[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 804 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 804

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 14, 1999

 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

_______________________________________________________________________

                                 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 1999''.

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

SEC. 3. LICENSING FEDERALLY OWNED INVENTIONS.

    (a) In General.--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 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, which 
        may be extended by the agency upon the applicant's request and 
        the applicant's demonstration that the refusal of such an 
        extension would be unreasonable as specified in the license;
            ``(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. Such terms and conditions shall include 
provisions--
            ``(1) retaining a nontransferable, 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; 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 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 and/or marketing of the invention, except that any such 
plan may 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. 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 with a nonprofit organization or small business firm, 
the Federal agency employing such coinventor may, for the purpose of 
consolidating rights in the invention and if it finds 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 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 no other transaction under this 
        chapter is conditioned on such acquisition.''; and
            (2) in section 207(a)--
                    (A) in paragraph (2), by striking ``patent 
                applications, patents, or other forms of protection 
                obtained'' and inserting ``inventions''; and
                    (B) in paragraph (3), 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''.

SEC. 5. 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 ``, if 
                the inventor's or coinventor's rights are assigned to 
                the United States'' after ``inventor or coinventors'';
                    (B) in subsection (a)(1)(B), by striking 
                ``succeeding fiscal year'' and inserting ``2 succeeding 
                fiscal years''; and
                    (C) in subsection (b)(2), by striking ``invention'' 
                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. 6. 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 enactment 1 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.--
            (1) In general.--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--
                    (A) 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
                    (B) establish and distribute to appropriate Federal 
                agencies--
                            (i) 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
                            (ii) 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).
            (2) Procedure design.--Procedures established under this 
        subsection shall be designed to the extent possible to--
                    (A) use or modify existing procedures;
                    (B) minimize burdens on Federal agencies;
                    (C) encourage industrial partnerships with national 
                laboratories; and
                    (D) 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. 7. 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. 8. 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, 208, 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, 208, 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 year and the 
                agency's plans for conducting its technology transfer 
                function for the upcoming year, including its 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 year, including--
                            ``(i) the number of patent applications 
                        filed;
                            ``(ii) the number of patents received;
                            ``(iii) the number of executed royalty-
                        bearing licenses, both exclusive and non-
                        exclusive, and the time elapsed from the date 
                        the license was requested to the date the 
                        license was issued;
                            ``(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;
                            ``(v) the number of licenses terminated; 
                        and
                            ``(vi) any other parameters or discussion 
                        that the agency deems relevant or unique to its 
                        practice of technology transfer.
            ``(3) Copy to secretary; congress.--The agency shall 
        transmit a copy of the report to the Secretary of Commerce for 
        inclusion in the annual report to Congress and the President as 
        set forth in subsection (g)(2) below.
            ``(4) Public availability.--The agency is also strongly 
        encouraged to make the required information available to the 
        public through web sites or other electronic means.'';
            (3) by striking subsection (g)(2) and inserting the 
        following:
            ``(2) Reports.--
                    ``(A) Annual report required.--The Secretary shall 
                submit each fiscal year, beginning one year after 
                enactment of the Technology Transfer Commercialization 
                Act of 1999, a summary report to the President and the 
                Congress on the use by the agencies and the Secretary 
                of the authorities specified in this Act and in 
                sections 207, 208, 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, lessons learned, and successful 
                        approaches in the licensing and transfer of 
                        technology in the context of the agencies' 
                        missions; and
                            ``(iii) discuss the progress made toward 
                        development of useful measures of the outcomes 
                        of these programs.
                    ``(C) Public availability.--The Secretary shall 
                make the report available to the public through 
                Internet websites 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 nt); and
            ``(2) are to be implemented in coordination with the 
        implementation of that Act.''.
    (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.--At least once every 5 years, beginning one year 
after enactment of the Technology Transfer Commercialization Act of 
1999, the Comptroller General shall transmit a report to the 
appropriate committee of the Senate and House of Representatives on the 
effectiveness of the various programs in this Act, including findings, 
conclusions, and recommendations for improvements in such programs.''.
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