[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1164 Reported in Senate (RS)]

                                                       Calendar No. 294

104th CONGRESS

  1st Session

                                S. 1164

                          [Report No. 104-194]

_______________________________________________________________________

                                 A BILL

 To amend the Stevenson-Wydler Technology Innovation Act of 1980 with 
 respect to inventions made under cooperative research and development 
                  agreements, and for other purposes.

_______________________________________________________________________

                           December 20, 1995

                        Reported with amendments
                                                       Calendar No. 294
104th CONGRESS
  1st Session
                                S. 1164

                          [Report No. 104-194]

 To amend the Stevenson-Wydler Technology Innovation Act of 1980 with 
 respect to inventions made under cooperative research and development 
                  agreements, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               August 10 (legislative day, July 10), 1995

 Mr. Rockefeller (for himself and Mr. Burns) introduced the following 
 bill; which was read twice and referred to the Committee on Commerce, 
                      Science, and Transportation

                           December 20, 1995

               Reported by Mr. Pressler, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
 To amend the Stevenson-Wydler Technology Innovation Act of 1980 with 
 respect to inventions made under cooperative research and development 
                  agreements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Technology Transfer Improvements Act 
of 1995''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Bringing technology and industrial innovation to the 
        marketplace is central to the economic, environmental, and 
        social well-being of the people of the United States.
            (2) The Federal Government can help United States business 
        to speed the development of new products and processes by 
        entering into cooperative research and development agreements 
        which make available the assistance of Federal laboratories to 
        the private sector, but the commercialization of technology and 
        industrial innovation in the United States depends upon actions 
        by business.
            (3) The commercialization of technology and industrial 
        innovation in the United States will be enhanced if companies, 
        in return for reasonable compensation to the Federal 
        Government, can more easily obtain exclusive licenses to 
        inventions which develop as a result of cooperative research 
        with scientists employed by Federal laboratories.

SEC. 3. USE OF FEDERAL TECHNOLOGY.

    Subparagraph (B) of section 11(e)(7) of the Stevenson-Wydler 
Technology Innovation Act of 1980 (15 U.S.C. 3710(e)(7)(B)) is amended 
to read as follows:
    ``(B) A transfer shall be made by any Federal agency under 
subparagraph (A), for any fiscal year, only if the amount so 
transferred by that agency (as determined under such subparagraph) 
would exceed $10,000.''.

SEC. 4. TITLE TO INTELLECTUAL PROPERTY ARISING FROM COOPERATIVE 
              RESEARCH AND DEVELOPMENT AGREEMENTS.

    Subsection (b) of section 12 of the Stevenson-Wydler Technology 
Innovation Act of 1980 (15 U.S.C. 3710a(b)) is amended to read as 
follows:
    ``(b) Enumerated Authority.--(1) Under an agreement entered into 
pursuant to subsection (a)(1), the laboratory may grant, or agree to 
grant in advance, to a collaborating party patent licenses or 
assignments, or options thereto, in any invention made in whole or in 
part by a laboratory employee under the agreement, for reasonable 
compensation when appropriate. The laboratory shall ensure that the 
collaborating party has the option to choose an exclusive license for a 
field of use for any such invention under the agreement or, if there is 
more than one collaborating party, that the collaborating parties are 
offered the option to hold licensing rights that collectively encompass 
the rights that would be held under such an exclusive license by one 
party. In consideration for the Government's contribution under the 
agreement, grants under this paragraph shall be subject to the 
following explicit conditions:
            ``(A) A nonexclusive, nontransferable, irrevocable, paid-up 
        license from the collaborating party to the laboratory to 
        practice the invention or have the invention practiced 
        throughout the world by or on behalf of the Government. In the 
        exercise of such license, the Government shall not publicly 
        disclose trade secrets or commercial or financial information 
        that is privileged or confidential within the meaning of 
        section 552(b)(4) of title 5, United States Code, or which 
        would be considered as such if it had been obtained from a non-
        Federal party.
            ``(B) If a laboratory assigns title or grants an exclusive 
        license to such an invention, the Government shall retain the 
        right--
                    ``(i) to require the collaborating party to grant 
                to a responsible applicant a nonexclusive, partially 
                exclusive, or exclusive license to use the invention in 
                the applicant's licensed field of use, on terms that 
                are reasonable under the circumstances; or
                    ``(ii) if the collaborating party fails to grant 
                such a license, to grant the license itself.
            ``(C) The Government may exercise its right retained under 
        subparagraphs (B) (ii) and (iii) only if the Government finds 
        that--
                    ``(i) the action is necessary to meet health or 
                safety needs that are not reasonably satisfied by the 
                collaborating party;
                    ``(ii) the action is necessary to meet requirements 
                for public use specified by Federal regulations, and 
                such requirements are not reasonably satisfied by the 
                collaborating party; or
                    ``(iii) the collaborating party has failed to 
                comply with an agreement containing provisions 
                described in subsection (c)(4)(B).
    ``(2) Under agreements entered into pursuant to subsection (a)(1), 
the laboratory shall ensure that a collaborating party may retain title 
to any invention made solely by its employee in exchange for normally 
granting the Government a nonexclusive, nontransferable, irrevocable, 
paid-up license to practice the invention or have the invention 
practiced throughout the world by or on behalf of the Government for 
research or other Government purposes.
    ``(3) Under an agreement entered into pursuant to subsection 
(a)(1), a laboratory may--
            ``(A) accept, retain, and use funds, personnel, services, 
        and property from a collaborating party and provide personnel, 
        services, and property to a collaborating party;
            ``(B) use funds received from a collaborating party in 
        accordance with subparagraph (A) to hire personnel to carry out 
        the agreement who will not be subject to full-time equivalent 
        restrictions of the agency; and
            ``(C) to the extent consistent with any applicable agency 
        requirements or standards of conduct, permit an employee or 
        former employee of the laboratory to participate in an effort 
        to commercialize an invention made by the employee or former 
        employee while in the employment or service of the Government.
    ``(4) A collaborating party in an exclusive license in any 
invention made under an agreement entered into pursuant to subsection 
(a)(1) shall have the right of enforcement under chapter 29 of title 
35, United States Code.
    ``(5) A Government-owned, contractor-operated laboratory that 
enters into a cooperative research and development agreement pursuant 
to subsection (a)(1) may use or obligate royalties or other income 
accruing to the laboratory under such agreement with respect to any 
invention only--
            ``(A) for payments to inventors;
            ``(B) for purposes described in clauses (i), (iii), and 
        (iv) of section 14(a)(1)(B); and
            ``(C) for scientific research and development consistent 
        with the research and development missions and objectives of 
        the laboratory.''.

SEC. 5. DISTRIBUTION OF INCOME FROM INTELLECTUAL PROPERTY RECEIVED BY 
              FEDERAL LABORATORIES.

    Section 14 of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3710c) is amended--
            (1) by amending subsection (a)(1) to read as follows:
            ``(1) Except as provided in paragraphs (2) and (4), any 
        royalties or other payments received by a Federal agency from 
        the licensing and assignment of inventions under agreements 
        entered into by Federal laboratories under section 12, and from 
        the licensing of inventions of Federal laboratories under 
        section 207 of title 35, United States Code, or under any other 
        provision of law, shall be retained by the agency whose 
        laboratory produced the invention and shall be disposed of as 
        follows:
                    ``(A)(i) The head of the agency or laboratory, or 
                such individual's designee, shall pay each year the 
                first $2,000, and thereafter at least 15 percent, of 
                the royalties or other payments to the inventor or 
                coinvestors.
                    ``(ii) An agency or laboratory may provide 
                appropriate incentives, from royalties or other 
                payments, to employees of laboratory who contribute 
                substantially to the technical development of licensed 
                or assigned inventions between the time that the 
                intellectual property rights to such inventions are 
                legally asserted and the time of the licensing or 
                assigning of the inventions.
                    ``(iii) The agency or laboratory shall retain the 
                royalties and other payments received from an invention 
                until the agency or laboratory makes payments to 
                employees of a laboratory under clause (i) or (ii).
                    ``(B) The balance of the royalties or other 
                payments shall be transferred by the agency to its 
                laboratories, with the majority share of the royalties 
                or other payments from any invention going to the 
                laboratory where the invention occurred. The royalties 
                or other payments so transferred to any laboratory may 
                be used or obligated by that laboratory during the 
                fiscal year in which they are received or during the 
                succeeding fiscal year--
                            ``(i) to reward scientific, engineering, 
                        and technical employees of the laboratory, 
                        including developers of sensitive or classified 
                        technology, regardless of whether the 
                        technology has commercial applications;
                            ``(ii) to further scientific exchange among 
                        the laboratories of the agency;
                            ``(iii) for education and training of 
                        employees consistent with the research and 
                        development missions and objectives of the 
                        agency or laboratory, and for other activities 
                        that increase the potential for transfer of the 
                        technology of the laboratories of the agency;
                            ``(iv) for payment of expenses incidental 
                        to the administration and licensing of 
                        intellectual property by the agency or 
                        laboratory with respect to inventions made at 
                        that laboratory, including the fees or other 
                        costs for the services of other agencies, 
                        persons, or organizations for intellectual 
                        property management and licensing services; or
                            ``(v) for scientific research and 
                        development consistent with the research and 
                        development missions and objectives of the 
                        laboratory.
                    ``(C) All royalties or other payments retained by 
                the agency or laboratory after payments have been made 
                pursuant to subparagraphs (A) and (B) that is 
                unobligated and unexpended at the end of the second 
                fiscal year succeeding the fiscal year in which the 
                royalties and other payments were received shall be 
                paid into the Treasury.'';
            (2) in subsection (a)(2)--
                    (A) by inserting ``or other payments'' after 
                ``royalties''; and
                    (B) by striking ``for the purposes described in 
                clauses (i) through (iv) of paragraph (1)(B) during 
                that fiscal year or the succeeding fiscal year'' and 
                inserting in lieu thereof ``under paragraph (1)(B)'';
            (3) in subsection (a)(3), by striking ``$100,000'' both 
        places it appears and inserting ``$150,000'';
            (4) in subsection (a)(4)--
                    (A) by striking ``income'' each place it appears 
                and inserting in lieu thereof ``payments'';
                    (B) by striking ``the payment of royalties to 
                inventors'' in the first sentence thereof and inserting 
                in lieu thereof ``payments to inventors'';
                    (C) by striking ``clause (i) of paragraph (1)(B)'' 
                and inserting in lieu thereof ``clause (iv) of 
                paragraph (1)(B)'';
                    (D) by striking ``payment of the royalties,'' in 
                the second sentence thereof and inserting in lieu 
                thereof ``offsetting the payments to inventors,''; and
                    (E) by striking ``<DELETED>clause </DELETED>clauses 
                (i) through (iv) of''; and
            (5) by amending paragraph (1) of subsection (b) to read as 
        follows:
            ``(1) by a contractor, grantee, or participant, or an 
        employee of a contractor, grantee, or participant, in an 
        agreement or other arrangement with the agency, or''.

SEC. 6. EMPLOYEE ACTIVITIES.

    Section 15(a) of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3710d(a)) is amended--
            (1) by striking ``the right of ownership to an invention 
        under this Act'' and inserting in lieu thereof ``ownership of 
        or the right of ownership to an invention made by a Federal 
        employee''; and
            (2) by inserting ``obtain or'' after ``the Government, 
        to''.

SEC. 7. AMENDMENT TO BAYH-DOLE ACT.

    Section 210(e) of title 35, United States Code, is amended by 
striking ``, as amended by the Federal Technology Transfer Act of 
1986,''.

SEC. 8. FASTENER QUALITY ACT AMENDMENTS.

    (a) Section 2 Amendments.--Section 2 of the Fastener Quality Act 
(15 U.S.C. 5401) is amended--
            (1) by striking subsection (a)(4), and redesignating 
        paragraphs (5) through (9) as paragraphs (4) through (8), 
        respectively;
            (2) by striking ``by lot number'' in subsection (a)(7), as 
        so redesignated by paragraph (1) of this subsection; and
            (3) by striking ``used in critical applications'' in 
        subsection (b) and inserting ``in commerce''.
    (b) Section 3 Amendments.--Section 3 of the Fastener Quality Act 
(15 U.S.C. 5402) is amended--
            (1) by striking ``having a minimum tensile strength of 
        150,000 pounds per square inch'' in paragraph (1)(B);
            (2) in paragraph (2) by inserting ``consensus'' after ``or 
        any other'';
            (3) in paragraph (5)--
                    (A) by inserting ``or'' after ``standard or 
                specification,'' in subparagraph (B);
                    (B) by striking ``or'' at the end of subparagraph 
                (C);
                    (C) by striking subparagraph (D); and
                    (D) by inserting ``or produced in accordance with 
                ASTM F 432'' after ``307 Grade A'';
            (4) by striking ``other person'' in paragraph (6) and 
        inserting ``government agency'';
            (5) by striking ``Standard'' in paragraph (8) and inserting 
        ``Standards'';
            (6) by striking paragraph (11) and redesignating paragraphs 
        (12) through (15) as paragraphs (11) through (14), 
        respectively;
            (7) by striking ``, a government agency'' and all that 
        follows through ``markings of any fastener'' in paragraph (13), 
        as so redesignated, and inserting ``or a government agency''; 
        and
            (8) by inserting ``for the purpose of achieving a uniform 
        hardness'' in paragraph (14), as so redesignated, after 
        ``quenching and tempering''.
    (c) Section 4 Repeal.--Section 4 of the Fastener Quality Act (15 
U.S.C. 5403) is repealed.
    (d) Section 5 Amendments.--Section 5 of the Fastener Quality Act 
(15 U.S.C. 5404) is amended--
            (1) by striking ``subsections (b) and (c)'' in subsection 
        (a)(1)(B) and (2)(A)(i) and inserting ``subsections (b), (c), 
        and (d)'';
            (2) by striking ``or, where applicable'' and all that 
        follows through ``section 7(c)(1)'' in subsection (c)(2);
            (3) by striking ``, such as the chemical, dimensional, 
        physical, mechanical, and any other'' in subsection (c)(3);
            (4) by inserting ``except as provided in subsection (d),'' 
        in subsection (c)(4) before ``state whether''; and
            (5) by adding at the end the following new subsection:
    ``(d) Alternative Procedure for Chemical Characteristics.--
Notwithstanding the requirements of subsections (b) and (c), a 
manufacturer shall be deemed to have demonstrated, for purposes of 
subsection (a)(1), that the chemical characteristics of a lot conform 
to the standards and specifications to which the manufacturer 
represents such lot has been manufactured if the following requirements 
are met:
            ``(1) The coil or heat number of metal from which such lot 
        was fabricated has been inspected and tested with respect to 
        its chemical characteristics by a laboratory accredited in 
        accordance with the procedures and conditions specified by the 
        Secretary under section 6.
            ``(2) Such laboratory has provided to the manufacturer, 
        either directly or through the metal manufacturer, a written 
        inspection and testing report, which shall be in a form 
        prescribed by the Secretary by regulation, listing the chemical 
        characteristics of such coil or heat number.
            ``(3) The report described in paragraph (2) indicates that 
        the chemical characteristics of such coil or heat number 
        conform to those required by the standards and specifications 
        to which the manufacturer represents such lot has been 
        manufactured.
            ``(4) The manufacturer demonstrates that such lot has been 
        fabricated from the coil or heat number of metal to which the 
        report described in paragraphs (2) and (3) relates.
In prescribing the form of report required by subsection (c), the 
Secretary shall provide for an alternative to the statement required by 
subsection (c)(4), insofar as such statement pertains to chemical 
characteristics, for cases in which a manufacturer elects to use the 
procedure permitted by this subsection.''.
    (e) Section 6 Amendment.--Section 6(a)(1) of the Fastener Quality 
Act (15 U.S.C. 5405(a)(1)) is amended by striking ``Within 180 days 
after the date of enactment of this Act, the'' and inserting ``The''.
    (f) Section 7 Amendments.--Section 7 of the Fastener Quality Act 
(15 U.S.C. 5406) is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) Domestically Produced Fasteners.--It shall be unlawful for a 
manufacturer to sell any shipment of fasteners covered by this Act 
which are manufactured in the United States unless the fasteners--
            ``(1) have been manufactured according to the requirements 
        of the applicable standards and specifications and have been 
        inspected and tested by a laboratory accredited in accordance 
        with the procedures and conditions specified by the Secretary 
        under section 6; and
            ``(2) an original laboratory testing report described in 
        section 5(c) and a manufacturer's certificate of conformance 
        are on file with the manufacturer, or under such custody as may 
        be prescribed by the Secretary, and available for 
        inspection.'';
            (2) by inserting ``label'' after ``private'' the first 
        place it appears in subsection (c)(2);
            (3) by inserting ``to the same'' in subsection (c)(2) after 
        ``in the same manner and'';
            (4) by striking ``certificate'' in subsection (d)(1) and 
        inserting ``test report'';
            (5) by striking subsection (e) and inserting the following:
    ``(e) Commingling.--It shall be unlawful for any manufacturer, 
importer, or private label distributor to commingle like fasteners from 
different lots in the same container; except that such manufacturer, 
importer, or private label distributor may commingle like fasteners of 
the same type, grade, and dimension from not more than two tested and 
certified lots in the same container during repackaging and plating 
operations: Provided, that any container which contains the fasteners 
from two lots shall be conspicuously marked with the lot identification 
numbers of both lots.''; and
            (6) by striking subsection (f) and inserting the following:
    ``(f) Subsequent Purchaser.--If a person who purchases fasteners 
for any purpose so requests either prior to the sale or at the time of 
sale, the seller shall conspicuously mark the container of the 
fasteners with the lot number from which such fasteners were taken.''.
    (g) Section 9 Amendment.--Section 9 of the Fastener Quality Act (15 
U.S.C. 5408) is amended by adding at the end the following new 
subsection:
    ``(d) Enforcement.--The Secretary may designate officers or 
employees of the Department of Commerce to conduct investigations 
pursuant to this Act. In conducting such investigations, those officers 
or employees may, to the extent necessary or appropriate to the 
enforcement of this Act, exercise such authorities as are conferred 
upon them by other laws of the United States, subject to policies and 
procedures approved by the Attorney General.''.
    (h) Section 10 Amendments.--Section 10 of the Fastener Quality Act 
(15 U.S.C. 5409) is amended--
            (1) by striking ``10 years'' in subsections (a) and (b) and 
        inserting ``5 years''; and
            (2) by striking ``any subsequent'' in subsection (b) and 
        inserting ``the subsequent''.
    (i) Section 13 Amendment.--Section 13 of the Fastener Quality Act 
(15 U.S.C. 5412) is amended by striking ``within 180 days after the 
date of enactment of this Act''.
    (j) Section 14 Repeal.--Section 14 of the Fastener Quality Act (15 
U.S.C. 5413) is repealed.
S 1164 RS----2