[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2120 Reported in Senate (RS)]






                                                       Calendar No. 668
105th CONGRESS
  2d Session
                                S. 2120

                          [Report No. 105-358]

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 22, 1998

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

                           September 30, 1998

               Reported by Mr. McCain, with an amendment
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 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 signing of the 
agreement, 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 any 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 
exclusively 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.--Any licenses granted under section 207 
shall contain such terms and conditions as the granting agency 
considers appropriate. Such terms and conditions--
            ``(1) shall include provisions--
                    ``(A) retaining a nontransferable, 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;
                    ``(B) 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
                    ``(C) empowering the Federal agency to terminate 
                the license in whole or in part if the agency 
                determines that--
                            ``(i) 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;
                            ``(ii) the licensee is in breach of an 
                        agreement described in subsection (b);
                            ``(iii) 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
                            ``(iv) 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 intent to 
grant such a license has been provided at least 30 days before the 
license is granted, and the Federal agency has considered all comments 
received in response to that public notice.
    ``(f) Development 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 or 
commercialization milestones. Each Federal agency, in consultation with 
the Small Business Administration, shall develop consistent standards 
for exempting small business firms from the requirements of this 
subsection for non-exclusive licenses.
    ``(g) Nondisclosure of Certain Information.--An application shall 
include, as an independent subdocument a detailed description of the 
applicant's plan for development or marketing (or both) of the 
invention. The subdocument, which is exempt from disclosure under 
section 552 of title 5, United States Code, shall include only a 
statement--
            ``(1) of the time, nature, and amount of anticipated 
        investment of capital and other resources which the applicant 
        believes will be required to bring the invention to practical 
        application;
            ``(2) as to the applicant's capability and intention to 
        fulfill the plan, including information regarding 
        manufacturing, marketing, financial, and technical resources;
            ``(3) of the fields of use for which the applicant intends 
        to practice the invention; and
            ``(4) of the geographic areas--
                    ``(A) in which the applicant intends to manufacture 
                any product embodying the invention;
                    ``(B) where the applicant intends to use or sell 
                the invention; or
                    ``(C) both.''.
    (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. REVIEW OF COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT 
              PROCEDURES.

    (a) Review.--The Director of the Office of Science and Technology 
Policy, in consultation with the Office of Management and Budget, 
relevant Federal agencies, national laboratories, and any other person 
the Director considers appropriate, shall review the procedures used by 
Federal agencies to gather and consider the views of other agencies 
before final approval or disapproval of--
            (1) a joint work statement 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 a laboratory described in section 
        12(d)(2)(A) of the Stevenson-Wydler Technology Innovation Act 
        of 1980 (15 U.S.C. 3710a(d)(2)(A)), a cooperative research and 
        development agreement under such section 12, that involves 
        national security, or relates to a project which may have a 
        significant impact on domestic or international 
        competitiveness.
<DELETED>    (b) Procedures.--Within 1 year after the date of enactment 
of this Act, the Director of the Office of Science and Technology 
Policy shall establish and distribute to appropriate Federal agencies--
</DELETED>
        <DELETED>    (1) specific criteria to indicate the necessity 
        for interagency review of an approval or disapproval described 
        in subsection (a); and</DELETED>
        <DELETED>    (2) procedures for carrying out such interagency 
        review.</DELETED>
    (b) Procedures.--Within 1 year after the date of 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, and to minimize delay in the approval or 
disapproval of the joint work statement or cooperative research and 
development agreement under interagency review.

SEC. 5. 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 to the nonprofit organization or small 
        business firm; or
            ``(2) acquire any rights in the subject invention from the 
        nonprofit organization or small business firm, 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. 6. 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''.
                                                       Calendar No. 668

105th CONGRESS

  2d Session

                                S. 2120

                          [Report No. 105-358]

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                           September 30, 1998

                       Reported with an amendment