[Congressional Record Volume 144, Number 67 (Friday, May 22, 1998)]
[Senate]
[Pages S5451-S5453]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself and Mr. Frist):
  S. 2120. A bill to improve the ability of Federal agencies to license 
federally--owned inventions; to the Committee on Commerce, Science, and 
Transportation.


           TECHNOLOGY TRANSFER COMMERCIALIZATION ACT OF 1998

 Mr. ROCKFELLER. Mr. President, today with my colleague Senator 
Frist, I introduce the Technology Transfer Act of 1998. This bill would 
make technical changes and clarifications to the legislation which 
governs the transfer of intellectual property from the federal 
government to the private sector.
  The original Technology Transfer Improvements Act (TTIA), which I was 
author of in 1995, allowed for easier and quicker access to 
intellectual property which the government owns and private industry 
wants. It created a win-win situation. The government gets royalties 
from these licenses, private industry gets the intellectual property 
that it needs, and Americans get jobs from the production of inventions 
based on this intellectual property.
  This bill builds on the strong positive response from TTIA. It 
reduces the requirements for obtaining a non-exclusive license in order 
to allow as many companies and individuals as possible access to the 
information. It also addresses private industry's concerns about 
maintaining confidential information within applications.
  However, this does not come at the expense of the government being 
able to keep control of its property. This bill also clarifies the 
ability of the licensing agencies to terminate a license if certain 
criteria are not met. Furthermore, it allows the government to 
consolidate intellectual property which is developed in cooperation 
with a private entity so that the package can be relicensed to a third 
party.

[[Page S5452]]

  Technology transfer is a vital part of our national economy. It is 
what allows our industries to remain at the leading edge in their 
field. This bill clarifies and adjusts current legislation to allow for 
an even better working relationship between the federal government and 
private industry. I encourage my colleagues to support this bill and I 
ask unanimous consent that the text of the bill appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2120

       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 to 
     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 the section unless public notice 
     of the intent to grant such 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 or 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.
       (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--
       (1) specific criteria to indicate the necessity for 
     interagency review of an approval or disapproval described in 
     subsection (a); and
       (2) procedures for carrying out such interagency review.

     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 of 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 co-inventor 
     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).

[[Page S5453]]

     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''.
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