive to call forth the investment of risk 
capital and expenditures to bring the invention to practical 
application or otherwise promote the invention's utilization by 
the public; and 
PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3025 
"(D) the proposed terms and scope of exclusivity are not 
greater than reasonably necessary to provide the incentive for 
bringing the invention to practical application or otherwise 
promote the invention's utilization by the public. 
"(2) A Federal agency shall not grant such exclusive or partially 
exclusive license under paragraph (1) of this subsection if it deter-
mines that the grant of such license will tend substantially to lessen 
competition or result in undue concentration in any section of the 
country in any line of commerce to which the technology to be 
licensed relates, or to create or maintain other situations inconsistent 
with the antitrust laws. 
"(3) First preference in the exclusive or partially exclusive licens-
ing of federally owned inventions shall go to small business firms 
submitting plans that are determined by the agency to be within the 
capabilities of the firms and equally likely, if executed, to bring the 
invention to practical application as any plans submitted by appli-
cants that are not small business firms. 
"(d) After consideration of whether the interests of the Federal 
Government or United States industry in foreign commerce will be 
enhanced, any Federal agency may grant exclusive or partially 
exclusive licenses in any invention covered by a foreign patent 
application or patent, after public notice and opportunity for filing 
written objections, except that a Federal agency shall not grant such 
exclusive or partially exclusive license if it determines that the grant 
of such license will tend substantially to lessen competition or result 
in undue concentration in any section of the United States in any line 
of commerce to which the technology to be licensed relates, or to 
create or maintain other situations inconsistent with antitrust laws. 
"(e) The Federal agency shall maintain a record of determinations 
to grant exclusive or partially exclusive licenses. 
"(f) Any grant of a license shall contain such terms and conditions 
as the Federal agency determines appropriate for the protection of 
the interests of the Federal Government and the public, including 
provisions for the following: 
"(1) periodic reporting on the utilization or efforts at obtaining 
utilization that are being made by the licensee with particular 
reference to the plan submitted: Provided, That any such infor-
mation may be treated by the Federal agency as commercial and 
financial information obtained from a person and privileged and 
confidential and not subject to disclosure under section 552 of 
title 5 of the United States Code; 
"(2) the right of the Federal agency to terminate such license in 
whole or in part if it determines that the licensee is not executing 
the plan submitted with 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 application 
of the invention; 
"(3) the right of the Federal agency to terminate such license in 
whole or in part if the licensee is in breach of an agreement 
obtained pursuant to paragraph (b) of this section; and 
"(4) the right of the Federal agency to terminate the license in 
whole or in part if the agency determines that such action is 
necessary to meet requirements for public use specified by 
Federal regulations issued after the date of the license and such 
requirements are not reasonably satisfied by the licensee. 
Antitrust 
factors. 
Small business 
preference. 
Antitrust 
factors. 
Record. 
Terms and 
conditions. 
94 STAT. 3026 
PUBLIC LAW 96-517—DEC. 12, 1980 
35 use 210. 
"§ 210. Precedence of chapter 
"(a) This chapter shall take precedence over any other Act which 
would require a disposition of rights in subject inventions of small 
business firms or nonprofit organizations contractors in a manner 
that is inconsistent with this chapter, including but not necessarily 
limited to the following: 
"(1) section 10(a) of the Act of June 29,1935, as added by title I 
of the Act of August 14, 1946 (7 U.S.C. 427i(a); 60 Stat. 1085); 
"(2) section 205(a) of the Act of August 14, 1946 (7 U.S.C. 
1624(a); 60 Stat. 1090); 
"(3) section 501(c) of the Federal Mine Safety and Health Act of 
91 Stat. 1320. 
1977 (30 U.S.C. 951(c); 83 Stat. 742); 
"(4) section 106(c) of the National Traffic and Motor Vehicle 
Safety Act of 1966 (15 U.S.C 1395(c); 80 Stat. 721); 
"(5) section 12 of the National Science Foundation Act of 1950 
64 Stat. 154. 
(42 U.S.C. 1871(a); 82 Stat. 360); 
"(6) section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 
68 Stat. 944. 
2182; 68 Stat. 943); 
"(7) section 305 of the National Aeronautics and Space Act of 
1958 (42 U.S.C. 2457); 
"(8) section 6 of the Coal Research Development Act of 1960 (30 
U.S.C. 666; 74 Stat. 337); 
"(9) section 4 of the Helium Act Amendments of 1960 (50 
U.S.C. 167b; 74 Stat. 920); 
"(10) section 32 of the Arms Control and Disarmament Act of 
1961 (22 U.S.C. 2572; 75 Stat. 634); 
"(11) subsection (e) of section 302 of the Appalachian Regional 
Development Act of 1965 (40 U.S.C. App. 302(e); 79 Stat. 5); 
"(12) section 9 of the Federal Nonnuclear Energy Research 
88 Stat. 1887. 
and Development Act of 1974 (42 U.S.C. 5901; 88 Stat, 1878); 
42 use 5908. 
"(13) Section 5(d) of the Consumer Product Safety Act (15 
U.S.C. 2054(d); 86 Stat. 1211); 
"(14) section 3 of the Act of April 5,1944 (30 U.S.C. 323; 58 Stat. 
191); 
"(15) section 8001(c)(3) of the Solid Waste Disposal Act (42 
U.S.C. 6981(c); 90 Stat. 2829); 
"(16) section 219 of the Foreign Assistance Act of 1961 (22 
U.S.C. 2179; 83 Stat. 806); 
"(17) section 427(b) of the Federal Mine Health and Safety Act 
of 1977 (30 U.S.C. 937(b); 86 Stat. 155); 
"(18) section 306(d) of the Surface Mining and Reclamation 
Act of 1977 (30 U.S.C. 1226(d); 91 Stat. 455); 
"(19) section 21(d) of the Federal Fire Prevention and Control 
Act of 1974 (15 U.S.C. 2218(d); 88 Stat. 1548); 
"(20) section 60^) of the Solar Photovoltaic E n e r ^ Research 
Development and Demonstration Act of 1978 (42 U.S.C. 5585(b); 
92 Stat. 2516); 
"(21) section 12 of the Native Latex Commercialization and 
7 use I78j. 
Economic Development Act of 1978 (7 U.S.C. 178(j); 92 Stat. 2533); 
and 
"(22) section 408 of the Water Resources and Development Act 
92 Stat. 1316. 
of 1978 (42 U.S.C. 7879; 92 Stat. 1360). 
The Act creating this chapter shall be construed to take precedence 
over any future Act unless that Act specifically cites this Act and 
provides that it shall take precedence over this Act. 
"
O
t
>
) Nothing in this chapter is intended to alter the effect of the 
laws cited in paragraph (a) of this section or any other laws with 
respect to the disposition of rights in inventions made in the perform-
PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3027 
ance of funding agreements with persons other than nonprofit 
organizations or small business firms. 
"(c) Nothing in this chapter is intended to limit the authority of Rights, 
agencies to agree to the disposition of rights in inventions made in the disposition. 
performance of work under funding agreements with persons other 
than nonprofit organizations or small business firms in accordance 
with the Statement of Government Patent Policy issued on August 
23, 1971 (36 Fed. Reg. 16887), agency regulations, or other applicable 
regulations or to otherwise limit the authority of agencies to allow 
such persons to retain ownership of inventions. Any disposition of 
rights in inventions mdde in accordance with the Statement or 
implementing regulations, including any disposition occurring before 
enactment of this section, are hereby authorized. 
"(d) Nothing in this chapter shall be construed to require the Disclosure. 
disclosure of intelligence sources or methods or to otherwise affect 
the authority granted to the Director of Central Intelligence by 
statute or Executive order for the protection of intelligence sources or 
methods. 
"§ 21L Relationship to antitrust laws 
35 use 2ii. 
"Nothing in this chapter shall be deemed to convey to any person 
immunity from civil or criminal liability, or to create any defenses to 
actions, under any antitrust law.". 
(b) The table of chapters for title 35, United States Code, is amended 
by adding immediately after the item relating to chapter 37 the 
following: 
"38. Patent rights in inventions made with Federal assistance.". 
SEC. 7. AMENDMENTS TO OTHER ACTS.—The following Acts are 
amended as follows: 
(a) Section 156 of the Atomic Energy Act of 1954 (42 U.S.C. 2186; 68 
Stat. 947) is amended by deleting the words "held by the Commission 
or". 
(b) The National Aeronautics and Space Act of 1958 is amended by 
repealing paragraph (g) of section 305 (42 U.S.C. 2457(g); 72 Stat. 436). 
(c) The Federal Nonnuclear Energy Research and Development Act 
of 1974 is amended by repealing paragraphs (g), (h), and (i) of section 9 
(42 U.S.C. 5908 (g), (h), and (i); 88 Stat. 1889-1891). 
SEC. 8. (a) Sections 2, 4, and 5 of this Act will take effect upon Effective dates, 
enactment. 
35 USC 41 note. 
(b) Section 1 of this Act will take effect on the first day of the 
seventh month beginning after its enactment and will apply to 
patents in force as of that date or issued thereafter. 
(c) Section 3 of this Act will take effect on the first day of the first 
fiscal year beginning on or after one calendar year after enactment. 
However, until section 3 takes effect, the Commissioner may credit 
the Patent and Trademark Office appropriation account in the 
Treasury of the United States with the revenues from collected 
reexamination fees, which will be available to pay the costs to the 
Office of reexamination proceedings. 
(d) Any fee in effect as of the date of enactment of this Act will 
remain in effect until a corresponding fee established under section 
41 of title 35, United States Code, or section 1113 of title 15, United 
States Code, takes effect. 
(e) Fees for maintaining a patent in force will not be applicable to 
patents applied for prior to the date of enactment of this Act. 
94 STAT. 3028 
PUBLIC LAW 96-517—DEC. 12, 1980 
Computerized 
data and 
retrieval 
system, report to 
Congress. 
35 use 14 note. 
"Computer 
program." 
17 use 117. 
17 use 106. 
(f) Sections 6 and 7 of this Act will take effect on the first day of the 
seventh month beginning after its enactment. Implementing regula-
tions may be issued earlier. 
(g) Sections 8 and 9 will take effect on the date of enactment of this 
Act. 
SEC. 9. The Commissioner of Patents and Trademarks shall report 
to Congress, within two years after the effective date of this Act, a 
plan to identify, and if necessary develop or have developed, comput-
erized data and retrieval systems equivalent to the latest state of the 
art which can be applied to all aspects of the operation of the Patent 
and Trademark Office, and particularly to the patent search file, the 
patent classification system, and the trademark search file. The 
report shall specify the cost of implementing the plan, how rapidly 
the plan can be implemented by the Patent and Trademark Office, 
without regard to funding which is or which may be available for this 
purpose in the future. 
SEC. 10. (a) Section 101 of title 17 of the United States Code is 
amended to add at the end thereof the following new language: 
"A 'computer program' is a set of statements or instructions to 
be used directly or indirectly in a computer in order to bring 
about a certain result.". 
O
b
) Section 117 of title 17 of the United States Code is amended to 
read as follows: 
*
*
§ 117. Limitations on exclusive rights: Computer programs 
"Notwithstanding the provisions of section 106, it is not an 
infringement for the owner of a copy of a computer program to make 
or authorize the making of another copy or adaptation of that 
computer program provided: 
"(1) that such a new copy or adaptation is created as an 
essential step in the utilization of the computer program in 
conjunction with a machine and that it is used in no other 
manner, or 
"(2) that such new copy or adaptation is for archival purposes 
only and that all archival copies are destroyed in the event that 
continued possession of the computer program should cease to be 
rightful. 
PUBLIC LAW 96-517—DEC. 12, 1980 
94 STAT. 3029 
"Any exact copies prepared in accordance with the provisions of 
this section may be leased, sold, or otherwise transferred, along with 
the copy from which such copies were prepared, only as part of the 
lease, sale, or other transfer of all rights in the program. Adaptations 
so prepared may be transferred only with the authorization of the 
copyright owner." 
Approved December 12, 1980. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 96-1307, Pt. I (Ck)mm. on the Judiciary) and No. 96-1307, Pt. 2 
(Comm. on Government Operations). 
CONGRESSIONAL RECORD, Vol. 126 (1980): 
Mar. 20, S. 2446 considered and passed Senate. 
Nov. 17, considered and passed House. 
Nov. 20, considered and passed Senate, amended. 
Nov. 21, House concurred in Senate amendment. 
79-194 
O—81—pt. 3 
25 : QL3