[Federal Register Volume 67, Number 143 (Thursday, July 25, 2002)]
[Rules and Regulations]
[Pages 48568-48571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18825]
[[Page 48568]]
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DEPARTMENT OF ENERGY
48 CFR Part 970
RIN 1991-AB55
Acquisition Regulations: Revision of Patent Regulations Relating
to Department of Energy Management and Operating Contracts
AGENCY: Department of Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy is adopting, with changes, as a final
rule the interim final rule published on November 15, 2000, which
amended the Department of Energy Acquisition Regulation (DEAR) to
improve the patent coverage relating to the Department's management and
operating contracts. The final rule generally reflects the contract
clauses used by the Department in management and operating contracts
over the last 5 years. The changes adapt patent-related clauses to
subcontracting under management and operating contracts, restate the
clauses in plain language, and provide a complete set of patent clauses
for a variety of management and operating contracts.
DATES: This final rule is effective August 26, 2002.
FOR FURTHER INFORMATION CONTACT: Robert M. Webb at (202) 586-8264
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Changes
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
J. Approval by the Office of the Secretary of Energy
I. Background
On November 15, 2000, at 65 FR 68932, the Department of Energy (DOE
or Department) published an interim final rule containing amendments to
the patent regulations covering its management and operating contracts.
In response to the notice of interim final rulemaking, DOE received
only one comment. That comment took no exception to the interim final
rule and opined that the rule had achieved its intended purposes of
clarity and organization. Internal deliberations of the Department have
resulted in minor changes to the interim final rule. These are
discussed in the next portion of this rule. Except as noted in this
preamble, the regulations and clauses are as originally promulgated.
Since publication of the interim final rule, the regulations and
clauses included in the interim final rule were republished as part of
a final rule republishing Part 970 of the DEAR (65 FR 80994, Dec. 22,
2000). While the provisions themselves were not changed in any way in
that republication, changes in numbering did occur. The numbering
system of this final rule are different than those used in the
publication of the interim final rule but are consistent with the
republication of DEAR Part 970.
Finally, since the publication of the interim final rule, Congress
enacted two statutes that affect the Technology Transfer Mission clause
at 970.5227-3. Section 3196 of Pub. L. 106-398 limited the time for
agency review and response to proposed joint work statements and
proposed Cooperative Research and Development Agreements (CRADAs) at
contractor-operated, government-owned laboratories. Also, Section 11 of
the Technology Transfer Commercialization Act of 2000, Pub. L. 106-404,
directs the Secretary to assure that certain of DOE's laboratory and
facilities contractors designate a Technology Partnership Ombudsman to
perform specified duties This final rule amends the Technology Transfer
Mission clause to implement these statutes. The implementing language
follows the statutory direction.
II. Discussion of Changes
In order to reflect Section 3196 of Pub.L. 106-398, changes have
been made to paragraph (n) of the Technology Transfer Mission clause,
now at 970.5227-3. These changes reflect the time for DOE review of
proposed joint work statements and CRADAs that result after enactment
of the statute. Additionally, a paragraph (p) has been added to the
same clause to reflect Section 11 of the Technology Transfer
Commercialization Act of 2000, Pub. L. 106-404. This latter change will
assure that DOE's management and operating and other major contractors
with a technology transfer mission designate a Technology Partnership
Ombudsman to perform specified duties.
The threshold for flowdown of the clause at 970.5227-4,
Authorization and Consent, has been raised to $100,000 to reduce the
contractor's burden of including it in subcontracts, and paragraph (c)
has been reorganized to improve its clarity. The flowdown threshold for
the clause at 970.5227-5, Notice and Assistance Regarding Patent and
Copyright Infringement, has been raised to $100,000 also to reduce the
contractor's burden of including the clause in subcontracts.
The clause at 970.5227-8, Refund of Royalties, was altered as a
result of experience gained since the publication of the interim final
rule. Changes have been made to limit the scope of the clause to
royalties payable for a licensing of an invention. The version
originally published covered all royalties, including royalties for
copyright. In this day of the purchase of large quantities of
commercial software, that inclusion would be burdensome and not provide
a return worth the investment of resources by both the contractor and
DOE. Additionally, the version of the clause included in the interim
final rule was written in a way that assumed there was a solicitation
and that the royalties could be identified in the contract price for
the term of the contract. While there are more solicitations leading to
management and operating contracts than ever before, there remain many
instances in which contracts are extended. In neither event would it be
possible for the offeror or the contractor to identify all royalties
associated with contract performance at the inception of the contract
because of the broad research and development nature of these
contracts; therefore, the Department has made changes to focus the
clause to require that the contractor gain DOE approval before paying
patent royalties of more than $250 during contract performance.
The Department has deleted the phrase ``as DOE deems appropriate''
as the last words of paragraph (b)(6) of the clause at 970.5227-10,
Patent Rights-Management and Operating Contracts, Nonprofit
Organizations or Small Business Firm Contractor and paragraph (b)(9) of
the clause at 970.5227-12, Patent Rights-Management and Operating
Contracts, For-Profit Contractor, Advance Class Waiver. The sentence
without that phrase accomplishes its intended purpose of requiring the
contractor to share royalties with a co-inventor who is a Federal
employee. That additional phrase could have been construed as making
the sharing scheme subject to DOE dictation or approval, neither of
which was intended.
The Department has also inserted specific reference to the National
Nuclear Security Administration in the definition of ``weapons related
inventions'' in Alternates I to the clauses at 970.5227-10 and -12.
[[Page 48569]]
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 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 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.
The Regulatory Flexibility Act does not apply to this rulemaking.
D. Review Under the Paperwork Reduction Act
Section 11 of the Technology Transfer Commercialization Act of
2000, Pub. L. 106-404, provides that each technology partnership
ombudsman appointed pursuant to the Act ``shall * * * report quarterly
on the number and nature of complaints and disputes raised, along with
the ombudsman's assessment of their resolution, consistent with the
protection of confidential and sensitive information'' to specified DOE
officials and employees. In this final rule, DOE is amending the
Technology Transfer Mission clause at 970.5227-3 to include this
reporting requirement. Although mandated by statute, the Technology
Partnership Ombudsman reporting requirement is subject to review and
approval by the Office of Management and Budget (OMB) pursuant to the
Paperwork Reduction Act, 44 U.S.C. 3501 et seq. As provided in OMB's
regulations implementing the Act, DOE will soon publish a separate
notice in the Federal Register inviting public comment on this
collection of information, after which it will submit the collection of
information to OMB for approval pursuant to 5 CFR 1320.10.
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this 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 rule is categorically excluded from NEPA review
because the amendments to the DEAR would be strictly procedural
(categorical exclusion A6); therefore, this 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 final rule merely provides
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 final rule 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 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. 801), DOE will submit to Congress a report
regarding the issuance of today's final rule prior to the effective
date set forth at the outset of this notice. The report will note that
it has been determined that this rule does not constitute a ``major
rule'' under that Act.
J. Approval by the Office of the Secretary of Energy
Issuance of this final rule has been approved by the Office of the
Secretary of Energy.
List of Subjects in 48 CFR Part 970
Government procurement.
Issued in Washington, DC, on July 15, 2002.
Richard H. Hopf,
Director, Office of Procurement and Assistance Management, U.S.
Department of Energy.
Accordingly, the interim rule amending Chapter 9 of Title 48 of the
Code of Federal Regulations which was published at 65 FR 68932 on
November 15, 2000, is adopted as a final rule with the following
changes.
[[Page 48570]]
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS.
1. The authority citation for Part 970 continues to read as
follows:
Authority: 42 U.S.C. 2201; 42 U.S.C. 7101 et seq.; 50 U.S.C.
2401 et seq.
Subpart 970.27--Patents, Data, and Copyrights.
2. The clause at 970.5227-3, Technology Transfer Mission, is
amended as follows:
a. The clause date is revised;
b. Paragraph (n)(1)(iii) is revised;
c. Paragraph (n)(l)(iv) is deleted and paragraph (n)(l)(v) is
redesignated as (n)(l)(iv);
d. Redesignated paragraph (n)(l)(iv) is amended by deleting the
last sentence; and
e. In Alternate I, paragraph (p) is redesignated as paragraph (q)
and the date is revised to read ``(August 2002)'', and a new paragraph
(p) is added to the clause:
970.5227-3 Technology transfer mission.
* * * * *
Technology Transfer Mission (August 2002)
(n) * * *
(1)(i) * * *
(ii) * * *
(iii) Within thirty (30) days after submission of a JWS or
proposed CRADA, the contracting officer shall approve, disapprove or
request modification to the JWS or CRADA. The contracting officer
shall provide a written explanation to the Contractor's Laboratory
Director or designee of any disapproval or requirement for
modification of a JWS or proposed CRADA.
* * * * *
(p) Technology Partnership Ombudsman.
(1) The Contractor agrees to establish a position to be known as
``Technology Partnership Ombudsman,'' to help resolve complaints
from outside organizations regarding the policies and actions of the
contractor with respect to technology partnerships (including
CRADAs), patents owned by the contractor for inventions made at the
laboratory, and technology licensing.
(2) The Ombudsman shall be a senior official of the Contactor's
laborratory staff, who is not involved in day-to-day technology
partnerships, patents or technology licensing, or, if appointed from
outside the laboratory or facility, shall function as such senior
official.
(3) The duties of the Technology Partnership Ombudsman shall
include:
(i) Serving as the focal point for assisting the public and
industry in resolving complaints and disputes with the laboratory or
facility regarding technology partnerships, patents, and technology
licensing;
(ii) Promoting the use of collaborative alternative dispute
resolution techniques such as mediation to facilitate the speedy and
low cost resolution of complaints and disputes, when appropriate;
and
(iii) Submitting a quarterly report, in a format provided by
DOE, to the Secretary of Energy, the Administrator for Nuclear
Security, the Director of the DOE Office of Dispute Resolution, and
the Contracting Officer concerning the number and nature of
complaints and disputes raised, along with the Ombudsman's
assessment of their resolution, consistent with the protection of
confidential and sensitive information.
(End of clause)
3. The clause at 970.5227-4 is revised to read as follows:
970.5227-4 Authorization and Consent.
Insert the following clause in solicitations and contracts in
accordance with 970.2702-1:
Authorization and Consent (August 2002)
(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)(1) 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 expected to exceed $100,000 at any tier for supplies or
services, including construction, architect-engineer services, and
materials, supplies, models, samples, and design or testing
services.
(2) 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 expected to exceed $100,000.
(3) Omission of an authorization and consent clause from any
subcontract, including those valued less than $100,000 does not
affect this authorization and consent.
(End of clause)
970.5227-5 [Amended]
4. Paragraph (c) of the clause at 970.5227-5 is amended by deleting
the reference ``$25,000'' and inserting ``$100,000'' in its place.
5. The clause at 970.5227-8 is revised to read as follows:
970.5227-8 Refund of Royalties.
Insert the following clause in solicitations and contracts in
accordance with 970.2702-4:
Refund of Royalties (August 2002)
(a) During performance of this Contract, if any royalties are
proposed to be charged to the Government as costs under this
Contract, the Contractor agrees to submit for approval of the
Contracting Officer, prior to the execution of any license, the
following information relating to each separate item of royalty:
(1) Name and address of licensor;
(2) Patent numbers, patent application serial numbers, or other
basis on which the royalty is payable;
(3) Brief description, including any part or model numbers of
each contract item or component on which the royalty is payable;
(4) Percentage or dollar rate of royalty per unit;
(5) Unit price of contract item;
(6) Number of units;
(7) Total dollar amount of royalties; and
(8) A copy of the proposed license agreement.
(b) If specifically requested by the Contracting Officer, the
Contractor shall furnish a copy of any license agreement entered
into prior to the effective date of this clause and an
identification of applicable claims of specific patents or other
basis upon which royalties are payable.
(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 that are used in the
performance of this contract or any subcontract hereunder.
(d) The Contractor shall furnish to the Contracting Officer,
annually upon request, a statement of royalties paid or required to
be paid in connection with performing this Contract and subcontracts
hereunder.
(e) For royalty payments under licenses entered into after the
effective date of this Contract, costs incurred for royalties
proposed under this paragraph shall be allowable only to the extent
that such royalties are approved by the Contracting Officer.If the
Contracting Officer determines that existing or proposed royalty
payments are inappropriate, any payments subsequent to such
determination shall be allowable only to the extent approved by the
Contracting Officer.
(f) 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 for which the Contractor
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 any royalties to which this clause applies,
the Contractor shall promptly notify the Contracting Officer of that
fact and shall promptly reimburse the Government for any refunds
received or royalties paid after having received notice of such
relief.
(h) The Contractor agrees to include, and require inclusion of,
this clause, including this paragraph (h), suitably modified to
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)
[[Page 48571]]
970.5227-10 [Amended]
6. The clause at 970.5227-10 is amended by:
a. Deleting the phrase ``as DOE deems appropriate'' at the end of
paragraph (b)(6); and
b. By adding the phrase ``or the National Nuclear Security
Administration'' at the end of Alternate 1 Weapons Related Subject
Inventions, paragraph (a)(10).
970.5227-12 [Amended]
7. The clause at 970.5227-12 is amended by:
a. Deleting the phrase ``as DOE deems appropriate'' at the end of
paragraph (b)(9); and
b. By adding the phrase ``or the National Nuclear Security
Administration'' at the end of Alternate 1 Weapons Related Subject
Inventions, paragraph (a)(9).
[FR Doc. 02-18825 Filed 7-24-02; 8:45 am]
BILLING CODE 6450-01-P