[Federal Register: September 11, 2000 (Volume 65, Number 176)]
[Proposed Rules]
[Page 54826-54828]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se00-25]
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DEPARTMENT OF COMMERCE
Assistant Secretary for Technology Policy
37 CFR Part 401
[Docket No. 95-0615153-0076-02]
RIN 0692-AA14
Rights to Inventions Made by Nonprofit Organizations and Small
Business Firms Under Government Grants, Contracts, and Cooperative
Agreements; Special Contracts To Provide Support Services for a
Government-Owned and -Operated Laboratory Under a Cooperative Research
and Development Agreement (CRADA) With a Collaborating Party
AGENCY: Assistant Secretary for Technology Policy, Commerce.
ACTION: Proposed rule with request for comments.
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SUMMARY: This proposed rule would authorize Federal agencies to use an
alternate patent rights clause in certain contracts with nonprofit
organizations and small business firms to provide support services at a
Government-owned and -operated laboratory in connection with a CRADA
between the laboratory and a collaborating party.
DATES: Comments must be received on or before October 11, 2000.
ADDRESSES: Comments should be mailed to Mr. Jon Paugh, Director,
Technology Competitiveness, Office of Technology Policy, Room 4418,
Herbert C. Hoover Building, U.S. Department of Commerce, Washington, DC
20230.
FOR FURTHER INFORMATION CONTACT: Mr. John Raubitschek, Patent Counsel,
at telephone: (202) 482-8010.
SUPPLEMENTARY INFORMATION: Under the authority of 35 U.S.C. 206 and the
delegation by the Secretary of Commerce in section 3(g) of DOO 10-18,
the Assistant Secretary of Commerce for Technology Policy may issue
revisions to 37 CFR part 401.
Under the Bayh-Dole Act (Pub. L. 96-517), nonprofit and small
business contractors and grantees have the option to retain rights in
their inventions in order to facilitate the commercialization of the
results of federally funded research. However, this option may be
limited if an exceptional circumstances determination is made by the
funding agency under 37 CFR 401.3(a)(2). The criteria for such a
determination are exacting and the contractor may appeal such a
determination. There is a need to limit the rights of certain
contractors and grantees in their inventions when
[[Page 54827]]
they are performing research for the Government under a cooperative
research and development agreement (CRADA) with a collaborating party
as authorized by the Federal Technology Transfer Act (Pub. L. 99-502)
(FTTA). If these rights are not limited, the collaborating party would
not receive the rights to which it would normally be entitled under a
CRADA, which includes the option for an exclusive license to any CRADA
invention made by a Government employee. Contractors are now being used
at certain federally-owned and -operated laboratories of various
agencies such as the Department of Defense and the Environmental
Protection Agency. The contracts are not usually entered into for
securing research expertise of a particular company or individual but
rather to provide general support to the operation of the laboratories.
Presently, some agencies using support contractors for CRADAs have
notified their collaborating parties that they will endeavor to acquire
the necessary rights from their contractors but cannot promise that
those rights will be obtained. Other agencies preclude their
contractors from working on CRADAs or permit them to own their
inventions whether or not made under a CRADA. When the Department of
Defense recently proposed a special clause for support contractors
limiting rights in their inventions, the Department of Commerce was
concerned that the exception was too broad and that the clause should
encourage negotiation.
Since the laboratory's obligations under the FTTA do not
technically apply to the inventions of its contractors, the Department
of Commerce does not consider that there is an actual conflict between
the Bayh-Dole Act and the FTTA. Nevertheless, we do believe that the
situation presents a conflict between the general policies of the Bayh-
Dole Act and the specific directives of the FTTA. We think that
allowing a support contractor to work under a CRADA in such
circumstances might be a negative factor or disincentive to the
participation by private parties in a CRADA because they would not be
assured of receiving rights in all CRADA inventions as mandated by the
FTTA.
Accordingly, we propose to add as an alternate a new subparagraph
to paragraph (b) of the basic patent rights clause that encourages the
contractor to negotiate with the collaborating party but in the absence
of an agreement, provides certain minimum rights for the collaborating
party in the contractor's inventions. The provision of those minimum
rights in a contract constitutes an exceptional circumstances
determination by the agency pursuant to 37 CFR 401.3(a)(2) and would be
appealable under Sec. 401.4. The rights would be of the same scope and
terms the collaborating party would receive in an invention made by a
Government employee under the CRADA, which is typically an option for
an exclusive license. Although negotiation should occur prior to the
contractor starting work under the CRADA, it could be postponed with
the permission of the Government until an invention is made by the
contractor under the CRADA. The procedures for using the alternate
clause are provided in new Sec. 401.3(a)(5). The alternate clause is
optional and laboratories may allow support contractors to own their
inventions made under a CRADA.
Classification
Administrative Procedure Act: Pursuant to section 553(a)(2) of the
Administrative Procedure Act (APA) (5 U.S.C. 553(a)(2)), the Assistant
Secretary of Commerce for Technology Policy finds that the notice and
comments requirements of the APA are not applicable. The Technology
Administration, however, is interested in the views of interested
parties and is, thus, soliciting comments on this policy.
Executive Order 12866
This proposed rule has been determined to be not significant for
purposes of E.O. 12866 (58 FR 51735, October 4, 1993).
Executive Order 13132
This proposed rule does not contain policies with Federalism
implications sufficient to warrant preparation of a Federalism
assessment under E.O. 13132.
Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), the Assistant General Counsel for Legislation and Regulation of
the Department of Commerce has certified to the Chief Counsel for
Advocacy, Small Business Administration that the proposed rule change
would not have a significant impact on a substantial number of small
entities. The principal impact of the rule is to encourage negotiations
between the support contractor and the laboratory's collaborating party
under a CRADA.
Paperwork Reduction Act
This proposed rule will impose no collection of information
requirements under the Paperwork Reduction Act (44 U.S.C. 3501 et
seq.).
List of Subjects in 37 CFR Part 401
Inventions, Patents, Nonprofit Organizations, Small Business Firms.
For the reasons set forth in the preamble, 37 CFR part 401 is
amended as follows:
PART 401--RIGHTS TO INVENTIONS MADE BY NONPROFIT ORGANIZATIONS AND
SMALL BUSINESS FIRMS UNDER GOVERNMENT GRANTS, CONTRACTS, AND
COOPERATIVE AGREEMENTS
1. The authority citation for 37 CFR part 401 continues to read as
follows:
Authority: 35 U.S.C. 206 and the delegation of authority by the
Secretary of Commerce to the Assistant Secretary of Commerce for
Technology Policy at sec. 3(g) of DOO 10-18.
2. Section 401.3 is amended by adding a new paragraph (a)(5) to
read as follows:
Sec. 401.3 Use of the standard clauses at Sec. 401.14.
* * * * *
(a) * * *
(5) If any part of the contract may require the contractor to
perform work on behalf of the Government at a Government laboratory
under a Cooperative Research and Development Agreement (CRADA) pursuant
to the statutory authority of 15 U.S.C. 3710a, the contracting officer
may include alternate paragraph (b) in the basic patent rights clause
in Sec. 401.14. Because the use of the alternate is based on a
determination of exceptional circumstances under Sec. 401.3(a)(2), the
contracting officer shall ensure that the appeal procedures of
Sec. 401.4 are satisfied whenever the alternate is used.
3. A new paragraph (c) is added to Sec. 401.14 to read as follows:
Sec. 401.14 Standard patent rights clauses.
* * * * *
(c) As prescribed in Sec. 401.3, replace (b) of the basic clause
with the following paragraphs (1) and (2):
(b) Allocation of principal rights. (1) The Contractor may
retain the entire right, title, and interest throughout the world to
each subject invention subject to the provisions of this clause,
including (2) below, and 35 U.S.C. 203. With respect to any subject
invention in which the Contractor retains title, the Federal
Government shall have a nonexclusive, nontransferable, irrevocable,
paid-up license to practice or have practiced for or on behalf of
the United States the subject invention throughout the world.
(2) If the Contractor performs support services at a Government
owned and
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operated laboratory directed by the Government to fulfill the
Government's obligations under a Cooperative Research and
Development Agreement (CRADA) authorized by 15 U.S.C. 3710a, the
Government may require the Contractor to try to negotiate an
agreement with the CRADA collaborating party or parties over the
rights to any subject invention the Contractor makes, solely or
jointly, in the course of its work under the CRADA. The agreement
shall be negotiated prior to the Contractor undertaking the CRADA
work or, with the permission of the Government, upon the
identification of a subject invention. In the absence of such an
agreement, the Contractor agrees to grant the collaborating party or
parties an option for a license in its inventions of the same scope
and terms set forth in the CRADA for inventions made by the
Government.
Kelly H. Carnes,
Assistant Secretary of Commerce for Technology Policy.
[FR Doc. 00-23080 Filed 9-8-00; 8:45 am]
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