[Congressional Record (Bound Edition), Volume 145 (1999), Part 7]
[House]
[Pages 9152-9157]
[From the U.S. Government Publishing Office, www.gpo.gov]



           TECHNOLOGY TRANSFER COMMERCIALIZATION ACT OF 1999

  Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 209) to improve the ability of Federal agencies to 
license federally owned inventions, as amended.
  The Clerk read as follows:

                                H.R. 209

       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. 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.

[[Page 9153]]

       ``(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 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.

[[Page 9154]]



     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 one year after enactment of the Technology Transfer 
     Commercialization Act of 1999, 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 nt);
       ``(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 nt).''.
       (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.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Wisconsin (Mr. Sensenbrenner) and the gentleman from Colorado (Mr. 
Udall) each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).


                             General Leave

  Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks on the bill, H.R. 209.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, in the past two decades, Congress, through legislation 
considered by the Committee on Science, has established a system to 
transfer and commercialize unclassified technology from our Federal 
laboratories to ensure that United States citizens receive the full 
benefit from our government's investment in research and development.
  To help further these goals, the Committee on Science first reported 
the Stephenson-Wydler Technology Innovation Act of 1980. The committee 
expanded on that landmark legislation with the passage of the Federal 
Technology Transfer Act of 1986, the National Competitive Technology 
Transfer Act of 1989, the American Technology Preeminence Act of 1991, 
and the National Technology Transfer and Advancement Act of 1995, among 
others.
  As a result, the Committee on Science has strengthened and improved 
the process of technology transfer from our Federal labs. Technology 
transfer has resulted in products which are currently being used to 
enhance our quality of life.
  A few examples include biomedical products, such as the AIDS home 
testing kit; transportation innovations, such as the global positioning 
system; and new materials technology that make automobiles lighter and 
more fuel-efficient.
  H.R. 209 continues the Committee on Science's long and rich history 
of advancing technology transfer to help boost our Nation's standard of 
living. The bill improves and streamlines the ability of Federal 
agencies to license federally-owned inventions.
  Under the Technology Transfer Commercialization Act, Federal agencies 
would be provided with two important new tools for effectively 
commercializing on-the-shelf government-owned inventions. First, the 
bill's revised authorities of Section 209 of the Bayh-Dole Act; and 
second, the ability to license technology as part of a cooperative 
research and development agreement.
  Both mechanisms make Federal technology transfer programs much more 
attractive to American private industries that seek to form 
partnerships with the Federal labs.
  I congratulate the chairwoman of the Subcommittee on Technology, the 
gentlewoman from Maryland (Mrs. Morella) for introducing H.R. 209, and 
for her very capable efforts in working cooperatively with members of 
the minority, the administration, and the

[[Page 9155]]

other body to reach an agreement on this important bipartisan bill.
  Mr. Speaker, H.R. 209 was reported by the committee without objection 
by voice vote and has been discharged by the Committee on the 
Judiciary, to which the bill was sequentially referred.
  I appreciate the cooperation of the chairman and ranking member of 
the Committee on the Judiciary, the gentleman from Illinois (Mr. Hyde) 
and the gentleman from Michigan (Mr. Conyers), for their cooperation in 
expeditiously bringing this bill to the floor. H.R. 209 is yet another 
important step in refining our Nation's technology transfer laws to 
remove existing impediments to enhance government and industry 
collaboration, and I urge its adoption.
  Mr. Speaker, I reserve the balance of my time.
  Mr. UDALL of Colorado. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of H.R. 209, the Technology Transfer 
Commercialization Act of 1999. H.R. 209 is the product of 2 years of 
hard work on the part of the Committee on Science, the Senate Committee 
on Commerce, the Senate Committee on the Judiciary, and the 
administration.

                              {time}  1445

  We seem finally to have developed a version of the legislation that 
is acceptable to all these parties.
  This is no small feat in the world of patent policy, and I want to 
thank the gentleman from Wisconsin (Chairman Sensenbrenner), the 
gentleman from California (Mr. Brown), the gentlewoman from Maryland 
(Mrs. Morella), the subcommittee chair, and the gentleman from Michigan 
(Mr. Barcia), the subcommittee ranking Democrat, for their hard work 
which has put us in this enviable position.
  H.R. 209 is the first comprehensive review of Federal patent policy 
in 15 years. The 1980 Bayh-Dole Act, which it amends, has made a major 
difference in the commercialization of Federal inventions. Before Bayh-
Dole passed, it was relatively rare for inventions resulting from 
Federal research to reach their market potential.
  As many as 20,000 Federal inventions were patented but not licensed. 
Only two or three inventions at that point had achieved royalties as 
high as a million dollars, and the total royalty stream for the entire 
Federal Government at that time was less than the royalties received by 
a mid-sized university today.
  Bayh-Dole has opened major opportunities to research universities 
like the University of Colorado, which is in my district in Colorado. 
It has been a major contributor to the outreach activities of 
contractor-operated laboratories like the National Renewable Energy 
Laboratory, located also in Colorado. It has led to benefits for 
Federally employed inventors and their laboratories, including NIST and 
NOAA at the Department of Commerce and throughout the government.
  Over the 19 years since the enactment of the Bayh-Dole Act, we have 
learned of the need for some improvements. The bill before us takes 
advantage of the lessons learned and is intended to make the law more 
user friendly. It also updates the act to reflect the new ways that 
industry now gets and shares information.
  One important section of the bill developed by the gentlewoman from 
California (Mrs. Tauscher) deserves special mention. That section 
provides for the Committee on National Security, part of the Office of 
Science and Technology Policy, to work with affected agencies, to make 
sure that major cooperative research and development agreements get 
proper interagency review.
  Some of these cooperative agreements involve issues of national 
security, domestic competitiveness, and even international 
competitiveness. These clearly extend beyond the expertise of the 
contracting agency and interagency clearance will permit resolution of 
significant issues before agreements are signed.
  We are pleased that the Committee on National Security has begun its 
work in anticipation of the passage of this provision and that they are 
also examining analogous situations that involve Work for Others 
agreements and patent licensing.
  Mr. Speaker, H.R. 209 is very similar to legislation that passed the 
House twice last Congress. A handful of improvements have been made at 
the suggestion of the Senate Judiciary Committee. Jurisdictional 
differences in the Senate also appear to have been worked out.
  So it is our hope that if we can pass this bill today, it will be 
considered in the near future by the Senate and cleared by the 
President perhaps this month. I urge passage of the bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield such time as she may consume 
to the gentlewoman from Maryland (Mrs. Morella).
  Mrs. MORELLA. Mr. Speaker, I shall not exceed 10 minutes, although I 
could with this bill, and it has been around long enough. It was passed 
by the House in the last session by our Committee on Science. I 
appreciate the time that the gentleman from Wisconsin has yielded to 
me.
  Mr. Speaker, as previously stated by the gentleman from Wisconsin 
(Chairman Sensenbrenner) from the Committee on Science, Congress has 
long encouraged the transfer of unclassified technology created in our 
Federal laboratories to United States private industry.
  Our Federal laboratories have long been considered one of our 
greatest scientific research and development resources, employing one 
out of every six scientists in the country, and encompassing one-fifth 
of the country's laboratory and equipment capabilities.
  Effectively capturing this wealth of ideas and technology from our 
Federal laboratories through the transfer to the private industry for 
commercialization has helped to bolster our Nation's ability to compete 
in the global marketplace. By permitting effective collaboration 
between our Federal laboratories and private industry, new technologies 
are being rapidly commercialized.
  Federal technology transfer stimulates the American economy. It 
enhances the competitive position of the United States industry 
internationally, promotes the development and use of new technologies 
developed under taxpayer funded research so those innovations are 
incorporated quickly and effectively into practice, and that is to the 
benefit of the American public.
  By reducing the delay and the uncertainty created by existing 
procedural barriers, by lowering the transactional costs associated 
with licensing Federal technologies from the government, we could 
greatly increase participation by the private sector in its technology 
transfer programs.
  This approach would expedite the commercialization of government-
owned inventions; and through royalties, it could reduce the cost to 
the American taxpayer for the production of new technology-based 
products created in our Nation's Federal laboratories. That is the 
intention of the bill that is before us.
  The goal of H.R. 209, the Technology Transfer Commercialization Act, 
is to remove the procedural obstacles and, to the greatest extent 
possible within the public interest, the uncertainty involved in the 
licensing of Federally patented inventions created in a government-
owned, government-operated laboratory by applying the successful Bayh-
Dole Act provisions to a GOGO.
  As a result, the Technology Transfer Commercialization Act provides 
Federal laboratories with two important new tools for effectively 
commercializing on-the-shelf, government-owned inventions: one, the 
bill's revised authorities of section 209 of the Bayh-Dole Act, and, 
two, the ability to license technology as part of a CRADA.
  Both mechanisms make Federal technology transfer programs much more 
attractive to United States private companies that seek to form 
partnerships with Federal laboratories.
  H.R. 209, as amended by the committee, also makes a number of smaller 
adjustments to the Bayh-Dole Act and the Stevenson-Wydler Act of 1980 
to improve those laws and to reflect a series of consensus lessons 
learned

[[Page 9156]]

from 19 years of practical application of our current Federal 
technology transfer laws.
  Given the importance and benefits of technology transfer, the 
Committee on Science and the Subcommittee on Technology, which I chair, 
continue to refine the technology transfer provisions to facilitate 
greater government, university, and industry collaboration.
  I believe it is important to note that, with the enactment of these 
new authorities, most recently with the National Technology Transfer 
and Advancement Act of 1995, and now with the Technology Transfer 
Commercialization Act of 1999, that Congress has gone to great lengths 
to provide the Federal agencies with unprecedented authorities to enter 
into research and development partnerships with industry.
  It is only fair that, as public stewards, these agencies must now be 
held accountable for aggressively applying these mechanisms.
  Too many times the private sector's perception is that the 
bureaucracy's main concern is avoiding criticism in making decisions, 
not in completing the deal. This complaint has been heard too many 
times to not believe there is some truth behind the charge.
  Innovation is always a difficult task. It must be approached 
aggressively and prudently. Those are not contradictory goals. They 
require good judgment combined with the willingness to take risks.
  So it is my expectation using our oversight powers to ensure that 
this will be so, that Federal agencies can now effectively utilize the 
expanded authorities that we in Congress have provided and which we 
fully expect them to use to promote partnerships with industry.
  I want to also note that the bill before us represents a bipartisan 
and a bicameral consensus. I am pleased to have worked closely with the 
members of the minority, the administration, and the Senate in helping 
to perfect the bill since it was originally introduced.
  I am especially pleased that the administration has issued a 
statement of administration policy stating that, ``the Administration 
supports House passage of H.R. 209, which will significantly facilitate 
the licensing of government-owned inventions by Federal agencies.''
  I would like to thank the gentleman from Wisconsin (Mr. 
Sensenbrenner) and the gentleman from California (Mr. Brown), chairman 
and ranking member of the Committee on Science, as well as the 
gentleman from Michigan (Mr. Barcia), ranking member of the 
Subcommittee on Technology, for their support of H.R. 209.
  I also want to commend a number of the Members of the other body, 
Senators Rockefeller, Frist, Hatch and Leahy for their input and 
support in helping to refine the legislation.
  It is my understanding that H.R. 209 will soon be placed before the 
Senate for its consideration. I look forward to its expedited 
consideration and its eventual enactment into law in the near future.
  So I urge my colleagues to support H.R. 209 and to pass this 
important measure.
  Mr. Speaker, as previously stated by the Chairman of the Science 
Committee, Congress has long encouraged the transfer of unclassified 
technology created in our Federal laboratories to United States private 
industry.
  Our Federal laboratories have long been considered one of our 
greatest scientific research and development resources--employing one 
of every six scientists in the country, and encompassing one-fifth of 
the country's laboratory and equipment capabilities.
  Effectively capturing this wealth of ideas and technology from our 
Federal labs, through the transfer to private industry for 
commercialization, has helped to bolster our Nation's ability to 
compete in the global marketplace.
  By permitting effective collaboration between our Federal 
laboratories and private industry, new technologies are being rapidly 
commercialized.
  Federal technology transfer stimulates the American economy, enhances 
the competitive position of United States industry internationally, and 
promotes the development and use of new technologies developed under 
taxpayer funded research so those innovations are incorporated quickly 
and effectively into practice--to the benefit of the American public.
  One of the most successful legislative frameworks for advancing 
Federal technology transfer has been the Bayh-Dole Act.
  The Bayh-Dole Act, enacted in 1980, permits universities, not-for-
profit organizations, and small businesses to obtain title to 
scientific inventions developed with Federal Government support.
  The Bayh-Dole Act also allows Federal agencies to license Government-
owned patented scientific inventions either nonexclusively, partially 
exclusively, or exclusively, depending upon which license is determined 
to be the most effective means for achieving commercialization.
  Critical pressures originally prompted the passage of the Bayh-Dole 
Act.
  Prior to its enactment, many discoveries resulting from Federally-
funded scientific research were not commercialized for the American 
public's benefit.
  Since the Federal Government lacked the resources to market new 
inventions, and private industry was reluctant to make high-risk 
investments without the protection of patent rights, many valuable 
innovations were left unused on the shelf of Federal laboratories.
  With its success licensing Federal inventions, the Bayh-Dole Act is 
widely viewed as an effective framework for Federal technology 
transfer.
  For example, the Association of University Technology Managers (AUTM) 
conducted a 1996 study on the effect of the Bayh-Dole Act.
  AUTM concluded that the law garnered tremendous economic benefits not 
just for the universities and private industry directly involved in 
each partnership, but more importantly, for the United States economy 
as a whole.
  The AUTM report documented that the impact of the Bayh-Dole Act 
represented a very real gain to Federal agencies and the Nation since 
it not only encourages the commercialization of Government-owned 
patents that would otherwise gather dust on the shelf, but it also 
brings in revenues to the Federal Government through licensing fees.
  Accordingly, the process for the licensing of Government-owned 
patents should continue to be refined by streamlining the procedures 
and by removing the uncertainty associated with the licensing process.
  Both past and prospective private industry partners, however, have 
voiced their concerns regarding the Federal technology licensing 
process.
  The private sector has already demonstrated a strong interest in the 
strategic advantages of partnering with a Federal laboratory through a 
Cooperative Research and Development Agreement (CRADA) or through the 
licensing of Government-owned technology, but companies are deterred by 
the delays and uncertainty often associated with the lengthy Federal 
technology transfer process.
  These procedural barriers and delays can increase transaction costs 
and are often incompatible with the private sector's need for a swift 
commercialization calendar.
  The present regulations governing Federal technology transfer have 
also made it difficult for a Government-owned, Government-operated 
laboratory (GOGO) to bring existing scientific inventions into a CRADA 
even when its inclusion would create a more complete technology 
package.
  Currently, a GOGO does not have the flexibility that small businesses 
and non-profits have in managing their inventions under the Bayh-Dole 
Act.
  Also, a GOGO, unlike a GOCO, currently faces statutory notification 
provisions when granting exclusive licenses, and more importantly, it 
cannot include existing inventions in a CRADA.
  By reducing the delay and uncertainty created by existing procedural 
barriers, and by lowering the transactional costs associated with 
licensing Federal technologies from the Government, we could greatly 
increase participation by the private sector in its technology transfer 
programs.
  This approach would expedite the commercialization of Government-
owned inventions, and through royalties, could reduce the cost to the 
American taxpayer for the production of new technology-based products 
created in our Nation's Federal laboratories.
  That is our intention in the bill before us.
  The goal of H.R. 209, The Technology Transfer Commercialization Act, 
is to remove the procedural obstacles and, to the greatest extent 
possible within the public interest, the uncertainty involved in the 
licensing of Federally patented inventions created in a Government-
owned, Government-operated laboratory, by applying the successful Bayh-
Dole Act provisions to a GOGO.

[[Page 9157]]

  As a result, the Technology Transfer Commercialization Act provides 
Federal laboratories with two important new tools for effectively 
commercializing on-the-shelf, Government-owned inventions:
  (1) The bill's revised authorities of Section 209 of the Bayh-Dole 
Act; and
  (2) The ability to license technology as part of a CRADA.
  Both mechanisms make Federal technology transfer programs much more 
attractive to United States private companies that seek to form 
partnerships with Federal laboratories.
  H.R. 209, as amended by the Committee, also makes a number of smaller 
adjustments to the Bayh-Dole Act and the Stevenson-Wydler Act of 1980 
to improve those laws and to reflect a series of consensus ``lessons 
learned'' from 19 years of practical application of our current Federal 
technology transfer laws.
  Given the importance and benefits of technology transfer, the Science 
Committee and my Technology Subcommittee have continued to refine the 
technology transfer process to facilitate greater Government, 
university, and industry collaboration.
  As a result, the ability of the United States to compete globally has 
been strengthened and a new paradigm for greater collaboration among 
the scientific enterprises that conduct our nation's research and 
development--Government, industry, and universities--has been 
developed.
  Federal agencies have now been provided with unparalleled authorities 
to promote technology transfer.
  I believe it's important, however, to note that with the enactment of 
these new authorities, most recently with the National Technology 
Transfer and Advancement Act of 1995, and now with the Technology 
Transfer Commercialization Act of 1999, Congress has gone to great 
lengths to provide the Federal agencies with unprecedented authorities 
to enter into research and development partnerships with industry.
  It is only fair that as public stewards, these agencies must now be 
held accountable for aggressively applying these mechanisms.
  Too many times the private sector's perception is that the 
bureaucracy's main concern is avoiding criticism in making decisions, 
not in completing the deal.
  This complaint has been heard too many times to not believe there is 
some truth behind the charge.
  Innovation is always a difficult task and must be approached 
aggressively and prudently.
  These are not contradictory goals--they require good judgment 
combined with the willingness to take risks.
  It is my expectation, and using our oversight powers to ensure that 
his will be so, that Federal agencies can now effectively utilize the 
expanded authorities we, in Congress, have provided and which we fully 
expect them to use to promote partnerships with industry.
  Let me close by noting that the bill before us represents a 
bipartisan and bicameral consensus.
  I am pleased to have worked closely with the members of the Minority, 
the Administration, and the Senate is helping to perfect the bill since 
it was originally introduced.
  I am especially pleased that the Administration has issued a 
Statement of Administration Policy stating that, ``the Administration 
supports House passage of H.R. 209, which will significantly facilitate 
the licensing of Government-owned inventions by Federal agencies.''
  I would like to thank the Chairman and Ranking Member of the Science 
committee, Mr. Sensenbrenner and Mr. Brown, as well as the Ranking 
Member of my Technology Subcommittee, Mr. Barcia, for their support of 
H.R. 209.
  I would also like to commend a number of members of the other body, 
Senators Rockefeller, Frist, Hatch, and Leahy for their input and 
support in helping to refine the legislation.
  It is my understanding that H.R. 209 will soon be placed before the 
Senate for its consideration.
  I look forward to its expedited consideration and its eventual 
enactment into law in the very near future.
  I urge all of my colleagues to support H.R. 209, the Technology 
Transfer Commercialization Act of 1999 and to pass this important 
measure.
  Mr. BERRY. Mr. Speaker, Ms. Morella is a Member I have great respect 
for because of her bipartisanship.
  I appreciate the efforts made in the H.R. 209, the Technology 
Transfer Commercialization Act of 1999, to ensure members of the public 
benefit from inventions created by the federal government.
  However, I am concerned that this bill could lead to consumers having 
to pay more for prescription drugs as a result of there not being 
adequate notification or time to raise public objections concerning the 
government granting a company the exclusive right to manufacture a 
prescription drug developed by federal researchers.
  I look forward to working with members of the House of 
Representatives and the Senate to ensure that any legislation 
eventually enacted works to the benefit of the public and businesses, 
alike.
  Mr. UDALL of Colorado. Mr. Speaker, I have no further requests for 
time, and I yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Wisconsin (Mr. Sensenbrenner) that the House suspend the 
rules and pass the bill, H.R. 209, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________