[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 209 Enrolled Bill (ENR)]

        H.R.209

                       One Hundred Sixth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Monday,
             the twenty-fourth day of January, two thousand


                                 An Act


 
 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 2000''.

SEC. 2. FINDINGS.

    The Congress finds that--
        (1) the importance of linking our unparalleled network of over 
    700 Federal laboratories and our Nation's universities with United 
    States industry continues to hold great promise for our future 
    economic prosperity;
        (2) the enactment of the Bayh-Dole Act in 1980 was a landmark 
    change in United States technology policy, and its success provides 
    a framework for removing bureaucratic barriers and for simplifying 
    the granting of licenses for inventions that are now in the Federal 
    Government's patent portfolio;
        (3) Congress has demonstrated a commitment over the past 2 
    decades to fostering technology transfer from our Federal 
    laboratories and to promoting public/private sector partnerships to 
    enhance our international competitiveness;
        (4) Federal technology transfer activities have strengthened 
    the ability of United States industry to compete in the global 
    marketplace; developed a new paradigm for greater collaboration 
    among the scientific enterprises that conduct our Nation's research 
    and development--government, industry, and universities; and 
    improved the quality of life for the American people, from medicine 
    to materials;
        (5) the technology transfer process must be made ``industry 
    friendly'' for companies to be willing to invest the significant 
    time and resources needed to develop new products, processes, and 
    jobs using federally funded inventions; and
        (6) Federal technology licensing procedures should balance the 
    public policy needs of adequately protecting the rights of the 
    public, encouraging companies to develop existing government 
    inventions, and making the entire system of licensing government 
    technologies more consistent and simple.

SEC. 3. 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, for which a patent application 
was filed before the signing of the agreement, and directly within the 
scope of the work under the agreement,'' after ``under the 
agreement,''.

SEC. 4. 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 under 
section 207(a)(2) 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 application, 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 
    application of the invention within a reasonable time, which time 
    may be extended by the agency upon the applicant's request and the 
    applicant's demonstration that the refusal of such extension would 
    be unreasonable;
        ``(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 under section 207(a)(2) 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 section 207(a)(2) 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(a)(2) shall contain such terms and conditions as the granting 
agency considers appropriate, and shall include provisions--
        ``(1) retaining a nontransferrable, irrevocable, paid-up 
    license for any 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, except 
    that any such report shall be treated by the Federal agency as 
    commercial and financial information obtained from a person and 
    privileged and confidential and not subject to disclosure under 
    section 552 of title 5 of the United States Code; 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 application 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 application 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 court of competent 
        jurisdiction 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 section 207(a)(2) 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 before the end of the comment period 
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) Plan.--No Federal agency shall grant any license under a 
patent or patent application on a federally owned invention unless the 
person requesting the license has supplied the agency with a plan for 
development or marketing of the invention, except that any such plan 
shall be treated by the Federal agency as commercial and financial 
information obtained from a person and privileged and confidential and 
not subject to disclosure under section 552 of title 5 of the 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. 5. MODIFICATION OF STATEMENT OF POLICY AND OBJECTIVES FOR CHAPTER 
              18 OF TITLE 35, UNITED STATES CODE.

    Section 200 of title 35, United States Code, is amended by striking 
``enterprise;'' and inserting ``enterprise without unduly encumbering 
future research and discovery;''.

SEC. 6. 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 with a nonprofit organization, a small business firm, or 
a non-Federal inventor, the Federal agency employing such coinventor 
may, for the purpose of consolidating rights in the invention and if it 
finds that it would expedite the development of the invention--
        ``(1) license or assign whatever rights it may acquire in the 
    subject invention to the nonprofit organization, small business 
    firm, or non-Federal inventor in accordance with the provisions of 
    this chapter; or
        ``(2) acquire any rights in the subject invention from the 
    nonprofit organization, small business firm, or non-Federal 
    inventor, but only to the extent the party from whom the rights are 
    acquired voluntarily enters into the transaction and no other 
    transaction under this chapter is conditioned on such 
    acquisition.''; 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 and 
        administering royalties to 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. 7. TECHNICAL AMENDMENTS TO THE STEVENSON-WYDLER TECHNOLOGY 
              INNOVATION ACT OF 1980.

    The Stevenson-Wydler Technology Innovation Act of 1980 is amended--
        (1) in section 4(4) (15 U.S.C. 3703(4)), by striking ``section 
    6 or section 8'' and inserting ``section 7 or 9'';
        (2) in section 4(6) (15 U.S.C. 3703(6)), by striking ``section 
    6 or section 8'' and inserting ``section 7 or 9'';
        (3) in section 5(c)(11) (15 U.S.C. 3704(c)(11)), by striking 
    ``State of local governments'' and inserting ``State or local 
    governments'';
        (4) in section 9 (15 U.S.C. 3707), by--
            (A) striking ``section 6(a)'' and inserting ``section 
        7(a)'';
            (B) striking ``section 6(b)'' and inserting ``section 
        7(b)''; and
            (C) striking ``section 6(c)(3)'' and inserting ``section 
        7(c)(3)'';
        (5) in section 11(e)(1) (15 U.S.C. 3710(e)(1)), by striking 
    ``in cooperation with Federal Laboratories'' and inserting ``in 
    cooperation with Federal laboratories'';
        (6) in section 11(i) (15 U.S.C. 3710(i)), by striking ``a gift 
    under the section'' and inserting ``a gift under this section'';
        (7) in section 14 (15 U.S.C. 3710c)--
            (A) in subsection (a)(1)(A)(i), by inserting ``, other than 
        payments of patent costs as delineated by a license or 
        assignment agreement,'' after ``or other payments'';
            (B) in subsection (a)(1)(A)(i), by inserting ``, if the 
        inventor's or coinventor's rights are assigned to the United 
        States'' after ``inventor or coinventors'';
            (C) in subsection (a)(1)(B), by striking ``succeeding 
        fiscal year'' and inserting ``2 succeeding fiscal years'';
            (D) in subsection (a)(2), by striking ``Government-operated 
        laboratories of the''; and
            (E) in subsection (b)(2), by striking ``inventon'' and 
        inserting ``invention''; and
        (8) in section 22 (15 U.S.C. 3714), by striking ``sections 11, 
    12, and 13'' and inserting ``sections 12, 13, and 14''.

SEC. 8. REVIEW OF COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT 
              PROCEDURES.

    (a) Review.--Within 90 days after the date of the enactment of this 
Act, each Federal agency with a federally funded laboratory that has in 
effect on that date of the enactment one or more cooperative research 
and development agreements under section 12 of the Stevenson-Wydler 
Technology Innovation Act of 1980 (15 U.S.C. 3710a) shall report to the 
Committee on National Security of the National Science and Technology 
Council and the Congress on the general policies and procedures used by 
that agency 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 1 year after the date of the enactment of 
this Act, the Committee on National Security of the National Science 
and Technology Council, in conjunction with relevant Federal agencies 
and national laboratories, shall--
        (1) determine the adequacy of existing procedures and methods 
    for interagency coordination and awareness with respect to 
    cooperative research and development agreements described in 
    subsection (a); 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 with respect to 
        cooperative research and development agreements described in 
        subsection (a).
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.
    (c) Limitation.--Nothing in this Act, nor any procedures 
established under this section shall provide to the Office of Science 
and Technology Policy, the National Science and Technology Council, or 
any Federal agency the authority to disapprove a cooperative research 
and development agreement or joint work statement, under section 12 of 
the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
3710a), of another Federal agency.

SEC. 9. INCREASED FLEXIBILITY FOR FEDERAL LABORATORY PARTNERSHIP 
              INTERMEDIARIES.

    Section 23 of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3715) is amended--
        (1) in subsection (a)(1) by inserting ``, institutions of 
    higher education as defined in section 1201(a) of the Higher 
    Education Act of 1965 (20 U.S.C. 1141(a)), or educational 
    institutions within the meaning of section 2194 of title 10, United 
    States Code'' after ``small business firms''; and
        (2) in subsection (c) by inserting ``, institutions of higher 
    education as defined in section 1201(a) of the Higher Education Act 
    of 1965 (20 U.S.C. 1141(a)), or educational institutions within the 
    meaning of section 2194 of title 10, United States Code,'' after 
    ``small business firms''.

SEC. 10. REPORTS ON UTILIZATION OF FEDERAL TECHNOLOGY.

    (a) Agency Activities.--Section 11 of the Stevenson-Wydler 
Technology Innovation Act of 1980 (15 U.S.C. 3710) is amended--
        (1) by striking the last sentence of subsection (b);
        (2) by inserting after subsection (e) the following:
    ``(f) Agency Reports on Utilization.--
        ``(1) In general.--Each Federal agency which operates or 
    directs one or more Federal laboratories or which conducts 
    activities under sections 207 and 209 of title 35, United States 
    Code, shall report annually to the Office of Management and Budget, 
    as part of the agency's annual budget submission, on the activities 
    performed by that agency and its Federal laboratories under the 
    provisions of this section and of sections 207 and 209 of title 35, 
    United States Code.
        ``(2) Contents.--The report shall include--
            ``(A) an explanation of the agency's technology transfer 
        program for the preceding fiscal year and the agency's plans 
        for conducting its technology transfer function, including its 
        plans for securing intellectual property rights in laboratory 
        innovations with commercial promise and plans for managing its 
        intellectual property so as to advance the agency's mission and 
        benefit the competitiveness of United States industry; and
            ``(B) information on technology transfer activities for the 
        preceding fiscal year, including--
                ``(i) the number of patent applications filed;
                ``(ii) the number of patents received;
                ``(iii) the number of fully-executed licenses which 
            received royalty income in the preceding fiscal year, 
            categorized by whether they are exclusive, partially-
            exclusive, or non-exclusive, and the time elapsed from the 
            date on which the license was requested by the licensee in 
            writing to the date the license was executed;
                ``(iv) the total earned royalty income including such 
            statistical information as the total earned royalty income, 
            of the top 1 percent, 5 percent, and 20 percent of the 
            licenses, the range of royalty income, and the median, 
            except where disclosure of such information would reveal 
            the amount of royalty income associated with an individual 
            license or licensee;
                ``(v) what disposition was made of the income described 
            in clause (iv);
                ``(vi) the number of licenses terminated for cause; and
                ``(vii) any other parameters or discussion that the 
            agency deems relevant or unique to its practice of 
            technology transfer.
        ``(3) Copy to secretary; attorney general; congress.--The 
    agency shall transmit a copy of the report to the Secretary of 
    Commerce and the Attorney General for inclusion in the annual 
    report to Congress and the President required by subsection (g)(2).
        ``(4) Public availability.--Each Federal agency reporting under 
    this subsection is also strongly encouraged to make the information 
    contained in such report available to the public through Internet 
    sites or other electronic means.'';
        (3) by striking subsection (g)(2) and inserting the following:
        ``(2) Reports.--
            ``(A) Annual report required.--The Secretary, in 
        consultation with the Attorney General and the Commissioner of 
        Patents and Trademarks, shall submit each fiscal year, 
        beginning 1 year after the enactment of the Technology Transfer 
        Commercialization Act of 2000, a summary report to the 
        President, the United States Trade Representative, and the 
        Congress on the use by Federal agencies and the Secretary of 
        the technology transfer authorities specified in this Act and 
        in sections 207 and 209 of title 35, United States Code.
            ``(B) Content.--The report shall--
                ``(i) draw upon the reports prepared by the agencies 
            under subsection (f);
                ``(ii) discuss technology transfer best practices and 
            effective approaches in the licensing and transfer of 
            technology in the context of the agencies' missions; and
                ``(iii) discuss the progress made toward development of 
            additional useful measures of the outcomes of technology 
            transfer programs of Federal agencies.
            ``(C) Public availability.--The Secretary shall make the 
        report available to the public through Internet sites or other 
        electronic means.''; and
        (4) by inserting after subsection (g) the following:
    ``(h) Duplication of Reporting.--The reporting obligations imposed 
by this section--
        ``(1) are not intended to impose requirements that duplicate 
    requirements imposed by the Government Performance and Results Act 
    of 1993 (31 U.S.C. 1101 note);
        ``(2) are to be implemented in coordination with the 
    implementation of that Act; and
        ``(3) are satisfied if an agency provided the information 
    concerning technology transfer activities described in this section 
    in its annual submission under the Government Performance and 
    Results Act of 1993 (31 U.S.C. 1101 note).''.
    (b) Royalties.--Section 14(c) of the Stevenson-Wydler Technology 
Innovation Act of 1980 (15 U.S.C. 3710c(c)) is amended to read as 
follows:
    ``(c) Reports.--The Comptroller General shall transmit a report to 
the appropriate committees of the Senate and House of Representatives 
on the effectiveness of Federal technology transfer programs, including 
findings, conclusions, and recommendations for improvements in such 
programs. The report shall be integrated with, and submitted at the 
same time as, the report required by section 202(b)(3) of title 35, 
United States Code.''.

SEC. 11. TECHNOLOGY PARTNERSHIPS OMBUDSMAN.

    (a) Appointment of Ombudsman.--The Secretary of Energy shall direct 
the director of each national laboratory of the Department of Energy, 
and may direct the director of each facility under the jurisdiction of 
the Department of Energy, to appoint a technology partnership ombudsman 
to hear and help resolve complaints from outside organizations 
regarding the policies and actions of each such laboratory or facility 
with respect to technology partnerships (including cooperative research 
and development agreements), patents, and technology licensing.
    (b) Qualifications.--An ombudsman appointed under subsection (a) 
shall be a senior official of the national laboratory or facility who 
is not involved in day-to-day technology partnerships, patents, or 
technology licensing, or, if appointed from outside the laboratory or 
facility, function as such a senior official.
    (c) Duties.--Each ombudsman appointed under subsection (a) shall--
        (1) serve as the focal point for assisting the public and 
    industry in resolving complaints and disputes with the national 
    laboratory or facility regarding technology partnerships, patents, 
    and technology licensing;
        (2) promote 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
        (3) 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--
            (A) the Secretary;
            (B) the Administrator for Nuclear Security;
            (C) the Director of the Office of Dispute Resolution of the 
        Department of Energy; and
            (D) the employees of the Department responsible for the 
        administration of the contract for the operation of each 
        national laboratory or facility that is a subject of the 
        report, for consideration in the administration and review of 
        that contract.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.