[Congressional Record Volume 144, Number 150 (Tuesday, October 20, 1998)]
[House]
[Pages H11679-H11681]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           TECHNOLOGY TRANSFER COMMERCIALIZATION ACT OF 1998

  Mrs. MORELLA. Mr. Speaker, I ask unanimous consent that the Committee 
on Science be discharged from further consideration of the bill (H.R. 
4859) to improve the ability of Federal agencies to license federally 
owned inventions, and ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Maryland?
  There was no objection.
  The Clerk read the bill, as follows:

                               H.R. 4859

       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, 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) 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 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 
     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. Such terms and 
     conditions 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; 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

[[Page H11680]]

     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 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 or small 
     business firm in accordance with the provisions of this 
     chapter; 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) 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.

       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 ``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. 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 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 one 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. 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. STUDY AND REPORT ON BIOLOGICAL DEPOSITS IN SUPPORT OF 
                   BIOTECHNOLOGY PATENTS.

       (a) In General.--Not later than 6 months after the date of 
     the enactment of this Act, the General Accounting Office, in 
     consultation with the United States Patent and Trademark 
     Office, shall conduct a study and submit a report to Congress 
     on the potential risks to the United States biotechnology 
     industry relating to biological deposits in support of 
     biotechnology patents.
       (b) Contents.--The study conducted under this section shall 
     include--
       (1) an examination of the risk of export and the risk of 
     third-party transfer of biological deposits, and the risks 
     posed by the change to 18-month publication requirements;
       (2) an analysis of comparative legal and regulatory 
     regimes; and
       (3) any related recommendations.
       (c) Consideration of Report.--In drafting regulations 
     affecting biological deposits (including any modification of 
     37 Code of Federal Regulations 1.801 et seq.), the United 
     States Patent and Trademark Office shall consider the 
     recommendations of the study conducted under this section.

     SEC. 9. PROVISIONAL APPLICATIONS.

       (a) Abandonment.--Section 111(b)(5) of title 35, United 
     States Code, is amended to read as follows:
       ``(5) Abandonment.--Notwithstanding the absence of a claim, 
     upon timely request and as prescribed by the Commissioner, a 
     provisional application may be treated as an application 
     filed under subsection (a). Subject to section 119(e)(3) of 
     this title, if no such request is made, the provisional 
     application shall be regarded as abandoned 12 months after 
     the filing date of such application and shall not be subject 
     to revival thereafter.''.
       (b) Technical Amendment Relating to Weekends and 
     Holidays.--Section 119(e) of title 35, United States Code, is 
     amended by adding at the end the following:
       ``(3) If the day that is 12 months after the filing date of 
     a provisional application falls on a Saturday, Sunday, or 
     Federal holiday within the District of Columbia, the period 
     of pendency of the provisional application shall be extended 
     to the next succeeding secular or business day.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to a provisional application filed on or after 
     June 8, 1995.


[[Page H11681]]


  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

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