[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2544 Reported in House (RH)]

                                                 Union Calendar No. 347

105th CONGRESS

  2d Session

                               H. R. 2544

                      [Report No. 105-620, Part I]

_______________________________________________________________________

                                 A BILL

 To improve the ability of Federal agencies to license federally owned 
                              inventions.

_______________________________________________________________________

                             July 14, 1998

Referral to the Committee on the Judiciary extended for a period ending 
                      not later than July 14, 1998

                             July 14, 1998

 Committee on the Judiciary discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
                                                 Union Calendar No. 347
105th CONGRESS
  2d Session
                                H. R. 2544

                      [Report No. 105-620, Part I]

 To improve the ability of Federal agencies to license federally owned 
                              inventions.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 25, 1997

 Mrs. Morella introduced the following bill; which was referred to the 
     Committee on Science, and in addition to the Committee on the 
 Judiciary, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

                             July 14, 1998

        Reported from the Committee on Science with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                             July 14, 1998

Referral to the Committee on the Judiciary extended for a period ending 
                      not later than July 14, 1998

                             July 14, 1998

 Additional sponsors: Mr. Sensenbrenner, Mr. Brown of California, Mr. 
                  Barcia, Mrs. Tauscher, and Mr. Cook

                             July 14, 1998

 Committee on the Judiciary discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
    [For text of introduced bill, see copy of bill as introduced on 
                          September 25, 1997]

_______________________________________________________________________

                                 A BILL


 
 To improve the ability of Federal agencies to license federally owned 
                              inventions.

    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 
Commercialization Act of 1998''.

SEC. 2. COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS.

    Section 12(b)(1) of the Stevenson-Wydler Technology Innovation Act 
of 1980 (15 U.S.C. 3710a(b)(1)) is amended by inserting ``or, subject 
to section 209 of title 35, United States Code, may grant a license to 
an invention which is federally owned, made before the granting of the 
license, and directly related to the scope of the work under the 
agreement,'' after ``under the agreement,''.

SEC. 3. LICENSING FEDERALLY OWNED INVENTIONS.

    (a) Amendment.--Section 209 of title 35, United States Code, is 
amended to read as follows:
``Sec. 209. Licensing federally owned inventions
    ``(a) Authority.--A Federal agency may grant an exclusive or 
partially exclusive license on a federally owned invention only if--
            ``(1) granting the license is a reasonable and necessary 
        incentive to--
                    ``(A) call forth the investment capital and 
                expenditures needed to bring the invention to practical 
                application; or
                    ``(B) otherwise promote the invention's utilization 
                by the public;
            ``(2) the Federal agency finds that the public will be 
        served by the granting of the license, as indicated by the 
        applicant's intentions, plans, and ability to bring the 
invention to practical application or otherwise promote the invention's 
utilization by the public, and that the proposed scope of exclusivity 
is not greater than reasonably necessary to provide the incentive for 
bringing the invention to practical utilization, as proposed by the 
applicant, or otherwise to promote the invention's utilization by the 
public;
            ``(3) the applicant makes a commitment to achieve practical 
        utilization of the invention within a reasonable time;
            ``(4) granting the license will not tend to substantially 
        lessen competition or create or maintain a violation of the 
        Federal antitrust laws; and
            ``(5) in the case of an invention covered by a foreign 
        patent application or patent, the interests of the Federal 
        Government or United States industry in foreign commerce will 
        be enhanced.
    ``(b) Manufacture in United States.--A Federal agency shall 
normally grant a license to use or sell any federally owned invention 
in the United States only to a licensee who agrees that any products 
embodying the invention or produced through the use of the invention 
will be manufactured substantially in the United States.
    ``(c) Small Business.--First preference for the granting of any 
exclusive or partially exclusive licenses under this section shall be 
given to small business firms having equal or greater likelihood as 
other applicants to bring the invention to practical application within 
a reasonable time.
    ``(d) Terms and Conditions.--Licenses granted under this section 
shall contain such terms and conditions as the granting agency 
considers appropriate. Such terms and conditions shall include 
provisions--
            ``(1) retaining a nontransferrable, irrevocable, paid-up 
        license for the Federal agency to practice the invention or 
        have the invention practiced throughout the world by or on 
        behalf of the Government of the United States;
            ``(2) requiring periodic reporting on utilization of the 
        invention, and utilization efforts, by the licensee, but only 
        to the extent necessary to enable the Federal agency to 
        determine whether the terms of the license are being complied 
        with; and
            ``(3) empowering the Federal agency to terminate the 
        license in whole or in part if the agency determines that--
                    ``(A) the licensee is not executing its commitment 
                to achieve practical utilization of the invention, 
                including commitments contained in any plan submitted 
                in support of its request for a license, and the 
                licensee cannot otherwise demonstrate to the 
                satisfaction of the Federal agency that it has taken, 
                or can be expected to take within a reasonable time, 
                effective steps to achieve practical utilization of the 
                invention;
                    ``(B) the licensee is in breach of an agreement 
                described in subsection (b);
                    ``(C) termination is necessary to meet requirements 
                for public use specified by Federal regulations issued 
                after the date of the license, and such requirements 
                are not reasonably satisfied by the licensee; or
                    ``(D) the licensee has been found by a competent 
                authority to have violated the Federal antitrust laws 
                in connection with its performance under the license 
                agreement.
    ``(e) Public Notice.--No exclusive or partially exclusive license 
may be granted under this section unless public notice of the intention 
to grant an exclusive or partially exclusive license on a federally 
owned invention has been provided in an appropriate manner at least 15 
days before the license is granted, and the Federal agency has 
considered all comments received in response to that public notice. 
This subsection shall not apply to the licensing of inventions made 
under a cooperative research and development agreement entered into 
under section 12 of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3710a).
    ``(f) Basic Business Plan.--A Federal agency may grant a license on 
a federally owned invention only if the person requesting the license 
has supplied to the agency a basic business plan with development 
milestones, commercialization milestones, or both.
    ``(g) Nondisclosure of Certain Information.--Any basic business 
plan, and revisions thereto, submitted by an applicant for a license, 
and any report on the utilization or utilization efforts of a licensed 
invention submitted by a licensee, shall be treated by the Federal 
agency as commercial and financial information obtained from a person 
and not subject to disclosure under section 552 of title 5, United 
States Code.''.
    (b) Conforming Amendment.--The item relating to section 209 in the 
table of sections for chapter 18 of title 35, United States Code, is 
amended to read as follows:

``209. Licensing federally owned inventions.''.

SEC. 4. TECHNICAL AMENDMENTS TO BAYH-DOLE ACT.

    Chapter 18 of title 35, United States Code (popularly known as the 
``Bayh-Dole Act''), is amended--
            (1) by amending section 202(e) to read as follows:
    ``(e) In any case when a Federal employee is a coinventor of any 
invention made under a funding agreement with a nonprofit organization 
or small business firm, the Federal agency employing such coinventor 
may, for the purpose of consolidating rights in the invention--
            ``(1) license or assign whatever rights it may acquire in 
        the subject invention from its employee to the nonprofit 
        organization or small business firm; or
            ``(2) acquire any rights in the subject invention, but only 
        to the extent the party from whom the rights are acquired 
        voluntarily enters into the transaction.''; and
            (2) in section 207(a)--
                    (A) by striking ``patent applications, patents, or 
                other forms of protection obtained'' and inserting 
                ``inventions'' in paragraph (2); and
                    (B) by inserting ``, including acquiring rights for 
                the Federal Government in any invention, but only to 
                the extent the party from whom the rights are acquired 
                voluntarily enters into the transaction, to facilitate 
                the licensing of a federally owned invention'' after 
                ``or through contract'' in paragraph (3).

SEC. 5. TECHNICAL AMENDMENTS TO THE STEVENSON-WYDLER TECHNOLOGY 
              INNOVATION ACT OF 1980.

    Section 14(a)(1) of the Stevenson-Wydler Technology Innovation Act 
of 1980 (15 U.S.C. 3710c(a)(1)) is amended--
            (1) in subparagraph (A)(i), by inserting ``, if the 
        inventor's or coinventor's rights are assigned to the United 
        States'' after ``inventor or coinventors''; and
            (2) in subparagraph (B), by striking ``succeeding fiscal 
        year'' and inserting ``2 succeeding fiscal years''.

SEC. 6. REVIEW OF COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT 
              PROCEDURES.

    (a) Review.--The Director of the Office of Science and Technology 
Policy, in consultation with relevant Federal agencies, national 
laboratories, and any other person the Director considers appropriate, 
shall review the general policies and procedures used by Federal 
agencies to gather and consider the views of other agencies on--
            (1) joint work statements under section 12(c)(5)(C) or (D) 
        of the Stevenson-Wydler Technology Innovation Act of 1980 (15 
        U.S.C. 3710a(c)(5)(C) or (D)); or
            (2) in the case of laboratories described in section 
        12(d)(2)(A) of the Stevenson-Wydler Technology Innovation Act 
        of 1980 (15 U.S.C. 3710a(d)(2)(A)), cooperative research and 
        development agreements under such section 12,
with respect to major proposed cooperative research and development 
agreements that involve critical national security technology or may 
have a significant impact on domestic or international competitiveness.
    (b) Procedures.--Within one year after the date of the enactment of 
this Act, the Director of the Office of Science and Technology Policy, 
in consultation with relevant Federal agencies and national 
laboratories, shall--
            (1) determine the adequacy of existing procedures and 
        methods for interagency coordination and awareness; and
            (2) establish and distribute to appropriate Federal 
        agencies--
                    (A) specific criteria to indicate the necessity for 
                gathering and considering the views of other agencies 
                on joint work statements or cooperative research and 
                development agreements as described in subsection (a); 
                and
                    (B) additional procedures, if any, for carrying out 
                such gathering and considering of agency views.
Procedures established under this subsection shall be designed to the 
extent possible to use or modify existing procedures, to minimize 
burdens on Federal agencies, to encourage industrial partnerships with 
national laboratories, and to minimize delay in the approval or 
disapproval of joint work statements and cooperative research and 
development agreements.