[Federal Register Volume 65, Number 221 (Wednesday, November 15, 2000)]
[Rules and Regulations]
[Pages 68932-68948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28629]


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DEPARTMENT OF ENERGY

48 CFR Parts 927 and 970

RIN: 1991-AB55


Acquisition Regulations: Revision of Patent Regulations Relating 
to DOE Management and Operating Contracts

AGENCY: Department of Energy.

ACTION: Interim final rule and opportunity for public comment.

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SUMMARY: The Department of Energy (DOE) is amending the Department of 
Energy Acquisition Regulation (DEAR) to improve the patent coverage 
relating to management and operating contracts. The clauses contained 
herein generally reflect the clauses used in such DOE contracts over 
the last five years. The changes made pursuant to this rule adapt 
patent related clauses to subcontracting under management and operating 
contracts, will result in clauses stated in ``plain language,'' and 
will provide a complete set of patent clauses for all varieties of 
management and operating contract.

DATES: This rule is effective December 15, 2000. Comments on the 
interim final rule should be submitted by January 16, 2001.

ADDRESSES: Comments (3 copies) should be addressed to: Robert M. Webb, 
U.S. Department of Energy, Office of Procurement and Assistance 
Management, 1000 Independence Avenue, SW., Washington, D.C. 20585.

FOR FURTHER INFORMATION CONTACT: Robert M. Webb at (202) 586-8264.

SUPPLEMENTARY INFORMATION:

I. Background.
II. Explanation of Changes in the Patent Rights Clauses.
III. Procedural Requirements.
    A. Review Under Executive Order 12866.
    B. Review Under Executive Order 12988.
    C. Review Under the Regulatory Flexibility Act.
    D. Review Under the Paperwork Reduction Act.
    E. Review Under the National Environmental Policy Act.
    F. Review Under Executive Order 13132.
    G. Review Under the Unfunded Mandates Reform Act of 1995.
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999.
    I. Congressional Review.

I. Background

    The Department of Energy (DOE or Department) last revised its 
patent regulations covering management and operating contracts on March 
2, 1995 at 60 FR 11824. That rule created two patent rights clauses, 
one for nonprofit contractors and a second for profit-making 
contractors. The former adapted the Bayh-Dole clause, granting title to 
inventions first conceived or reduced to practice under the contract to 
the contractor, for use in management and operating (M&O) contracts. 
The second clause retained title to those inventions in the United 
States. In the interim it has become apparent that the clauses could be 
designed to more effectively deal with the realities of performance 
under DOE management and operating contracts. There is a need to modify 
the specified clauses to reflect additional statutory requirements and 
the special treatment of exceptional circumstances in defense related 
activities. This interim final rule fulfills those needs.
    This rulemaking establishes three clauses, one for nonprofit 
contractors, one for profit-making contractors where their contracts do 
not provide for technology transfer responsibilities, and a third for 
large profit-making contractors where their contracts do provide for 
technology transfer activities. The terms of the third clause reflect 
DOE's probable issuance of an advance waiver under which large profit-
making management and operating contractors with a technology transfer 
mission will receive title to inventions. The individual class waiver 
that is likely to be granted may cause the actual terms of the patent 
clause used to vary from the model published here.
    This interim final rule also adapts customary ancillary patent 
clauses to the special circumstances of DOE's management and operating 
contracts. The clause normally used to authorize and give consent to a 
contractor to use or manufacture an invention has been modified to 
allow a contractor to request and DOE to authorize copying copyrighted 
work. It also reflects that if a subcontractor is employed under a 
management and operating contract to perform research and development, 
the clause flowed down should use paragraph (a) as in the Federal 
Acquisition Regulation (FAR) Alternate 1, as opposed to the basic 
clause as is called for under paragraph (b) of the FAR clause.
    The interim final rule limits the notice and assistance clause to 
subcontracts valued at $25,000 or more. The FAR clause limit for 
flowdown is the simplified acquisition threshold of $100,000.
    The interim final rule establishes a flowdown for patent indemnity. 
In the area of royalties, the interim final rule provides for the 
contractor to provide to DOE information bearing on any royalty 
proposed to be paid after contract award. The relevant FAR provision 
does not foresee long term contracting with the variety of royalty 
activities that the Department is currently experiencing under its 
management and operating contracts.
    This interim final rule also makes small changes to clauses for 
notice of right to request patent waiver and rights to proposal data, 
resulting from their being drafted in ``plain language.'' Additionally, 
a change has been made to DEAR Part 927 to assure that the facilities 
license contained in the three M&O patent clauses is used in 
appropriate contracts not subject to Part 970.

II. Explanation of Changes in the Patent Rights Clauses

A. Plain Language

    All clauses in this interim final rule, except the nonprofit clause 
at 970.5204-101, were rewritten from former clauses to incorporate 
suggested language and sentence structure for clarifying and 
simplifying contract provisions. For example, the clause language is 
written in the present tense and exceptions are generally stated at the 
beginning of regulatory provisions. Italicized headings were added to 
all subparagraphs. At such time as the FAR is revised to reflect 
``plain language,'' particularly with regard to the Bayh-Dole clause at 
FAR 52.227-11 (the core of the clause at 970.5204-101), which is 
overseen by the Department of Commerce, these regulations will be 
reviewed and revised as appropriate.

B. Organization of Clause Provisions

    Modest changes were made to the organization of each of the patent 
rights clauses, so that like topics and provisions appear in a similar 
order in all of the clauses, as shown by the index. Also, if the same 
provision appeared in more than one clause, an

[[Page 68933]]

effort was made to maintain similar paragraph lettering and text.

C. Allocation of Principal Rights: Exceptional Circumstance Subject 
Inventions, Inventions Related to National Security, and Treaties and 
International Agreements

    The Allocation of Principal Rights paragraph (b) in each of the 
patent rights clauses is drafted according to the statutory disposition 
of rights in inventions depending on contractor type. In addition, 
paragraph (b) of clauses at 970.5204-101 and -103 include new 
subparagraphs addressing exceptional circumstance subject inventions 
and the disposition of rights controlled by treaties and international 
agreements (see 970.5204-101-(b)(3)&(4); -103-(b)(5)&(6)). Alternate 1 
also provides for the allocation of rights in subject inventions 
related to weapons and national security, respectively, to be inserted 
under paragraph (b). These new provisions are located under allocation 
of principal rights because they affect the contractor's ability to 
take title.

D. Allocation of Principal Rights: Requests for Greater Rights by the 
Contractor and Contractor Employee-inventors, and the Assignment of 
Government Rights of Government Employee-inventors

    The Allocation of Principal Rights paragraph (b) in each of the 
patent rights clauses includes provisions for the contractor and 
contractor employee-inventor to request greater rights in inventions, 
and for the Government to assign to the contractor the rights acquired 
from a Government employee-inventor (see 970.5204-101(b)(4)(5)&(6); -
102(b)(2); -103(b)(7)(8)&(9)).

E. Subject Invention Disclosures

    All of the patent rights clauses include a modified list of 
information required in a subject invention disclosure. The list 
provides DOE with sufficient information to oversee invention 
reporting.

F. Efficient Administration of Subject Inventions

    Provisions appear in one or more of the patent rights clauses and 
address procedures for ensuring that all subject inventions are 
promptly reported by inventors to the contractor and by the contractor 
to DOE.

G. DOE Decisions Concerning Federally Funded Inventions

    The clauses at 970.5204-101 and -103 that provide the contractor 
with the right to retain title to subject inventions, either by statute 
or under an advance class waiver, include a new provision which 
confirms that it is at DOE's sole discretion to accept or refuse the 
return of rights to a subject invention that had been previously 
elected by the contractor (see 970.5204-101(d)(4); -103(d)(1)).
    The patent rights clause at 970.5204-102 does not contemplate the 
contractor's retention of rights in inventions, and, therefore, if such 
a restriction on the return of title should apply to a large business 
contractor whose contract has no technology transfer mission, it must 
be included in the terms and conditions of the instrument granting 
rights in the invention, e.g., identified waiver. In addition, DOE's 
discretion to grant or refuse requests by the contractor for greater 
rights or for a contractor license is more clearly stated in all of the 
patent rights clauses, such that there is no confusion that a 
contractor does not automatically receive such rights simply by 
requesting them, but rather DOE may grant or refuse to grant such 
rights, ensuring Government missions and objectives are considered (see 
patent rights clauses 970.5204-101(b)(5)(6)&(7) and (e)(1); 970.5204-
102(b)(2) and (d)(1)(i)); and 970.5204-103(b)(7)(8)&(9) and (e)(1)).

H. Withholding of Payment

    The provision entitled Withholding of payment from former clause 48 
CFR 970.5204-72 has been deleted from the for-profit clauses (970.5204-
102 and -103). While the provision is applicable to prime contractors 
generally, such withholding is not a practice employed by the 
Contracting Officer with respect to M&O contracts.

I. Royalty Sharing and Balance of Royalties Provisions in the For-
Profit, Advance Class Waiver Clause

    The former nonprofit clause, 48 CFR 970.5204-71, includes royalty 
sharing and balance of royalties provisions under paragraph (k) 
entitled Special provisions for contracts with nonprofit organizations. 
Since this subject matter is addressed in the accompanying Technology 
Transfer Mission clause, these provisions clauses have been deleted 
from the nonprofit clause (970.5204-101), and omitted from the for-
profit, advance class waiver clause (970.5204-103).

J. Rights Governed by Other Agreements

    A provision specifying that rights to inventions made under certain 
third party agreements are governed by DOE approved provisions is 
omitted from the for-profit, advance waiver clause because it is 
covered in the Technology Transfer Mission clause, paragraph (n)(4), 
which must accompany the for-profit, advance waiver clause (970.5204-
103) in an M&O contract.

K. Reports

    The interim and final reports required by various provisions are 
collectively organized under a single paragraph, Reports, for each of 
the patent clauses (see 970.5204-101(m); 970.5204-102(k); 970.5204-
103(m)).

L. Classified Inventions

    The Classified Inventions provision from 10 CFR 600.27 has been 
modified and included in all of the clauses (see 970.5204-101(q); -
102(m); -103(p)). The provision was included and not presented as an 
alternate because almost all of the DOE laboratories have the potential 
for engaging in research involving classified subject matter. The 
provision may be deleted if this is absolutely not the case, by 
approval of DOE patent counsel at the time of contracting.

M. Patent Functions

    This new provision, already in most management and operating 
contracts, is included in each all the clauses (see 970.5204-101(r); -
102(n); -103(r)). It requires the contractor to assist patent counsel 
with patent related functions.

N. Educational Awards Subject to 35 U.S.C. 212

    This new provision, also already in most management and operating 
contracts, is included in two of the clauses (see 970.5204-101(s); -
103(s)). It protects Government rights in research related to excepted 
areas of technology from possible allocation to students under 35 
U.S.C. 212.

O. Annual Appraisal by Patent Counsel

    This new provision, also already in most management and operating 
contracts, is included in all of the clauses (see 970.5204-101(t); -
102(p); -103(t)). It allows, but does not require, DOE patent counsel 
to conduct annual appraisals to evaluate the contractor's effectiveness 
in identifying and protecting inventions.

P. Weapons Related Subject Inventions

    Alternate 1 entitled Weapons Related Subject Inventions is 
available for the nonprofit clause and the for-profit, advance class 
waiver clause.

Q. Transfer of a Contractor License

    DOE must approve the transfer of a contractor license in a subject 
invention. The former clause 48 CFR 970.5204-71(e)(1) (last sentence) 
provided for an

[[Page 68934]]

exception: ``except when transferred to the successor of that part of 
the Contractor's business to which the invention pertains.''

R. Two Year Election Period for For-Profit Contractors Retaining Title 
Under an Advance Class Waiver

    A two (2) year period for election to retain title has been 
included in subparagraph (c)(3) of the for-profit, advance class 
waiver, patent rights clause at 970.5204-103.

III. Procedural Requirements

A. Review Under Executive Order 12866

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993). 
Accordingly, this interim final rule is not subject to review under 
that Executive Order by the Office of Information and Regulatory 
Affairs of the Office of Management and Budget (OMB).

B. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. With regard to the review 
required by section 3(a), section 3(b) of Executive Order 12988 
specifically requires that Executive agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, if any; (5) adequately defines 
key terms; and (6) addresses other important issues affecting clarity 
and general draftsmanship under any guidelines issued by the Attorney 
General. Section 3(c) of Executive Order 12988 requires Executive 
agencies to review regulations in light of applicable standards in 
section 3(a) and section 3(b) to determine whether they are met or it 
is unreasonable to meet one or more of them. DOE has completed the 
required review and determined that, to the extent permitted by law, 
this interim final regulation meets the relevant standards of Executive 
Order 12988.

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires 
preparation of an initial regulatory flexibility analysis for any rule 
that must be proposed for public comment and that is likely to have 
significant economic impact on a substantial number of small entities. 
There is no legal requirement to propose today's rule for public 
comment, and, therefore, the Regulatory Flexiblility Act does not apply 
to this rulemaking proceeding.

D. Review Under the Paperwork Reduction Act.

    This interim final rule does not contain information collection 
requirements that require approval by the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. 3507 et. seq.).

E. Review Under the National Environmental Policy Act

    DOE has concluded that promulgation of this interim final rule 
falls into a class of actions which would not individually or 
cumulatively have significant impact on the human environment, as 
determined by DOE's regulations (10 CFR Part 1021, subpart D) 
implementing the National Environmental Policy Act of 1969 (NEPA) (42 
U.S.C. 4321 et seq.). Specifically, this interim rule is categorically 
excluded from NEPA review because the amendments to the DEAR would be 
strictly procedural (categorical exclusion A6). Therefore, this interim 
final rule does not require an environmental impact statement or 
environmental assessment pursuant to NEPA.

F. Review Under Executive Order 13132

    Executive Order 13132 (64 FR 43255, August 4, 1999) requires that 
regulations or rules be reviewed for any substantial direct effects on 
States, on the relationship between the national government and the 
States, or in the distribution of power and responsibilities among the 
various levels of Government. If there are sufficient substantial 
direct effects, then Executive Order 13132 requires agencies to engage 
in intergovernmental consultation and take other steps before 
promulgating such a regulation or rule. This interim final rule merely 
provides for the Department a single set of clauses to govern patent 
rights in its contracts for the management and operation of major DOE 
sites and facilities. The action does not involve any substantial 
direct effects on States or other considerations stated in Executive 
Order 13132.

G. Review Under the Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally 
requires a Federal agency to perform a detailed assessment of costs and 
benefits of any rule imposing a Federal Mandate with costs to State, 
local or tribal governments, or to the private sector, of $100 million 
or more. This interim final rulemaking would only affect private sector 
entities, and the impact is less than $100 million.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a 
Family Policymaking Assessment for any proposed rule or policy that may 
affect family well-being. This interim final rule would not affect the 
family.

I. Congressional Notification

    Consistent with the Small Business Regulatory Enforcement Fairness 
Act of 1996 (5 U.S.C. Secs. 801, 804), DOE will submit to Congress a 
report regarding the issuance of today's interim final rule prior to 
the effective date set forth at the outset of this notice. The report 
will note the Office of Management and Budget's determination that this 
rule does not constitute a ``major rule'' under that Act.

List of Subjects in 48 CFR Parts 927 and 970

    Government procurement.

    Issued in Washington, D.C. on October 6, 2000.
T.J. Glauthier,
Deputy Secretary, Department of Energy.
    For the reasons set out in the preamble, Chapter 9 of Title 48 of 
the Code of Federal Regulations is amended as set forth below.

PART 927--PATENTS, DATA, AND COPYRIGHTS

    1. The authority citation for Part 927 is revised to read as 
follows:

    Authority: Atomic Energy Act of 1954, as amended (42 U.S.C. 
2168, 2182, 2201); Federal Nonnuclear Energy Research and 
Development Act of 1974 (42 U.S.C. 5908); Department of Energy 
National Security and Military Applications of Nuclear Energy 
Authorization Act of 1987 (42 U.S.C. 7261a.); Department of Energy 
Organization Act (42

[[Page 68935]]

U.S.C. 7101 et seq.); National Nuclear Security Administration Act 
(50 U.S.C. 4201 et seq.)


    2. Section 927.303(c) is added to read as follows:


927.303  Contract clauses.

* * * * *
    (c) Any contract that has as a purpose the design, construction, 
operation, or management integration of a collection of contracts for 
the same purpose, of a Government-owned research, development, 
demonstration or production facility must accord the Government certain 
rights with respect to further use of the facility by or on behalf of 
the Government upon termination of the contract. The patent rights 
clause in such contracts must include the following facilities license 
paragraph:

    [Insert appropriate paragraph no.] Facilities License. In 
addition to the rights of the parties with respect to inventions or 
discoveries conceived or first actually reduced to practice in the 
course of or under this contract, the Contractor agrees to and does 
hereby grant to the Government an irrevocable, nonexclusive, paid-up 
license in and to any inventions or discoveries regardless of when 
conceived or actually reduced to practice or acquired by the 
Contractor at any time through completion of this contract and which 
are incorporated or embodied in the construction of the facility or 
which are utilized in the operation of the facility or which cover 
articles, materials, or products manufactured at the facility (1) to 
practice or have practiced by or for the Government at the facility, 
and (2) to transfer such license with the transfer of that facility. 
Notwithstanding the acceptance or exercise by the Government of 
these rights, the Government may contest at any time the 
enforceability, validity or scope of, title to, any rights or 
patents herein licensed.

(End of paragraph)

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

    3. The authority citation for Part 970 continues to read as 
follows:

    Authority: Atomic Energy Act of 1954 (42 U.S.C. 2201); 
Department of Energy Organization Act (42 U.S.C. 7101 et seq.); 
National Nuclear Security Administration Act (50 U.S.C. 2401 et 
seq.).

    4. Sections 970.2701 through 970.2704 are revised and 970.2702-1 
through 970.2702-6 are added to read as follows:


970.2701  General.

    This subpart applies to negotiation of patent rights, rights in 
technical data provisions and other related provisions for the 
Department of Energy contracts for the management and operation of 
DOE's major sites or facilities, including the conduct of research and 
development and nuclear weapons production, and contracts which involve 
major, long-term or continuing activities conducted at a DOE site.


970.2702  Patent related clauses.


970.2702-1  Authorization and consent.

    Contracting officers must use the clause at 970.5204-94, 
Authorization and Consent, instead of the clause at 48 CFR 52.227-2.


970.2702-2  Notice and assistance regarding patent and copyright 
infringement.

    Contracting officers must use the clause at 970.5204-95, Notice and 
Assistance Regarding Patent and Copyright Infringement, instead of the 
clause at 48 CFR 52.227-2.


970.2702-3  Patent indemnity.

    (a) Contracting officers must use the clause at 970.5204-96, Patent 
Indemnity-Subcontracts to assure that subcontracts appropriately 
address patent indemnity.
    (b) Normally, the clause at 48 CFR 52.227-3 would not be 
appropriate for an M&O contract; however, if there is a question, such 
as when the mission of the contractor involves production, the 
contracting officer must consult with local patent counsel and use the 
clause where appropriate.


970.2702-4  Royalties.

    Contracting officers must use the solicitation provision at 
970.5204-97, Royalty Information, and the clause at 970.5204-98, Refund 
of Royalties instead of the provision at 48 CFR 52.227-8 and the clause 
at 48 CFR 52.227-9, respectively.


970.2702-5  Rights to proposal data.

    Contracting officers must include the clause at 48 CFR 52.227-23, 
Rights to Proposal Data, in all solicitations and contracts for the 
management and operation of DOE sites and facilities.


970.2702-6  Notice of right to request patent waiver.

    Contracting officers must include the provision at 970.5204-100 in 
all solicitations for contracts for the management and operation of DOE 
sites or facilities.


970.2703  Purposes of patent rights clauses.

    (a) DOE sites and facilities are managed and operated on behalf of 
the Department of Energy by a contractor, pursuant to management and 
operating contracts that are generally awarded for a five (5) year 
term, with the possibility for renewal. Special provisions relating to 
patent rights are appropriately incorporated into an M&O contract 
because of the unique circumstances and responsibilities of managing 
and operating a Government-owned facility, as compared to other 
federally funded research and development contracts.
    (b)(1) Technology transfer mission clause. In accordance with 
Public Law 101-189, section 3133(d), DOE may grant technology transfer 
authority to M&O contractors operating a DOE facility. Generally, M&O 
contractors have the right to elect to retain title to inventions made 
under the contract, whether a nonprofit or educational organizations, 
as a result of 35 U.S.C. 200 et seq. (Bayh-Dole Act), or a large 
business, as a result of a class patent waiver issued pursuant to 10 
CFR part 784. Under such contracts, the M&O contractor assumes 
responsibilities for commercializing retained inventions, in accordance 
with the Technology Transfer Mission clause provided at 970.5204-40. 
That clause also governs such activities as the distribution of 
royalties earned from inventions made under the contract and the 
transfer of patent rights in inventions made under the contract to 
successor contractors.
    (2) If the M&O contractor is a nonprofit organization or small 
business firm having technology transfer authority, the following 
clauses are inserted into the M&O contract: 970.5204-40 and 970.5204-
101.
    (3) If the M&O contract has technology transfer as mission and is 
to be performed by a for-profit, large business firm that has been 
granted an advance class waiver, the following clauses are inserted 
into the M&O contract: 970.5204-40 and 970.5204-103. The terms of the 
clause at 970.5204-103 are subject to modification to conform to the 
terms of the class waiver.
    (4) If the M&O contract does not have a technology transfer mission 
and is to be performed by a for-profit, large business firm and does 
not have advance class waiver under 10 CFR part 784, the patent rights 
clause at 970.5204-102 is inserted into the M&O contract, and the 
Technology Transfer Mission clause is inapplicable.
    (5) If the contractor is an educational institution, a non-profit 
organization or a small business firm and is conducting privately 
funded technology transfer activities, involving the use of private 
funds to conduct licensing and marketing activities related to 
inventions made under the contract in accordance with the Bayh-Dole 
Act, DOE may modify the patent rights clause (970.5204-101) to address 
issues such as the disposition of royalties

[[Page 68936]]

earned under the privately funded technology transfer program, the 
transfer of patent rights to a successor contractor, allowable cost 
restrictions concerning privately funded technology transfer 
activities, and the Government's freedom from any liability related to 
licensing under the contractor's privately funded technology transfer 
program.
    (c) Contracting officers must consult with DOE patent counsel 
assisting the contracting activity or the Assistant General Counsel for 
Technology Transfer and Intellectual Property for assistance in 
selecting for use in the solicitation, negotiating, or approving 
appropriate patent rights clauses for a M&O contract. It may be 
appropriate to include more than one patent rights clause in a 
solicitation if the successful contractor could, for instance, be 
either an educational or a large business. If a large business may be 
selected for performance of a contract that will include a technology 
transfer clause, the solicitation must include the clause at 970.5204-
103 to reflect the waiver that will likely be granted. If the 
solicitation includes more than one patent clause, it must include an 
explanation of the circumstances under which the appropriate clause 
will be used. The final award must contain only one patent rights 
clause.


970.2704  Patent rights clause provisions for management and operating 
contractors.

    (a) Allocation of principal rights: Bayh-Dole provisions. If the 
management and operating contractor is an educational institution or 
nonprofit organization, the patent rights clause provided at 970.5204-
101 must be inserted into the M&O contract. Such entities are 
beneficiaries of Bayh-Dole Act, including the paramount right of the 
contractor to elect to retain title to inventions conceived or first 
actually reduced to practice in performance of work under the contract, 
except in DOE-exempted areas of technology or in operation of DOE 
facilities primarily dedicated to naval nuclear propulsion or weapons 
related programs.
    (b) Allocation of principal rights: Government title. (1) The 
patent rights clause provided at 970.5204-102 must be incorporated into 
the M&O contract if the contractor is a for-profit, large business firm 
and the contract does not have a technology transfer mission or if, 
without regard to the type of contractor, the contract is for the 
operation of a DOE facility primarily dedicated to naval nuclear 
propulsion or weapons related programs. That clause provides for DOE's 
statutory obligation to take title to inventions conceived or first 
actually reduced to practice in the course of or under an M&O contract, 
and does not contemplate an advance class waiver of Government rights 
in inventions, or participation by the contractor in technology 
transfer activities.
    (2) While only in rare circumstances does a for-profit large 
business contractor whose contract contains no technology transfer 
mission receive rights in or title to inventions made under the 
contract, the contractor does have the right to request a license or 
foreign patent rights in inventions made under the contract, and may 
petition for a waiver of Government rights in identified inventions. 
The patent rights clause 970.5204-102 does not include many of the 
provisions of patent rights clauses 970.5204-101 and 970.5204-103, 
related to the filing of patent applications by the contractor, the 
granting of rights in inventions by the contractor to third parties 
(preference for United States industry), and conditions allowing the 
Government to grant licenses to third parties in inventions retained by 
the contractor (march-in rights). Any instrument granting rights in 
inventions made under a contract governed by patent rights clause 
970.5204-102 must include these additional provisions within its terms 
and conditions.
    (c) Allocation of principal rights: Contractor right to elect title 
under an advance class waiver. If the M&O contractor is a for-profit, 
large business firm and the Government has granted an advance class 
waiver of Government rights in inventions made in the course of or 
under the M&O contract, under the authority of the Atomic Energy Act of 
1954 (42 U.S.C. 2182) and the Federal Nonnuclear Energy Act of 1974 (42 
U.S.C. 5908(c)), the patent rights clause provided at 970.5204-103 must 
be inserted into the M&O contract, unless the terms and conditions of 
such an approved waiver alter or replace the patent rights clause 
provisions pursuant to 10 CFR part 784.
    (d) Extensions of time--DOE discretion. The patent rights clauses 
for M&O contracts require the contractor to take certain actions within 
prescribed time periods to comply with the contract and preserve its 
rights in inventions. The M&O contractor may request extensions of time 
in which to take such actions by submitting written justification to 
DOE, and DOE may grant the contractor's requests, on a case-by-case 
basis. If the time period expired due to negligence by the contractor, 
DOE may grant a request for an extension of time upon a showing by the 
contractor that corrective procedures are in place to avoid such 
negligence in the future. If a contractor is requesting an extension of 
time in which to elect to retain title to an invention, DOE may grant 
the request if the extension allows the contractor to conduct further 
experimentation, market research, or other analysis helpful to 
determine contractor interest in electing title to the invention, among 
other considerations. Generally, the extensions of time are for periods 
of between six (6) months to one (1) year.
    (e) Facilities license. These include the rights to make, use, 
transfer, or otherwise dispose of all articles, materials, products, or 
processes embodying inventions or discoveries used or embodied in the 
facility regardless of whether or not conceived or first actually 
reduced to practice under or in the course of such a contract. The 
patent rights clauses, 970.5204-101, 970.5204-102, and 970.5204-103, 
each contain a provision granting the Government this facilities 
license.
    (f) Deletion of classified inventions provision. If DOE determines 
that the research, development, demonstration or production work to be 
performed during the course of a management and operating contract most 
probably will not involve classified subject matter or result in any 
inventions that require security classification, DOE patent counsel may 
advise the contracting officer to delete the patent rights clause 
provision entitled, ``Classified Inventions'' from the M&O contract.
    (g) Alternate 1--Weapons related research or production. If DOE 
grants technology transfer authority to a DOE facility, pursuant to 
Public Law 101-189 section 3133(d), and the DOE owned facility is 
involved in weapons related research and development, or production, 
then Alternate 1 of the patent rights clauses must be inserted into the 
M&O contract. Alternate 1 defines weapons related subject inventions 
and restricts the contractor's rights with respect to such inventions.


970.5204-71 and 970.5204-72  [Removed]

    5. Sections 970.5204-71 and 970.5204-72 are removed and reserved.
    6. Sections 970.5204-94 through 970.5204-98 and 970.5204-100 
through 970.5204-103 are added to read as follows:


970.5204-94  Authorization and consent.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-1:


[[Page 68937]]



Authorization and Consent (Nov. 2000)

    (a) The Government authorizes and consents to all use and 
manufacture of any invention described in and covered by a United 
States patent in the performance of this contract or any subcontract 
at any tier.
    (b) If the Contractor is sued for copyright infringement or 
anticipates the filing of such a lawsuit, the Contractor may request 
authorization and consent to copy a copyrighted work from the 
contracting officer. Programmatic necessity is a major consideration 
for DOE in determining whether to grant such request.
    (c) The Contractor agrees to include, and require inclusion of, 
the Authorization and Consent clause at 52.227-1, without Alternate 
1, but suitably modified to identify the parties, in all 
subcontracts at any tier for supplies or services (including 
construction, architect-engineer services, and materials, supplies, 
models, samples, and design or testing services expected to exceed 
$25,000).
    (d) The Contractor agrees to include, and require inclusion of, 
paragraph (a) of this Authorization and Consent clause, suitably 
modified to identify the parties, in all subcontracts at any tier 
for research and development activities. Omission of an 
authorization and consent clause from any subcontract, including 
those valued less than $25,000 does not affect this authorization 
and consent.

(End of clause)


970.5204-95  Notice and assistance regarding patent and copyright 
infringement.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-2:

Notice and Assistance Regarding Patent and Copyright Infringement (Nov. 
2000)

    (a) The Contractor shall report to the Contracting Officer 
promptly and in reasonable written detail, each notice or claim of 
patent or copyright infringement based on the performance of this 
contract of which the Contractor has knowledge.
    (b) If any person files a claim or suit against the Government 
on account of any alleged patent or copyright infringement arising 
out of the performance of this contract or out of the use of any 
supplies furnished or work or services performed hereunder, the 
Contractor shall furnish to the Government, when requested by the 
Contracting Officer, all evidence and information in possession of 
the Contractor pertaining to such suit or claim. Except where the 
Contractor has agreed to indemnify the Government, the Contractor 
shall furnish such evidence and information at the expense of the 
Government.
    (c) The Contractor agrees to include, and require inclusion of, 
this clause suitably modified to identify the parties, in all 
subcontracts at any tier expected to exceed $25,000.
(End of clause)

970.5204-96  Patent indemnity--subcontracts.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-3:

Patent Indemnity--Subcontracts (Nov. 2000)

    Except as otherwise authorized by the Contracting Officer, the 
Contractor shall obtain indemnification of the Government and its 
officers, agents, and employees against liability, including costs, 
for infringement of any United States patent (except a patent issued 
upon an application that is now or may hereafter be withheld from 
issue pursuant to a secrecy order by the Government) from 
Contractor's subcontractors for any contract work subcontracted in 
accordance with FAR 48 CFR 52.227-3.

(End of clause)

970.5204-97  Royalty information.

    Insert the following provision in solicitations in accordance with 
970.2702-4:

Royalty Information (Nov. 2000)

    (a) Cost or charges for royalties. If the response to this 
solicitation contains costs or charges for royalties totaling more 
than $250, the following information shall be included in the 
response relating to each separate item of royalty or license fee:
    (1) Name and address of licensor;
    (2) Date of license agreement;
    (3) Patent numbers, patent application serial numbers, or other 
basis on which the royalty is payable;
    (4) Brief description, including any part or model numbers of 
each contract item or component on which the royalty is payable;
    (5) Percentage or dollar rate of royalty per unit;
    (6) Unit price of contract item;
    (7) Number of units; and
    (8) Total dollar amount of royalties.
    (b) Copies of current licenses. In addition, if specifically 
requested by the Contracting Officer before execution of the 
contract, the offeror shall furnish a copy of the current license 
agreement and an identification of applicable claims of specific 
patents or other basis upon which the royalty may be payable.

(End of provision)


970.5204-98  Refund of royalties.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-4:

Refund of Royalties (Nov 2000)

    (a) The contract price includes certain amounts for royalties, 
payable by the Contractor or subcontractors or both, reported to the 
Contracting Officer in accordance with the Royalty Information 
provision of the solicitation.
    (b) During performance of this contract, if any additional 
royalty payments are proposed to be charged to the Government as 
costs under the contract that were not included in the original 
contract price, the Contractor agrees to submit for approval of the 
Contracting Officer prior to the execution of any licensing 
agreement the following information relating to each separate item 
of royalty or license fee:
    (1) Name and address of licensor;
    (2) Date of license agreement;
    (3) Patent numbers, patent application serial numbers, or other 
basis on which the royalty is payable;
    (4) Brief description, including any part or model numbers of 
each contract item or component on which the royalty is payable;
    (5) Percentage or dollar rate of royalty per unit;
    (6) Unit price of contract item;
    (7) Number of units; and
    (8) Total dollar amount of royalties.
    (9) In addition, if specifically requested by the Contracting 
Officer, the contractor shall furnish a copy of the current license 
agreement and an identification of applicable claims of specific 
patents.
    (c) The term ``royalties'' as used in this clause refers to any 
costs or charges in the nature of royalties, license fees, patent or 
license amortization costs, or the like, for the use of or for 
rights in patents and patent applications in connection with 
performing this contract or any subcontract hereunder. The term also 
includes any costs or charges associated with the access to, use of, 
or other right pertaining to data that is represented to be 
proprietary and is related to the performance of this contract or 
subcontracts, or the copying of such data or data that is 
copyrighted.
    (d) The Contractor shall furnish to the Contracting Officer, 
before final payment under this contract, a statement of royalties 
paid or required to be paid in connection with performing this 
contract and subcontracts hereunder.
    (e) The Contractor is compensated for any royalties reported 
under paragraph (b) of this clause only to the extent that such 
royalties were included in the contract price and are determined by 
the Contracting Officer to be properly chargeable to the Government 
and allocable to the contract.
    (f) The Contracting Officer shall reduce the contract price to 
the extent any royalties that are included in the contract price are 
not, in fact, paid by the Contractor or are determined by the 
Contracting Officer not to be properly chargeable to the Government 
and allocable to the contract. The Contractor agrees to repay or 
credit the Government accordingly, as the Contracting Officer 
directs. Regardless of prior DOE approval of any individual payments 
or royalties, DOE may contest at any time the enforceability, 
validity, scope of, or title to, a patent or the proprietary nature 
of data pursuant to which DOE makes a royalty or other payment.
    (g) If at any time within 3 years after final payment under this 
contract, the Contractor for any reason is relieved in whole or in 
part from the payment of the royalties included in the final 
contract price as adjusted pursuant to paragraph (f) of this clause, 
the Contractor shall promptly notify the Contracting Office of that 
fact and shall promptly reimburse the Government in a corresponding 
amount.
    (h) The Contractor agrees to include, and require inclusion of, 
this clause, including this paragraph (h), suitably modified to

[[Page 68938]]

identify the parties in any subcontract at any tier in which the 
amount of royalties reported during negotiation of the subcontract 
exceeds $250.
(End of clause)

970.5204-100  Notice of right to request patent waiver.

    Insert the following provision in solicitations in accordance with 
970.2704-6:

Notice of Right To Request Patent Waiver (Nov. 2000)

    Offerors have the right to request a waiver of all or any part 
of the rights of the United States in inventions conceived or first 
actually reduced to practice in performance of the contract, in 
advance of or within 30 days after the effective date of 
contracting. If such advance waiver is not requested or the request 
is denied, the Contractor has a continuing right under the contract 
to request a waiver of the rights of the Government in identified 
inventions, i.e., individual inventions conceived or first actually 
reduced to practice in performance of the contract. Contractors that 
are domestic small businesses and domestic nonprofit organizations 
may not need a waiver and will have included in their contracts a 
patent clause reflecting their right to elect title to subject 
inventions pursuant to the Bayh-Dole Act (35 U.S.C. 200 et seq.).

(End of provision)


970.5204-101  Patent rights--management and operating contracts, 
nonprofit organization or small business firm contractor.

    As prescribed in 970.2703(c), insert the following clause:

Patent Rights--Management and Operating Contracts, Nonprofit 
Organization or Small Business Firm Contractor (Nov. 2000)

    (a) Definitions.
    (1) DOE licensing regulations means the Department of Energy 
patent licensing regulations at 10 CFR part 781.
    (2) Exceptional circumstance subject invention means any subject 
invention in a technical field or related to a task determined by 
the Department of Energy to be subject to an exceptional 
circumstance under 35 U.S.C. 202(a)(ii) and in accordance with 37 
CFR 401.3(e).
    (3) Invention means any invention or discovery which is or may 
be patentable or otherwise protectable under Title 35 of the United 
States Code, or any novel variety of plant which is or may be 
protected under the Plant Variety Protection Act (7 U.S.C. 2321 et 
seq.).
    (4) Made when used in relation to any invention means the 
conception or first actual reduction to practice of such invention.
    (5) Nonprofit organization means a university or other 
institution 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.
    (6) Patent Counsel means the Department of Energy (DOE) Patent 
Counsel assisting the DOE contracting activity.
    (7) 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 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.
    (8) Small business firm means a small business concern as 
defined at section 2 of Pub. L. 85-536 (15 U.S.C. 632) and 
implementing regulations of the Administrator of the Small Business 
Administration. For the purpose of this clause, the size standards 
for small business concerns involved in Government procurement and 
subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, 
are used.
    (9) Subject invention means any invention of the contractor 
conceived or first actually reduced to practice in the performance 
of work under this contract, provided that in the case of a variety 
of plant, the date of determination (as defined in section 41(d) of 
the Plant Variety Protection Act, 7 U.S.C. 2401(d)) shall also occur 
during the period of contract performance.
    (b) Allocation of principal rights. (1) Retention of title by 
the Contractor. Except for exceptional circumstance subject 
inventions, the contractor may retain the entire right, title, and 
interest throughout the world to each subject invention subject to 
the provisions of this clause 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) Exceptional circumstance subject inventions. Except to the 
extent that rights are retained by the Contractor in a determination 
of exceptional circumstances or granted to a contractor through a 
determination of greater rights in accordance with subparagraph 
(b)(4) of this clause, the Contractor does not have a right to 
retain title to any exceptional circumstance subject inventions and 
agrees to assign to the Government the entire right, title, and 
interest, throughout the world, in and to any exceptional 
circumstance subject inventions.
    (i) Inventions within or relating to the following fields of 
technology are exceptional circumstance subject inventions:
    (A) Uranium enrichment technology;
    (B) Storage and disposal of civilian high-level nuclear waste 
and spent fuel technology; and
    (C) National security technologies classified or sensitive under 
Section 148 of the Atomic Energy Act (42 U.S.C. 2168).
    (ii) Inventions made under any agreement, contract or 
subcontract related to the following are exceptional circumstance 
subject inventions:
    (A) DOE Steel Initiative and Metals Initiative;
    (B) U.S. Advanced Battery Consortium; and
    (C) Any funding agreement which is funded in part by the 
Electric Power Research Institute (EPRI) or the Gas Research 
Institute (GRI).
    (iii) DOE reserves the right to unilaterally amend this contract 
to modify, by deletion or insertion, technical fields, tasks, or 
other classifications for the purpose of determining DOE exceptional 
circumstance subject inventions.
    (3) Treaties and international agreements. Any rights acquired 
by the Contractor in subject inventions are subject to any 
disposition of right, title, or interest in or to subject inventions 
provided for in treaties or international agreements identified at 
Appendix [Insert Reference] to this contract. DOE reserves the right 
to unilaterally amend this contract to identify specific treaties or 
international agreements entered into or to be entered into by the 
Government after the effective date of this contract and to 
effectuate those license or other rights which are necessary for the 
Government to meet its obligations to foreign governments, their 
nationals and international organizations under such treaties or 
international agreements with respect to subject inventions made 
after the date of the amendment.
    (4) Contractor request for greater rights in exceptional 
circumstance subject inventions. The Contractor may request rights 
greater than allowed by the exceptional circumstance determination 
in an exceptional circumstance subject invention by submitting such 
a request in writing to Patent Counsel at the time the exceptional 
circumstance subject invention is disclosed to DOE or within eight 
(8) months after conception or first actual reduction to practice of 
the exceptional circumstance subject invention, whichever occurs 
first, unless a longer period is authorized in writing by the Patent 
Counsel for good cause shown in writing by the Contractor. DOE may, 
in its discretion, grant or refuse to grant such a request by the 
Contractor.
    (5) Contractor employee-inventor rights. If the Contractor does 
not elect to retain title to a subject invention or does not request 
greater rights in an exceptional circumstance subject invention, a 
Contractor employee-inventor, after consultation with the Contractor 
and with written authorization from the Contractor in accordance 
with 10 CFR 784.9(b)(4), may request greater rights, including 
title, in the subject invention or the exceptional circumstance 
invention from DOE, and DOE may, in its discretion, grant or refuse 
to grant such a request by the Contractor employee-inventor.
    (6) Government assignment of rights in Government employees' 
subject inventions. If a Government employee is a joint inventor of 
a subject invention or of an exceptional circumstance subject 
invention to which the Contractor has rights, the Government may 
assign or refuse to assign to the Contractor any rights in the 
subject invention or exceptional circumstance subject invention 
acquired by the Government from the Government employee, in 
accordance with 48 CFR 27.304-1(d). The rights assigned to

[[Page 68939]]

the Contractor are subject to any provision of this clause that is 
applicable to subject inventions in which the Contractor retains 
title, including reservation by the Government of a nonexclusive, 
nontransferable, irrevocable, paid-up license, except that the 
Contractor shall file its initial patent application claiming the 
subject invention or exceptional circumstance invention within one 
(1) year after the assignment of such rights. The Contractor shall 
share royalties collected for the manufacture, use or sale of the 
subject invention with the Government employee, as DOE deems 
appropriate.
    (c) Subject invention disclosure, election of title and filing 
of patent application by contractor. (1) Subject invention 
disclosure. The contractor will disclose each subject invention to 
the Patent Counsel within two months after the inventor discloses it 
in writing to contractor personnel responsible for patent matters. 
The disclosure to the agency shall be in the form of a written 
report and shall identify the contract under which the invention was 
made and the inventor(s) and all sources of funding by B&R code for 
the invention. It shall be sufficiently complete in technical detail 
to convey a clear understanding to the extent known at the time of 
the disclosure, of the nature, purpose, operation, and the physical, 
chemical, biological or electrical characteristics of the invention. 
The disclosure shall also identify any publication, on sale or 
public use of the invention and whether a manuscript describing the 
invention has been submitted for publication and, if so, whether it 
has been accepted for publication at the time of disclosure. The 
disclosure shall include a written statement as to whether the 
invention falls within an exceptional circumstance field. DOE will 
make a determination and advise the Contractor within 30 days of 
receipt of an invention disclosure as to whether the invention is an 
exceptional circumstance subject invention. In addition, after 
disclosure to the Patent Counsel, the Contractor will promptly 
notify the agency of the acceptance of any manuscript describing the 
invention for publication or of any on sale or public use planned by 
the contractor. The Contractor shall obtain approval from Patent 
Counsel prior to any release or publication of information 
concerning any nonelectable subject invention such as an exceptional 
circumstance subject invention or any subject invention related to a 
treaty or international agreement.
    (2) Election by the Contractor. Except as provided in paragraph 
(b)(2) of this clause, the Contractor will elect in writing whether 
or not to retain title to any such invention by notifying the 
Federal agency within two years of disclosure to the Federal agency. 
However, in any case where publication, on sale or public use has 
initiated the one year statutory period wherein valid patent 
protection can still be obtained in the United States, the period 
for election of title may be shortened by the agency to a date that 
is no more than 60 days prior to the end of the statutory period.
    (3) Filing of patent applications by the Contractor. The 
Contractor will file its initial patent application on a subject 
invention to which it elects to retain title within one year after 
election of title or, if earlier, or prior to the end of any 1-year 
statutory period wherein valid patent protection can be obtained in 
the United States after a publication, on sale, or public use. The 
Contractor will file patent applications in additional countries or 
international patent offices within either ten months of the 
corresponding initial patent application or six months from the date 
permission is granted by the Commissioner of Patents and Trademarks 
to file foreign patent applications where such filing has been 
prohibited by a Secrecy Order.
    (4) Contractor's request for an extension of time. Requests for 
an extension of the time for disclosure, election, and filing under 
subparagraphs (c)(1), (2) and (3) may, at the discretion of Patent 
Counsel, be granted.
    (5) Publication approval. During the course of the work under 
this contract, the Contractor or its employees may desire to release 
or publish information regarding scientific or technical 
developments conceived or first actually reduced to practice in the 
course of or under this contract. In order that public disclosure of 
such information will not adversely affect the patent interest of 
DOE or the Contractor, approval for release or publication shall be 
secured from the Contractor personnel responsible for patent matters 
prior to any such release or publication. Where DOE's approval of 
publication is requested, DOE's response to such requests for 
approval shall normally be provided within 90 days except in 
circumstances in which a domestic patent application must be filed 
in order to protect foreign rights. In the case involving foreign 
patent rights, DOE shall be granted an additional 180 days with 
which to respond to the request for approval, unless extended by 
mutual agreement.
    (d) Conditions when the Government may obtain title. The 
Contractor will convey to the DOE, upon written request, title to 
any subject invention--
    (1) If the Contractor fails to disclose or elect title to the 
subject invention within the times specified in paragraph (c) of 
this clause, or elects not to retain title; provided, that DOE may 
only request title within sixty (60) days after learning of the 
failure of the Contractor to disclose or to elect within the 
specified times .
    (2) In those countries in which the Contractor fails to file a 
patent application within the times specified in subparagraph (c) 
above; provided, however, that if the Contractor has filed a patent 
application in a country after the times specified in subparagraph 
(c) above, but prior to its receipt of the written request of the 
DOE, the Contractor shall continue to retain title in that country.
    (3) In any country in which the Contractor decides not to 
continue the prosecution of any application for, to pay the 
maintenance fees on, or defend in a reexamination or opposition 
proceeding on, a patent on a subject invention.
    (4) If the Contractor requests that DOE acquire title or rights 
from the Contractor in a subject invention to which the Contractor 
had initially retained title or rights, or in an exceptional 
circumstance subject invention to which the Contractor was granted 
greater rights, DOE may acquire such title or rights from the 
Contractor, or DOE may decide against acquiring such title or rights 
from the Contractor, at DOE's sole discretion.
    (e) Minimum rights of the Contractor and Protection of the 
Contractor's right to file. (1) Request for a Contractor license. 
The Contractor may request the right to reserve a revocable, 
nonexclusive, royalty-free license throughout the world in each 
subject invention to which the Government obtains title, except if 
the Contractor fails to disclose the invention within the times 
specified in paragraph (c) of this clause. DOE may grant or refuse 
to grant such a request by the Contractor. When DOE approves such 
reservation, the Contractor's license will normally extend to its 
domestic subsidiaries and affiliates, if any, within the corporate 
structure of which the Contractor is a party and includes the right 
to grant sublicenses of the same scope to the extent the Contractor 
was legally obligated to do so at the time the contract was awarded. 
The license is transferable only with the approval of DOE, except 
when transferred to the successor of that part of the contractor's 
business to which the invention pertains.
    (2) Revocation or modification of a Contractor license. The 
Contractor's domestic license may be revoked or modified by DOE to 
the extent necessary to achieve expeditious practical application of 
the subject invention pursuant to an application for an exclusive 
license submitted in accordance with applicable provisions at 37 CFR 
part 404 and DOE licensing regulations at 10 CFR part 781. This 
license will not be revoked in the field of use or the geographical 
areas in which the Contractor has achieved practical application and 
continues to make the benefits of the subject invention reasonably 
accessible to the public. The license in any foreign country may be 
revoked or modified at the discretion of DOE to the extent the 
Contractor, its licensees, or the domestic subsidiaries or 
affiliates have failed to achieve practical application of the 
subject invention in that foreign country.
    (3) Notice of revocation of modification of a Contractor 
license. Before revocation or modification of the license, DOE will 
furnish the Contractor a written notice of its intention to revoke 
or modify the license, and the Contractor will be allowed thirty 
days (or such other time as may be authorized by DOE for good cause 
shown by the Contractor) after the notice to show cause why the 
license should not be revoked or modified. The Contractor has the 
right to appeal, in accordance with applicable regulations in 37 CFR 
part 404 and DOE licensing regulations at 10 CFR part 781 concerning 
the licensing of Government owned inventions, any decision 
concerning the revocation or modification of the license.
    (f) Contractor action to protect the Government's interest.
    (1) Execution of delivery of title or license instruments. The 
Contractor agrees to execute or to have executed, and promptly 
deliver to the Patent Counsel all instruments necessary to 
accomplish the following actions:
    (i) Establish or confirm the rights the Government has 
throughout the world in

[[Page 68940]]

those subject inventions to which the Contractor elects to retain 
title, and
    (ii) Convey title to DOE when requested under subparagraphs (b) 
or paragraph (d) of this clause and to enable the Government to 
obtain patent protection throughout the world in that subject 
invention.
    (2) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical 
and nontechnical employees, to disclose promptly in writing to 
Contractor personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor, each subject invention made under this contract in order 
that the Contractor can comply with the disclosure provisions of 
paragraph (c) of this clause, and to execute all papers necessary to 
file patent applications on subject inventions and to establish the 
Government's rights in the subject inventions. This disclosure 
format should require, as a minimum, the information required by 
subparagraph (c)(1) of this clause. The Contractor shall instruct 
such employees, through employee agreements or other suitable 
educational programs, on the importance of reporting inventions in 
sufficient time to permit the filing of patent applications prior to 
U.S. or foreign statutory bars.
    (3) Notification of discontinuation of patent protection. The 
contractor will notify the Patent Counsel of any decision not to 
continue the prosecution of a patent application, pay maintenance 
fees, or defend in a reexamination or opposition proceeding on a 
patent, in any country, not less than thirty days before the 
expiration of the response period required by the relevant patent 
office.
    (4) Notification of Government rights. The contractor agrees to 
include, within the specification of any United States patent 
applications and any patent issuing thereon covering a subject 
invention, the following statement, ``This invention was made with 
government support under (identify the contract) awarded by 
(identify the Federal agency). The government has certain rights in 
the invention.''
    (5) Invention identification procedures. The Contractor shall 
establish and maintain active and effective procedures to ensure 
that subject inventions are promptly identified and timely disclosed 
and shall submit a written description of such procedures to the 
Contracting Officer so that the Contracting Officer may evaluate and 
determine their effectiveness.
    (6) Invention filing documentation. If the Contractor files a 
domestic or foreign patent application claiming a subject invention, 
the Contractor shall promptly submit to Patent Counsel, upon 
request, the following information and documents:
    (i) The filing date, serial number, title, and a copy of the 
patent application (including an English-language version if filed 
in a language other than English);
    (ii) An executed and approved instrument fully confirmatory of 
all Government rights in the subject invention; and
    (iii) The patent number, issue date, and a copy of any issued 
patent claiming the subject invention.
    (7) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or 
disclosure by the Government is subject to the confidentiality 
provision at 35 U.S.C. 205 and 37 CFR part 40.
    (g) Subcontracts. (1) Subcontractor subject inventions. The 
Contractor shall not obtain rights in the subcontractor's subject 
inventions as part of the consideration for awarding a subcontract.
    (2) Inclusion of patent rights clause--non-profit organization 
or small business firm subcontractors. Unless otherwise authorized 
or directed by the Contracting Officer, the Contractor shall include 
the patent rights clause at 48 CFR 952.227-11, suitably modified to 
identify the parties, in all subcontracts, at any tier, for 
experimental, developmental, demonstration or research work to be 
performed by a small business firm or domestic nonprofit 
organization, except subcontracts which are subject to exceptional 
circumstances in accordance with 35 U.S.C. 202 and subparagraph 
(b)(2) of this clause. The subcontractor retains all rights provided 
for the contractor in the patent rights clause at 48 CFR 952.227-11.
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations and small business firms. Except for the 
subcontracts described in subparagraph (g)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-
13, suitably modified to identify the parties, in any contract for 
experimental, developmental, demonstration or research work. For 
subcontracts subject to exceptional circumstances, the contractor 
must consult with DOE patent counsel with respect to the appropriate 
patent clause.
    (4) DOE and subcontractor contract. With respect to subcontracts 
at any tier, DOE, the subcontractor, and the Contractor agree that 
the mutual obligations of the parties created by this clause 
constitute a contract between the subcontractor and DOE with respect 
to the matters covered by the clause; provided, however, that 
nothing in this paragraph is intended to confer any jurisdiction 
under the Contract Disputes Act in connection with proceedings under 
paragraph (j) of this clause.
    (5) Subcontractor refusal to accept terms of patent clause. If a 
prospective subcontractor refuses to accept the terms of a patent 
rights clause, the Contractor shall promptly submit a written notice 
to the Contracting Officer stating the subcontractor's reasons for 
such a refusal, including any relevant information for expediting 
disposition of the matter, and the Contractor shall not proceed with 
the subcontract without the written authorization of the Contracting 
Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing 
and identify the subcontractor, the applicable patent rights clause, 
the work to be performed under the subcontract, and the dates of 
award and estimated completion. Upon request of the Contracting 
Officer, the Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention.
    (h) Reporting on utilization of subject inventions. The 
Contractor agrees to submit to DOE on request, periodic reports, no 
more frequently than annually, on the utilization of a subject 
invention or on efforts at obtaining such utilization that are being 
made by the Contractor or its licensees or assignees. Such reports 
shall include information regarding the status of development, date 
of first commercial sale or use, gross royalties received by the 
Contractor, and such other data and information as DOE may 
reasonably specify. The Contractor also agrees to provide additional 
reports as may be requested by DOE in connection with any march-in 
proceeding undertaken by DOE in accordance with paragraph (j) of 
this clause. As required by 35 U.S.C. 202(c)(5), DOE agrees it will 
not disclose such information to persons outside the Government 
without permission of the Contractor.
    (i) Preference for United States industry. Notwithstanding any 
other provision of this clause, the Contractor agrees that neither 
it nor any assignee will grant to any person the exclusive right to 
use or sell any subject invention in the United States unless such 
person agrees that any product embodying the subject invention or 
produced through the use of the subject invention will be 
manufactured substantially in the United States. However, in 
individual cases, the requirement for such an agreement may be 
waived by DOE upon a showing by the Contractor or its 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 commercially feasible.
    (j) March-in rights. The Contractor agrees that, with respect to 
any subject invention in which it has acquired title, DOE has the 
right in accordance with the procedures in 37 CFR 401.6 and any DOE 
supplemental regulations 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 a request, DOE has the right to 
grant such a license itself if DOE determines that--
    (1) Such 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;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or 
their licensees;

[[Page 68941]]

    (3) Such 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
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this clause 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 such agreement.
    (k) Special provisions for contracts with nonprofit 
organizations.
    If the Contractor is a nonprofit organization, it agrees that--
    (1) DOE approval of assignment of rights. Rights to a subject 
invention in the United States may not be assigned by the Contractor 
without the approval of DOE, except where such assignment is made to 
an organization which has as one of its primary functions the 
management of inventions; provided, that such assignee will be 
subject to the same provisions of this clause as the Contractor.
    (2) Small business firm licensees. It will make efforts that are 
reasonable under the circumstances to attract licensees of subject 
inventions that are small business firms, and that it will give a 
preference to a small business firm when licensing a subject 
invention if the Contractor determines that the small business firm 
has a plan or proposal for marketing the invention which, if 
executed, is equally as likely to bring the invention to practical 
application as any plans or proposals from applicants that are not 
small business firms; provided, that the Contractor is also 
satisfied that the small business firm has the capability and 
resources to carry out its plan or proposal. The decision whether to 
give a preference in any specific case will be at the discretion of 
the Contractor. However, the Contractor agrees that the Secretary of 
Commerce may review the Contractor's licensing program and decisions 
regarding small business firm applicants, and the Contractor will 
negotiate changes to its licensing policies, procedures, or 
practices with the Secretary of Commerce when that Secretary's 
review discloses that the Contractor could take reasonable steps to 
more effectively implement the requirements of this subparagraph 
(k)(2).
    (3) Contractor licensing of subject inventions. To the extent 
that it provides the most effective technology transfer, licensing 
of subject inventions shall be administered by Contractor employees 
on location at the facility.
    (l) Communications. The Contractor shall direct any 
notification, disclosure or request provided for in this clause to 
the Patent Counsel assisting the DOE contracting activity.
    (m) Reports. (1) Interim reports. Upon DOE's request, the 
Contractor shall submit to DOE, no more frequently than annually, a 
list of subject inventions disclosed to DOE during a specified 
period, or a statement that no subject inventions were made during 
the specified period; and a list of subcontracts containing a patent 
clause and awarded by the Contractor during a specified period, or a 
statement that no such subcontracts were awarded during the 
specified period.
    (2) Final reports. Upon DOE's request, the Contractor shall 
submit to DOE, prior to closeout of the contract, a list of all 
subject inventions disclosed during the performance period of the 
contract, or a statement that no subject inventions were made during 
the contract performance period; and a list of all subcontracts 
containing a patent clause and awarded by the Contractor during the 
contract performance period, or a statement that no such 
subcontracts were awarded during the contract performance period.
    (n) Examination of Records Relating to Subject Inventions. (1) 
Contractor compliance. Until the expiration of three (3) years after 
final payment under this contract, the Contracting Officer or any 
authorized representative may examine any books (including 
laboratory notebooks), records, documents, and other supporting data 
of the Contractor, which the Contracting Officer or authorized 
representative deems reasonably pertinent to the discovery or 
identification of subject inventions, including exceptional 
circumstance subject inventions, or to determine Contractor 
compliance with any requirement of this clause.
    (2) Unreported inventions. If the Contracting Officer is aware 
of an invention that is not disclosed by the Contractor to DOE, and 
the Contracting Officer believes the unreported invention may be a 
subject invention, including exceptional circumstance subject 
inventions, DOE may require the Contractor to submit to DOE a 
disclosure of the invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this 
paragraph is subject to appropriate conditions to protect the 
confidentiality of the information involved.
    (4) Power of inspection. With respect to a subject invention for 
which the Contractor has responsibility for patent prosecution, the 
Contractor shall furnish the Government, upon request by DOE, an 
irrevocable power to inspect and make copies of a prosecution file 
for any patent application claiming the subject invention.
    (o) Facilities License. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first 
actually reduced to practice in the course of or under this 
contract, the Contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up license in and to 
any inventions or discoveries regardless of when conceived or 
actually reduced to practice or acquired by the Contractor at any 
time through completion of this contract and which are incorporated 
or embodied in the construction of the facility or which are 
utilized in the operation of the facility or which cover articles, 
materials, or product manufactured at the facility (1) to practice 
or have practiced by or for the Government at the facility, and (2) 
to transfer such license with the transfer of that facility. 
Notwithstanding the acceptance or exercise by the Government of 
these rights, the Government may contest at any time the 
enforceability, validity or scope of, or title to, any rights or 
patents herein licensed.
    (p) Atomic Energy. (1) Pecuniary awards. No claim for pecuniary 
award of compensation under the provisions of the Atomic Energy Act 
of 1954, as amended, may be asserted with respect to any invention 
or discovery made or conceived in the course of or under this 
contract.
    (2) Patent agreements. Except as otherwise authorized in writing 
by the Contracting Officer, the Contractor shall obtain patent 
agreements to effectuate the provisions of subparagraph (p)(1) of 
this clause from all persons who perform any part of the work under 
this contract, except nontechnical personnel, such as clerical 
employees and manual laborers.
    (q) Classified Inventions. (1) Approval for filing a foreign 
patent application. The Contractor shall not file or cause to be 
filed an application or registration for a patent disclosing a 
subject invention related to classified subject matter in any 
country other than the United States without first obtaining the 
written approval of the Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance 
with this clause the Contractor files a patent application in the 
United States disclosing a subject invention that is classified for 
reasons of security, the Contractor shall observe all applicable 
security regulations covering the transmission of classified subject 
matter. If the Contractor transmits a patent application disclosing 
a classified subject invention to the United States Patent and 
Trademark Office (USPTO), the Contractor shall submit a separate 
letter to the USPTO identifying the contract or contracts by agency 
and agreement number that require security classification markings 
to be placed on the patent application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees 
to include the substance of this clause in subcontracts at any tier 
that cover or are likely to cover subject matter classified for 
reasons of security.
    (r) Patent Functions. Upon the written request of the 
Contracting Officer or Patent Counsel, the Contractor agrees to make 
reasonable efforts to support DOE in accomplishing patent-related 
functions for work arising out of the contract, including, but not 
limited to, the prosecution of patent applications, and the 
determination of questions of novelty, patentability, and 
inventorship.
    (s) Educational Awards Subject to 35 U.S.C. 212. The Contractor 
shall notify the Contracting Officer prior to the placement of any 
person subject to 35 U.S.C. 212 in an area of technology or task (1) 
related to exceptional circumstance technology or (2) which is 
subject to treaties or international agreements as set forth in 
paragraph (b)(3) of this clause or agreements other than funding 
agreements. The Contracting Officer may disapprove of any such 
placement.
    (t) Annual Appraisal by Patent Counsel. Patent Counsel may 
conduct an annual appraisal to evaluate the Contractor's 
effectiveness in identifying and protecting subject inventions in 
accordance with DOE policy.
(End of clause)

Alternate 1: Weapons Related Subject Inventions.

    As prescribed at 970.2704-(k), insert the following as 
subparagraphs (a)(10) and (b)(7), respectively:

[[Page 68942]]

    (a) Definitions.
    (10) Weapons related subject invention means any subject 
invention conceived or first actually reduced to practice in the 
course of or under work funded by or through defense programs, 
including Department of Defense and intelligence reimbursable work, 
or the Naval Nuclear Propulsion Program of the Department of Energy.
    (b) Allocation of Principal Rights.
    (7) Weapons related subject inventions. Except to the extent 
that DOE is solely satisfied that the Contractor meets certain 
procedural requirements and DOE grants rights to the Contractor in 
weapons related subject inventions, the Contractor does not have the 
right to retain title to any weapons related subject inventions.

(End of Alternate)


970.5204-102  Patent rights--management and operating contracts, for-
profit contractor, non-technology transfer.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2703(c):

Patent Rights--Management and Operating Contracts, For-Profit 
Contractor, Non-Technology Transfer (Nov 2000)

    (a) Definitions. (1) DOE licensing regulations means the 
Department of Energy patent licensing regulations at 10 CFR part 
781.
    (2) DOE patent waiver regulations means the Department of Energy 
patent waiver regulations at 10 CFR part 784.
    (3) Invention means any invention or discovery which is or may 
be patentable or otherwise protectable under title 35 of the United 
States Code, or any novel variety of plant which is or may be 
protected under the Plant Variety Protection Act (7 U.S.C. 2321, et 
seq.).
    (4) Made when used in relation to any invention means the 
conception or first actual reduction to practice of such invention.
    (5) Patent Counsel means DOE Patent Counsel assisting the 
contracting activity.
    (6) 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 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.
    (7) Subject Invention means any invention of the contractor 
conceived or first actually reduced to practice in the course of or 
under this contract, provided that in the case of a variety of 
plant, the date of determination (as defined in section 41(d) of the 
Plant Variety Protection Act, 7 U.S.C. 2401(d)) shall also occur 
during the period of contract performance.
    (b) Allocation of Principal Rights. (1) Assignment to the 
Government. Except to the extent that rights are retained by the 
Contractor by a determination of greater rights in accordance with 
subparagraph (b)(2) of this clause or by a request for foreign 
patent rights in accordance with subparagraph (d)(2) of this clause, 
the Contractor agrees to assign to the Government the entire right, 
title, and interest throughout the world in and to each subject 
invention.
    (2) Greater rights determinations. The Contractor, or an 
Contractor employee-inventor after consultation with the Contractor 
and with the written authorization of the Contractor in accordance 
with DOE patent waiver regulations, may request greater rights, 
including title, in an identified subject invention than the 
nonexclusive license and the foreign patent rights provided for in 
paragraph (d) of this clause, in accordance with the DOE patent 
waiver regulations. Such a request shall be submitted in writing to 
Patent Counsel with a copy to the Contracting Officer at the time 
the subject invention is first disclosed to DOE in accordance with 
subparagraph (c)(2) of this clause, or not later than eight (8) 
months after such disclosure, unless a longer period is authorized 
in writing by the Contracting Officer for good cause shown in 
writing by the Contractor. DOE may grant or refuse to grant such a 
request by the Contractor or Contractor employee-inventor. Unless 
otherwise provided in the greater rights determination, any rights 
in a subject invention obtained by the Contractor pursuant to a 
determination of greater rights are subject to a nonexclusive, 
nontransferable, irrevocable, paid-up license to the Government to 
practice or have practiced the subject invention throughout the 
world by or on behalf of the Government of the United States 
(including any Government agency), and to any reservations and 
conditions deemed appropriate by the Secretary of Energy or 
designee.
    (c) Subject Invention Disclosures. (1) Contractor procedures for 
reporting subject inventions to Contractor personnel. Subject 
inventions shall be reported to Contractor personnel responsible for 
patent matters within six (6) months of conception and/or first 
actual reduction to practice, whichever occurs first in the 
performance of work under this contract. Accordingly, the Contractor 
shall establish and maintain effective procedures for ensuring such 
prompt identification and timely disclosure of subject inventions to 
Contractor personnel responsible for patent matters, and the 
procedures shall include the maintenance of laboratory notebooks, or 
equivalent records, and other records that are reasonably necessary 
to document the conception and/or the first actual reduction to 
practice of subject inventions, and the maintenance of records 
demonstrating compliance with such procedures. The Contractor shall 
submit a written description of such procedures to the Contracting 
Officer, upon request, for evaluation of the effectiveness of such 
procedures by the Contracting Officer.
    (2) Subject invention disclosure. The Contractor shall disclose 
each subject invention to Patent Counsel with a copy to the 
Contracting Officer within two (2) months after the subject 
invention is reported to Contractor personnel responsible for patent 
matters, in accordance with subparagraph (c)(1) of this clause, or, 
if earlier, within six (6) months after the Contractor has knowledge 
of the subject invention, but in any event before any on sale, 
public use, or publication of the subject invention. The disclosure 
to DOE shall be in the form of a written report and shall include:
    (i) The contract number under which the subject invention was 
made;
    (ii) The inventor(s) of the subject invention;
    (iii) A description of the subject invention in sufficient 
technical detail to convey a clear understanding of the nature, 
purpose and operation of the subject invention, and of the physical, 
chemical, biological or electrical characteristics of the subject 
invention, to the extent known by the Contractor at the time of the 
disclosure;
    (iv) The date and identification of any publication, on sale or 
public use of the invention;
    (v) The date and identification of any submissions for 
publication of any manuscripts describing the invention, and a 
statement of whether the manuscript is accepted for publication, to 
the extent known by the Contractor at the time of the disclosure;
    (vi) A statement indicating whether the subject invention 
concerns exceptional circumstances pursuant to 35 U.S.C. 202(ii), 
related to national security, or subject to a treaty or an 
international agreement, to the extent known or believed by 
Contractor at the time of the disclosure;
    (vii) All sources of funding by Budget and Resources (B&R) code; 
and
    (viii) The identification of any agreement relating to the 
subject invention, including Cooperative Research and Development 
Agreements and Work-for-Others agreements.
    Unless the Contractor contends otherwise in writing at the time 
the invention is disclosed, inventions disclosed to DOE under this 
paragraph are deemed made in the manner specified in Sections (a)(1) 
and (a)(2) of 42 U.S.C. 5908.
    (3) Publication after disclosure. After disclosure of the 
subject invention to the DOE, the Contractor shall promptly notify 
Patent Counsel of the acceptance for publication of any manuscript 
describing the subject invention or of any expected or on sale or 
public use of the subject invention, known by the Contractor.
    (4) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical 
and nontechnical employees, to disclose promptly in writing to 
Contractor personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor, each subject invention made under this contract, and to 
execute all papers necessary to file patent applications claiming 
subject inventions or to establish the Government's rights in the 
subject inventions. This disclosure format shall at a minimum 
include the information required by subparagraph (c)(2) of this 
clause. The Contractor shall instruct such employees, through 
employee agreements or other suitable educational programs, on the 
importance of reporting inventions in sufficient time to permit the

[[Page 68943]]

filing of patent applications prior to U.S. or foreign statutory 
bars.
    (5) Contractor procedures for reporting subject inventions to 
DOE. The Contractor agrees to establish and maintain effective 
procedures for ensuring the prompt identification and timely 
disclosure of subject inventions to DOE. The Contractor shall submit 
a written description of such procedures to the Contracting Officer, 
upon request, for evaluation of the effectiveness of such procedures 
by the Contracting Officer.
    (6) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or 
disclosure by the Government is subject to 35 U.S.C. 205 and 37 CFR 
401.13.
    (d) Minimum rights of the Contractor. (1) Contractor License.
    (i) Request for a Contractor license. Except for subject 
inventions that the Contractor fails to disclose within the time 
periods specified at subparagraph (c)(2) of this clause, the 
Contractor may request a revocable, nonexclusive, royalty-free 
license in each patent application filed in any country claiming a 
subject invention and any resulting patent in which the Government 
obtains title, and DOE may grant or refuse to grant such a request 
by the Contractor. If DOE grants the Contractor's request for a 
license, the Contractor's license extends to its domestic 
subsidiaries and affiliates, if any, within the corporate structure 
of which the Contractor is a party and includes the right to grant 
sublicenses of the same scope to the extent the Contractor was 
legally obligated to do so at the time the contract was awarded.
    (ii) Transfer of a Contractor license. DOE shall approve any 
transfer of the Contractor's license in a subject invention, and DOE 
may determine the Contractor's license is non-transferrable, on a 
case-by-case basis.
    (iii) Revocation or modification of a Contractor license. DOE 
may revoke or modify the Contractor's domestic license to the extent 
necessary to achieve expeditious practical application of the 
subject invention pursuant to an application for an exclusive 
license submitted in accordance with applicable provisions in 37 CFR 
part 404 and DOE licensing regulations. DOE may not revoke the 
Contractor's domestic license in that field of use or the 
geographical areas in which the Contractor, its licensee, or its 
domestic subsidiaries or affiliates achieved practical applications 
and continues to make the benefits of the invention reasonably 
accessible to the public. DOE may revoke or modify the Contractor's 
license in any foreign country to the extent the Contractor, its 
licensees, or its domestic subsidiaries or affiliates failed to 
achieve practical application in that foreign country.
    (iv) Notice of revocation or modification of a Contractor 
license. Before revocation or modification of the license, DOE shall 
furnish the Contractor a written notice of its intention to revoke 
or modify the license, and the Contractor shall be allowed thirty 
(30) days from the date of the notice (or such other time as may be 
authorized by DOE for good cause shown by the Contractor) to show 
cause why the license should not be revoked or modified. The 
Contractor has the right to appeal any decision concerning the 
revocation or modification of its license, in accordance with 
applicable regulations in 37 CFR part 404 and DOE licensing 
regulations.
    (2) Contractor's right to request foreign patent rights. If the 
Government has title to a subject invention and the Government 
decides against securing patent rights in a foreign country for the 
subject invention, the Contractor may request such foreign patent 
rights from DOE, and DOE may grant the Contractor's request, subject 
to a nonexclusive, nontransferable, irrevocable, paid-up license to 
the Government to practice or have practiced the subject invention 
in the foreign country, and any reservations and conditions deemed 
appropriate by the Secretary of Energy or designee. Such a request 
shall be submitted in writing to the Patent Counsel as part of the 
disclosure required by subparagraph (c)(2) of this clause, with a 
copy to the DOE Contracting Officer, unless a longer period is 
authorized in writing by the Contracting Officer for good cause 
shown in writing by the Contractor. DOE may grant or refuse to grant 
such a request, and may consider whether granting the Contractor's 
request best serves the interests of the United States.
    (e) Examination of records relating to inventions. (1) 
Contractor compliance. Until the expiration of three (3) years after 
final payment under this contract, the Contracting Officer or any 
authorized representative may examine any books (including 
laboratory notebooks), records, and documents and other supporting 
data of the Contractor, which the Contracting Officer or authorized 
representative deems reasonably pertinent to the discovery or 
identification of subject inventions, or to determine Contractor 
(and inventor) compliance with the requirements of this clause, 
including proper identification and disclosure of subject 
inventions, and establishment and maintenance of invention 
disclosure procedures.
    (2) Unreported inventions. If the Contracting Officer is aware 
of an invention that is not disclosed by the Contractor to DOE, and 
the Contracting Officer believes the unreported invention may be a 
subject invention, DOE may require the Contractor to submit to DOE a 
disclosure of the invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this 
paragraph is subject to appropriate conditions to protect the 
confidentiality of the information involved.
    (f) Subcontracts. (1) Subcontractor subject inventions. The 
Contractor shall not obtain rights in the subcontractor's subject 
inventions as part of the consideration for awarding a subcontract.
    (2) Inclusion of patent rights clause--non-profit organization 
or small business firm subcontractors. Unless otherwise authorized 
or directed by the Contracting Officer, the Contractor shall include 
the patent rights clause at 48 CFR 952.227-11, suitably modified to 
identify the parties in all subcontracts, at any tier, for 
experimental, developmental, demonstration or research work to be 
performed by a small business firm or domestic nonprofit 
organization, except subcontracts which are subject to exceptional 
circumstances in accordance with 35 U.S.C. 202(a)(ii).
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations and small business firms. Except for the 
subcontracts described in subparagraph (f)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-
13, suitably modified to identify the parties, in any contract for 
experimental, developmental, demonstration or research work.
    (4) DOE and subcontractor contract. With respect to subcontracts 
at any tier, DOE, the subcontractor, and the Contractor agree that 
the mutual obligations of the parties created by this clause 
constitute a contract between the subcontractor and DOE with respect 
to those matters covered by this clause.
    (5) Subcontractor refusal to accept terms of patent rights 
clause. If a prospective subcontractor refuses to accept the terms 
of a patent rights clause, the Contractor shall promptly submit a 
written notice to the Contracting Officer stating the 
subcontractor's reasons for such a refusal, including any relevant 
information for expediting disposition of the matter, and the 
Contractor shall not proceed with the subcontract without the 
written authorization of the Contracting Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing 
and identify the subcontractor, the applicable patent rights clause, 
the work to be performed under the subcontract, and the dates of 
award and estimated completion. Upon request of the Contracting 
Officer, the Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention, 
with a copy of the notification and identification to the 
Contracting Officer.
    (g) Atomic Energy. (1) Pecuniary awards. No claim for pecuniary 
award of compensation under the provisions of the Atomic Energy Act 
of 1954, as amended, may be asserted with respect to any invention 
or discovery made or conceived in the course of or under this 
contract.
    (2) Patent agreements. Except as otherwise authorized in writing 
by the Contracting Officer, the Contractor shall obtain patent 
agreements to effectuate the provisions of subparagraph (g)(1) of 
this clause from all persons who perform any part of the work under 
this contract, except nontechnical personnel, such as clerical 
employees and manual laborers.
    (h) Publication. The Contractor shall receive approval from 
Patent Counsel prior to releasing or publishing information 
regarding scientific or technical developments conceived or first 
actually reduced to practice in the course of or under this 
contract, to ensure such release or publication does not adversely 
affect the patent interests of DOE or the Contractor.

[[Page 68944]]

    (i) Communications. The Contractor shall direct any 
notification, disclosure, or request provided for in this clause to 
the Patent Counsel assisting the DOE contracting activity, with a 
copy of the communication to the Contracting Officer.
    (j) Reports. (1) Interim reports. Upon DOE's request, the 
Contractor shall submit to DOE, no more frequently than annually, a 
list of subject inventions disclosed to DOE during a specified 
period, or a statement that no subject inventions were made during 
the specified period; and/or a list of subcontracts containing a 
patent clause and awarded by the Contractor during a specified 
period, or a statement that no such subcontracts were awarded during 
the specified period. The interim report shall state whether the 
Contractor's invention disclosures were submitted to DOE in 
accordance with the requirements of subparagraphs (c)(1) and (c)(5) 
of this clause.
    (2) Final reports. Upon DOE's request, the Contractor shall 
submit to DOE, prior to closeout of the contract or within three (3) 
months of the date of completion of the contracted work, a list of 
all subject inventions disclosed during the performance period of 
the contract, or a statement that no subject inventions were made 
during the contract performance period; and/or a list of all 
subcontracts containing a patent clause and awarded by the 
Contractor during the contract performance period, or a statement 
that no such subcontracts were awarded during the contract 
performance period.
    (k) Facilities license. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first 
actually reduced to practice in the course of or under this 
contract, the Contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up license in and to 
any inventions or discoveries regardless of when conceived or 
actually reduced to practice or acquired by the contractor at any 
time through completion of this contract and which are incorporated 
or embodied in the construction of the facility or which are 
utilized in the operation of the facility or which cover articles, 
materials, or products manufactured at the facility (1) to practice 
or have practiced by or for the Government at the facility, and (2) 
to transfer such license with the transfer of that facility. 
Notwithstanding the acceptance or exercise by the Government of 
these rights, the Government may contest at any time the 
enforceability, validity or scope of, or title to, any rights or 
patents herein licensed.
    (l) Classified inventions. (1) Approval for filing a foreign 
patent application. The Contractor shall not file or cause to be 
filed an application or registration for a patent disclosing a 
subject invention related to classified subject matter in any 
country other than the United States without first obtaining the 
written approval of the Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance 
with this clause the Contractor files a patent application in the 
United States disclosing a subject invention that is classified for 
reasons of security, the Contractor shall observe all applicable 
security regulations covering the transmission of classified subject 
matter. If the Contractor transmits a patent application disclosing 
a classified subject invention to the United States Patent and 
Trademark Office (USPTO), the Contractor shall submit a separate 
letter to the USPTO identifying the contract or contracts by agency 
and agreement number that require security classification markings 
to be placed on the patent application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees 
to include the substance of this clause in subcontracts at any tier 
that cover or are likely to cover subject matter classified for 
reasons of security.
    (m) Patent functions. Upon the written request of the 
Contracting Officer or Patent Counsel, the Contractor agrees to make 
reasonable efforts to support DOE in accomplishing patent-related 
functions for work arising out of the contract, including, but not 
limited to, the prosecution of patent applications, and the 
determination of questions of novelty, patentability, and 
inventorship.
    (n) Annual appraisal by Patent Counsel. Patent Counsel may 
conduct an annual appraisal to evaluate the Contractor's 
effectiveness in identifying and protecting subject inventions in 
accordance with DOE policy.

970.5204-103  Patent rights--management and operating contracts, for-
profit contractor, advance class waiver.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2703(c):

Patent Rights-Management and Operating Contracts, For-Profit 
Contractor, Advance Class Waiver (Nov. 2000)

    (a) Definitions. (1) DOE licensing regulations means the 
Department of Energy patent licensing regulations at 10 CFR part 
781.
    (2) DOE patent waiver regulations means the Department of Energy 
patent waiver regulations at 10 CFR part 784.
    (3) Exceptional Circumstance Subject Invention means any subject 
invention in a technical field or related to a task determined by 
the Department of Energy to be subject to an exceptional 
circumstance under 35 U.S.C. 202(a)(ii), and in accordance with 37 
CFR 401.3(e).
    (4) Invention means any invention or discovery which is or may 
be patentable or otherwise protectable under title 35 of the United 
States Code, or any novel variety of plant which is or may be 
protected under the Plant Variety Protection Act (7 U.S.C. 2321, et 
seq.).
    (5) Made when used in relation to any invention means the 
conception or first actual reduction to practice of such invention.
    (6) Patent Counsel means DOE Patent Counsel assisting the 
contracting activity.
    (7) 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 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.
    (8) Subject Invention means any invention of the contractor 
conceived or first actually reduced to practice in the course of or 
under this contract, provided that in the case of a variety of 
plant, the date of determination (as defined in section 41(d) of the 
Plant Variety Protection Act, 7 U.S.C. 2401(d)) shall also occur 
during the period of contract performance.
    (b) Allocation of Principal Rights. (1) Assignment to the 
Government. Except to the extent that rights are retained by the 
Contractor by the granting of an advance class waiver pursuant to 
subparagraph (b)(2) of this clause or a determination of greater 
rights pursuant to subparagraph (b)(7) of this clause, the 
Contractor agrees to assign to the Government the entire right, 
title, and interest throughout the world in and to each subject 
invention.
    (2) Advance class waiver of Government rights to the Contractor. 
DOE may grant to the Contractor an advance class waiver of 
Government rights in any or all subject inventions, at the time of 
execution of the contract, such that the Contractor may elect to 
retain the entire right, title and interest throughout the world to 
such waived subject inventions, in accordance with the terms and 
conditions of the advance class waiver. Unless otherwise provided by 
the terms of the advance class waiver, any rights in a subject 
invention retained by the Contractor under an advance class waiver 
are subject to 35 U.S.C. 203 and the provisions of this clause, 
including the Government license provided for in subparagraph (b)(3) 
of this clause, and any reservations and conditions deemed 
appropriate by the Secretary of Energy or designee.
    (3) Government license. With respect to any subject invention to 
which the Contractor retains title, either under an advance class 
waiver pursuant to subparagraph (b)(2) or a determination of greater 
rights pursuant to subparagraph (b)(7) of this clause, the 
Government has 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.
    (4) Foreign patent rights. If the Government has title to a 
subject invention and the Government decides against securing patent 
rights in a foreign country for the subject invention, the 
Contractor may request such foreign patent rights from DOE, and DOE 
may grant the Contractor's request, subject to 35 U.S.C. 203 and the 
provisions of this clause, including the Government license provided 
for in subparagraph (b)(3) of this clause, and any reservations and 
conditions deemed appropriate by the Secretary of Energy or 
designee.
    (5) Exceptional circumstance subject inventions. Except to the 
extent that rights are retained by the Contractor by a determination 
of greater rights in accordance with subparagraph (b)(7) of this 
clause, the Contractor does not have the right to retain title to 
any exceptional circumstance subject inventions and agrees to assign 
to the Government the entire right, title, and

[[Page 68945]]

interest, throughout the world, in and to any exceptional 
circumstance subject inventions.
    (i) Inventions within or relating to the following fields of 
technology are exceptional circumstance subject inventions:
    (A) Uranium enrichment technology;
    (B) Storage and disposal of civilian high-level nuclear waste 
and spent fuel technology; and
    (C) National security technologies classified or sensitive under 
Section 148 of the Atomic Energy Act (42 U.S.C. 2168).
    (ii) Inventions made under any agreement, contract or 
subcontract related to the following initiatives or programs are 
exceptional circumstance subject inventions:
    (A) DOE Steel Initiative and Metals Initiative;
    (B) U.S. Advanced Battery Consortium; and
    (C) Any funding agreement which is funded in part by the 
Electric Power Research Institute (EPRI) or the Gas Research 
Institute (GRI).
    (iii) DOE reserves the right to unilaterally amend this contract 
to modify, by deletion or insertion, technical fields, programs, 
initiatives, and/or other classifications for the purpose of 
defining DOE exceptional circumstance subject inventions.
    (6) Treaties and international agreements. Any rights acquired 
by the Contractor in subject inventions are subject to any 
disposition of right, title, or interest in or to subject inventions 
provided for in treaties or international agreements identified at 
Appendix [Insert Reference], to this contract. DOE reserves the 
right to unilaterally amend this contract to identify specific 
treaties or international agreements entered into or to be entered 
into by the Government after the effective date of this contract and 
to effectuate those license or other rights which are necessary for 
the Government to meet its obligations to foreign governments, their 
nationals and international organizations under such treaties or 
international agreements with respect to subject inventions made 
after the date of the amendment.
    (7) Contractor request for greater rights. The Contractor may 
request greater rights in an identified subject invention, including 
an exceptional circumstance subject invention, to which the 
Contractor does not have the right to elect to retain title, in 
accordance with the DOE patent waiver regulations, by submitting a 
such a request in writing to Patent Counsel with a copy to the 
Contracting Officer at the time the subject invention is first 
disclosed to DOE pursuant to subparagraph (c)(1) of this clause, or 
not later than eight (8) months after such disclosure, unless a 
longer period is authorized in writing by the Contracting Officer 
for good cause shown in writing by the Contractor. DOE may grant or 
refuse to grant such a request by the Contractor. Unless otherwise 
provided in the greater rights determination, any rights in a 
subject invention obtained by the Contractor under a determination 
of greater rights is subject to 35 U.S.C. 203 and the provisions of 
this clause, including the Government license provided for in 
subparagraph (b)(3) of this clause, and to any reservations and 
conditions deemed appropriate by the Secretary of Energy or 
designee.
    (8) Contractor employee-inventor rights. If the Contractor does 
not elect to retain title to a subject invention or does not request 
greater rights in a subject invention, including an exceptional 
circumstance subject invention, to which the Contractor does not 
have the right to elect to retain title, a Contractor employee-
inventor, after consultation with the Contractor and with written 
authorization from the Contractor in accordance with 10 CFR 
784.9(b)(4), may request greater rights, including title, in the 
subject invention or the exceptional circumstance invention from 
DOE, and DOE may grant or refuse to grant such a request by the 
Contractor employee-inventor.
    (9) Government assignment of rights in Government employees' 
subject inventions. If a DOE employee is a joint inventor of a 
subject invention to which the Contractor has rights, DOE may assign 
or refuse to assign any rights in the subject invention acquired by 
the Government from the DOE employee to the Contractor, consistent 
with 48 CFR 27.304-1(d). Unless otherwise provided in the 
assignment, the rights assigned to the Contractor are subject to the 
Government license provided for in subparagraph (b)(3) of this 
clause, and to any provision of this clause applicable to subject 
inventions in which rights are retained by the Contractor, and to 
any reservations and conditions deemed appropriate by the Secretary 
of Energy or designee. The Contractor shall share royalties 
collected for the manufacture, use or sale of the subject invention 
with the DOE employee, as DOE deems appropriate.
    (c) Subject invention disclosure, election of title, and filing 
of patent application by contractor. (1) Subject invention 
disclosure. The Contractor shall disclose each subject invention to 
Patent Counsel with a copy to the Contracting Officer within two (2) 
months after an inventor discloses it in writing to Contractor 
personnel responsible for patent matters or, if earlier, within six 
(6) months after the Contractor has knowledge of the subject 
invention, but in any event before any on sale, public use, or 
publication of the subject invention. The disclosure to DOE shall be 
in the form of a written report and shall include:
    (i) The contract number under which the subject invention was 
made;
    (ii) The inventor(s) of the subject invention;
    (iii) A description of the subject invention in sufficient 
technical detail to convey a clear understanding of the nature, 
purpose and operation of the subject invention, and of the physical, 
chemical, biological or electrical characteristics of the subject 
invention, to the extent known by the Contractor at the time of the 
disclosure;
    (iv) The date and identification of any publication, on sale or 
public use of the invention;
    (v) The date and identification of any submissions for 
publication of any manuscripts describing the invention, and a 
statement of whether the manuscript is accepted for publication, to 
the extent known by the Contractor at the time of the disclosure;
    (vi) A statement indicating whether the subject invention is an 
exceptional circumstance subject invention, related to national 
security, or subject to a treaty or an international agreement, to 
the extent known or believed by Contractor at the time of the 
disclosure;
    (vii) All sources of funding by Budget and Resources (B&R) code; 
and
    (viii) The identification of any agreement relating to the 
subject invention, including Cooperative Research and Development 
Agreements and Work-for-Others agreements.
    Unless the Contractor contends otherwise in writing at the time 
the invention is disclosed, inventions disclosed to DOE under this 
paragraph are deemed made in the manner specified in sections (a)(1) 
and (a)(2) of 42 U.S.C. 5908.
    (2) Publication after disclosure. After disclosure of the 
subject invention to the DOE, the Contractor shall promptly notify 
Patent Counsel of the acceptance for publication of any manuscript 
describing the subject invention or of any expected or on sale or 
public use of the subject invention, known by the Contractor. The 
Contractor shall obtain approval from Patent Counsel prior to any 
release or publication of information concerning an exceptional 
circumstance subject invention or any subject invention related to a 
treaty or international agreement.
    (3) Election by the Contractor under an advance class waiver. If 
the Contractor has the right to elect to retain title to subject 
inventions under an advance class waiver granted in accordance with 
subparagraph (b)(2) of this clause, and unless otherwise provided 
for by the terms of the advance class waiver, the Contractor shall 
elect in writing whether or not to retain title to any subject 
invention by notifying DOE within two (2) years of the date of the 
disclosure of the subject invention to DOE, in accordance with 
subparagraph (c)(1) of this clause. The notification shall identify 
the advance class waiver, state the countries, including the United 
States, in which rights are retained, and certify that the subject 
invention is not an exceptional circumstance subject invention or 
subject to a treaty or international agreement. If a publication, on 
sale or public use of the subject invention has initiated the 1-year 
statutory period under 35 U.S.C. 102(b), the period for election may 
be shortened by DOE to a date that is no more than sixty (60) days 
prior to the end of the 1-year statutory period.
    (4) Filing of patent applications by the Contractor under an 
advance class waiver. If the Contractor has the right to retain 
title to a subject invention in accordance with an advance class 
waiver pursuant to subparagraph (b)(2) of this clause or a 
determination of greater rights pursuant to paragraph (b)(7) of this 
clause, and unless otherwise provided for by the terms of the 
advance class waiver or greater rights determination, the Contractor 
shall file an initial patent application claiming the subject 
invention to which it retains title either within one (1) year after 
the Contractor's election to retain or grant of title to the subject 
invention or prior to the end of any 1-year statutory period under 
35 U.S.C. 102(b), whichever occurs first. Any patent applications 
filed by the Contractor in foreign

[[Page 68946]]

countries or international patent offices shall be filed within 
either ten (10) months of the corresponding initial patent 
application or, if such filing has been prohibited by a Secrecy 
Order, within six (6) months from the date permission is granted by 
the Commissioner of Patents and Trademarks to file foreign patent 
applications.
    (5) Submission of patent information and documents. If the 
Contractor files a domestic or foreign patent application claiming a 
subject invention, the Contractor shall promptly submit to Patent 
Counsel the following information and documents:
    (i) The filing date, serial number, title, and a copy of the 
patent application (including an English-language version if filed 
in a language other than English);
    (ii) An executed and approved instrument fully confirmatory of 
all Government rights in the subject invention; and
    (iii) The patent number, issue date, and a copy of any issued 
patent claiming the subject invention.
    (6) Contractor's request for an extension of time. Requests for 
an extension of the time to disclose a subject invention, to elect 
to retain title to a subject invention, or to file a patent 
application under subparagraphs (c)(1), (3), and (4) of this clause 
may be granted at the discretion of Patent Counsel or DOE.
    (7) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or 
disclosure by the Government is subject to 35 U.S.C. 205 and 37 CFR 
part 40.
    (d) Conditions when the Government may obtain title 
notwithstanding an advance class waiver. (1) Return of title to a 
subject invention. If the Contractor requests that DOE acquire title 
or rights from the Contractor in a subject invention, including an 
exceptional circumstance subject invention, to which the Contractor 
retained title or rights under subparagraph (b)(2) or subparagraph 
(b)(7) of this clause, DOE may acquire such title or rights from the 
Contractor, or DOE may decide against acquiring such title or rights 
from the Contractor, at DOE's sole discretion.
    (2) Failure to disclose or elect to retain title. Title vests in 
DOE and DOE may request, in writing, a formal assignment of title to 
a subject invention from the Contractor, and the Contractor shall 
convey title to the subject invention to DOE, if the Contractor 
elects not to retain title to the subject invention under an advance 
class waiver, or the Contractor fails to disclose or fails to elect 
to retain title to the subject invention within the times specified 
in subparagraphs (c)(1) and (c)(3) of this clause.
    (3) Failure to file domestic or foreign patent applications. In 
those countries in which the Contractor fails to file a patent 
application within the times specified in subparagraph (c)(4) of 
this clause, DOE may request, in writing, title to the subject 
invention from the Contractor, and the Contractor shall convey title 
to the subject invention to DOE; provided, however, that if the 
Contractor has filed a patent application in any country after the 
times specified in subparagraph (c)(4) of this clause, but prior to 
its receipt of DOE's written request for title, the Contractor 
continues to retain title in that country.
    (4) Discontinuation of patent protection by the Contractor. If 
the Contractor decides to discontinue the prosecution of a patent 
application, the payment of maintenance fees, or the defense of a 
subject invention in a reexamination or opposition proceeding, in 
any country, DOE may request, in writing, title to the subject 
invention from the Contractor, and the Contractor shall convey title 
to the subject invention to DOE.
    (5) Termination of advance class waiver. DOE may request, in 
writing, title to any subject inventions from the Contractor, and 
the Contractor shall convey title to the subject inventions to DOE, 
if the advance class waiver granted under subparagraph (b)(2) of 
this clause is terminated under paragraph (u) of this clause.
    (e) Minimum rights of the Contractor. (1) Request for a 
Contractor license. Except for subject inventions that the 
Contractor fails to disclose within the time periods specified at 
subparagraph (c)(1) of this clause, the Contractor may request a 
revocable, nonexclusive, royalty-free license in each patent 
application filed in any country claiming a subject invention and 
any resulting patent in which the Government obtains title, and DOE 
may grant or refuse to grant such a request by the Contractor. If 
DOE grants the Contractor's request for a license, the Contractor's 
license extends to its domestic subsidiaries and affiliates, if any, 
within the corporate structure of which the Contractor is a party 
and includes the right to grant sublicenses of the same scope to the 
extent the Contractor was legally obligated to do so at the time the 
contract was awarded.
    (2) Transfer of a Contractor license. DOE shall approve any 
transfer of the Contractor's license in a subject invention, and DOE 
may determine that the Contractor's license is non-transferrable, on 
a case-by-case basis.
    (3) Revocation or modification of a Contractor license. DOE may 
revoke or modify the Contractor's domestic license to the extent 
necessary to achieve expeditious practical application of the 
subject invention pursuant to an application for an exclusive 
license submitted in accordance with applicable provisions in 37 CFR 
part 404 and DOE licensing regulations. DOE may not revoke the 
Contractor's domestic license in that field of use or the 
geographical areas in which the Contractor, its licensees or its 
domestic subsidiaries or affiliates have achieved practical 
applications and continues to make the benefits of the invention 
reasonably accessible to the public. DOE may revoke or modify the 
Contractor's license in any foreign country to the extent the 
Contractor, its licensees, or its domestic subsidiaries or 
affiliates failed to achieve practical application in that foreign 
country.
    (4) Notice of revocation or modification of a Contractor 
license. Before revocation or modification of the license, DOE shall 
furnish the Contractor a written notice of its intention to revoke 
or modify the license, and the Contractor shall be allowed thirty 
(30) days from the date of the notice (or such other time as may be 
authorized by DOE for good cause shown by the Contractor) to show 
cause why the license should not be revoked or modified. The 
Contractor has the right to appeal any decision concerning the 
revocation or modification of its license, in accordance with 
applicable regulations in 37 CFR part 404 and DOE licensing 
regulations.
    (f) Contractor action to protect the Government's interest. (1) 
Execution and delivery of title or license instruments. The 
Contractor agrees to execute or have executed, and to deliver 
promptly to DOE all instruments necessary to accomplish the 
following actions:
    (i) Establish or confirm the Government's rights throughout the 
world in subject inventions to which the Contractor elects to retain 
title;
    (ii) Convey title in a subject invention to DOE pursuant to 
subparagraph (b)(5) and paragraph (d) of this clause; or
    (iii) Enable the Government to obtain patent protection 
throughout the world in a subject invention to which the Government 
has title.
    (2) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical 
and nontechnical employees, to disclose promptly in writing to 
Contractor personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor, each subject invention made under this contract, and to 
execute all papers necessary to file patent applications claiming 
subject inventions or to establish the Government's rights in the 
subject inventions. This disclosure format shall at a minimum 
include the information required by subparagraph (c)(1) of this 
clause. The Contractor shall instruct such employees, through 
employee agreements or other suitable educational programs, on the 
importance of reporting inventions in sufficient time to permit the 
filing of patent applications prior to U.S. or foreign statutory 
bars.
    (3) Contractor procedures for reporting subject inventions to 
DOE. The Contractor agrees to establish and maintain effective 
procedures for ensuring the prompt identification and timely 
disclosure of subject inventions to DOE. The Contractor shall submit 
a written description of such procedures to the Contracting Officer, 
upon request, for evaluation and approval of the effectiveness of 
such procedures by the Contracting Officer.
    (4) Notification of discontinuation of patent protection. With 
respect to any subject invention for which the Contractor has 
responsibility for patent prosecution, the Contractor shall notify 
Patent Counsel of any decision to discontinue the prosecution of a 
patent application, payment of maintenance fees, or defense of a 
subject invention in a reexamination or opposition proceeding, in 
any country, not less than thirty (30) days before the expiration of 
the response period for any action required by the corresponding 
patent office.
    (5) Notification of Government rights. With respect to any 
subject invention to which the Contractor has title, the Contractor 
agrees to include, within the specification of any

[[Page 68947]]

United States patent application and within any patent issuing 
thereon claiming a subject invention, the following statement, 
``This invention was made with Government support under (identify 
the contract) awarded by the United States Department of Energy. The 
Government has certain rights in the invention.''
    (6) Avoidance of royalty charges. If the Contractor licenses a 
subject invention, the Contractor agrees to avoid royalty charges on 
acquisitions involving Government funds, including funds derived 
through a Military Assistance Program of the Government or otherwise 
derived through the Government, to refund any amounts received as 
royalty charges on a subject invention in acquisitions for, or on 
behalf of, the Government, and to provide for such refund in any 
instrument transferring rights in the subject invention to any 
party.
    (7) DOE approval of assignment of rights. Rights in a subject 
invention in the United States may not be assigned by the Contractor 
without the approval of DOE.
    (8) Small business firm licensees. The Contractor shall make 
efforts that are reasonable under the circumstances to attract 
licensees of subject inventions that are small business firms, and 
may give a preference to a small business firm when licensing a 
subject invention if the Contractor determines that the small 
business firm has a plan or proposal for marketing the invention 
which, if executed, is equally as likely to bring the invention to 
practical application as any plans or proposals from applicants that 
are not small business firms; provided, the Contractor is also 
satisfied that the small business firm has the capability and 
resources to carry out its plan or proposal. The decision as to 
whether to give a preference in any specific case is at the 
discretion of the Contractor.
    (9) Contractor licensing of subject inventions. To the extent 
that it provides the most effective technology transfer, licensing 
of subject inventions shall be administered by Contractor employees 
on location at the facility.
    (g) Subcontracts. (1) Subcontractor subject inventions. The 
Contractor shall not obtain rights in the subcontractor's subject 
inventions as part of the consideration for awarding a subcontract.
    (2) Inclusion of patent rights clause--non-profit organization 
or small business firm subcontractors. Unless otherwise authorized 
or directed by the Contracting Officer, the Contractor shall include 
the patent rights clause at 48 CFR 952.227-11, suitably modified to 
identify the parties, in all subcontracts, at any tier, for 
experimental, developmental, demonstration or research work to be 
performed by a small business firm or domestic nonprofit 
organization, except subcontracts which are subject to exceptional 
circumstances in accordance with 35 U.S.C. 202 and subparagraph 
(b)(5) of this clause.
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations or small business firms. Except for the 
subcontracts described in subparagraph (g)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-
13, suitably modified to identify the parties and any applicable 
exceptional circumstance, in any contract for experimental, 
developmental, demonstration or research work.
    (4) DOE and subcontractor contract. With respect to subcontracts 
at any tier, DOE, the subcontractor and Contractor agree that the 
mutual obligations of the parties created by this clause constitute 
a contract between the subcontractor and DOE with respect to those 
matters covered by this clause; provided, however, that nothing in 
this paragraph is intended to confer any jurisdiction under the 
Contract Disputes Act in connection with proceedings under paragraph 
(j) of this clause.
    (5) Subcontractor refusal to accept terms of patent rights 
clause. If a prospective subcontractor refuses to accept the terms 
of a patent rights clause, the Contractor shall promptly submit a 
written notice to the Contracting Officer stating the 
subcontractor's reasons for such refusal and including relevant 
information for expediting disposition of the matter; and the 
Contractor shall not proceed with the subcontract without the 
written authorization of the Contracting Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing 
and identify the subcontractor, the applicable patent rights clause, 
the work to be performed under the subcontract, and the dates of 
award and estimated completion. Upon request of the Contracting 
Officer, the Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention, 
with a copy of the notification and identification to the 
Contracting Officer.
    (h) Reporting on utilization of subject inventions. Upon request 
by DOE, the Contractor agrees to submit periodic reports, no more 
frequently than annually, describing the utilization of a subject 
invention or efforts made by the Contractor or its licensees or 
assignees to obtain utilization of the subject invention. The 
reports shall include information regarding the status of 
development, date of first commercial sale or use, gross royalties 
received by the Contractor, and other data and information 
reasonably specified by DOE. Upon request by DOE, the Contractor 
also agrees to provide reports in connection with any march-in 
proceedings undertaken by DOE, in accordance with paragraph (j) of 
this clause. If any data or information reported by the Contractor 
in accordance with this provision is considered privileged and 
confidential by the Contractor, its licensee, or assignee and the 
Contractor properly marks the data or information privileged or 
confidential, DOE agrees not to disclose such information to persons 
outside the Government, to the extent permitted by law.
    (i) Preference for United States industry. Notwithstanding any 
other provision of this clause the Contractor agrees that with 
respect to any subject invention in which it retains title, neither 
it nor any assignee may 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 
manufactured substantially in the United States. However, in 
individual cases, DOE may waive the requirement for such an 
agreement upon a showing by the Contractor or its 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 commercially feasible.
    (j) March-in rights. With respect to any subject invention to 
which the Contractor has elected to retain or is granted title, DOE 
may, in accordance with the procedures in the DOE patent waiver 
regulations, 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. If the Contractor, assignee or exclusive licensee 
refuses such a request, DOE has the right to grant such a license 
itself if DOE determines that--
    (1) Such 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;
    (2) Such action is necessary to alleviate health or safety needs 
that are not reasonably satisfied by the Contractor, assignee, or 
their licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by government regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (4) Such action is necessary because the agreement to 
substantially manufacture in the United States and required by 
paragraph (i) of this clause has neither been obtained nor waived or 
because a licensee of the exclusive right to use or sell any subject 
invention in the United States is in breach of such agreement.
    (k) Communications. The Contractor shall direct any 
notification, disclosure, or request provided for in this clause to 
the Patent Counsel identified in the contract .
    (l) Reports. (1) Interim reports. Upon DOE's request, the 
Contractor shall submit to DOE, no more frequently than annually, a 
list of subject inventions disclosed to DOE during a specified 
period, or a statement that no subject inventions were made during 
the specified period; and/or a list of subcontracts containing a 
patent clause and awarded by the Contractor during a specified 
period, or a statement that no such subcontracts were awarded during 
the specified period. The interim report shall state whether the 
Contractor's invention disclosures were submitted to DOE in 
accordance with the requirements of subparagraphs (f)(3) and (f)(4) 
of this clause.

[[Page 68948]]

    (2) Final reports. Upon DOE's request, the Contractor shall 
submit to DOE, prior to closeout of the contract or within three (3) 
months of the date of completion of the contracted work, a list of 
all subject inventions disclosed during the performance period of 
the contract, or a statement that no subject inventions were made 
during the contract performance period; and/or a list of all 
subcontracts containing a patent clause and awarded by the 
Contractor during the contract performance period, or a statement 
that no such subcontracts were awarded during the contract 
performance period.
    (m) Facilities license. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first 
actually reduced to practice in the course of or under this 
contract, the Contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up license in and to 
any inventions or discoveries regardless of when conceived or 
actually reduced to practice or acquired by the contractor at any 
time through completion of this contract and which are incorporated 
or embodied in the construction of the facility or which are 
utilized in the operation of the facility or which cover articles, 
materials, or products manufactured at the facility (1) to practice 
or have practiced by or for the Government at the facility, and (2) 
to transfer such license with the transfer of that facility. 
Notwithstanding the acceptance or exercise by the Government of 
these rights, the Government may contest at any time the 
enforceability, validity or scope of, or title to, any rights or 
patents herein licensed.
    (n) Atomic energy. (1) Pecuniary awards. No claim for pecuniary 
award of compensation under the provisions of the Atomic Energy Act 
of 1954, as amended, may be asserted with respect to any invention 
or discovery made or conceived in the course of or under this 
contract.
    (2) Patent agreements. Except as otherwise authorized in writing 
by the Contracting Officer, the Contractor shall obtain patent 
agreements to effectuate the provisions of subparagraph (o)(1) of 
this clause from all persons who perform any part of the work under 
this contract, except nontechnical personnel, such as clerical 
employees and manual laborers.
    (o) Classified inventions. (1) Approval for filing a foreign 
patent application. The Contractor shall not file or cause to be 
filed an application or registration for a patent disclosing a 
subject invention related to classified subject matter in any 
country other than the United States without first obtaining the 
written approval of the Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance 
with this clause the Contractor files a patent application in the 
United States disclosing a subject invention that is classified for 
reasons of security, the Contractor shall observe all applicable 
security regulations covering the transmission of classified subject 
matter. If the Contractor transmits a patent application disclosing 
a classified subject invention to the United States Patent and 
Trademark Office (USPTO), the Contractor shall submit a separate 
letter to the USPTO identifying the contract or contracts by agency 
and agreement number that require security classification markings 
to be placed on the patent application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees 
to include the substance of this clause in subcontracts at any tier 
that cover or are likely to cover subject matter classified for 
reasons of security.
    (p) Examination of records relating to inventions. (1) 
Contractor compliance. Until the expiration of three (3) years after 
final payment under this contract, the Contracting Officer or any 
authorized representative may examine any books (including 
laboratory notebooks), records, and documents and other supporting 
data of the Contractor, which the Contracting Officer or authorized 
representative deems reasonably pertinent to the discovery or 
identification of subject inventions, including exceptional 
circumstance subject inventions, or to determine Contractor (and 
inventor) compliance with the requirements of this clause, including 
proper identification and disclosure of subject inventions, and 
establishment and maintenance of invention disclosure procedures.
    (2) Unreported inventions. If the Contracting Officer is aware 
of an invention that is not disclosed by the Contractor to DOE, and 
the Contracting Officer believes the unreported invention may be a 
subject invention, DOE may require the Contractor to submit to DOE a 
disclosure of the invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this 
paragraph is subject to appropriate conditions to protect the 
confidentiality of the information involved.
    (4) Power of inspection. With respect to a subject invention for 
which the Contractor has responsibility for patent prosecution, the 
Contractor shall furnish the Government, upon request by DOE, an 
irrevocable power to inspect and make copies of a prosecution file 
for any patent application claiming the subject invention.
    (q) Patent functions. Upon the written request of the 
Contracting Officer or Patent Counsel, the Contractor agrees to make 
reasonable efforts to support DOE in accomplishing patent-related 
functions for work arising out of the contract, including, but not 
limited to, the prosecution of patent applications, and the 
determination of questions of novelty, patentability, and 
inventorship.
    (r) Educational awards subject to 35 U.S.C. 212. The Contractor 
shall notify the Contracting Officer prior to the placement of any 
person subject to 35 U.S.C. 212 in an area of technology or task (1) 
related to exceptional circumstance technology or (2) any person who 
is subject to treaties or international agreements as set forth in 
paragraph (b)(6) of this clause or to agreements other than funding 
agreements. The Contracting Officer may disapprove of any such 
placement.
    (s) Annual appraisal by Patent Counsel. Patent Counsel may 
conduct an annual appraisal to evaluate the Contractor's 
effectiveness in identifying and protecting subject inventions in 
accordance with DOE policy.
    (t) Publication. The Contractor shall receive approval from 
Patent Counsel prior to releasing or publishing information 
regarding scientific or technical developments conceived or first 
actually reduced to practice in the course of or under this 
contract, to ensure such release or publication does not adversely 
affect the patent rights of DOE or the Contractor.
    (u) Termination of Contractor's advance class waiver. If a 
request by the Contractor for an advance class waiver pursuant to 
subparagraph (b)(2) of this clause or a determination of greater 
rights pursuant to paragraph (c) of this clause contains false 
material statements or fails to disclose material facts, and DOE 
relies on the false statements or omissions in granting the 
Contractor's request, the waiver or grant of any Government rights 
(in whole or in part) to the subject invention(s) may be terminated 
at the discretion of the Secretary of Energy or designee. Prior to 
termination, DOE shall provide the Contractor with written 
notification of the termination, including a statement of facts in 
support of the termination, and the Contractor shall be allowed 
thirty (30) days, or a longer period authorized by the Secretary of 
Energy or designee for good cause shown in writing by the 
Contractor, to show cause for not terminating the waiver or grant. 
Any termination of an advance class waiver or a determination of 
greater rights is subject to the Contractor's license as provided 
for in paragraph (f) of this clause.

(End of Clause)

Alternate 1--Weapons Related Subject Inventions

    As prescribed at 970.2704-(k), insert the following as 
subparagraphs (a)(10) and (b)(8), respectively:
    (a) Definitions.
    (10) Weapons Related Subject Invention means any subject 
invention conceived or first actually reduced to practice in the 
course of or under work funded by or through defense programs , 
including Department of Defense and intelligence reimbursable work, 
or the Naval Nuclear Propulsion Program of the Department of Energy.
    (b) Allocation of Principal Rights.
    (10) Weapons related subject inventions. Except to the extent 
that DOE is solely satisfied that the Contractor meets certain 
procedural requirements and DOE grants rights to the Contractor in 
weapons related subject inventions, the Contractor does not have a 
right to retain title to any weapons related subject inventions.

(End of Alternate)

[FR Doc. 00-28629 Filed 11-14-00; 8:45 am]
BILLING CODE 6450-01-P