[House Report 104-390]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 104-390
_______________________________________________________________________
NATIONAL TECHNOLOGY TRANSFER AND ADVANCEMENT ACT OF 1995
_______________________________________________________________________
December 7, 1995.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Walker, from the Committee on Science,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 2196]
[Including cost estimate of the Congressional Budget Office]
The Committee on Science, to whom was referred the bill
(H.R. 2196) to amend the Stevenson-Wydler Technology Innovation
Act of 1980 with respect to inventions made under cooperative
research and development agreements, and for other purposes,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
I. Amendment.......................................................2
II. Purpose of the Bill.............................................8
III. Background and Need for the Legislation.........................8
IV. Legislative History............................................10
V. Outline Summary of Major Provisions of the Bill................11
VI. Section-by-Section Analysis....................................13
Section 1. Short Title................................... 13
Section 2. Findings...................................... 13
Section 3. Use of Federal Technology..................... 13
Section 4. Title to Intellectual Property Arising from
Cooperative Research and Development Agreements........ 13
Section 5. Distribution of Income from Intellectual
Property Received by Federal Laboratories.............. 14
Section 6. Employee Activities........................... 14
Section 7. Amendment to Bayh-Dole Act.................... 14
Section 8. National Institute of Standards and Technology
Act Amendments......................................... 14
Section 9. Research Equipment............................ 14
Section 10. Personnel.................................... 14
Section 11. Fastener Quality Act Amendments.............. 15
Section 12. Standards Conformity......................... 15
Section 13. Sense of Congress............................ 15
VII. Committee Views................................................15
VIII. Summary of Hearings............................................26
a. 103rd Congress........................................ 26
b. 104th Congress........................................ 28
IX. Summary of Committee Actions...................................32
a. Subcommittee Markup................................... 32
b. Committee Markup...................................... 32
X. Congressional Budget Office Analysis and Cost Estimates........33
XI. Effect of Legislation on Inflation.............................35
XII. Oversight Findings and Recommendations.........................35
XIII. Oversight Findings and Recommendations by the Committee on
Government Reform and Oversight................................35
XIV. Changes in Existing Law Made by the Bill, As Reported..........36
XV. Committee Recommendations......................................52
XVI. Reports to Congress............................................52
XVII. Exchange of Committee Correspondence...........................53
XVIII.Additional Views...............................................55
XIX. Proceedings from Subcommittee Markup of H.R. 2196..............57
XX. Proceedings from Full Committee Markup of H.R. 2196...........105
I. Amendment
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Technology Transfer and
Advancement Act of 1995''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Bringing technology and industrial innovation to the
marketplace is central to the economic, environmental, and
social well-being of the people of the United States.
(2) The Federal Government can help United States business
to speed the development of new products and processes by
entering into cooperative research and development agreements
which make available the assistance of Federal laboratories to
the private sector, but the commercialization of technology and
industrial innovation in the United States depends upon actions
by business.
(3) The commercialization of technology and industrial
innovation in the United States will be enhanced if companies,
in return for reasonable compensation to the Federal
Government, can more easily obtain exclusive licenses to
inventions which develop as a result of cooperative research
with scientists employed by Federal laboratories.
SEC. 3. USE OF FEDERAL TECHNOLOGY.
Subparagraph (B) of section 11(e)(7) of the Stevenson-Wydler
Technology Innovation Act of 1980 (15 U.S.C. 3710(e)(7)(B)) is amended
to read as follows:
``(B) A transfer shall be made by any Federal agency under
subparagraph (A), for any fiscal year, only if the amount so
transferred by that agency (as determined under such subparagraph)
would exceed $10,000.''.
SEC. 4. TITLE TO INTELLECTUAL PROPERTY ARISING FROM COOPERATIVE
RESEARCH AND DEVELOPMENT AGREEMENTS.
Subsection (b) of section 12 of the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3710a(b)) is amended to read as
follows:
``(b) Enumerated Authority.--(1) Under an agreement entered into
pursuant to subsection (a)(1), the laboratory may grant, or agree to
grant in advance, to a collaborating party patent licenses or
assignments, or options thereto, in any invention made in whole or in
part by a laboratory employee under the agreement, for reasonable
compensation when appropriate. The laboratory shall ensure, through
such agreement, that the collaborating party has the option to choose
an exclusive license for a field of use for any such invention under
the agreement or, if there is more than one collaborating party, that
the collaborating parties are offered the option to hold licensing
rights that collectively encompass the rights that would be held under
such an exclusive license by one party. In consideration for the
Government's contribution under the agreement, grants under this
paragraph shall be subject to the following explicit conditions:
``(A) A nonexclusive, nontransferable, irrevocable, paid-up
license from the collaborating party to the laboratory to
practice the invention or have the invention practiced
throughout the world by or on behalf of the Government. In the
exercise of such license, the Government shall not publicly
disclose trade secrets or commercial or financial information
that is privileged or confidential within the meaning of
section 552(b)(4) of title 5, United States Code, or which
would be considered as such if it had been obtained from a non-
Federal party.
``(B) If a laboratory assigns title or grants an exclusive
license to such an invention, the Government shall retain the
right--
``(i) to require the collaborating party to grant
to a responsible applicant a nonexclusive, partially
exclusive, or exclusive license to use the invention in
the applicant's licensed field of use, on terms that
are reasonable under the circumstances; or
``(ii) if the collaborating party fails to grant
such a license, to grant the license itself.
``(C) The Government may exercise its right retained under
subparagraphs (B) (ii) and (iii) only if the Government finds
that--
``(i) the action is necessary to meet health or
safety needs that are not reasonably satisfied by the
collaborating party;
``(ii) the action is necessary to meet requirements
for public use specified by Federal regulations, and
such requirements are not reasonably satisfied by the
collaborating party; or
``(iii) the collaborating party has failed to
comply with an agreement containing provisions
described in subsection (c)(4)(B).
``(2) Under agreements entered into pursuant to subsection (a)(1),
the laboratory shall ensure that a collaborating party may retain title
to any invention made solely by its employee in exchange for normally
granting the Government a nonexclusive, nontransferable, irrevocable,
paid-up license to practice the invention or have the invention
practiced throughout the world by or on behalf of the Government for
research or other Government purposes.
``(3) Under an agreement entered into pursuant to subsection
(a)(1), a laboratory may--
``(A) accept, retain, and use funds, personnel, services,
and property from a collaborating party and provide personnel,
services, and property to a collaborating party;
``(B) use funds received from a collaborating party in
accordance with subparagraph (A) to hire personnel to carry out
the agreement who will not be subject to full-time-equivalent
restrictions of the agency;
``(C) to the extent consistent with any applicable agency
requirements or standards of conduct, permit an employee or
former employee of the laboratory to participate in an effort
to commercialize an invention made by the employee or former
employee while in the employment or service of the Government;
and
``(D) waive, subject to reservation by the Government of a
nonexclusive, irrevocable, paid-up license to practice the
invention or have the invention practiced throughout the world
by or on behalf of the Government, in advance, in whole or in
part, any right of ownership which the Federal Government may
have to any subject invention made under the agreement by a
collaborating party or employee of a collaborating party.
``(4) A collaborating party in an exclusive license in any
invention made under an agreement entered into pursuant to subsection
(a)(1) shall have the right of enforcement under chapter 29 of title
35, United States Code.
``(5) A Government-owned, contractor-operated laboratory that
enters into a cooperative research and development agreement pursuant
to subsection (a)(1) may use or obligate royalties or other income
accruing to the laboratory under such agreement with respect to any
invention only--
``(A) for payments to inventors;
``(B) for a purposes described in clauses (i), (ii), (iii),
and (iv) of section 14(a)(1)(B); and
``(C) for scientific research and development consistent
with the research and development missions and objectives of
the laboratory.''.
SEC. 5. DISTRIBUTION OF INCOME FROM INTELLECTUAL PROPERTY RECEIVED BY
FEDERAL LABORATORIES.
Section 14 of the Stevenson-Wydler Technology Innovation Act of
1980 (15 U.S.C. 3710c) is amended--
(1) by amending subsection (a)(1) to read as follows:
``(1) Except as provided in paragraphs (2) and (4), any royalties or
other payments received by a Federal agency from the licensing and
assignment of inventions under agreements entered into by Federal
laboratories under section 12, and from the licensing of inventions of
Federal laboratories under section 207 of title 35, United States Code,
or under any other provision of law, shall be retained by the
laboratory which produced the invention and shall be disposed of as
follows:
``(A)(i) The head of the agency or laboratory, or such
individual's designee, shall pay each year the first $2,000,
and thereafter at least 15 percent, of the royalties or other
payments to the inventor or coinventors.
``(ii) An agency or laboratory may provide appropriate
incentives, from royalties, or other payments, to laboratory
employees who are not an inventor of such inventions but who
substantially increased the technical value of such inventions.
``(iii) The agency or laboratory shall retain the royalties
and other payments received from an invention until the agency
or laboratory makes payments to employees of a laboratory under
clause (i) or (ii).
``(B) The balance of the royalties or other payments shall
be transferred by the agency to its laboratories, with the
majority share of the royalties or other payments from any
invention going to the laboratory where the invention occurred.
The royalties or other payments so transferred to any
laboratory may be used or obligated by that laboratory during
the fiscal year in which they are received or during the
succeeding fiscal year--
``(i) to reward scientific, engineering, and
technical employees of the laboratory, including
developers of sensitive or classified technology,
regardless of whether the technology has commercial
applications;
``(ii) to further scientific exchange among the
laboratories of the agency;
``(iii) for education and training of employees
consistent with the research and development missions
and objectives of the agency or laboratory, and for
other activities that increase the potential for
transfer of the technology of the laboratories of the
agency;
``(iv) for payment of expenses incidental to the
administration and licensing of intellectual property
by the agency or laboratory with respect to inventions
made at that laboratory, including the fees or other
costs for the services of other agencies, persons, or
organizations for intellectual property management and
licensing services; or
``(v) for scientific research and development
consistent with the research and development missions
and objectives of the laboratory.
``(C) All royalties or other payments retained by the
agency or laboratory after payments have been made pursuant to
subparagraphs (A) and (B) that is unobligated and unexpended at
the end of the second fiscal year succeeding the fiscal year in
which the royalties and other payments were received shall be
paid into the Treasury.'';
(2) in subsection (a)(2)--
(A) by inserting ``or other payments'' after
``royalties''; and
(B) by striking ``for the purposes described in
clauses (i) through (iv) of paragraph (1)(B) during
that fiscal year or the succeeding fiscal year'' and
inserting in lieu thereof ``under paragraph (1)(B)'';
(3) in subsection (a)(3), by striking ``$100,000'' both
places it appears and inserting ``$150,000'';
(4) in subsection (a)(4)--
(A) by striking ``income'' each place it appears
and inserting in lieu thereof ``payments'';
(B) by striking ``the payment of royalties to
inventors'' in the first sentence thereof and inserting
in lieu thereof ``payments to inventors'';
(C) by striking ``clause (i) of paragraph (1)(B)''
and inserting in lieu thereof ``clause (iv) of
paragraph (1)(B)'';
(D) by striking ``payment of the royalties,'' in
the second sentence thereof and inserting in lieu
thereof ``offsetting the payments to inventors,''; and
(E) by striking ``clauses (i) through (iv) of'';
and
(5) by amending paragraph (1) of subsection (b) to read as
follows:
``(1) by a contractor, grantee, or participant, or an
employee of a contractor, grantee, or participant, in an
agreement or other arrangement with the agency, or''.
SEC. 6. EMPLOYEE ACTIVITIES.
Section 15(a) of the Stevenson-Wydler Technology Innovation Act of
1980 (15 U.S.C. 3710d(a)) is amended--
(1) by striking ``the right of ownership to an invention
under this Act'' and inserting in lieu thereof ``ownership of
or the right of ownership to an invention made by a Federal
employee''; and
(2) by inserting ``obtain or'' after ``the Government,
to''.
SEC. 7. AMENDMENT TO BAYH-DOLE ACT.
Section 210(e) of title 35, United States Code, is amended by
striking ``, as amended by the Federal Technology Transfer Act of
1986,''.
SEC. 8. NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY ACT AMENDMENTS.
The National Institute of Standards and Technology Act (15 U.S.C.
271 et seq.) is amended--
(1) in section 10(a)--
(A) by striking ``nine'' and inserting in lieu
thereof ``15''; and
(B) by striking ``five'' and inserting in lieu
thereof ``10'';
(2) in section 15--
(A) by striking ``Pay Act of 1945; and'' and
inserting in lieu thereof ``Pay Act of 1945;''; and
(B) by inserting ``; and (h) the provision of
transportation services for employees of the Institute
between the facilities of the Institute and nearby
public transportation, notwithstanding section 1344 of
title 31, United States Code'' after ``interests of the
Government''; and
(3) in section 19, by striking ``nor more than forty'' and
inserting in lieu thereof ``nor more than 60''.
SEC. 9. RESEARCH EQUIPMENT.
Section 11(i) of the Stevenson-Wydler Technology Innovation Act of
1980 (15 U.S.C. 3710(i)) is amended--
(1) by inserting ``loan, lease,'' after ``department,
may''; and
(2) by inserting ``Actions taken under this subsection
shall not be subject to Federal requirements on the disposal of
property.'' after ``education and research activities.''.
SEC. 10. PERSONNEL.
The personnel management demonstration project established under
section 10 of the National Bureau of Standards Authorization Act for
Fiscal Year 1987 (15 U.S.C. 275 note) is extended indefinitely.
SEC. 11. FASTENER QUALITY ACT AMENDMENTS.
(a) Section 2 Amendments.--Section 2 of the Fastener Quality Act
(15 U.S.C. 5401) is amended--
(1) by striking subsection (a)(4), and redesignating
paragraphs (5) through (9) as paragraphs (4) through (8),
respectively;
(2) in subsection (a)(7), as so redesignated by paragraph
(1) of this subsection, by striking ``by lot number''; and
(3) in subsection (b), by striking ``used in critical
applications'' and inserting in lieu thereof ``in commerce''.
(b) Section 3 Amendments.--Section 3 of the Fastener Quality Act
(15 U.S.C. 5402) is amended--
(1) in paragraph (1)(B) by striking ``having a minimum
tensile strength of 150,000 pounds per square inch'' and
inserting in lieu thereof ``having a minimum Rockwell C
hardness of 40 or above'';
(2) in paragraph (2), by inserting ``consensus'' after ``or
any other'';
(3) in paragraph (5)--
(A) by inserting ``or'' after ``standard or
specification,'' in subparagraph (B);
(B) by striking ``or'' at the end of subparagraph
(C);
(C) by striking subparagraph (D); and
(D) by inserting ``or produced in accordance with
ASTM F 432'' after ``307 Grade A'';
(4) in paragraph (6) by striking ``other person'' and
inserting in lieu thereof ``government agency'';
(5) in paragraph (8) by striking ``Standard'' and inserting
in lieu thereof ``Standards'';
(6) by striking paragraph (11) and redesignating paragraphs
(12) through (15) as paragraphs (11) through (14),
respectively;
(7) in paragraph (13), as so redesignated by paragraph (6)
of this subsection, by striking ``, a government agency'' and
all that follows through ``markings of any fastener'' and
inserting in lieu thereof ``or a government agency''; and
(8) in paragraph (14), as so redesignated by paragraph (6)
of this subsection, by inserting ``for the purpose of achieving
a uniform hardness'' after ``quenching and tempering''.
(c) Section 4 Repeal.--Section 4 of the Fastener Quality Act (15
U.S.C. 5403) is repealed.
(d) Section 5 Amendments.--Section 5 of the Fastener Quality Act
(15 U.S.C. 5404) is amended--
(1) in subsection (a)(1)(B) and (2)(A)(i) by striking
``subsections (b) and (c)'' and inserting in lieu thereof
``subsections (b), (c), and (d)'';
(2) in subsection (c)(2) by striking ``or, where
applicable'' and all that follows through ``section 7(c)(1)'';
(3) in subsection (c)(3) by striking ``, such as the
chemical, dimensional, physical, mechanical, and any other'';
(4) in subsection (c)(4) by inserting ``except as provided
in subsection (d),'' before ``state whether''; and
(5) by adding at the end the following new subsection:
``(d) Alternative Procedure for Chemical Characteristics.--
Notwithstanding the requirements of subsections (b) and (c), a
manufacturer shall be deemed to have demonstrated, for purposes of
subsection (a)(1), that the chemical characteristics of a lot conform
to the standards and specifications to which the manufacturer
represents such lot has been manufactured if the following requirements
are met:
``(1) The coil or heat number of metal from which such lot
was fabricated has been inspected and tested with respect to
its chemical characteristics by a laboratory accredited in
accordance with the procedures and conditions specified by the
Secretary under section 6.
``(2) Such laboratory has provided to the manufacturer,
either directly or through the metal manufacturer, a written
inspection and testing report, which shall be in a form
prescribed by the Secretary by regulation, listing the chemical
characteristics of such coil or heat number.
``(3) The report described in paragraph (2) indicates that
the chemical characteristics of such coil or heat number
conform to those required by the standards and specifications
to which the manufacturer represents such lot has been
manufactured.
``(4) The manufacturer demonstrates that such lot has been
fabricated from the coil or heat number of metal to which the
report described in paragraphs (2) and (3) relates.
In prescribing the form of report required by subsection (c), the
Secretary shall provide for an alternative to the statement required by
subsection (c)(4), insofar as such statement pertains to chemical
characteristics, for cases in which a manufacturer elects to use the
procedure permitted by this subsection.''.
(e) Section 6 Amendment.--Section 6(a)(1) of the Fastener Quality
Act (15 U.S.C. 5405(a)(1)) is amended by striking ``Within 180 days
after the date of enactment of this Act, the'' and inserting in lieu
thereof ``The''.
(f) Section 7 Amendments.--Section 7 of the Fastener Quality Act
(15 U.S.C. 5406) is amended--
(1) by amending subsection (a) to read as follows:
``(a) Domestically Produced Fasteners.--It shall be unlawful for a
manufacturer to sell any shipment of fasteners covered by this Act
which are manufactured in the United States unless the fasteners--
``(1) have been manufactured according to the requirements
of the applicable standards and specifications and have been
inspected and tested by a laboratory accredited in accordance
with the procedures and conditions specified by the Secretary
under section 6; and
``(2) an original laboratory testing report described in
section 5(c) and a manufacturer's certificate of conformance
are on file with the manufacturer, or under such custody as may
be prescribed by the Secretary, and available for
inspection.'';
(2) in subsection (c)(2) by inserting ``to the same'' after
``in the same manner and'';
(3) in subsection (d)(1) by striking ``certificate'' and
inserting in lieu thereof ``test report''; and
(4) by striking subsections (e), (f), and (g) and inserting
in lieu thereof the following:
``(e) Commingling.--It shall be unlawful for any manufacturer,
importer, or private label distributor to commingle like fasteners from
different lots in the same container, except that such manufacturer,
importer, or private label distributor may commingle like fasteners of
the same type, grade, and dimension from not more than two tested and
certified lots in the same container during repackaging and plating
operations. Any container which contains fasteners from two lots shall
be conspicuously marked with the lot identification numbers of both
lots.
``(f) Subsequent Purchaser.--If a person who purchases fasteners
for any purpose so requests either prior to the sale or at the time of
sale, the seller shall conspicuously mark the container of the
fasteners with the lot number from which such fasteners were taken.''.
(g) Section 9 Amendment.--Section 9 of the Fastener Quality Act (15
U.S.C. 5408) is amended by adding at the end the following new
subsection:
``(d) Enforcement.--The Secretary may designate officers or
employees of the Department of Commerce to conduct investigations
pursuant to this Act. In conducting such investigations, those officers
or employees may, to the extent necessary or appropriate to the
enforcement of this Act, exercise such authorities as are conferred
upon them by other laws of the United States, subject to policies and
procedures approved by the Attorney General.''.
(h) Section 10 Amendments.--Section 10 of the Fastener Quality Act
(15 U.S.C. 5409) is amended--
(1) in subsections (a) and (b), by striking ``10 years''
and inserting in lieu thereof ``5 years''; and
(2) in subsection (b), by striking ``any subsequent'' and
inserting in lieu thereof ``the subsequent''.
(i) Section 13 Amendment.--Section 13 of the Fastener Quality Act
(15 U.S.C. 5412) is amended by striking ``within 180 days after the
date of enactment of this Act''.
(j) Section 14 Repeal.--Section 14 of the Fastener Quality Act (15
U.S.C. 5413) is repealed.
SEC. 12. STANDARDS CONFORMITY.
(a) Use of Standards.--Section 2(b) of the National Institute of
Standards and Technology Act (15 U.S.C. 272(b)) is amended--
(1) in paragraph (2), by striking ``, including comparing
standards'' and all that follows through ``Federal
Government'';
(2) by redesignating paragraphs (3) through (11) as
paragraphs (4) through (12), respectively; and
(3) by inserting after paragraph (2) the following new
paragraph:
``(3) to compare standards used in scientific
investigations, engineering, manufacturing, commerce, industry,
and educational institutions with the standards adopted or
recognized by the Federal Government and to coordinate the use
by Federal agencies of private sector standards, emphasizing
where possible the use of standards developed by private,
consensus organizations;''.
(b) Conformity Assessment Activities.--Section 2(b) of the National
Institute of Standards and Technology Act (15 U.S.C. 272(b)) is
amended--
(1) by striking ``and'' at the end of paragraph (11), as so
redesignated by subsection (a)(2) of this section;
(2) by striking the period at the end of paragraph (12), as
so redesignated by subsection (a)(2) of this section, and
inserting in lieu thereof ``; and''; and
(3) by adding at the end the following new paragraph:
``(13) to coordinate Federal, State, local, and private
sector standards conformity assessment activities, with the
goal of eliminating unnecessary duplication and complexity in
the development and promulgation of conformity assessment
requirements and measures.''.
(c) Transmittal of Plan to Congress.--The National Institute of
Standards and Technology shall, by January 1, 1996, transmit to the
Congress a plan for implementing the amendments made by this section.
(d) Utilization of Consensus Standards by Federal Agencies;
Reports.--(1) To the extent practicable, all Federal agencies and
departments shall use, for procurement and regulatory applications,
standards that are developed or adopted by voluntary consensus
standards bodies.
(2) Federal agencies and departments shall consult with voluntary,
private sector, consensus standards bodies, and shall participate with
such bodies in the development of standards, as appropriate in carrying
out paragraph (1).
(3) If a Federal agency or department elects to use, for
procurement or regulatory applications, standards that are not
developed or adopted by voluntary consensus standards bodies, the head
of such agency or department shall transmit to the Office of Management
and Budget an explanation of the reasons for adopting such standards.
The Office of Management and Budget shall annually transmit to the
Congress all explanations received by it under this subsection.
SEC. 13. SENSE OF CONGRESS.
It is the sense of the Congress that the Malcolm Baldrige National
Quality Award program offers substantial benefits to United States
industry, and that all funds appropriated for such program should be
spent in support of the goals of the program.
II. Purpose of the Bill
H.R. 2196, as reported, amends the Stevenson-Wydler
Technology Innovation Act of 1980 (P.L. 96-480) and the Federal
Technology Transfer Act of 1986 (P.L. 99-502), among other
provisions. The bill seeks to provide the following objectives:
(1) To promote prompt deployment by United States industry
of discoveries created in a collaborative agreement with
federal laboratories by guaranteeing the industry partner
sufficient intellectual property rights to the invention;
(2) To provide important incentives and rewards to federal
laboratory personnel who create new inventions;
(3) To provide several clarifying and strengthening
amendments to current technology transfer laws; and
(4) To make changes affecting the Fastener Quality Act
(P.L. 101-592), the federal use of standards, and the
management and administration of scientific research and
standards measurement at the National Institute of Standards
and Technology (NIST).
III. Background and Need for the Legislation
Many of the United States economic advances of the new
millennium are rooted in the research and development performed
in our laboratories today. Our nation's future well-being,
therefore, becomes dependent on the continuous transfer of
basic science and technology from our laboratories in the
United States, including our federal laboratories, to the
private sector to create commercial goods and services.
Successful technology transfer results in the creation of
innovative products or processes becoming available to meet or
induce market demand.
Congress has long tried to encourage transfer to the
private sector of unclassified technology created in our
federal laboratories. This is eminently logical since federal
laboratories are considered one of our nation's greatest
assets; yet, they are also a largely untapped resource of
technical expertise. The United States has over 700 federal
laboratories, employing one of six scientists in the nation and
occupying one-fifth of the country's lab and equipment
capabilities. It is, therefore, important to our future
economic well-being to make the ideas and resources of our
federal laboratory scientists available to United States
companies for commercialization opportunities.
By permitting effective collaboration between our federal
laboratories and private industry, new technologies and
industrial innovation can be effectively commercialized and
brought into the broader economy, thus enhancing our nation's
ability to compete in the global marketplace. To help further
this goal, Congress first enacted the Stevenson-Wydler
Technology Innovation Act of 1980 (P.L. 96-480). The Stevenson-
Wydler Act required federal laboratories to take an active role
in technical cooperation and established technology transfer
offices at all major federal laboratories. That landmark
legislation expanded considerably with the Federal Technology
Transfer Act of 1986 (P.L. 99-502) and the National
Competitiveness Technology Transfer Act of 1989 (P.L. 101-189).
The Federal Technology Transfer Act of 1986 allowed a
government-owned, government-operated (GOGO) laboratory staffed
by federal employees to enter into a Cooperative Research and
Development Agreement (CRADA) with industry, universities, and
others. The CRADA mechanism allows a laboratory and an
industrial company to negotiate patent rights and royalties
before they conduct joint research, giving the company patent
protection for any inventions and products that result from the
collaboration. This patent protection provides an incentive for
the companies to invest in turning laboratory ideas into
commercial products. Furthermore, if a federal laboratory
negotiates the payment of royalties as part of a CRADA
arrangement, the Federal Technology Transfer Act of 1986
provides that part of those royalties are shared with the
federal inventor as a reward for his or her work and as an
incentive to them and others to report and assist in the
transfer of potentially valuable inventions. A CRADA also
provides a federal laboratory with valuable insights into the
needs and priorities of industry, and with the expertise
available only in industry, that enhances a laboratory's
ability to accomplish its mission.
The National Competitiveness Technology Transfer Act of
1989, included as Section 3131 et seq. of the Department of
Defense Authorization Act for Fiscal Year 1990 (P.L. 101-189),
extended the CRADA authority to a government-owned, contractor-
operated (GOCO) laboratory such as the ones at the Department
of Energy. It also protected information and innovations,
brought into and created through a CRADA, from disclosure for a
limited period of time.
Since the inception in 1986 of the CRADA legislation, over
2,000 have been signed, resulting in the transfer of
technology, knowledge, and expertise back and forth between our
federal laboratories and the private sector. Under current law,
the work done under a CRADA must not detract from the mission
responsibilities of a federal laboratory. The federal
laboratory may accept funds, personnel, services, and property
from the private sector partner and may provide personnel,
services, and property in return, but the labs are expressly
prohibited from providing direct funding to their collaborating
partners.
Despite the success of the CRADA legislation, there are
existing impediments to private companies entering into CRADAs.
The law was originally designed to provide a great deal of
flexibility in the negotiation of intellectual property rights
to both the private sector partner and the federal laboratory;
however, it provides, little guidance to either party on the
adequacy of those rights a private sector partner should
receive in a CRADA.
Agencies are given broad discretion in the determination of
intellectual property rights under CRADA legislation. This has
often resulted in laborious negotiations of patent rights for
certain laboratories and their partners each time they discuss
a new CRADA. With options ranging from assigning the company
full patent title to providing the company with only a
nonexclusive license for a narrow field of use, both sides must
undergo this negotiation on the range of intellectual property
rights for each CRADA.
This uncertainty of intellectual property rights, coupled
with the time and effort required in negotiation, may now be
hindering collaboration by the private sector with federal
laboratories. This, in essence, has become a barrier to
technology transfer. Companies are reluctant to enter into
CRADAs, or equally important, to commit substantial investments
to commercialize CRADA inventions, unless they have some
assurance they will control important intellectual property
rights.
H.R. 2196, the National Technology Transfer and Advancement
Act of 1995, seeks to enhance the possibility of
commercialization of technology and industrial innovation in
the United States by providing assurances that sufficient
rights to intellectual property will be granted to the private
sector partner with a federal laboratory. The Act guarantees to
the private sector partner the option, at minimum, of selecting
an exclusive license in a field of use for a new invention
created jointly or solely by the government laboratory in a
CRADA. The company would then have the right to use the new
invention in exchange for reasonable compensation to the
laboratory. The Act also assures the collaborator that it may
take title to an invention it makes under the CRADA.
In addition, H.R. 2196 addresses concerns about government
rights to an invention created in a CRADA. It provides that the
federal government will retain minimum statutory rights to use
the technology for its own purposes. It provides limited
government ``march-in-rights'' if there is a public necessity
that requires compulsory licensing of the technology. H.R. 2196
also provides enhanced financial incentives and rewards to
federal laboratory scientists for new technology that results
in marketable products, to be paid for from the income the
laboratories receive for the commercialized technology.
IV. Legislative History
Congresswoman Constance A. Morella of Maryland introduced
H.R. 2196 on August 4, 1995. The bill was originally
cosponsored by Congressmen Robert S. Walker of Pennsylvania,
George E. Brown, Jr. of California, and John S. Tanner of
Tennessee. Senator John D. Rockefeller, IV of West Virginia
introduced the Senate companion bill, S. 1164, on August 10,
1995.
On June 27, 1995, the House Science Committee's Technology
and Basic Research Subcommittees held a joint hearing on
technology transfer and our federal laboratories, with a focus
on the draft text of H.R. 2196. The testimony from the June
hearing supplemented the hearing record already established in
the previous Congress on the bill text. On September 20, 1994,
in the 103rd Congress, the House Science, Space, and Technology
Committee's Technology, Environment, and Aviation Subcommittee
held a hearing on H.R. 3590, the Technology Transfer
Improvements Act of 1993, which led to further refinements in
the bill.
On October 18, 1995, the Technology Subcommittee
unanimously reported H.R. 2196 favorably to the full Committee,
with an amendment in the nature of a substitute. The amendment
incorporated certain provisions affecting the National
Institute of Standards and Technology (NIST), among others,
which were approved by the House Science Committee, on June 28,
1995, as part of H.R. 1870, the American Technology Advancement
Act of 1995. The amendment provisions were passed by the House,
on October 12, 1995, in Title VI of H.R. 2405, the Omnibus
Civilian Science Authorization Act of 1995.
On October 25, 1995, the Science Committee considered H.R.
2196, as amended by the subcommittee. The Committee accepted
certain additional amendments to the bill and ordered H.R. 2196
reported to the House without objection by voice vote.
V. Outline Summary of Major Provisions of the Bill
Statutory Authority:
Amends the Stevenson-Wydler Technology Innovation Act
of 1980 (P.L. 96-480) and the Federal Technology
Transfer Act of 1986 (P.L. 99-502), among other
provisions, by creating incentives and eliminating
impediments to encourage technology commercialization,
and for other purposes.
Impacts upon technology transfer policies in both a
government-owned, government-operated (GOGO) laboratory
and a government-owned, contractor-operated (GOCO)
laboratory.
Effect upon Technology Transfer in a CRADA:
Provides assurances to United States companies that it
will be granted sufficient intellectual property rights
to justify prompt commercialization of inventions
arising from a CRADA with a federal laboratory
Provides important incentives and rewards to federal
laboratory personnel who create new inventions
Effect upon CRADA Private Sector Partner under the Act:--
Guarantees right to option, at minimum, of exclusive
license in a field of use for inventions jointly or
solely developed by a federal laboratory resulting from
a CRADA
Assures that privileged and confidential information
will be protected when CRADA invention is used by the
government
Assures private sector partner the right to possess
its own inventions developed in a CRADA
Effect upon Federal Government under the Act:
Provides right to use invention for legitimate
government needs
Clarifies contributions laboratories can make in a
CRADA and continues current prohibition of direct
federal funds to a private sector partner in a CRADA
Clarifies that agencies may use royalty revenue to
hire temporary personnel to assist in the CRADA or in
related projects
Permits agencies to use royalty revenue for related
research in the laboratory, and for related
administrative and legal costs
Allows federal government to require licensing of its
own inventions to others only for compelling public
health, safety, or regulatory needs
Returns all unused royalty revenue to the Treasury
after the completion of the second fiscal year
Clarifies authority of laboratories, agencies, or
departments to transfer excess scientific equipment by
gift, loan, or lease to public and private schools and
nonprofit institutions
Effect upon Federal Scientist/Inventor under the Act:
Provides the inventor with the first $2,000, and
thereafter, at least 15% of the royalties, in each
year, accrued for inventions made by the inventor
Increases individual maximum royalty award to $150,000
per year
Allows rewards for other lab personnel who
substantially assist in the invention
Restates current law permitting a federal employee to
work on the commercialization of his or her invention
Clarifies that a federal inventor can obtain or retain
title to his or her invention in the event the
government chooses not to pursue it
Administrative and Management Provisions Affecting the National
Institute of Standards and Technology (NIST):
Provides authority for a shuttle bus service between
the NIST Gaithersburg, Maryland campus and the Shady
Grove Metro subway station for employees to use in
their commute to work
Expands the NIST Visiting Committee to 15 members,
with the requirement that 10 members shall be from
United States industry
Increases the cap on postdoctoral fellowships to 60
positions from 40 positions
Makes permanent the NIST Personnel Demonstration
Project
Fastener Quality Act Amendments:
Amends the Fastener Quality Act (P.L. 101-592), as
recommended by the Fastener Advisory Committee,
focusing on heat mill certification, mixing of like-
certified fasteners, and sale of fasteners with minor
nonconformances
Federal Use of Standards:
Restates and clarifies existing authority for the
National Institute of Standards and Technology (NIST)
to coordinate standards and conformity assessment
activities in all levels of government
Codifies Office of Management and Budget (OMB)
Circular A-119, requiring federal agencies to adopt and
use standards developed by voluntary consensus
standards bodies and to work closely with those
organizations to ensure that the developed standards
are consistent with agency needs
VI. Section-by-Section Analysis
section 1. short title.
The Act may be cited as the ``National Technology Transfer
and Advancement Act of 1995.''
section 2. findings.
Bringing technology and industrial innovation to the
marketplace is central to the economic, environmental, and
social well-being of the country. The federal government can
help United States businesses speed the development of new
products and processes by entering into a Cooperative Research
and Development Agreement (CRADA) with private sector
businesses. A CRADA arrangement makes available the assistance
of federal laboratories to the private sector. However, the
successful commercialization of technology and industrial
innovation is predominantly dependent on actions taken by the
private sector. This commercialization will be enhanced if
companies, in return for reasonable compensation to the federal
government, can more easily obtain exclusive licenses to
inventions made jointly or solely by a federal laboratory which
develop as a result of this cooperative research with federal
laboratory scientists. Private sector partners are also assured
that they will own inventions they develop in a CRADA.
section 3. use of federal technology.
Amends the Stevenson-Wydler Technology Innovation Act of
1980 to continue participation in the Federal Laboratory
Consortium for Technology Transfer by all federal agencies with
major federal laboratories.
section 4. title to intellectual property arising from cooperative
research and development agreements.
Guarantees an industrial partner to a joint Cooperative
Research and Development Agreement (CRADA) the option to
choose, at minimum, an exclusive license for a field of use to
the resulting invention. Reiterates government's right to use
the invention for its legitimate needs, but stresses the
obligation to protect from public disclosure any information
classified as privileged or confidential under Exemption 4 of
the Freedom of Information Act (FOIA).
Provides that, when the laboratory assigns ownership or an
exclusive license to the industry partner, licensing to others
may be required if needed to satisfy compelling public health,
safety or regulatory concerns. Clarifies current law defining
the contributions laboratories can make in the CRADA. Clarifies
that agencies may use royalties to hire temporary personnel to
assist in the CRADA or related projects. Enumerates how a
government-owned, government-operated (GOGO) laboratory and a
government-owned, contractor-operated (GOCO) laboratory may use
resulting royalties. Guarantees industrial partner the right to
take title to its invention under a CRADA in exchange for
granting the government a license for research or governmental
purpose.
section 5. distribution of income from intellectual property received
by federal laboratories.
Requires that agencies must pay federal inventors each year
the first $2,000 and thereafter at least 15% of the royalties
received by the agency for the inventions made by the employee.
Increases an inventor's maximum royalty award to $150,000 per
year. Allows for rewarding other laboratory personnel involved
in the project, permits agencies to pay for related
administrative and legal costs, and provides a significant new
incentive by allowing the laboratory to use royalties for
related research in the laboratory. Provides for federal
laboratories to return all unobligated and unexpended royalty
revenue to the Treasury after the end of the second fiscal year
after the year which the royalties were earned.
section 6. employee activities.
Clarifies the original congressional intent that rights to
inventions should be offered to employees when the agency is
not pursuing them. Permits a federal scientist, or a former
laboratory employee, in the event that the federal government
chooses not to pursue the right of ownership to his or her
invention or otherwise promote its commercialization, to obtain
or retain title to the invention for the purposes of
commercialization.
section 7. amendment to bayh-dole act.
Reflects technical changes made by this Act as it affects
the Bayh-Dole Act (P.L. 96-517).
section 8. national institute of standards and technology act
amendments.
Provides authority for the National Institute of Standards
and Technology (NIST) to have a shuttle bus service between its
Gaithersburg, Maryland campus and the Shady Grove Metro subway
station for employees to use in their commute to work. Expands
the NIST Visiting Committee from 9 members to 15, with the
requirement that 10 members, increased from 5, shall be from
United States industry. Increases the cap of postdoctoral
fellowships from a maximum of 40 to 60 positions per fiscal
year.
section 9. research equipment.
Clarifies that a laboratory, agency, or department can
give, loan, or lease excess scientific equipment to public and
private schools and nonprofit institutions, without regard to
federal property disposal laws.
section 10. personnel.
Makes permanent the National Institute of Standards and
Technology (NIST) Personnel Demonstration Project. The project
has helped NIST recruit and retain the ``best and the
brightest'' scientists to meet its scientific research and
measurement standards mission.
section 11. fastener quality act amendments.
Amends the Fastener Quality Act (P.L. 101-592), as
recommended by the Fastener Advisory Committee, focusing on
mill heat certification, mixing of like-certified fasteners,
and sale of fasteners with minor non-conformances. The Fastener
Advisory Committee reported that, without these recommended
changes, the cumulative burden of compliance costs would be
close to $1 billion on the fastener industry.
section 12. standards conformity.
Restates existing authorities for National Institute of
Standards and Technology (NIST) activities in standards and
conformity assessment. Requires NIST to coordinate among
federal agencies, survey existing state and federal practices,
and report back to Congress on recommendations for improvements
in these activities. Codifies OMB Circular A-119 requiring
federal agencies to adopt and use standards developed by
voluntary consensus standards bodies and to work closely with
those organizations to ensure that the developed standards are
consistent with agency needs.
section 13. sense of congress.
Provides that it is the sense of Congress that the Malcolm
Baldrige National Quality Award program offers substantial
benefits to United States industry, and that all funds
appropriated for the program should be spent in support of its
goals.
VII. Committee Views
section 1. short title.
H.R. 2196 was originally introduced as the ``Technology
Transfer Improvements Act of 1995.'' The title of the bill was
changed to the ``National Technology Transfer and Advancement
Act of 1995'' to reflect the addition of certain provisions in
H.R. 1870, the American Technology Advancement Act of 1995,
among others. The added provisions passed the House in Title VI
of H.R. 2405, the Omnibus Civilian Science Authorization Act of
1995.
section 2. findings.
The Committee understands that promoting technology and
bringing industrial innovation to the marketplace is vital to
our nation's future. To further this objective and to help
speed the development of new technologies, the Committee has
long promoted the concept of Cooperative Research and
Development Agreements (CRADA) between federal laboratories and
United States industry.
The Committee, however, believes commercialization of
technology and its corollary impact upon our nation's ability
to compete in the global marketplace ultimately depends on
actions by industry. United States industry, therefore, must be
provided assurances that they will be granted sufficient
rights--such as an exclusive license for a field of use--to
justify prompt commercialization of resulting inventions
arising from a CRADA.
section 3. use of federal technology.
The Committee supports continued participation in the
Federal Laboratory Consortium for Technology Transfer (FLC) to
develop and facilitate further technology transfer from our
federal laboratories.
section 4. title to intellectual property arising from cooperative
research and development agreements.
The section provides clear guidelines that simplify the
negotiation of a Cooperative Research and Development Agreement
(CRADA)--addressing a major concern of private sector
companies--and, in the process, gives companies greater
assurance they will share in the benefits of the research they
fund. The Committee believes the Act will result in a reduction
of negotiation time and effort required to implement a CRADA
and an alleviation of the uncertainty that can deter companies
from working with the government. This will lead to quicker
transfer and commercialization of laboratory technology.
Each private sector partner entering into a CRADA with a
federal laboratory has the ability to require that the CRADA
provides exclusive intellectual property rights for a pre-
negotiated field of use for any invention occurring under the
agreement, regardless of whether the invention is made by a
laboratory employee, a company employee, or a combination
thereof. Thus, the industrial partner receives, at minimum, the
option of an exclusive license in a field of use selected by
the company. The important factor is that industry selects
which option makes the most sense under the CRADA.
A company will now have the knowledge that they are assured
of having no less than an exclusive license in an application
area of its choosing. The Committee believes these statutory
guidelines give companies real assurance that they will receive
important intellectual property out of any CRADA they fund.
Knowing they have an exclusive claim to the invention will,
consequently, give a company both an extra incentive to enter
into a CRADA and the knowledge that they can safely invest
further in the commercialization of that invention.
Although a collaborating party is given a statutory option
to choose an exclusive license for a field of use, agencies may
still assign full patent title to the company. Agencies
consulted by the Committee felt they needed to retain that
flexibility for inventions made by government employees and the
Act allows them to do so.
The Committee fully expects that the private sector partner
enters into a CRADA in order to advance a specific research
agenda and that the company intends to aggressively pursue,
whenever appropriate, full commercial opportunities for any new
discoveries resulting from the CRADA. Should a prviate sector
partner, for their own reasons, choose not to commercialize a
resulting invention while another company is interested in
pursuing its commercial opportunities, the Committee expects
that the CRADA partner would license the invention rights to
the other company.
It is generally contemplated that companies and agencies
will work together to convert that company's specific research
agenda into a document stating a particular field of use, for
which the company is entitled to exclusive intellectual
property rights. If more than one company is involved, the
Committee expects each of their research interests be taken
into consideration in defining the field of use, and that in no
event will the total rights given to the private sector
participants under a CRADA be less than they would be if just
one company was participating in the CRADA.
In return for the intellectual property rights, the
government may negotiate for royalties as reasonable
compensation. The government is always entitled to a non-
exclusive, nontransferable, paid-up license to use the
invention for its own purposes, since it should not be expected
both to pay for the research and then to pay for the use of
that research.
In addition, the government retains minimal rights to
require licensing to another company under unusual but
important circumstances, such as when the invention is needed
to meet health and safety needs not reasonably satisfied by the
collaborating party or if the collaborating partner fails to
comply with the agreement requirements, which the Committee
believes includes the failure of the private sector partner to
pursue the invention's commercial opportunities. In compelling
circumstances of public necessity, the government can invoke
these limited ``march-in'' rights. The language parallels
similar provisions in the Bayh-Dole Act covering universities
and non-profit organizations. These rights assure the public
that their interests in the new technologies are being
considered. Also, it should be noted that for purposes of this
section, any party holding property rights, in inventions
arising under this section originally assigned to a non-
governmental, non-laboratory party to the CRADA shall be
considered collaborating parties.
The government may have rights to use the invention, for
its legitimate needs, but must protect from public disclosure
any information classified as privileged or confidential under
Exemption 4 of the Freedom of Information Act. CRADA
participants are given the same Freedom of Information Act
(FOIA) protection they would have as government contractors.
The Committee believes this is not an unreasonable burden on
the government and is an important safeguard to industry that
its investment in the CRADA will be protected.
The section modifies current law to make sure that
personnel hired with funds received from the private sector
partner in a CRADA shall not be subject to full time equivalent
personnel ceilings and restrictions. It clarifies that agencies
may use royalties to hire temporary personnel to assist in the
CRADA or related projects. Currently, many agencies face a cap
on bringing in additional personnel because of federal
downsizing. The current language will not affect downsizing,
but allows those laboratories with sufficient royalty funds, to
bring in needed temporary staff to make partnerships under the
Act successful. This is accomplished without requiring
additional federal funds.
The Committee is sensitive to the differences between a
government-owned, government-operated (GOGO) laboratory and a
government-owned, contractor-operated (GOCO) laboratory, and
has worked to make sure that private sector partners can
receive the same benefits from entering a CRADA with either
type of laboratory. The Committee expects the statute to treat
both types of laboratories similarly. To this end, it expects
agencies to modify their prime contracts with contractor-
operated laboratories within 90 days of enactment of this
legislation to reflect the intent of this Act.
These modifications are to include delegating to the
laboratory director the authority to negotiate intellectual
property provisions for the government, including the right to
waive rights of ownership in an invention made by a
collaborating party, giving GOCO employees authority to
commercialize inventions under the same conditions as employees
of other government laboratories, and allowing a GOCO to keep
royalty income for distribution. The section allows the
managers of a GOCO to use royalty streams to make payments to
inventors, for the various uses available to a GOGO, or for
scientific research and development consistent with laboratory
missions and objectives. The Act does not change the current
prohibition on providing federal funds to a private sector
partner in a CRADA.
It is also the Committee's intent under this Act, as it is
in the public laws this Act amends, that an agency should
determine which of its management levels should be considered a
laboratory for purposes of this Act. It is not the intent of
the Committee to count as laboratories under this Act,
individual research laboratories which are part of a larger
management structure which is also a laboratory. However, the
Committee approves of decisions of agencies, such as the
Department of Defense and the National Institutes of Health, to
treat certain research institutes, centers, and divisions as
separate laboratories even if they are co-located with other
institutes, centers, or divisions.
The Committee believes the clear intellectual property
guidelines enumerated in this section will simplify the
negotiation of a CRADA and, in the process, give companies
greater assurance they will share in the benefits of the
research they fund. The Committee expects that this change will
increase the number of collaborative efforts between government
and industry, reduce the time and effort required to negotiate
such agreements, and thus speed the transfer of laboratory
technology and know-how to the American public and the broader
economy.
section 5. distribution of income from intellectual property received
by federal laboratories.
When royalties or other payments are received from the
licensing and assignment of inventions under a CRADA, the
section requires that agencies must pay the federal inventor
each year the first $2,000 and thereafter at least 15% of the
royalties. In addition, it raises the maximum royalty award per
year to $150,000 to any one person. The section responds to
criticism made before the Committee that agencies are not
sufficiently rewarding laboratory personnel for their
inventions.
Royalty sharing was established by the Federal Technology
Transfer Act of 1986 and was intended to provide an incentive
for scientists and government-employee inventors at federal
laboratories to report, develop, and help license inventions
with commercial potential. The General Accounting Office, in
its December 1992 report to Congress entitled ``Technology
Transfer: Barriers Limit Royalty Sharing's Effectiveness''
(GAO/RCED-93-6) outlined the scope of the existing limitations.
The Committee addressed in this section certain royalty sharing
recommendations made by GAO, affecting distribution of income
from intellectual property received in a CRADA.
Currently, the law states only that the federal inventor
should receive a minimum of 15% of the royalties, with a
maximum annual award of $100,000. Since few CRADA inventions,
in practice, generate large annual royalties, only a few
inventors under current law, consequently, would receive a
substantial bonus. The Committee believes that providing
inventors with the first $2,000 earned each year from an
invention, and then 15% of the remainder, is a better reward
and incentive.
The section also provides for the distribution of the
balance of royalties or other payments received by a
laboratory. A laboratory may reward personnel, other than the
inventor, who substantially contribute to the invention. A
laboratory may pay for related administrative and legal costs,
such as education, training, intellectual property management,
and licensing services. In addition, the Act provides a
significant new incentive by allowing the laboratory to use
royalties for related scientific research and development,
consistent with the objectives and mission of the laboratory. A
laboratory may have until the end of the second fiscal year,
succeeding the fiscal year in which the royalties and other
payments were received, to obligate and expend the funds before
all unused monies are returned to the federal treasury. In
these times of limited federal fiscal resources, the Committee
supports these important incentives and administrative
provisions in this section.
section 6. employee activities.
The section clarifies the original Congressional intent
that rights to inventions should be given to employees or
former employees, in certain instances, when the agency does
not intend to file for a patent or maintain an existing patent.
The Committee believes this language will correct any confusion
that has arisen in some agencies regarding whether the
government can subsequently waive ownership to inventions it
does not intend to pursue. In the event the federal government
chooses not to pursue the invention, a federal scientist may
obtain or retain title to his or her invention for the purposes
of commercialization.
section 7. amendment to bayh-dole act.
The section restates the current law that the provisions of
the Stevenson-Wydler Technology Innovation Act of 1980, as
amended, shall take precedence over the provisions of the Bayh-
Dole Act (P.L. 96-517) to the extent that they permit or
require disposition of rights in subject inventions which are
inconsistent with the Act.
section 8. national institute of standards and technology act
amendments.
Authority for Metro Shuttle
Currently, the National Institute of Standards and
Technology (NIST) provides a limited shuttle service between
its Gaithersburg, Maryland campus and the Shady Grove Metro
subway station for use only by visitors, official guests, and
employees traveling on official business to Washington D. C.
This requested authority would allow all NIST employees to use
the shuttle to get to, and from, the Shady Grove station for
their daily commute between work and home.
The Committee supports NIST's request for this authority.
Providing authority for a Metro shuttle would not require any
additional funding and would provide cost savings for the
federal government since NIST would use the shuttle in lieu of
individual employee transit subsidies.
Agencies are currently authorized to provide cash subsidies
to employees to encourage them to use mass transit. This
subsidy costs approximately $65 per employee per month. NIST
does not currently provide these subsidies and will not provide
them if given this requested authority. NIST proposes to
encourage the use of mass transit by allowing employees to use
the existing shuttle service.
The Committee understands that most NIST employees do not
currently take advantage of mass transit since NIST is several
miles from the Shady Grove Metro station and because the
available commercial bus transportation route from Shady Grove
to NIST is circuitous and extremely time consuming. The
Committee further understands, however, that NIST employees
have indicated they would be willing to take mass transit if
convenient direct bus transportation from the Metro station
were made available.
In addition, the Committee is aware that the National
Capital Planning Commission and the Maryland National Park and
Planning Commission are also strongly urging NIST to develop a
Transportation Management Plan which would encourage the use of
mass transportation, as well as a plan to encourage car pooling
and bicycling.
Expansion of the Visiting Committee Membership
The Committee supports NIST's request to expand its
Visiting Committee on Advanced Technology (VCAT) from nine
members to fifteen members. This expansion will ensure the
VCAT's expertise can match the breadth and diversity of NIST
programs. Assessments of NIST laboratory programs require a
panel with broad technical expertise since the labs have eight
major operating units specializing in different fields of
science and technology, which focus on different industry
sectors.
In addition to this expertise, an ideal panel would include
a diverse membership representing industry and government
laboratories. At its present size of nine members, the
Committee understands that the VCAT is challenged to provide
the broad oversight and advice needed to best inform NIST's
programs.
Post-Doctoral Fellows Program
The Postdoctoral Fellowship Program provides NIST with an
opportunity to keep abreast of the latest developments in
academic research. Additionally, the program provides a
continuing infusion of the nation's outstanding scientists,
mathematicians, and engineers into the NIST staff, both on a
temporary basis and by selective recruiting for career
appointments.
For recent doctoral graduates, the program provides an
opportunity for concentrated research in association with NIST
staff, often as a climax to formal career preparation. In
return, NIST laboratories receive a stimulus to their industry-
oriented programs from the presence of bright, highly
motivated, recent doctoral graduates with records of research
productivity. New ideas, techniques, and approaches to problems
contribute to the overall research climate of the laboratories.
The number of postdoctoral fellowships at NIST was last
increased in the National Bureau of Standards Authorization Act
of 1987 (P.L. 99-574). An increase in the program to 60
possible positions, from its current cap of 40 fellowships,
would permit NIST to enhance some of its programs. The NIST
Postdoctoral Fellowships Program provides two-year fellowship
appointments for outstanding scientists and engineers chosen
through a national competition administered by the National
Research Council and the National Academy of Sciences. Fellows
are not to be included in agency personnel ceilings.
section 9. research equipment.
The Committee intends to clarify a laboratory, agency, or
department's authority to give, loan, or lease excess
scientific equipment to public and private schools and
nonprofit institutions, without regard to federal property
disposal laws. The section clarifies the American Technology
Preeminence Act of 1991 (P.L. 102-245) that allowed federal
laboratories to donate their excess scientific equipment
directly to these institutions, but which was interpreted by
some agencies as being subject to federal property disposal
laws, thereby negating its impact.
The original intention was to eliminate much of the
paperwork burden which seems to hinder federal laboratories
from donating such equipment. The cumbersome paperwork
requirements also discouraged the public and private schools
from attempting to obtain excess equipment. The section makes
clear the intent of the original amendment as an alternative,
free-standing method of distribution of surplus laboratory
property. The Committee believes this should eliminate further
problems with its implementation.
section 10. personnel.
The Committee recognizes the success of the National
Institute of Standards and Technology (NIST) Personnel
Demonstration Project and its dramatic effect on personnel
management and administration.
The NIST Authorization Act for Fiscal Year 1987 (P.L. 99-
574), which originated in this Committee, established the NIST
Personnel Demonstration Project to create an innovative new
personnel management system with hiring, classification,
compensation, and performance methods more like those of the
private sector. The legislation required NIST to work with OPM
under the provisions of 5 U.S.C. 4703, which authorized
demonstration projects for a duration of five years, but
provided OPM authority to extend a project.
The success of the five-year pilot effort led OPM to extend
the NIST Personnel Demonstration Project beyond its original
five year period to September 30, 1995. The pilot project is
once again up for renewal, but the Committee feels that the
concept is now proven and that there is nothing further to be
gained by treating it as an experiment. Therefore, this section
makes permanent the current NIST personnel system.
Feedback from managers and employees, as well as evaluation
reports from OPM contractors, showed the project had met its
objectives to recruit and retain quality staff, make
compensation more competitive, link pay to performance,
simplify position classification, streamline processing,
improve the staffing process, get new hires aboard faster, and
increase the manager's role and accountability in personnel
management. As a result, NIST is now competing more effectively
in the labor market. New hires have been made under the system
that could not have been made previously because NIST could not
make or match offers for highly-recruited scientists in a
timely manner. This pay-for-performance system has also
improved NIST's ability to keep its best personnel.
section 11. fastener quality act amendments.
The Committee has adopted recommendations made by the
Fastener Advisory Committee, amending the Fastener Quality Act
(P.L. 101-592). The Fastener Advisory Committee, created by
Congress, determined that the Fastener Quality Act will have an
unintended, detrimental impact on business. The Fastener
Advisory Committee reported that without these recommended
changes, the cumulative burden of costs on the fastener
industry could be close to $1 billion for absolute compliance
to the Fastener Quality Act.
In the 101st Congress, the writers of the original Fastener
Quality Act set out to answer real threats that counterfeit and
substandard fasteners posed to our defense readiness and our
public safety. At the time, the perception in the media was
that counterfeit and substandard fasteners were mainly imported
from overseas. In reality, there were many cases where these
counterfeit and substandard fasteners were manufactured
domestically.
Counterfeit and substandard fasteners in most cases are two
different problems. Counterfeit fasteners penetrated the
industry by not having correct, and in some cases, no
manufacturer's identification marks and specification marks.
These marks are necessary to indicate grade of material and to
trace the manufacturer of the product. Substandard fasteners
are products that fail in application either through improper
manufacturing or misapplication of a product by the function of
the fastener in its intended use. To address both of these
problems, fasteners covered by this Act are required to be
tested, inspected, and certified by accredited laboratories
prior to distribution into market.
The Fastener Quality Act requires registration of
manufacturer's headmarks with the Patent and Trademark Office.
In addition, conformance letters, which tie the products to its
manufacturing specifications, are mandatory on all material
manufactured by foreign sources. Domestic manufacturers are
required to keep the certification of performance and a copy of
the test report on file.
The Committee has adopted recommendations in this section
for amending the Fastener Quality Act that were submitted in
March 1992 and again in February 1995 to Congress by the
Fastener Advisory Committee. Such recommendations were the
result of nine public meetings by the Fastener Advisory
Committee involving more than 2,000 pages of transcript
documenting the need for the amendments. Subsequent to the
recommendations to Congress, the National Institute of
Standards and Technology (NIST) published proposed implementing
regulations for public comment in August 1992. More than 300
letters were received from the public. Over 70% of the letters
supported the recommendations of the Fastener Advisory
Committee for amending the Act.
The Committee has listened to the Fastener Advisory
Committee, its Fastener Public Law Task Force, and other
representatives from the manufacturing, importing, and
distribution sectors of the United States fastener industry.
The task force represents 85 percent of all United States
companies and their suppliers involved in the manufacture,
distribution, and importation of fasteners and over 100,000
employees in all 50 states. The Committee, along with NIST, has
worked to improve the law, while preserving safety and quality.
The section focuses mainly on mill heat certification,
mixing of like-certified fasteners, and sale of fasteners, in
most cases, with minor non-conformances. The Committee believes
that the section maintains safety, reduces the unnecessary
burdens on industry, and ensures proper enforcement of the
Fastener Quality Act.
In addition, the Committee understands concerns voiced by
the fastener industry regarding the methods in which fasteners
may be altered under the Fastener Quality Act. As originally
passed, the Fastener Quality Act states that fasteners may be
altered in three ways: by through hardening; by electroplating
fasteners having tensile strengths of 150,000 psi or higher; or
by machining. Further in the Fastener Quality Act, it is stated
that if such an alteration changes the performance of the
fastener so it no longer conforms to the original standards and
manufacturer's certification. It is considered a significant
alteration, and the person who sells such fasteners shall be
treated as the manufacturer, causing the altered fastener to be
inspected and tested. The Committee expects these concerns can
be adequately addressed by removing the specific statutory
threshold value of altered fasteners from this Act. This will
permit NIST to establish a threshold value in its implementing
regulations, based on extensive technical review, following
NIST's consideration of public comment by members of the
fastener industry and other interested parties.
section 12. standards conformity.
The Committee understands the crucial role standards play
in all facets of daily life and in the ability of the nation to
compete in the global marketplace. The United States, unlike
the federalized standards system of most other countries,
relies heavily on a decentralized, private sector-based,
voluntary consensus standards system. Past federal government
efforts have concentrated primarily in metrology research,
maintenance of national measurement standards, including
calibration services and standard reference materials,
participation in voluntary standards activities, government-to-
government negotiations, and development of standards for
governmental purposes. This unique consensus-based voluntary
system has served us well for over a century and has
contributed significantly to United States competitiveness,
health, public welfare, and safety.
Playing an important role in maintaining a future
competitiveness edge is the ability to develop standards which
match the speed of the rapidly changing technology of the
marketplace. While the Committee is aware that the standards
role of the federal government is different from that of our
trading partners, federal agencies are, nevertheless, major
participants in the United States standards system.
The key challenge is to update domestic standards
activities, in light of increased internationalization of
commerce, and to reduce duplication and waste by effectively
integrating the federal government and private sector resources
in the voluntary consensus standards system, while protecting
its industry-driven nature and the public good. Better
coordination of federal standards activities is clearly crucial
to this effort.
These issues were raised by the National Research Council
(NRC) in its March, 1995 report entitled, ``Standards,
Conformity Assessment, and Trade in the 21st Century.'' The NRC
report recommended that Congress amend NIST's organic act (15
U.S.C. 271, et seq.) to clarify NIST's lead role in the
implementation of a government-wide policy of phasing out the
use of federally-developed standards wherever possible, in
favor of standards developed by private sector, consensus
standards organizations, with input from affected agencies.
This policy is already eliminating duplication of effort and
conflict between government standards and specifications, and
widely-accepted industry practices in the same technical areas.
The Committee, after conducting a June 29, 1995 hearing on the
issue, adopted the NRC recommendation in this section, making
it clear NIST has lead agency responsibility for standards and
conformity assessment activities that are interagency in
nature.
The section requires NIST to develop a strategic plan to
evaluate state and local criteria for accrediting testing
laboratories and product certifiers, and to take the lead in
efforts to build a network of mutual recognition agreements
regarding conformity assessment among federal, state, and local
authorities, in the interest of eliminating unnecessary
duplication and burden on industry. The collective impact of
these changes is to grant NIST a clear statutory mandate to act
as the lead agency for ensuring federal use of standards
developed by private consensus standards organizations to meet
regulatory and procurement needs, and to guide the states
toward a national, rationalized system of conformity assessment
and certification.
NIST is required to report to Congress on its progress and
the feasibility of such actions by January 1, 1996.
In addition, the section codifies the present requirements
of Office of Management and Budget (OMB) Circular A-119 and
requires agencies, through OMB, to report annually to Congress
on the reasons for deviating from voluntary consensus standards
when the head of the agency deems that prospective consensus
standards are not appropriate to the agency needs. OMB Circular
A-119 was originally promulgated in 1982 and revised in 1993.
It requires federal agencies to adopt and use standards,
developed by voluntary consensus standards bodies, and to work
closely with these organizations to ensure that developed
standards are consistent with agency needs. Adherence to OMB
Circular A-119 is a matter of great concern to industry and the
Committee since the federal record with regard to the use of
voluntary consensus standards is mixed, at best.
It is not the Committee's intent to create a bureaucratic
reporting requirement, or to slow down standards procurement
activities within agencies. It is, however, the intent of the
Committee to make private sector-developed consensus standards
the rule, rather than the exception. Voluntary, private sector,
consensus standards can be developed by standards bodies which
include active government participation with industry. In the
exceptional situation where federally-developed standards are
deemed necessary, the Committee requires the agencies to report
any standards development activities to OMB, via NIST.
The Committee does recognize the hard work and extensive
conversion now actively underway in certain agencies, such as
the Department of Defense, to implement OMB Circular A-119 and
understands that this codification of the Circular complements
rather than supplants these activities. The Committee
understands that these agencies have already implemented
procedures for high-level internal review of decisions to write
federal standards. The Committee believes codifying OMB
Circular A-119, however, should not result in significant
changes, if any, in these standards development procedures.
An agency report to OMB required under this section is to
be clear and informative, but may be summary in nature. The
Committee is not requiring agencies to fully catalog every
standards exception in their reporting, but does require that
those records be accessible to Congress.
The section will have the effect of assisting agencies in
focusing their attention on the need to work with these
voluntary consensus standards bodies, whenever and wherever
appropriate. It will also assist Congress in monitoring federal
agency efforts to implement the OMB Circular A-119.
Additionally, the section is consistent with recommendations
made to the Committee as part of the NRC testimony regarding
its March, 1995 report.
section 13. sense of congress.
The Committee supports the goals of the Malcolm Baldrige
National Quality Award program. With the United States facing
increased competition in the global marketplace, the
development of effective quality methods have helped the
nation's industries to maintain their market share. These
quality methods have led to greater process control, more
efficient quality cost measurements and controls, better
quality management, and fewer manufacturing defects.
One such method of generating awareness and interest in
total quality principles and encouraging United States
businesses to produce globally competitive quality products and
services is the Malcolm Baldrige National Quality Award. The
Award was established under the Malcolm Baldrige National
Quality Improvement Act of 1987 (P.L. 100-107) and was named
after the late Secretary of Commerce.
As a result of adherence to the Baldrige Award principles,
participating companies have created frameworks by which to
measure their business success, set clear directions, and share
accountability. Past award recipients have used the Award's
major tenets and selection criteria to develop a commitment to
quality and increased competitiveness. The Baldrige Award is
managed by the National Institute of Standards and Technology
(NIST).
VIII. Summary of Hearings
a. 103rd Congress
The Technology Transfer Improvements Act of 1993
On September 20, 1993, the House Science, Space, and
Technology Committee's Subcommittee on Technology, Environment,
and Aviation held a hearing on H.R. 3590, the Technology
Transfer Improvements Act of 1993, the legislation upon which
H.R. 2196 is based. The bill, which had been revised since its
original introduction, received strong support from the
Administration and a series of federal agency officials, as
well as a broad spectrum of industry association
representatives.
The following witnesses testified before the subcommittee:
The Honorable Mary L. Good, Under Secretary for Technology,
Department of Commerce; Agnes Dover, Deputy General Counsel for
Technology Transfer and Procurement, presenting testimony for
the Honorable Charles B. Curtis, Under Secretary of the
Department of Energy; David M. Ostfeld, Vice President, Career
Activities Council, Institute of Electrical and Electronics
Engineers (IEEE); Dr. William Martin, Vice President,
Technology Transfer, Martin Marietta Energy Systems, Oak Ridge,
Tennessee; Margaret McNamara, Vice Chairman, Federal Laboratory
Consortium (FLC); Dr. Roger Werne, Member of the Council on
Governmental Relations (COGR) and Associate Director of
Engineering and Technology Transfer, Lawrence Livermore
National Laboratory, Livermore, California; and Joseph P.
Allen, Director, Training and Economic Development, National
Technology Transfer Center, Wheeling, West Virginia.
Panel 1: Dr. Mary Lowe Good, Undersecretary of Commerce for
Technology, testified to the Administration's support for the
bill. She stated that the management of intellectual property
arising from federally-supported research and development is
essential to the successful promotion of early
commercialization of new technology. She also noted that a
CRADA remains an important avenue for government-industry-
academic interaction and said that under the Clinton
Administration the focus is moving away from ``technology
transfer'' and mission spin-off toward development of
technologies with commercial potential. She stated that in the
situation of jointly developed technology arising under a
CRADA, the Administration supports ensuring the collaborating
party the right to an exclusive license for the government's
right of ownership in the invention. She also said that such an
approach means that the private sector is able to effectively
use the technology and, that in consideration for the
government's contribution under the CRADA, the government
retains certain rights and can ensure that the technology can
be used appropriately in other industrial settings.
Agnes Dover, Deputy General Counsel for Technology Transfer
and Procurement of the Department of Energy (DOE), testified to
DOE's support of the bill. She noted that the average CRADA
approval process time has been reduced by 50%, and the
percentage of small business participation in a CRADA has
increased from 25% to 35% in 1993. She said that DOE believes
it is important that the exclusive license be for a defined
field of use. She stated that utilization of a defined field of
use would enhance other commercialization opportunities by
enabling the laboratories to commercialize inventions arising
under a CRADA in a field of use for which the collaborating
party has no interest, while providing to the collaborating
party necessary rights in the invention.
Panel 2: David M. Ostfeld, Vice-President for the Institute
of Electrical and Electronics Engineers, testified that
commercialization of technology and industrial innovation by
business is enhanced by ownership of any invention or
intellectual property developed in a CRADA and offered his
support for the bill. Mr. Ostfeld stated that the incentives
provided by the bill will encourage the commercialization of
technology and will enhance United States competitiveness, as
well as provide rewards to federal laboratory inventors.
Dr. William Martin, Vice President of Technology Transfer
for Martin Marietta Energy Systems, testified that significant
improvements can be made to enhance the interaction between the
federal laboratories and industry by: (1) improving the
awareness of industry with regard to federal laboratory
capabilities; (2) striving to increase industry input for
market-driven projects when appropriate to the funding agency's
mission; and (3) reducing the barriers that inhibit the process
of collaboration. He stated that Martin Marietta has
implemented a number of process improvements that are beginning
to streamline procedures and reduce the cycle time associated
with processing a CRADA. He also noted other barriers to the
CRADA process include the time required for discussion,
refinement, and development of the technical aspects of the
work to be performed in a CRADA. Mr. Martin indicated his
support for the bill.
Ms. Margaret McNamara, Vice Chairman for the Federal
Laboratory Consortium, testified that exclusive licenses for
fields of use are becoming the "best practice" evolving among
government laboratories because they promote the widest
possible commercialization of technology by protecting the
commercial positions of private companies while also preventing
unproductive monopolization of rights to technology. She stated
that assigning all intellectual property developed jointly by
laboratory and private sector employees under a CRADA to the
private sector partner could substantially reduce the
commercial exploitation of the technology. Ms. McNamara stated
that the bill would help promote CRADA development.
Dr. Roger Werne of the Lawrence Livermore National
Laboratory testified that licensing laboratory technologies to
companies in appropriate fields of use becomes essential to
success. He stated that when intellectual property is jointly
developed in a CRADA and is exclusively licensed to the
company, the laboratory retains the right to use that
intellectual property for government purposes. He also stated
that this retention is important since many technologies are
dual-use and may be needed for future national security needs.
Dr. Werne noted that exclusivity in licensing requires the
ability to protect proprietary information for the duration of
the licenses and all legislation should protect the right of
the company-laboratory partnerships to protect that
information. He said that a failure to do so may render the
exclusivity useless. Dr. Werne indicated his support for the
bill.
Joseph P. Allen, Director of the National Technology
Transfer Center, stated the belief by some companies that
concluding agreements under the law takes too long and that
agencies are not applying the same standards of exclusivity for
intellectual property rights. Mr. Allen stated his reluctance
to see a legislative formula mandating that agencies can not
spend more than 15% of their royalties for administrative and
licensing costs, noting that these expenses are a real barrier
to effective technology transfer. He stated that the bill would
serve to enhance technology transfer.
b. 104th Congress
Federal Technology Transfer Policies and our Federal
Laboratories: Methods for Improving Incentives for Technology
Transfer at Federal Laboratories
On June 27, 1995, the Subcommittee on Technology and the
Subcommittee on Basic Research held a joint hearing to receive
testimony regarding the transfer of technology from federal
laboratories, with a focus on the draft text of H.R. 2196.
Witnesses from federal laboratories and from industry
provided commentary on a circulated draft of H.R. 2196. The
hearing supplemented the record on the bill already established
in the previous Congress. Witnesses expressed support for the
text, as an effective mechanism for stimulating greater
commercialization of the research being performed by the
federal laboratories.
Presenting testimony at the hearing were: Joseph P. Allen,
Director of Training, Marketing, and Economic Development,
National Technology Transfer Center, Wheeling, West Virginia;
Tina McKinley, Chair, Federal Laboratory Consortium, Oak Ridge
Institute for Science and Education, Oak Ridge, Tennessee; Dr.
Robert Templin, Jr., President, Virginia's Center for
Innovative Technology, Herndon, Virginia; John T. Preston,
Director, Technology Development Association of University
Technology Managers, Cambridge, Massachusetts; Ambassador C.
Paul Robinson, Vice President, Laboratory Development, Sandia
National Laboratory; Richard Marczewski, Manager, Technology
Transfer Office, National Renewable Energy Laboratory; Dr.
Peter B. Lyons, Director, Industrial Partnership Office, Los
Alamos National Laboratory; William Martin, Vice President,
Office of Technology Transfer, Lockheed-Martin Energy Systems,
Oak Ridge National Laboratory; Thomas F. Fortin, Vice-
President, Rio Grande Medical Technologies, Inc., Albuquerque,
New Mexico; William Elkins, Chairman and Director of Product
Development, Life Enhancement Technologies, Mountain View,
California; and Michael G. Ury, Vice President, Research &
Development, Fusion Lighting, Rockville, Maryland.
Panel 1: Mr. Joseph Allen, Director of Training, Marketing
and Economic Development at the National Technology Transfer
Center, commended Mrs. Morella on her legislation. He
identified three key components of the legislation: (1) it is
market-driven; (2) there are incentives for laboratories and
scientists; and (3) intellectual property is given to companies
that commercialize the technology. He stated the ultimate goal
should be linking federal laboratories, universities, and state
and local business assistance programs strategically with
United States industry in locally led initiatives.
Dr. Robert Templin, President of Virginia's Center for
Innovative Technology, stated that assessing the return on
investment from technology transfer is difficult, but crucial.
He also commented on the need to get authority to the local
laboratories so the labs can enter into agreements, allowing
them to be more responsive to market-driven needs. Dr. Templin
stated the bill would forge effective partnerships by making
them more responsive and timely.
Ms. Tina McKinley, Chair of the Federal Laboratory
Consortium at the Oak Ridge Institute for Science and
Education, testified to her support for the legislation, and
indicated it will contribute to the speed and effectiveness of
federal technology transfer. She explained that all technology
is different and volatile, and flexibility is necessary:
laboratories have to be able to select from a range of
mechanisms depending on the local situation. Mr. John Preston,
Director of Technology Development at MIT, representing the
Association of University Technology Managers, stated that we
must use technology transfer to remain competitive
internationally. The net effect of the delay in commercializing
technology, he added, is that American ideas and inventions are
adopted by foreign competitors rather than United States
companies. He said we should, ``even the playing field by
creating industrial research competitiveness that rivals what
our foreign competitors are doing.'' He stated that there is a
critical need for new approaches to technology
commercialization, and that we need to have the courage to
lower the bureaucracy that stifles entrepreneurship. Mr.
Preston indicated his support for the bill.
Panel 2: Ambassador C. Paul Robinson, Vice President,
Laboratory Development, Sandia National Laboratory, testified
on the uniqueness of the Nation's DOE laboratories as ``multi-
problem solvers'' for U.S. industry, which is what industry
seeks and what the labs can best deliver. Ambassador Robinson
believes the process by which technology partnerships are
developed should be streamlined to improve efficiency. In
response to criticism that technology partnerships were
giveaways to individual companies, he stated that Sandia is
increasingly working with a consortium of U.S. companies. He
stated that the federal laboratories benefit by seeking ways
their long-term goals can be leveraged by industry's aims.
Ambassador Robinson stated his support for the principles of
H.R. 2196.
Mr. Ronald W. Cochran of Lawrence Livermore National
Laboratory, testified that industrial partnering is vital to
the future success of Livermore's programs. He stressed that
continued congressional leadership is essential to further
refine the technology transfer system and keep it viable. Mr.
Cochran also expressed support for the bill as a way to build
on past experience with industrial partnering. He also stated
the laboratories must have many options available when seeking
out technology partnerships and to listen to industry as the
best way to gauge the effectiveness of partnerships.
Mr. Richard Marczewski of the National Renewable Energy
Laboratory (NREL), testified that a CRADA is only one mechanism
used by his laboratory to transfer technology and that the
laboratories should have a variety of mechanisms at their
disposal to bring technology to the market. He further stated
that NREL plans to increase its use of licensing in the future
and will actively seek access to foreign markets by acquiring
foreign patents. He testified that he shares the bill's general
goals on improving technology transfer.
Dr. Peter Lyons of Los Alamos National Laboratory,
testified that reducing the global nuclear danger is Los
Alamos' central mission and the labs must use the best sources
of domestic science and technology to meet such a multi-faceted
goal. Therefore, Dr. Lyons feels alliances with industry are
very important to sustain and to expand that base of domestic
science and technology. He feels partnerships with industry
help Los Alamos' core competencies and agrees with the need for
flexibility in finding ways to work with industry. He voiced
support for provisions within the bill which strengthen the
CRADA mechanism.
Mr. William Martin of Oak Ridge National Laboratory,
testified that the bill is a ``win-win'' situation for
government and the private sector. Mr. Martin stated that
federal agencies must fulfill their missions as assigned by
Congress and what should be addressed at this time is how to
improve the process of technology transfer. One improvement
which should be made, according to Mr. Martin, is to make
industry better aware of the applicability of government-
developed technology. Further, he expressed a need to get
industry involved earlier in the R&D process and reduce
bureaucratic barriers to technology transfer.
Panel 3: Mr. Michael Ury, Mr. Tom Fortin, and Mr. William
Elkins gave the industry perspective in working with federal
laboratories and the success of technology transfer programs.
All three supported the CRADA mechanism and the concepts of
H.R. 2196.
Maintaining Our International Competitiveness: The Importance
of Standards and Conformity Assessment on Industry
On June 29, 1995, the Subcommittee on Technology held a
hearing to receive testimony regarding the importance of
standards and conformity assessment on industry. Witnesses
discussed recommendations made in the National Research
Council's report, released March 1995, entitled ``Standards,
Conformity Assessment, and Trade in the 21st Century.''
Panel 1: Dr. Gary Hufbauer, Senior Fellow at the Institute
for International Economics, testified as Chairman of the
National Research Council's International Standards, Conformity
Assessment, and U.S. Trade Policy Project Committee. This
Committee was responsible for the research and development of
the NRC report. He stated that the Committee looked at two
areas: (1) the voluntary consensus standard setting system; and
(2) conformity assessment, the system for measuring and
certifying conformance to standards. While the report found
that the standards development process works well, the NRC
recommended several changes in the conformity assessment
system. Dr. Hufbauer said the conformity assessment system has
unnecessary duplication among federal and local governments.
The Committee's recommendations, he explained, give the
National Institute of Standards and Technology (NIST) the lead
role by assigning them the responsibility of phasing out
federally-operated conformity assessment activities and asking
them to work with state and local governments to eliminate
duplicative accreditation systems.
Ms. Amy Marasco, Vice President and General Counsel of the
American National Standards Institute (ANSI), stated that the
OMB Circular A-119 needs Congressional backing to be effective.
She said it is in the best interests of the nation to require
federal employees to participate in the voluntary consensus
standards process and to require federal agencies to adopt
voluntary consensus standards whenever it is practical and
feasible.Dr. Belinda Collins, Director of Standards at NIST,
testified that the federal government's role in the standards
process is to be both a partner and a participant with the
private sector. She stressed that NIST is looking forward to
coordinating activities in the standards process, but that NIST
should not be ``policing'' activities. She also stated that
recognizing NIST as the lead agency for coordinating conformity
assessment activities is a positive step since there has not
previously been any federal agency assigned to that task, and
conformity assessment is much more of a decentralized,
omplicated activity than standards development.
Panel 2: Dr. Louis Dixon, Automotive Safety and Engineering
Standards of Ford Motor Company, testified about the importance
of efficient conformity assessment. He said manufacturers and
consumers are significantly affected by the cost of redundant
conformity assessment activities. He added, ``where
certifications are required, certifications should be based on
one assessment, from one location, and should be acceptable
anywhere in the world.''
Mr. Gerald Ritterbusch, Manager of Product Safety and
Environmental Control at Caterpillar, Inc., testified regarding
changes needed in the conformity assessment process. He stated
the public sector should handle assessment and accreditation,
and the federal government can step in at the recognition
level. Government support, he said, is absolutely essential.Mr.
Walter Poggi, President of Retlif Testing Laboratories and
representing American Council of Independent Laboratories
(ACIL), stated he was testifying as a small businessman and
that he disagreed with some of the NRC's recommendations. He
said he does not think it is practical for every federal agency
to stop performing conformity assessment activities and
indicated it is counter to the international trend. He also
felt the standards development process is slow, costly and
discriminates against small business. Mr. Stephen Oksala,
Director of Corporate Standards at Unisys Corporation, said he
agreed with most of the NRC's recommendations and stressed the
importance of industry leadership in the standards development
partnership. He said, ``move the standards and conformity
assessment infrastructures from the public to the private
sector, and let the federal government concentrate on
supporting that process through participation, recognition, and
harmonization.''
Mr. Rod Lee, Senior Vice President of Lithonia Lighting,
and representing the National Electrical Manufacturers
Association (NEMA), provided testimony regarding the lighting
fixture industry as an example of a government agency mandating
a standards policy and not using the voluntary consensus
standard system. He stated that the government is mandating
that lighting equipment be provided in modular, hard metric
increments. He explained that the manufacturer's current
standardized machine tool can not produce the hard metric
fixture, required by government regulation, and it would be
extremely expensive to adhere strictly to the federal
guidelines. In addition, he added, the lighting industry does
not believe there is any value added to the industry in
adopting nonstandard equipment only for the government, while
the private sector has not indicated any demand for the hard
metric fixtures.
IX. Summary of Committee Actions
a. Subcommittee Markup
On October 18, 1995, the Technology Subcommittee of the
House Science Committee held a subcommittee markup of H.R.
2196. One amendment, in the nature of a substitute, was offered
by Chairwoman Morella.
The amendment in the nature of a substitute, renamed H.R.
2196 as ``the National Technology Transfer and Advancement Act
of 1995.'' The amendment also incorporated the original base
text of H.R. 2196 and added certain provisions, affecting the
National Institute of Standards and Technology (NIST), among
others, which were passed by the House in H.R. 2405, the
Omnibus Civilian Science Authorization Act of 1995.
These added provisions included administrative management
amendments affecting the National Institute of Standards and
Technology (NIST). The provisions permit NIST to continue
hiring the ``best and the brightest'' scientists by permanently
extending the NIST Personnel Demonstration Program and increase
the cap on its Postdoctoral Fellows Program. Other changes
included: providing authority for federal laboratories to give
excess scientific equipment to public and private schools;
expansion of membership of the NIST Visiting Committee; and
creating authority for a Metro Shuttle for NIST employees.
Additional provisions in the amendment related to the Fastener
Quality Act and the federal use of standards.
The amendment in the nature of a substitute was adopted by
voice vote. The Technology Subcommittee then reported, by voice
vote with a quorum present, H.R. 2196, as amended, to the full
Committee for consideration.
b. Committee Markup
On October 25, 1995, the Science Committee convened to
consider H.R 2196. Four amendments were offered in the
following order:
(1) En Bloc amendment offered by Mrs. Morella. The en bloc
amendment made technical changes suggested by witnesses at the
June 27, 1995 joint hearing before the Technology and Basic
Research Subcommittees on H.R. 2196 and federal technology
transfer. Adopted by voice vote.
(2) Amendment regarding use of private voluntary standards
offered by Mrs. Morella. This amendment accomplishes two
objectives: (1) codifies the present requirements of OMB
Circular A-119 that requires federal agencies to adopt and use
standards developed by voluntary consensus standards bodies and
to work closely with those organizations to ensure that the
developed standards are consistent with agency needs; and (2)
requires federal agencies, through the Office of Management and
Budget, to annually report to Congress on the reasons for
deviating from voluntary consensus standards when the head of
the agency deems that those consensus standards are not
appropriate to the agency's needs. Adopted by voice vote.
(3) Amendment to strike Section 11 of the Act offered by
Mr. Brown. The amendment sought to strike Section 11, the
Fastener Quality Act Amendments. Defeated by voice vote.
(4) Sense of Congress Amendment offered by Mr. Brown. Sense
of Congress amendment that the Malcolm Baldrige National
Quality Award program offers substantial benefits to United
States industry, and that all funds appropriated for such
programs should be spent in support of the goals of the
program. Adopted by voice vote.
With a quorum present, the Committee adopted and ordered
reported H.R. 2196, as amended, to the House of Representatives
by voice vote.
X. Congressional Budget Office Analysis and Cost Estimates
Clause 2(l)(3)(c) of rule XI requires each Committee Report
to include a cost estimate prepared by the Director of the
Congressional Budget Office, pursuant to section 403 of the
Congressional Budget Act of 1974, if the cost estimate is
timely submitted. The following is the Congressional Budget
Office estimate:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 8, 1995.
Hon. Robert S. Walker,
Chairman, Committee on Science,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed H.R. 2196, the National Technology Transfer and
Advancement Act of 1995, as ordered reported by the House
Committee on Science on October 25, 1995. We estimate that
implementing this bill would cost a total of $10 million over
the next five years, assuming appropriation of the necessary
funds. In addition, provisions regarding the expenditure of
license-related income would increase direct spending during
this period but the impacts would not be significant.
Because H.R. 2196 would affect direct spending, the bill
would be subject to pay-as-you-go procedures. The bill would
not affect the budgets of state or local governments.
Bill Purpose. H.R. 2196 would revise statutory guidelines
for various Federal activities promoting technology transfer.
The bill would clarify government policies for cooperative
research and development agreements (CRADA's), especially with
regard to rights to intellectual property and allowable
contributions and expenditures. Policies for the distribution
of royalties collected by the government under technology
licensing agreements also would be modified. The bill would
earmark a higher portion of the annual income from licenses for
payments to inventors or coinventors, raise the ceiling on the
amounts that can be paid to inventors, allow government
laboratories to reinvest any remaining proceeds in related
research initiatives, and extend the time allowed for agencies
to obligate the proceeds by one year.
In addition, H.R. 2196 would provide new directives for the
National Institute of Standards and Technology (NIST). It would
authorize an increase in the number of postdoctorate positions
from 40 to 60, and would authorize the agency to provide
regular shuttle service connecting the Gaithersburg campus to
the Washington subway system. The bill also would expand the
membership of NIST's visiting committee from 9 to 15 members.
Finally, the bill would amend the provisions of the Fasteners
Quality Act regarding laboratory accreditation, commingling of
fasteners, and enforcement of the Act.
Federal Budgetary Impact. If enacted, H.R. 2196 would
affect both discretionary spending and direct spending. CBO
estimates that increasing the number of postdoctorate positions
at NIST would result in costs to the Federal Government of
about $2 million in fiscal year 1996 and $10 million over the
1996-2000 period, assuming appropriation of the necessary
amounts.
Giving agencies an additional year to obligate income from
royalties would increase direct spending because funds that
currently lapse would now be spent instead of being returned to
the Treasury. CBO estimates that the impact of this change in
direct spending would not be significant because the amounts
that lapse under existing law are small (less than $100,000 a
year). Changing the guidelines for CRADA's would have no net
budgetary impact because any additional collections from
royalties resulting from the new policies would be matched by
an increase in spending for either payments to inventors or
related agency programs. Other provisions of the bill would
have no significant budgetary impact.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Kathleen
Gramp and Rachel Forward, who can be reached at 226-2860.
Sincerely,
June O'Neill, Director.
cc: Hon. George E. Brown, Jr.,
Ranking Minority Member
------
December 1, 1995
memorandum
TO: Ben Wu
FROM: Kathy Gramp
SUBJECT: Pay-as-you-go effects of H.R. 2196
On November 8, 1995, CBO provided a cost estimate for H.R.
2196, the National Technology Transfer and Advancement Act of
1995, as ordered reported by the House Committee on Science on
October 25, 1995. As explained in that letter, this bill would
affect direct spending because of provisions involving income
and expenditures related to licenses and CRADA's, but we
estimate that the impact on direct spending would not be
significant (less than $100,000).
Section 252 of the Balanced Budget and Emergency Deficit
Control Act of 1985 sets up pay-as-you-go procedures for
legislation affecting direct spending or receipts through 1998.
Because H.R. 2196 would affect direct spending, the bill would
be subject to pay-as-you-go procedures. At your request, I have
prepared a table that shows the estimated pay-as-you-go impacts
described in the November 8 estimate.
------------------------------------------------------------------------
(by fiscal year, in millions of
dollars)
-----------------------------------
1996 1997 1998
------------------------------------------------------------------------
Change in outlays 0 0 0
Change in receipts n/a n/a n/a
------------------------------------------------------------------------
Please give me a call if you have any questions.
XI. Effect of Legislation on Inflation
In accordance with rule XI, clause 2(1)(4) of the Rules of
the House of Representatives, this legislation is assumed to
have no inflationary effect on prices and costs in the
operation of the national economy.
XII. Oversight Findings and Recommendations
Clause 2(1)(3)(A) of rule XI requires each Committee Report
to contain oversight findings and recommendations required
pursuant to clause 2(b)(1) of rule X. The Committee has no
oversight findings.
XIII. Oversight Findings and Recommendations by the Committee on
Government Reform and Oversight
Clause 2(1)(3)(D) of rule XI requires each Committee Report
to contain a summary of the oversight findings and
recommendations made by the House Government Reform and
Oversight Committee pursuant to clause 4(c)(2) of rule X,
whenever such findings have been timely submitted. The
Committee on Science has received no such findings or
recommendations from the Committee on Government Reform and
Oversight.
XIV. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
STEVENSON-WYDLER TECHNOLOGY INNOVATION ACT OF 1980
* * * * * * *
SEC. 11. UTILIZATION OF FEDERAL TECHNOLOGY.
(a) * * *
* * * * * * *
(e) Establishment of Federal Laboratory consortium for
Technology Transfer.--(1) * * *
* * * * * * *
(7)(A) Subject to subparagraph (B), an amount equal to
0.008 percent of the budget of each Federal agency from any
Federal source, including related overhead, that is to be
utilized by or on behalf of the laboratories of such agency for
a fiscal year referred to in subparagraph (B)(ii) shall be
transferred by such agency to the National Institute of
Standards at the beginning of the fiscal year involved. Amounts
so transferred shall be provided by the Institute to the
Consortium for the purpose of carrying out activities of the
Consortium under this subsection.
[(B) A transfer shall be made by any Federal agency under
subparagraph (A), for any fiscal year, only if--
[(i) the amount so transferred by that agency (as
determined under such subparagraph) would exceed
$10,000; and
[(ii) such transfer is made with respect to the
fiscal year 1987, 1988, 1989, 1990, 1991, 1992, 1993,
1994, 1995, or 1996.]
(B) A transfer shall be made by any Federal agency under
subparagraph (A), for any fiscal year, only if the amount so
transferred by that agency (as determined under such
subparagraph) would exceed $10,000.
* * * * * * *
(i) Research Equipment.--The Director of a laboratory, or
the head of any Federal agency or department, may loan, lease,
give research equipment that is excess to the needs of the
laboratory, agency, or department to an educational institution
or nonprofit organization for the conduct of technical and
scientific education and research activities. Actions taken
under this subsection shall not be subject to Federal
requirements on the disposal of property. Title of ownership
shall transfer with a gift under the section.
SEC. 12. COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS.
(a) * * *
[(b) Enumerated Authority.--Under agreements entered into
pursuant to subsection (a)(1), a Government-operated Federal
laboratory, and, to the extent provided in an agency-approved
joint work statement, a Government-owned, contractor-operated
laboratory, may (subject to subsection (c) of this section)--
[(1) accept, retain, and use funds, personnel,
services, and property from collaborating parties and
provide personnel, services, and property to
collaborating parties;
[(2) grant or agree to grant in advance, to a
collaborating party, patent licenses or assignments, or
options thereto, in any invention made in whole or in
part by a laboratory employee under the agreement,
retaining a nonexclusive, nontransferrable,
irrevocable, paid-up license to practice the invention
or have the invention practiced throughout the world by
or on behalf of the Government and such other rights as
the Federal laboratory deems appropriate;
[(3) waive, subject to reservation by the
Government of a nonexclusive, irrevocable, paid-up
license to practice the invention or have the invention
practiced throughout the world by or on behalf of the
Government, in advance, in whole or in part, any right
of ownership which the Federal Government may have to
any subject invention made under the agreement by a
collaborating party or employee of a collaborating
party;
[(4) determine rights in other intellectual
property developed under an agreement entered into
under subsection (a)(1); and
[(5) to the extent consistent with any applicable
agency requirements and standards of conduct, permit
employees or former employees of the laboratory to
participate in efforts to commercialize inventions they
made while in the service of the United States.
A Government-owned, contractor-operated laboratory that enters
into a cooperative research and development agreement under
subsection (a)(1) may use or obligate royalties or other income
accruing to such laboratory under such agreement with respect
to any invention only (i) for payments to inventors; (ii) for
the purposes described in section 14(a)(1)(B) (i), (ii), and
(iv); and (iii) for scientific research and development
consistent with the research and development mission and
objectives of the laboratory.]
(b) Enumerated Authority.--(1) Under an agreement entered
into pursuant to subsection (a)(1), the laboratory may grant,
or agree to grant in advance, to a collaborating party patent
licenses or assignments, or options thereto, in any invention
made in whole or in part by a laboratory employee under the
agreement, for reasonable compensation when appropriate. The
laboratory shall ensure, through such agreement, that the
collaborating party has the option to choose an exclusive
license for a field of use for any such invention under the
agreement or, if there is more than one collaborating party,
that the collaborating parties are offered the option to hold
licensing rights that collectively encompass the rights that
would be held under such an exclusive license by one party. In
consideration for the Government's contribution under the
agreement, grants under this paragraph shall be subject to the
following explicit conditions:
(A) A nonexclusive, nontransferable, irrevocable,
paid-up license from the collaborating party to the
laboratory to practice the invention or have the
invention practiced throughout the world by or on
behalf of the Government. In the exercise of such
license, the Government shall not publicly disclose
trade secrets or commercial or financial information
that is privileged or confidential within the meaning
of section 552(b)(4) of title 5, United States Code, or
which would be considered as such if it had been
obtained from a non-Federal party.
(B) If a laboratory assigns title or grants an
exclusive license to such an invention, the Government
shall retain the right--
(i) to require the collaborating party to
grant to a responsible applicant a
nonexclusive, partially exclusive, or exclusive
license to use the invention in the applicant's
licensed field of use, on terms that are
reasonable under the circumstances; or
(ii) if the collaborating party fails to
grant such a license, to grant the license
itself.
(C) The Government may exercise its right retained
under subparagraphs (B) (ii) and (iii) only if the
Government finds that--
(i) the action is necessary to meet health
or safety needs that are not reasonably
satisfied by the collaborating party;
(ii) the action is necessary to meet
requirements for public use specified by
Federal regulations, and such requirements are
not reasonably satisfied by the collaborating
party; or
(iii) the collaborating party has failed to
comply with an agreement containing provisions
described in subsection (c)(4)(B).
(2) Under agreements entered into pursuant to subsection
(a)(1), the laboratory shall ensure that a collaborating party
may retain title to any invention made solely by its employee
in exchange for normally granting the Government a
nonexclusive, nontransferable, irrevocable, paid-up license to
practice the invention or have the invention practiced
throughout the world by or on behalf of the Government for
research or other Government purposes.
(3) Under an agreement entered into pursuant to subsection
(a)(1), a laboratory may--
(A) accept, retain, and use funds, personnel,
services, and property from a collaborating party and
provide personnel, services, and property to a
collaborating party;
(B) use funds received from a collaborating party
in accordance with subparagraph (A) to hire personnel
to carry out the agreement who will not be subject to
full-time-equivalent restrictions of the agency;
(C) to the extent consistent with any applicable
agency requirements or standards of conduct, permit an
employee or former employee of the laboratory to
participate in an effort to commercialize an invention
made by the employee or former employee while in the
employment or service of the Government; and
(D) waive, subject to reservation by the Government
of a nonexclusive, irrevocable, paid-up license to
practice the invention or have the invention practiced
throughout the world by or on behalf of the Government,
in advance, in whole or in part, any right of ownership
which the Federal Government may have to any subject
invention made under the agreement by a collaborating
party or employee of a collaborating party.
(4) A collaborating party in an exclusive license in any
invention made under an agreement entered into pursuant to
subsection (a)(1) shall have the right of enforcement under
chapter 29 of title 35, United States Code.
(5) A Government-owned, contractor-operated laboratory that
enters into a cooperative research and development agreement
pursuant to subsection (a)(1) may use or obligate royalties or
other income accruing to the laboratory under such agreement
with respect to any invention only--
(A) for payments to inventors;
(B) for a purposes described in clauses (i), (ii),
(iii), and (iv) of section 14(a)(1)(B); and
(C) for scientific research and development
consistent with the research and development missions
and objectives of the laboratory.
* * * * * * *
SEC. 14. DISTRIBUTION OF ROYALTIES RECEIVED BY FEDERAL AGENCIES.
(a) In General.--[(1) Except as provided in paragraphs (2)
and (4), any royalties or other income received by a Federal
agency from the licensing or assignment of inventions under
agreements entered into by Government-operated Federal
laboratories under section 12, and inventions of Government-
operated Federal laboratories licensed under section 207 of
title 35, United States Code, or under any other provision of
law, shall be retained by the agency whose laboratory produced
the invention and shall be disposed of as follows:
[(A)(i) The head of the agency or his designee shall pay at
least 15 percent of the royalties or other income the agency
receives on account of any invention to the inventor (or co-
inventors) if the inventor (or each such co-inventor) has
assigned his or her rights in the invention to the United
States. This clause shall take effect on the date of the
enactment of this section unless the agency publishes a notice
in the Federal Register within 90 days of such date indicating
its election to file a Notice of Proposed Rulemaking pursuant
to clause (ii).
[(ii) An agency may promulgate, in accordance with section
553 of title 5, United States Code, regulations providing for
an alternative program for sharing royalties with inventors
under clause (i). Such regulations must--
[(I) guarantee a fixed minimum payment to each such
inventor, each year that the agency receives royalties
from that inventor's invention;
[(II) provide a percentage royalty share to each
such inventor, each year that the agency receives
royalties from that inventor's invention in excess of a
threshold amount;
[(III) provide that total payments to all such
inventors shall exceed 15 percent of total agency
royalties in any given fiscal year; and
[(IV) provide appropriate incentives from royalties
for those laboratory employees who contribute
substantially to the technical development of a
licensed invention between the time of the filing of
the patent application and the licensing of the
invention.
[(iii) An agency that has published its intention to
promulgate regulations under clause (ii) may elect not to pay
inventors under clause (i) until the expiration of two years
after the date of the enactment of this Act or until the date
of the promulgation of such regulations, whichever is earlier.
If an agency makes such an election and after two years the
regulations have not been promulgated, the agency shall make
payments (in accordance with clause (i)) of at least 15 percent
of the royalties involved, retroactive to the date of the
enactment of this Act. If promulgation of the regulations
occurs within two years after the date of the enactment of this
Act, payments shall be made in accordance with such
regulations, retroactive to the date of the enactment of this
Act. The agency shall retain its royalties until the inventor's
portion is paid under either clause (i) or (ii). Such royalties
shall not be transferred to the agency's Government-operated
laboratories under subparagraph (B) and shall not revert to the
Treasury pursuant to paragraph (2) as a result of any delay
caused by rulemaking under this subparagraph.
[(B) The balance of the royalties or other income shall be
transferred by the agency to its Government-operated
laboratories, with the majority share of the royalties or other
income from any invention going to the laboratory where the
invention occurred; and the funds so transferred to any such
laboratory may be used or obligated by that laboratory during
the fiscal year in which they are received or during the
succeeding fiscal year--
[(i) for payment of expenses incidental to the
administration and licensing of inventions by that
laboratory or by the agency with respect to inventions
which occurred at that laboratory, including the fees
or other costs for the services of other agencies,
persons, or organizations for invention management and
licensing services;
[(ii) to reward scientific, engineering, and
technical employees of that laboratory, including
payments to inventors and developers of sensitive or
classified technology, regardless of whether the
technology has commercial applications;
[(iii) to further scientific exchange among the
Government-operated laboratories of the agency; or
[(iv) for education and training of employees
consistent with the research and development mission
and objectives of the agency, and for other activities
that increase the licensing potential for transfer of
the technology of the laboratories of the agency.
Any of such funds not so used or obligated by the end of the
fiscal year succeeding the fiscal year in which they are
received shall be paid into the Treasury of the United States.]
(1) Except as provided in paragraphs (2) and (4), any royalties
or other payments received by a Federal agency from the
licensing and assignment of inventions under agreements entered
into by Federal laboratories under section 12, and from the
licensing of inventions of Federal laboratories under section
207 of title 35, United States Code, or under any other
provision of law, shall be retained by the laboratory which
produced the invention and shall be disposed of as follows:
(A)(i) The head of the agency or laboratory, or
such individual's designee, shall pay each year the
first $2,000, and thereafter at least 15 percent, of
the royalties or other payments to the inventor or
coinventors.
(ii) An agency or laboratory may provide
appropriate incentives, from royalties, or other
payments, to laboratory employees who are not an
inventor of such inventions but who substantially
increased the technical value of such inventions.
(iii) The agency or laboratory shall retain the
royalties and other payments received from an invention
until the agency or laboratory makes payments to
employees of a laboratory under clause (i) or (ii).
(B) The balance of the royalties or other payments
shall be transferred by the agency to its laboratories,
with the majority share of the royalties or other
payments from any invention going to the laboratory
where the invention occurred. The royalties or other
payments so transferred to any laboratory may be used
or obligated by that laboratory during the fiscal year
in which they are received or during the succeeding
fiscal year--
(i) to reward scientific, engineering, and
technical employees of the laboratory,
including developers of sensitive or classified
technology, regardless of whether the
technology has commercial applications;
(ii) to further scientific exchange among
the laboratories of the agency;
(iii) for education and training of
employees consistent with the research and
development missions and objectives of the
agency or laboratory, and for other activities
that increase the potential for transfer of the
technology of the laboratories of the agency;
(iv) for payment of expenses incidental to
the administration and licensing of
intellectual property by the agency or
laboratory with respect to inventions made at
that laboratory, including the fees or other
costs for the services of other agencies,
persons, or organizations for intellectual
property management and licensing services; or
(v) for scientific research and development
consistent with the research and development
missions and objectives of the laboratory.
(C) All royalties or other payments retained by the
agency or laboratory after payments have been made
pursuant to subparagraphs (A) and (B) that is
unobligated and unexpended at the end of the second
fiscal year succeeding the fiscal year in which the
royalties and other payments were received shall be
paid into the Treasury.
(2) If, after payments to inventors under paragraph (1),
the royalties or other payments received by an agency in any
fiscal year exceed 5 percent of the budget of the Government-
operated laboratories of the agency for that year, 75 percent
of such excess shall be paid to the Treasury of the United
States and the remaining 25 percent may be used or obligated
[for the purposes described in clauses (i) through (iv) of
paragraph (1)(B) during that fiscal year or the succeeding
fiscal year] under paragraph (1)(B). Any funds not so used or
obligated shall be paid into the Treasury of the United States.
(3) Any payment made to an employee under this section
shall be in addition to the regular pay of the employee and to
any other awards made to the employee, and shall not affect the
entitlement of the employee to any regular pay, annuity, or
award to which he is otherwise entitled or for which he is
otherwise eligible or limit the amount thereof. Any payment
made to an inventor as such shall continue after the inventor
leaves the laboratory or agency. Payments made under this
section shall not exceed [$100,000] $150,000 per year to any
one person, unless the President approves a larger award (with
the excess over [$100,000] $150,000 being treated as a
Presidential award under section 4504 of title 5, United States
Code).
(4) A Federal agency receiving royalties or other [income]
payments as a result of invention management services performed
for another Federal agency or laboratory under section 207 of
title 35, United States Code, may retain such royalties or
[income] payments to the extent required to offset [the payment
of royalties to inventors] payments to inventors under clause
(i) of paragraph (1)(A), costs and expenses incurred under
clause [(i)] (iv) of paragraph (1)(B), and the cost of foreign
patenting and maintenance for any invention of the other
agency. All royalties and other [income] payments remaining
after [payment of the royalties,] offsetting the payments to
inventors, costs, and expenses described in the preceding
sentence shall be transferred to the agency for which the
services were performed, for distribution in accordance with
[clauses (i) through (iv) of] paragraph (1)(B).
(b) Certain Assignments.--If the invention involved was one
assigned to the Federal agency--
[(1) by a contractor, grantee, or participant in a
cooperative agreement with the agency, or]
(1) by a contractor, grantee, or participant, or an
employee of a contractor, grantee, or participant, in
an agreement or other arrangement with the agency, or
* * * * * * *
SEC. 15. EMPLOYEE ACTIVITIES.
(a) In General.--If a Federal agency which has [the right
of ownership to an invention under this Act] ownership of or
the right of ownership to an invention made by a Federal
employee does not intend to file for a patent application or
otherwise to promote commercialization of such invention, the
agency shall allow the inventor, if the inventor is a
Government employee or former employee who made the invention
during the course of employment with the Government, to obtain
or retain title to the invention (subject to reservation by the
Government of a nonexclusive, nontransferrable, irrevocable,
paid-up license to practice the invention or have the invention
practiced throughout the world by or on behalf of the
Government). In addition, the agency may condition the
inventor's right to title on the timely filing of a patent
application in cases when the Government determines that it has
or may have a need to practice the invention.
* * * * * * *
----------
SECTION 210 OF TITLE 35, UNITED STATES CODE
Sec. 210. Precedence of chapter
(a) * * *
* * * * * * *
(e) The provisions of the Stevenson-Wydler Technology
Innovation Act of 1980[, as amended by the Federal Technology
Transfer Act of 1986,] shall take precedence over the
provisions of this chapter to the extent that they permit or
require a disposition of rights in subject inventions which is
inconsistent with this chapter.
----------
NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY ACT
* * * * * * *
establishment, functions, and activities
Sec. 2. (a) There is established within the Department of
Commerce a science, engineering, technology, and measurement
laboratory to be known as the National Institute of Standards
and Technology (hereafter in this Act referred to as the
``Institute'').
(b) The Secretary of Commerce (hereafter in this Act
referred to as the ``Secretary'') acting through the Director
of the Institute (hereafter in this Act referred to as the
``Director'') and, if appropriate, through other officials, is
authorized to take all actions necessary and appropriate to
accomplish the purposes of this Act, including the following
functions of the Institute--
(1) to assist industry in the development of
technology and procedures needed to improve quality, to
modernize manufacturing processes, to ensure product
reliability, manufacturability, functionality, and
cost-effectiveness, and to facilitate the more rapid
commercialization, especially by small- and medium-
sized companies throughout the United States, of
products based on new scientific discoveries in fields
such as automation, electronics, advanced materials,
biotechnology, and optical technologies;
(2) to develop, maintain, and retain custody of the
national standards of measurement, and provide the
means and methods for making measurements consistent
with those standards[, including comparing standards
used in scientific investigations, engineering,
manufacturing, commerce, industry, and educational
institutions with the standards adopted or recognized
by the Federal Government];
(3) to compare standards used in scientific
investigations, engineering, manufacturing, commerce,
industry, and educational institutions with the
standards adopted or recognized by the Federal
Government and to coordinate the use by Federal
agencies of private sector standards, emphasizing where
possible the use of standards developed by private,
consensus organizations;
[(3)] (4) to enter into contracts, including
cooperative research and development arrangements, in
furtherance of the purposes of this Act;
[(4)] (5) to provide United States industry,
Government, and educational institutions with a
national clearinghouse of current information,
techniques, and advice for the achievement of higher
quality and productivity based on current domestic and
international scientific and technical development;
[(5)] (6) to assist industry in the development of
measurements, measurement methods, and basic
measurement technology;
[(6)] (7) to determine, compile, evaluate, and
disseminate physical constants and the properties and
performance of conventional and advanced materials when
they are important to science, engineering,
manufacturing, education, commerce, and industry and
are not available with sufficient accuracy elsewhere;
[(7)] (8) to develop a fundamental basis and
methods for testing materials, mechanisms, structures,
equipment, and systems, including those used by the
Federal Government;
[(8)] (9) to assure the compatibility of United
States national measurement standards with those of
other nations;
[(9)] (10) to cooperate with other departments and
agencies of the Federal Government, with industry, with
State and local governments, with the governments of
other nations and international organizations, and with
private organizations in establishing standard
practices, codes, specifications, and voluntary
consensus standards;
[(10)] (11) to advise government and industry on
scientific and technical problems; [and]
[(11)] (12) to invent, develop, and (when
appropriate) promote transfer to the private sector of
measurement devices to serve special national needs[.];
and
(13) to coordinate Federal, State, local, and
private sector standards conformity assessment
activities, with the goal of eliminating unnecessary
duplication and complexity in the development and
promulgation of conformity assessment requirements and
measures.
* * * * * * *
visiting committee on advanced technology
Sec. 10. (a) There is established within the Institute a
Visiting Committee on Advanced Technology (hereafter in this
Act referred to as the ``Committee''). The Committee shall
consist of [nine] 15 members appointed by the Director, at
least [five] 10 of whom shall be from United States industry.
The Director shall appoint as original members of the Committee
any final members of the National Bureau of Standards Visiting
Committee who wish to serve in such capacity. In addition to
any powers and functions otherwise granted to it by this Act,
the Committee shall review and make recommendations regarding
general policy for the Institute, its organization, its budget,
and its programs within the framework of applicable national
policies as set forth by the President and the Congress.
* * * * * * *
Sec. 15. In the performance of the functions of the
Institute the Secretary of Commerce is authorized to undertake
the following activities: (a) The purchase, repair, and
cleaning of uniforms for guards; (b) the care, maintenance,
protection, repair, and alteration of Institute buildings and
other plant facilities, equipment, and property. (c) the rental
of field sites and laboratory, office, and warehouse space; (d)
the purchase of reprints from technical journals or other
periodicals and the payment of page charges for the publication
of research papers and reports in such journals; (e) the
furnishing of food and shelter without repayment therefor to
employees of the Government at Arctic and Antarctic stations;
(f) for the conduct of observations on radio propagation
phenomena in the Arctic or Antarctic regions, the appointment
of employees at base rates established by the Secretary of
Commerce which shall not exceed such maximum rates as may be
specified from time to time in the appropriation concerned, and
without regard to the civil service and classification laws and
titles II and III of the Federal Employees Pay Act of 1945;
[and] (g) the erection on leased property of specialized
facilities and working and living quarters when the Secretary
of Commerce determines that this will best serve the interests
of the Government; and (h) the provision of transportation
services for employees of the Institute between the facilities
of the Institute and nearby public transportation,
notwithstanding section 1344 of title 31, United States Code.
* * * * * * *
Sec. 19. The Institute in conjunction with the National
Academy of Sciences, shall establish and conduct a post-
doctoral fellowship program which shall be organized and
carried out in substantially the same manner as the National
Academy of Sciences/National Research Council Post-Doctoral
Research Associate Program that was in effect prior to 1986,
and which shall include not less than twenty nor more than
[forty] 60 new fellows per fiscal year.
* * * * * * *
----------
FASTENER QUALITY ACT
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fastener Quality Act''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds that--
(1) * * *
* * * * * * *
[(4) the sale in commerce of nonconforming
fasteners and the use of nonconforming fasteners in
numerous critical applications have reduced the combat
readiness of the Nation's military forces, endangered
the safety of other Federal projects and activities,
and cost both the public and private sectors large sums
in connection with the retesting and purging of
fastener inventories;]
[(5)] (4) the purchase and use of nonconforming
fasteners stem from material misrepresentations about
such fasteners made by certain manufacturers,
importers, and distributors engaged in commerce;
[(6)] (5) current fastener standards of measurement
evaluate bolts and other fasteners according to
multiple criteria, including strength, hardness, and
composition, and provide grade identification markings
on fasteners to make the characteristics of individual
fasteners clear to purchasers and users;
[(7)[ (6) current tests required by consensus
standards, designed to ensure that fasteners are of
standard measure, are adequate and appropriate for use
as standards in a program of high-strength fastener
testing;
[(8)] (7) the lack of traceability [by lot number]
of fasteners sold in commerce is a serious impediment
to effective quality control efforts; and
[(9)] (8) the health and safety of Americans is
threatened by the widespread sale in commerce of
mismarked, substandard, and counterfeit fasteners, a
practice which also harms American manufacturers,
importers, and distributors of safe and conforming
fasteners, and workers in the American fastener
industry.
(b) Purpose.--In order to protect public safety, to deter
the introduction of nonconforming fasteners into commerce, to
improve the traceability of fasteners [used in critical
applications] in commerce, and generally to provide commercial
and governmental customers with greater assurance that
fasteners meet stated specifications, it is the purpose of this
Act to create procedures for the testing, certification, and
distribution of certain fasteners used in commerce within the
United States.
SEC. 3. DEFINITIONS.
As used in this Act, the term--
(1) ``alter'' means to alter--
(A) by through-hardening,
(B) by electroplating of fasteners [having
a minimum tensile strength of 150,000 pounds
per square inch] having a minimum Rockwell C
hardness of 40 or above, or
(C) by machining;
(2) ``consensus standards organization'' means the
American Society for Testing and Materials, American
National Standards Institute, American Society of
Mechanical Engineers, Society of Automotive Engineers,
or any other consensus standard-setting organization
determined by the Secretary to have comparable
knowledge, expertise, and concern for health and safety
in the field for which such organization purports to
set standards;
* * * * * * *
(5) ``fastener'' means--
(A) a--
(i) screw, nut, bolt, or stud
having internal or external threads, or
* * * * * * *
(B) a screw, nut, bolt, or stud having
internal or external threads which bears a
grade identification marking required by a
standard or specification, or
(C) a washer to the extent that it is
subject to a standard or specification
applicable to a screw, nut, bolt, or stud
described in subparagraph (B), [or
[(D) any item within a category added by
the Secretary in accordance with section 4(b),]
except that such term does not include any screw, nut,
bolt, or stud that is produced and marked as ASTM A 307
Grade A or produced in accordance with ASTM F 432;
(6) ``grade identification marking'' means any
symbol appearing on a fastener purporting to indicate
that the fastener's base material, strength properties,
or performance capabilities conform to a specific
standard of a consensus standards organization or
[other person] government agency;
* * * * * * *
(8) ``Institute'' means the National Institute of
[Standard] Standards and Technology;
* * * * * * *
[(11) ``original equipment manufacturer'' means a
person who uses fasteners in the manufacture or
assembly of its products and sells fasteners to
authorized dealers as replacement or service parts for
its products;]
[(12)] (11) ``private label distributor'' means a
person who contracts with a manufacturer for the
fabrication of fasteners bearing the distributor's
distinguishing insignia;
[(13)] (12) ``Secretary'' means the Secretary of
Commerce;
[(14)] (13) ``standards and specifications'' means
the provisions of a document published by a consensus
standards organization[, a government agency, or a
major end-user of fasteners which defines or describes
dimensional characteristics, limits of size, acceptable
materials, processing, functional behavior, plating,
baking, inspecting, testing, packaging, and required
markings of any fastener] or a government agency; and
[(15)] (14) ``through-harden'' means heating above
the transformation temperature followed by quenching
and tempering for the purpose of achieving a uniform
hardness.
[SEC. 4. SPECIAL RULES FOR FASTENERS.
[(a) Waiver Requirement.--If the Secretary determines that
any category of fastener is not used in critical applications,
the Secretary shall waive the requirements of this Act with
respect to such category.
[(b) Additional Items.--If the Secretary determines that--
[(1) a category of screw, nut, bolt, or stud which
is not described in section 3(5)(A)(i) or (B),
[(2) a category of item which is associated with a
fastener described in section 3(5)(A), (B), or (C), or
[(3) a category of item which serves a function
comparable to that served by a fastener so described
is used in critical applications, the Secretary may include
such category under section 3(5)(D) and therefore within the
definition of fasteners under this Act.
[(c) Notice and Opportunity for Comments.--The Secretary
shall provide advance notice and the opportunity for public
comments prior to making any determination under subsections
(a) and (b) and shall act through the Director in making any
such determination.]
SEC. 5. TESTING AND CERTIFICATION OF FASTENERS.
(a) Requirement.--(1) No fastener shall be offered for sale
or sold in commerce unless it is part of a lot which--
(A) conforms to the standards and specifications to
which the manufacturer represents it has been
manufactured; and
(B) has been inspected, tested, and certified as
provided in [subsections (b) and (c)] subsections (b),
(c), and (d) of this section.
(2)(A) Paragraph (1)(B) of this subsection shall not apply
to fasteners which are part of a lot of 50 fasteners or less
if, within 10 working days after the delivery of such
fasteners, or as soon as practicable thereafter--
(i) inspection, testing, and certification as
provided in [subsections (b) and (c)] subsections (b),
(c), and (d) is carried out; and
* * * * * * *
(c) Laboratory Report of Testing.--If a laboratory
performing the inspection and testing under subsection (b)(1)
determines, as to the characteristics selected under the
sampling procedures prescribed by the Secretary and based on
the sample examined, that a lot conforms to the standards and
specifications to which the manufacturer represents it has been
manufactured, the laboratory shall provide to the manufacturer
a written inspection and testing report with respect to such
lot. The report, which shall be in a form prescribed by the
Secretary by regulation, shall--
(1) state the manufacturer's name, the part
description, and the lot number and note the grade
identification mark and insignia found on the fastener;
(2) reference the standards and specifications
disclosed by the manufacturer with respect to such lot
under subsection (b)(1) [or, where applicable,
certified by the manufacturer under section 7(c)(1)];
(3) list the markings and characteristics selected
under the Secretary's procedures for testing[, such as
the chemical, dimensional, physical, mechanical, and
any other] significant characteristics required by the
standards and specifications described in paragraph (2)
and specify the results of the inspection and testing
under subsection (b)(1);
(4) except as provided in subsection (d), state
whether, based on the samples provided as
representative of the lot, such lot has been found
after such inspection and testing to conform to such
standards and specifications; and
(5) bear the original signature of a laboratory
employee or officer determined by the Secretary to be
responsible for the accuracy of the report and of the
inspection and testing to which it relates.
(d) Alternative Procedure for Chemical Characteristics.--
Notwithstanding the requirements of subsections (b) and (c), a
manufacturer shall be deemed to have demonstrated, for purposes
of subsection (a)(1), that the chemical characteristics of a
lot conform to the standards and specifications to which the
manufacturer represents such lot has been manufactured if the
following requirements are met:
(1) The coil or heat number of metal from which
such lot was fabricated has been inspected and tested
with respect to its chemical characteristics by a
laboratory accredited in accordance with the procedures
and conditions specified by the Secretary under section
6.
(2) Such laboratory has provided to the
manufacturer, either directly or through the metal
manufacturer, a written inspection and testing report,
which shall be in a form prescribed by the Secretary by
regulation, listing the chemical characteristics of
such coil or heat number.
(3) The report described in paragraph (2) indicates
that the chemical characteristics of such coil or heat
number conform to those required by the standards and
specifications to which the manufacturer represents
such lot has been manufactured.
(4) The manufacturer demonstrates that such lot has
been fabricated from the coil or heat number of metal
to which the report described in paragraphs (2) and (3)
relates.
In prescribing the form of report required by subsection (c),
the Secretary shall provide for an alternative to the statement
required by subsection (c)(4), insofar as such statement
pertains to chemical characteristics, for cases in which a
manufacturer elects to use the procedure permitted by this
subsection.
SEC. 6. LABORATORY ACCREDITATION.
(a) Establishment of Accreditation Program.--(1) [Within
180 days after the date of enactment of this Act, the] The
Secretary, acting through the Director, shall issue regulations
which shall include--
(A) * * *
* * * * * * *
SEC. 7. SALE OF FASTENERS SUBSEQUENT TO MANUFACTURE.
[(a) Domestically Produced Fasteners.--It shall be unlawful
for a manufacturer to sell any shipment of fasteners (except
fasteners for which the Secretary has waived the requirements
of this Act pursuant to section 4) which are manufactured in
the United States unless the fasteners are accompanied, at the
time of delivery, by a written certificate by the manufacturer
certifying that--
[(1) the fasteners have been manufactured according
to the requirements of the applicable standards and
specifications and have been inspected and tested by a
laboratory accredited in accordance with the procedures
and conditions specified by the Secretary under section
6; and
[(2) an original laboratory testing report
described in section 5(c) is on file with the
manufacturer, or under such custody as may be
prescribed by the Secretary, and available for
inspection.]
(a) Domestically Produced Fasteners.--It shall be unlawful
for a manufacturer to sell any shipment of fasteners covered by
this Act which are manufactured in the United States unless the
fasteners--
(1) have been manufactured according to the
requirements of the applicable standards and
specifications and have been inspected and tested by a
laboratory accredited in accordance with the procedures
and conditions specified by the Secretary under section
6; and
(2) an original laboratory testing report described
in section 5(c) and a manufacturer's certificate of
conformance are on file with the manufacturer, or under
such custody as may be prescribed by the Secretary, and
available for inspection.
* * * * * * *
(c) Option For Importers and Private Label Distributors.--
(1) * * *
(2) If the importer or private distributor assumes the
responsibility in writing for the inspection and testing of
such lot or portion, the provisions of section 5(a) and
subsections (a) and (b) of this section shall apply to the
importer or private label distributor in the same manner and to
the same extent as to a manufacturer; except that the importer
or private label distributor shall provide to the testing
laboratory the manufacturer's certificate described under
paragraph (1) of this subsection.
(d) Alterations Subsequent to Manufacture.--(1) Any person
who significantly alters a fastener so that such fastener no
longer conforms to the description in the relevant
[certificate] test report issued under section 5(c), and who
thereafter offers for sale or sells such altered fastener,
shall be treated as a manufacturer for purposes of this Act and
shall cause such altered fastener to be inspected and tested
under section 5 or this section as though it were newly
manufactured, unless delivery of such fastener to the purchaser
is accompanied by a written statement noting the original lot
number, disclosing the subsequent alteration, and warning that
such alteration may affect the dimensional or physical
characteristics of the fastener.
(2) Any person who knowingly sells an altered fastener and
who did not alter such fastener shall provide to the purchaser
a copy of the statement required by paragraph (1).
[(e) Commingling.--(1) Subject to paragraph (2), it shall
be unlawful for any manufacturer or any person who purchases
any quantity of fasteners for resale at wholesale to commingle
like fasteners from different lots in the same container;
except that such manufacturer or such person may commingle like
fasteners of the same type, grade, and dimension from not more
than two tested and certified lots in the same container during
repackaging and plating operations: Provided, That any
container which contains like fasteners from two lots shall be
conspicuously marked with the lot identification numbers of
both lots.
[(2) Paragraph (1) does not apply to sales by original
equipment manufacturers to their authorized dealers for use in
assembling or servicing products produced by the original
equipment manufacturers.
[(f) Subsequent Purchaser.--(1) It shall be unlawful for
any person to sell fasteners, of any quantity, to any person
who purchases such fasteners--
[(A) for sale at wholesale, or
[(B) for assembling components of a product or
structure for sale,
unless the container of fasteners sold is conspicously marked
with the number of the lot from which such fasteners were
taken, except that this requirement shall not apply to sales by
original equipment manufacturers to their authorized
dealers for use in assembling or servicing products
produced by the original equipment manufacturer.
[(2) If a person who purchases fasteners for purposes other
than those described in paragraph (1) (A) and (B) so requests
either prior to the sale or at the time of sale, the seller
shall conspicuously mark the container of fasteners with the
lot number from which such fasteners were taken.
[(g) Regulations.--The Secretary may issue such regulations
as may be necessary to ensure compliance with the provisions of
this section.]
(e) Commingling.--It shall be unlawful for any
manufacturer, importer, or private label distributor to
commingle like fasteners from different lots in the same
container, except that such manufacturer, importer, or private
label distributor may commingle like fasteners of the same
type, grade, and dimension from not more than two tested and
certified lots in the same container during repackaging and
plating operations. Any container which contains fasteners from
two lots shall be conspicuously marked with the lot
identification numbers of both lots.
(f) Subsequent Purchaser.--If a person who purchases
fasteners for any purpose so requests either prior to the sale
or at the time of sale, the seller shall conspicuously mark the
container of the fasteners with the lot number from which such
fasteners were taken.
* * * * * * *
SEC. 9. REMEDIES AND PENALTIES.
(a) * * *
* * * * * * *
(d) Enforcement.--The Secretary may designate officers or
employees of the Department of Commerce to conduct
investigations pursuant to this Act. In conducting such
investigations, those officers or employees may, to the extent
necessary or appropriate to the enforcement of this Act,
exercise such authorities as are conferred upon them by other
laws of the United States, subject to policies and procedures
approved by the Attorney General.
SEC. 10. RECORDKEEPING REQUIREMENTS.
(a) Laboratories.--Laboratories which perform inspections
and testing under section 5(b) shall retain for [10 years] 5
years all records concerning the inspection and testing, and
certification, of fasteners under section 5.
(b) Manufacturers, Importers, Private Label Distributors,
and Persons who Make Significant Alterations.--Manufacturers,
importers, private label distributors, and persons who make
significant alterations shall retain for [10 years] 5 years all
records concerning the inspection and testing, and
certification, of fasteners under section 5, and shall provide
copies of any applicable laboratory testing report or
manufacturer's certificate upon request to [any subsequent] the
subsequent purchaser of fasteners taken from the lot to which
such testing report or manufacturer's certificate relates.
* * * * * * *
SEC. 13. REGULATIONS.
The Secretary shall [within 180 days after the date of
enactment of this Act] issue such regulations as may be
necessary to implement this Act.
[SEC. 14. ADVISORY COMMITTEE.
[Within 90 days after the date of enactment of this Act,
the Secretary shall appoint an advisory committee consisting of
representatives of fastener manufacturers, importers,
distributors, end-users, independent laboratories, and
standards organizations. The Secretary and Director shall
consult with the advisory committee--
[(1) prior to promulgating any regulations under
this Act; and
[(2) in such other matters related to fasteners as
the Secretary may determine.]
* * * * * * *
XV. Committee Recommendations
On October 25, 1995, a quorum being present, the Committee
on Science favorably reported by voice vote H.R. 2196, the
National Technology Transfer and Advancement Act of 1995, as
amended, to the House of Representatives and recommends its
enactment.
XVI. Reports to Congress
Upon the enactment of this Act, the National Institute of
Standards and Technology (NIST) shall, by January 1, 1996,
transmit to the Congress a plan for implementing Section 12 of
the amendment regarding standards and conformity assessment.
XVII. Exchanges of Committee Correspondence
House of Representatives,
Committee on Commerce,
Washington, DC, November 30, 1995.
Hon. Robert S. Walker,
Chairman, Committee on Science,
House of Representatives, Washington, DC.
Dear Mr. Chairman:
On October 25, 1995, the Committee on Science ordered
reported H.R. 2196, the National Technology Transfer and
Advancement Act of 1995. As ordered reported by the Science
Committee, H.R. 2196 contains several provisions that implicate
the jurisdiction of the Commerce Committee, namely, amendments
to the Fastener Quality Act.
As you know, the Commerce Committee has had a longstanding
jurisdictional interest in the issue of fastener quality and
the Fastener Quality Act. In the 100th Congress, the Committee
undertook an investigation of counterfeit and substandard
fasteners. This investigation resulted in the issuance of a
unanimously approved Subcommittee report entitled ``The Threat
from Substandard Fasteners: Is America Losing Its Grip.''
In the 101st Congress, Congressman Dingell and Congressman
Roe each introduced separate bills on fastener quality.
Congressman Dingell and Congressman Roe drafted a composite
bill, H.R. 3000, which was reported by both the Commerce
Committee and the Science Committee and ultimately became the
Fastener Quality Act of 1990.
It is my understanding that the amendments to the Fastener
Quality Act proposed in H.R. 2196 are based on the
recommendations of the industry-government Fastener Public Law
Task Force. These amendments primarily address three issues:
heat mill certification; commingling; and minor nonconformance.
The provisions of H.R. 2196 that amend the Fastener Quality Act
clearly fall within the jurisdiction of the Commerce Committee.
Additionally, I acknowledge the jurisdiction of the
Committee on Science over the provisions in H.R. 2196 that seek
to promote corporate cooperation in research and development at
Federal laboratories. A related but distinct issue, the
commercialization of technologies developed by federally funded
laboratories, has been the subject of longstanding discourse
between the Committee on Commerce and the Committee on Science.
I look forward to obtaining a better understanding of the
history of this discourse and reserve my right to revisit the
issue following consideration of this legislation by the full
House.
I recognize your desire to bring this legislation before
the House in an expeditious manner. Therefore, I will not seek
a sequential referral of the bill. By agreeing not to seek a
sequential referral, the Commerce Committee does not waive its
jurisdictional claims. In addition, the Commerce Committee
reserves its authority to seek equal conferees on these and any
other provisions of the bill that are within the Commerce
Committee's jurisdiction during any House-Senate conference
that may be convened on this legislation. I would seek your
commitment to support any such request.
I would appreciate your including this letter as a part of
the Committee's report on H.R. 2196 and as part of the record
during consideration of this bill by the House.
Thank you for your cooperation on this matter.
Sincerely,
Thomas J. Bliley, Jr., Chairman.
cc:
Hon. George E. Brown, Jr.,
Ranking Minority Member,
Committee on Science
Hon. John D. Dingell,
Ranking Minority Member,
Committee on Commerce
Mr. Charles W. Johnson, III,
Parliamentarian
------
House of Representatives,
Committee on Science,
Washington, DC, December 1, 1995.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
Dear Tom:
I am in receipt of your letter dated November 30, 1995,
regarding amendments to H.R. 2196, the National Technology
Transfer and Advancement Act of 1995, which was ordered
reported by the Committee on Science on October 25, 1995.
I agree that the provisions to the Fastener Quality Act,
which have been incorporated into H.R. 2196, fall within the
jurisdiction of the Commerce Committee, and I thank you for
your agreement not to seek sequential referral of this bill.
You have my commitment that I will support any request by your
Committee for equal conferees on amendments to the Fastener
Quality Act or other provisions of the legislation which fall
within the Commerce Committee's jurisdiction should a House-
Senate conference be convened on this legislation.
Your letter, and this response, will be included as part of
the Committee's report on H.R. 2196 and will be part of the
record during consideration of this bill by the full House.
Thank you for your assistance in expediting consideration
of this important legislation.
Cordially,
Robert S. Walker, Chairman.
cc:
Hon. George E. Brown, Jr.
Hon. John D. Dingell
Mr. Charles W. Johnson, III, Parliamentarian
XVIII. ADDITIONAL VIEWS
This Committee has tended to speak with one voice on
technology transfer matters for two decades, and I hope that
this tradition can continue. H.R. 2196, the National Technology
Transfer and Advancement Act, as introduced, clearly follows in
the tradition of the Bayh-Dole and Stevenson-Wydler Acts, and
Committee Democrats view positively many of the changes made
since introduction. These amendments were carefully refined
over a period of two Congresses in a fully open manner,
soliciting and considering the views of all concerned. This
part of the bill is a work product of which every member can be
proud.
Unfortunately, the Fastener Quality Act Amendments which
have been added to this bill have not been handled in the same
manner. This is unfortunate particularly because these
amendments are critical to protecting public safety. Three
Congresses ago, this Committee and the Committee on Energy and
Commerce wrote the original Fastener Quality Act to answer the
very real threats that counterfeit imported fasteners were
posing to our defense preparedness, NASA programs, industrial
worker safety, and transportation safety. Counterfeit
fasteners, largely from Taiwan and other East Asian countries,
were being passed off as high strength bolts, nuts, and wheel
studs. When these substandard fasteners inevitably failed,
accidents occurred. Investigations and indictments followed, as
did extensive Congressional legislative hearings. These led to
passage of a relatively tough and bipartisanly-supported
Fastener Quality Act.
Since then, experience in implementing the new law has led
to a general recognition that certain parts of the legislation
impose unnecessary burdens on industry. I would have hoped that
these needed amendments to the Fastener Quality Act would have
been developed with the same degree of care as the original
act. However, this year's consideration of Fastener Quality Act
amendments has been marked by shortcuts for which we have paid
the price. There have been no public hearings on the bill and
no opportunity for Members of the committee to become informed
about the issues involved in these amendments. Instead, when
Department of Commerce authorization legislation was considered
in late Spring, the majority proposed a version of these
amendments which was portrayed to be substantially the same as
a series of fastener amendments which had been considered last
Congress. There turned out to be substantial differences
between the two versions. Later, on just 24 hours notice, we
were asked to amend the Committee-passed version of these
amendments on the floor because, as drafted, the bill's
enforcement provisions had been omitted. When the provisions
came back before the Committee on Science as part of this
legislation, our committee agreed to change one of the
amendment's key definitions after receiving panic calls from
various standards and engineering groups. Then, just before
full committee consideration, we learned of a 17 page position
paper from a domestic fastener industry group that questioned
many of the other changes which were added this year. After the
bill was reported, the top fastener official in the National
Institute of Standards and Technology admitted that one of this
paper's criticisms was true; the amendments had inadvertently
omitted many altered fasteners from coverage.
The history of this bill amply illustrates the perils of
rushing through complicated legislation without the benefit of
hearings and public comment. While I do not disagree with the
bill's intent, I cannot help but remain concerned that there
may be additional problems lurking in this bill which we have
not been able to catch in this truncated process. I can only
hope that we have not inadvertently reopened the floodgates for
phony fasteners and a renewed threat to public safety.
George E. Brown, Jr.
XIX. Proceedings from Subcommittee Markup
SUBCOMMITTEE MARKUP ON H.R. 2196--THE TECHNOLOGY TRANSFER IMPROVEMENTS
ACT OF 1995
----------
WEDNESDAY, OCTOBER 18, 1995
U.S. House of Representatives,
Committee on Science,
Subcommittee on Technology,
Washington, D. C.
The Subcommittee met at 1:10 p.m. in Room 2318 of the
Rayburn House Office Building, the Honorable Constance A.
Morella, Chairwoman of the Subcommittee, presiding.
Mrs. Morella. This afternoon the Technology Subcommittee
will be marking up H.R. 2196, the Technology Transfer
Improvements Act of 1995, a bill which I have introduced, co-
sponsored by Chairman Walker, Committee Ranking Minority Member
Congressman Brown, and our Subcommittee Ranking Member
Congressman Tanner.
[The bill follows:]
Mrs. Morella. As we proceed with debate on this measure, I
am going to be offering an amendment in the nature of a
substitute renaming H.R. 2196 as the ``National Technology
Transfer and Advancement Act of 1995.''
My amendment incorporates the original base text of the
Technology Transfer Improvements Act, adds certain provisions
affecting the National Institute of Standards and Technology,
which was passed by the House in H.R. 2405, the House-passed
Omnibus Civilian Science Authorization Act of 1995.
These added provisions are very important to NIST for its
administration and management of scientific research and
standards measurement, as we have heard in testimony before
this subcommittee.
These provisions include language for NIST expanding its
ability to continue hiring the ``best and brightest''
scientists by permanently extending the NIST Personnel
Demonstration Program and increasing the cap on the NIST
Postdoctoral Fellows Program. Other changes include:
Providing authority to give excess scientific equipment to
secondary schools; Expansion of membership of the NIST Visiting
Committee; and Creating authority for a NIST Metro Shuttle for
employees, among others.
H.R. 2196 is the product of an effort of many years to
improve and enhance development of Cooperative Research and
Development Agreements, CRADAs, undertaken by myself and
Senator Rockefeller from West Virginia.
This legislation will help facilitate and speed technology
cooperation between companies and our Nation's Federal
laboratories, and thus will benefit our economy and our
citizens.
It does so by giving companies and Federal laboratories
clear guidelines regarding intellectual property rights to
technology that is developed under cooperative research
projects--guidelines that will reduce negotiating time and
alleviate the uncertainty that can deter companies from working
with the Government.
Currently the law provides little guidance on intellectual
property rights that a collaborating partner should receive
from a CRADA.
The current law gives agencies very broad discretion on
this matter, which provides flexibility, but also means that
both companies and laboratory executives must laboriously
negotiate patent rights each time they discuss a new CRADA.
Neither side has much guidance as to what constitutes an
appropriate agreement regarding intellectual property developed
under a CRADA.
Options range from assigning full patent title to the
company to providing the firm with only a non-exclusive license
for a narrow field of use.
We certainly have learned from industry executives that
this uncertainty, as well as the time and the effort involved
in negotiating intellectual property in each CRADA was often a
barrier to working with the Federal laboratories.
We also learned that companies reluctant to enter into a
CRADA are equally important to commit additional resources to
commercialize a CRADA invention unless they have some assurance
they will control important intellectual property rights.
So the purpose of the Technology Transfer Improvements Act
is to provide those assurances to United States Industry that
they will be granted sufficient rights to justify prompt
commercialization of resulting inventions arising from CRADAs
with Federal laboratories.
The bill would also provide important new incentives to
Federal laboratory personnel who create new inventions. In this
way, a CRADA would be made more attractive to both American
industry and Federal laboratories.
The bill is important because it comes at a time when both
Federal labs and industry need to work closer together for
their mutual benefit and for our national competitiveness.
So the bill enhances commercialization of technology and
industrial innovation in the United States by guaranteeing to a
collaborating partner from industry, in a CRADA, the option to
choose an exclusive license for a field of use.
The collaborating party would have the right to use the
technology in exchange for reasonable compensation to the
laboratory.
In addition, the bill provides that the Federal Government
will retain minimum statutory rights to use the technology for
its own purposes. If the title holder does not commercialize
the technology in any field of use, or it is not manufactured
in the United States, or if there is a public necessity to the
technology, the Government may exercise its ``march-in rights''
provided in the bill.
The bill would also seek to encourage greater cooperation
between Federal labs and U.S. industry by enhancing the
financial incentives and the awards given to Federal laboratory
scientists for technology that results in marketable products.
These incentives are paid from the income the laboratories
receive for commercialized technology and not from tax dollars.
The hearing record is clear on the need for this bill. On
June 27th, this Subcommittee and the Basic Research
Subcommittee held a joint hearing on technology transfer and
our Federal laboratories with a focus on this Technology
Transfer Improvements Act.
The witnesses at the hearing testified very favorably in
support of the bill. The testimony from the hearing
supplemented the hearing record on the bill that already had
been established in the 103rd Congress.
In the previous Congress, hearings in the House and Senate
were held on the previous version of the bill, H.R. 3590 and S.
1537. The bills received strong support from the Administration
and a series of Federal agency officials, as well as a broad
spectrum of academicians and industry association
representatives.
These hearings have helped to spark a very beneficial
debate on the current role of our Federal laboratories in our
Nation's global competitiveness, a topic which we will continue
to explore in this Congress.
H.R. 2196 is an important step in the right direction, and
I welcome the input of all those who have an interest in the
bill as this Subcommittee examines additional measures to
enhance our international competitiveness.
I want to thank all my distinguished colleagues for their
co-sponsorship of H.R. 2196 and I look forward to working with
them to expedite enactment of this necessary legislation. I
urge my colleagues to support it.
My lengthy opening statement was so that you would get a
feeling of what the bill does and its background.
I would now like to yield to the Ranking Minority Member of
the Subcommittee, Mr. Tanner.
Mr. Tanner. Thank you, Madam Chairman. I want to thank Ms.
Johnson and Mr. McHale and others who were here this morning. I
was in another committee with regard to the Bosnian situation
and I am sorry I couldn't be here, but I appreciate their
efforts.
Mrs. Morella. Did you solve the situation?
Mr. Tanner. No. I wish it was that simple. Thank you, very
much. I also am a strong advocate of public-private
partnerships to promote American competitiveness. I want to
thank Chairwoman Morella for asking me to be an original co-
sponsor of H.R. 2196, the Technology Transfer Improvements Act
of 1995.
It is a step in the right direction, and we ought to do our
best to assure that government investment in our Federal labs
provides the maximum return on the taxpayers' investment.
This bill reaffirms the Chairlady's and my support for
promoting these government-industry partnerships, although
unfortunately I think we have our work cut out for us in
convincing some of our colleagues on this committee of the
benefits of these partnerships. The Full Committee has sent
very mixed signals about its position on this issue.
Today we are marking up a bill to promote technology
transfer in cooperation between the Federal labs and industry.
Yet, only last week the House-passed Omnibus Science Bill
eliminated funding for Cooperative Research and Development
Agreements, CRADAs, at the Department of Energy saying that
CRADAs were nothing more than another form of corporate
welfare. It is obvious that this is an unresolved issue in the
104th Congress.
Again I want to thank the Chairwoman of this Subcommittee
for her efforts in this regard, and only hope that we can work
together to convince others, who have something to do with the
work of this Full Committee, of the merit of our position.
There is a conflict on some of our members. Ms. Lofgren is
in another markup in another committee now. Therefore, I would
like to suggest that we dispense with this matter quickly.
I reserve the right, if I may, for Subcommittee members to
offer amendments at the Full Committee markup next week. I
understand that the Chairwoman is amenable to that and may have
an amendment or two of her own.
Mrs. Morella. Yes.
Mr. Tanner. Thank you.
Mrs. Morella. Hearing no objection, I so move that that can
be the case, they can be offered.
[No response.]
Mrs. Morella. I would like to ask, unless anyone has any
opening statements they would like to make?
[No response.]
Mrs. Morella. I know everybody has got many meetings that
they are currently in the middle of or going to attend. Then I
would like to ask unanimous consent that the amendment in the
nature of a substitute entitled ``The National Technology
Transfer and Advancement Act of 1995'', which was prepared by
legislative counsel and previously distributed to the Members,
be considered as read and open for amendment at any point.
[The amendment follows:]
Mrs. Morella. At the present time, I don't hear any
amendments at the Subcommittee level. Are there any amendments
that are to be considered?
[No response.]
Mrs. Morella. Hearing none, the question is on the
amendment in the nature of a substitute. All those in favor
will say aye.
[Chorus of ayes.]
Mrs. Morella. Opposed, say no.
[No response.]
Mrs. Morella. In the opinion of the Chair, the ayes have
it. The question is on the bill H.R. 2196, the Technology
Transfer Improvements Act of 1995, as amended. All those in
favor will say aye.
[Chorus of ayes.]
Mrs. Morella. Those opposed will say no.
[No response.]
Mrs. Morella. In the opinion of the Chair the ayes have it.
Mr. Tanner. Madam Chairwoman, I move that a clean bill be
prepared by the Chair for further consideration by the
Committee.
Mrs. Morella. The Subcommittee has heard the motion. Those
in favor will say aye.
[Chorus of ayes.]
Mrs. Morella. Those opposed will say no.
[No response.]
Mrs. Morella. The motion is agreed to. The bill is reported
to the Full Committee. Without objection, the Motion to
Reconsider is laid upon the table.
This concludes our Subcommittee markup on the measure H.R.
2196, Technology Transfer Improvements Act of 1995. I thank you
all for coming.
[Whereupon, at 1:20 p.m., the markup was concluded and the
Committee proceeded to further business.]
XX. Proceedings from Full Committee Markup
FULL COMMITTEE MARKUP ON H.R. 2196--THE NATIONAL TECHNOLOGY TRANSFER
AND ADVANCEMENT ACT OF 1995
----------
WEDNESDAY, OCTOBER 25, 1995
U.S. House of Representatives,
Committee on Science,
Washington, D.C.
The Committee met, pursuant to notice, at 10:35 a.m. in
room 2318, Rayburn House Office Building, Hon. Robert S. Walker
[Chairman of the Committee] presiding.
The Chairman. Good morning. Pursuant to notice, the
Committee on Science is meeting today to consider the
following, H.R. 2196, the National Technology Transfer and
Advancement Act of 1995, and amendments to the rules governing
procedure for the Committee on Science for the 104th Congress.
I ask unanimous consent for the authority to recess. Without
objection.
We will now proceed to the consideration of H.R. 2196, the
National Technology Transfer and Advancement Act of 1995. Let
me begin by commending Chairwoman Morella and the Members of
her Technology Subcommittee for favorably reporting H.R. 2196,
the National Technology Transfer and Advancement Act of 1995,
to the full Committee.
This Committee has a rich tradition of promoting technology
transfer from our national laboratories. Beginning with the
landmark Stevenson-Wydler Technology Innovation Act of 1980,
through the Federal Technology Transfer Act of 1986, among
other bills, the Science Committee has originated legislation
which has stimulated and increased the quality of technology in
the United States.
These acts have permitted the private sector to develop
cooperative research and development agreements, CRADAs, with
our Federal laboratories, thereby providing them with access to
the expertise of the engineers, scientists and facility
resources of our national labs. In a CRADA, the laboratories
can contribute people, facilities, equipment and ideas, but not
funding, while the private sector companies contribute people
and funding.
H.R. 2196 provides guidelines that simplify the negotiation
of CRADAs, addressing a major concern of private sector
companies, and in the process, give companies greater assurance
that they will share in the benefits of the research they fund.
As a result, this bill will reduce the time and effort required
to develop a CRADA, reduce the uncertainty that can deter
companies from working with Government, and thus speed the
transfer and commercialization of laboratory technology to the
American people.
The bill is an important step toward making our
Government's huge investment in science and technology, made
primarily to carry out important Government missions, more
useful to interested commercial companies and our economy.
I especially wish to applaud Chairwoman Morella for her
leadership on this bill and her efforts to promote technology
transfer. H.R. 2196 represents the type of legislation which
this new Congress must undertake. By rethinking and improving
the method our Government conducts its business, without the
need to invoke new spending authority, H.R. 2196 signals a new
approach to Government technology policy legislation.
I am pleased to join my distinguished colleague, Mr. Brown,
the Committee's ranking minority member, in co-sponsoring H.R.
2196. There's been a strong bipartisan support for this bill
and I look forward to continuing to work with him and the
members of the minority as we bring the bill to the House
floor.
I'm also pleased that 2196 includes amendments of the
Fastener Quality Act. These amendments are very important to
the fastener industry, and we need to include these changes to
the current Act. And the reason for it I think is quite clear.
This Committee marked up the Fastener Quality Act in 1991. I
attached an amendment to form the Fastener Advisory Committee.
This Committee was to determine if the Act would have a
detrimental impact on business. The Fastener Advisory Committee
reported that without their recommended changes, the burden of
cost would be close to $1 billion on the fastener industry. We
attempted in the last Congress to amend the law, but
unfortunately we were not successful.
We had language to pass, we had language pass the House and
Senate, however, the language did die in conference. This
Committee addresses the concerns of the Fastener Advisory
Committee, heat mill certification, mixing of like certified
fasteners and the sale of minor non-conformance.
Working with this Congress and NIST, the Fastener Public
Law Task Force, comprised of members from manufacturing,
importing and distributing, has worked to improve the law while
maintaining safety and quality. Public Law Task Force
represents 85 percent of all the companies involved in the
manufacture or distribution and importation of fasteners and
their suppliers in the United States. Combined, the Task Force
represents over 100,000 employees in all 50 states.
We have worked with both sides of the aisle, the
Administration, manufacturers, distributors and importers to
reach a solution. I ask all my colleagues to approve these
changes as we take them up today.
[A copy of H.R. 2196 follows:]
The Chairman. The Chair would now recognize Mr. Brown for
any opening statement he might have.
Mr. Brown. Thank you, Mr. Chairman. I do have a brief
statement. As you have already mentioned, I did join with you
and Mrs. Morella and Mr. Tanner as original co-sponsors of this
legislation. And as you've also commented, this Committee has
tended to speak with one voice on technology transfer matters
for the last two decades, and I hope that tradition can
continue.
The Technology Transfer and Advancement Act, as introduced,
clearly follows in the tradition of the Bayh-Dole and
Stevenson-Wydler Act, and I view positively many of the changes
made since it was introduced. Therefore, I congratulate you and
other members on both sides who have contributed to these
revisions.
I am, I do have some concerns about the Fastener Quality
Act amendments. You and I have been through the development of
this legislation over a period of several years. We recognize
the importance of it. You commented already about the very real
threat that defective fasteners frequently, counterfeit and
pirated into this country, have caused over the years, and they
can be the cause of very serious accidents and difficulties of
many kinds, and that we do need to have an industry supported,
effective program to preclude getting fake fasteners or
defective fasteners into the stream of commerce.
It was my hope that the amendments that we adopted on the
floor a couple of weeks ago to the Science Authorization Bill,
which I believe you were the author of, would correct the
defects. And I'm still not clear whether they do or not. I
supported them at the time with the understanding that I did
need further time to study and review the problem.
Now, I understand we're attaching amendments which are
similar but not identical to the ones we adopted on the floor,
that you will propose these amendments as a part of this Act,
or you will support them. And I'm still not clear what
additional changes have been made. And I have been given,
although I have not had a chance to study, substantial amount
of correspondence indicating that there's still some problems
in the fastener industry with regard to all the details here.
Now, I'm not indicating that this is necessarily a fatal
flaw in the language. And I might be willing to accept any
number of compromises that would allow us to move an agreed-
upon bill expeditiously. I'm not objecting to that process. But
I'm still not fully confident that I understand all of the
changes and the reaction within the fastener community; that
is, those who are involved with fasteners, to the changes that
are being proposed. And I'm expressing those reservations to
you. And when we come to the actual amendment, I might make
some other suggestions.
Thank you very much, Mr. Chairman.
The Chairman. Thank you, Mr. Brown. Mrs. Morella, do you
wish to be recognized for an opening statement?
Mrs. Morella. Yes, thank you. I'll try to make it brief.
I'd ask unanimous consent that an opening statement be included
in the record, Mr. Chairman, and simply point out that this
Committee does have a history of encouraging in a strong
bipartisan manner the transfer of technology and collaboration
between our Federal laboratories and industry. And this
particular bill before us that we're going to consider in this
full Committee, H.R. 2196, follows in that tradition.
And I do very much commend and indicate my pleasure at
having the Chairman of the full Committee as a co-sponsor, and
having the distinguished ranking member, Congressman Brown,
subcommittee ranking member Congressman Tanner, also as co-
sponsors of the bill before us. And I would certainly welcome
any other co-sponsors as we prepare the bill for floor
consideration.
H.R. 2196 will help facilitate and speed technology
cooperation between industry and our Federal laboratories, thus
benefitting our economy and our citizens. In so doing, it gives
both companies and Federal laboratories clear guidelines
regarding intellectual property rights to technology developed
under cooperative research and development agreement, a CRADA,
guidelines that will reduce negotiating time, and enhance the
likelihood of prompt commercialization of new inventions. In
this way, a CRADA is made more attractive to both American
industry and Federal laboratories.
The bill is important because it comes at a time when both
Federal labs and industry need to work closer together for
their mutual benefit and our national competitiveness.
Specifically, the bill enhances commercialization of technology
and industrial innovation in the United States by guaranteeing
to a collaborating partner from industry in a CRADA the option
to choose an exclusive license for a field of use. The
collaborating party would have the right to use the technology
in exchange for reasonable compensation to the laboratory.
The bill also provides for adequate minimum statutory
rights for the Federal Government and the technology. And in
addition, H.R. 2196 provides important incentives in royalty
sharing to Federal laboratory personnel who create new
technologies by enhancing the financial incentives and rewards
given to Federal laboratory scientists for technology that
results in marketable products. It's important to note that
these incentives are paid for from the income the laboratories
receive for commercialized technology, and not from tax
dollars.
So I'm pleased that this bill has a strong support in this
Congress and in past Congresses from the Administration, a
series of Federal agency officials, Federal laboratory
directors, as well as a broad spectrum of academicians,
industry association representatives, and private sector
offices. So I urge all my colleagues to support this important
bill and to report out favorably 2196. I thank you, Mr.
Chairman, and the members of my subcommittee.
[The prepared statement of Mrs. Morella and a memorandum
from Mrs. Morella to Mr. Walker, dated October 19, 1995,
follow:]
The Chairman. Mr. Tanner, opening statement?
Mr. Tanner. Thank you very much, Mr. Chairman. I want to
thank Mrs. Morella for working with me and asking me to be a
co-sponsor of H.R. 2196. I think it reaffirms this Committee's
traditional support for promoting Government-industry
partnerships. And we also in this bill ensure the Government
investment in our Federal laboratories provides the maximum
return on the taxpayers' investment. This bill is a step in
that direction, and I commend it to the Committee, and I
appreciate this opportunity.
Thank you.
The Chairman. Thank you, Mr. Tanner. Are there any other
members seeking recognition for an opening statement?
[No response.]
The Chairman. If not, then we will open the bill for
discussion. I ask unanimous consent the bill be considered as
read and open to amendment at any point. Without objection. I
ask members to proceed with the amendments in the order of the
roster. Without objection.
Mr. Brown. Mr. Chairman?
The Chairman. Mr.--
Mr. Brown. I'm unaware of any amendments having been
noticed. But I do have a couple of amendments.
The Chairman. Mrs. Morella, I think, has some.
Mr. Brown. By all means.
The Chairman. Mrs. Morella?
Mrs. Morella. Yes, Mr. Chairman. I do have an amendment
that I ask be accepted as read. It's an en bloc amendment to
make just technical changes.
The Clerk. En bloc amendment to H.R. 2196 offered by Mrs.
Morella--
Mrs. Morella. Mr. Chairman, I ask that the Committee
dispense with the further reading of the amendment.
The Chairman. Without objection. The gentlelady is
recognized for five minutes to offer your amendment.
Mrs. Morella. Thank you. It will take much less time than
that, Mr. Chairman. Because on June 27th, my Technology
Subcommittee and the Basic Research Subcommittee chaired by my
distinguished colleague from New Mexico, Mr. Schiff, held a
joint hearing on technology transfer and on Federal
laboratories, with a focus on this bill, H.R. 2196. And the
witnesses at the hearing testified very favorably in support of
the bill and offered some suggestions to the bill.
So I've taken some of these suggestions offered at the June
hearing, incorporated them into the en bloc amendment before
you. And there's a detailed analysis and description of the
amendment that has been distributed to all members of the
Committee.
Mr. Chairman, the record of the need for this legislation
is large. I've received input from a great number of
organizations and individuals regarding H.R. 2196, and to the
extent practicable, I've attempted to accommodate the concerns
of all interested parties. And this en bloc amendment follows
that approach. And I urge my colleagues to support the
amendment.
[The en bloc amendment offered by Mrs. Morella follows:]
The Chairman. Is there further discussion of the amendment?
Mr. Brown. Mr. Chairman?
The Chairman. Mr. Brown.
Mr. Brown. Just by way of further explanation, I'm looking
at the last amendment offered by Mrs. Morella, on page 13, line
24, amend paragraph (2) to read as follows. That has the effect
of striking paragraph (A), which inserts ``International
Organization for Standardization'' after ``Society of
Automotive Engineers.''
Why did you originally have the IOS in, and now with your
technical amendment, you're striking it? Could you just give us
a little background on that subject?
The Chairman. I would say to the gentleman, this is all
things that we have been trying to work with the industry on.
And it's my understanding that IOS is not a consensus standards
organization. It's not obligated to resolve negative balance
and use as a majority by country rule, even when a major
producing country has voted negative.
And so therefore, it's thought that this could have a
detrimental impact. If IOS is given legal blessing as a
consensus standard organization, it would be in the current
draft language contained in the Fastener Act Amendments that
were previously approved by the Committee. And it would
undermine the consensus standards that were worked out by the
American Society of Mechanical Engineers, the American Society
for Testing Materials, the Society of Automotive Engineers, and
the American Standards, National Standards Institute and
similar bodies, by employing equal recognition of standards
adopted by an organization that does not operate by consensus.
The Standards Advisory Committee did not recommend IOS as a
consensus standard organization. Inclusion of this draft in the
original drafts of the Fastener Quality Act amendments was an
error. And we're trying to correct that at this time.
Mr. Brown. Thank you very much for that explanation, Mr.
Chairman.
The Chairman. Is there further discussion? Mr. Ehlers?
Mr. Ehlers. Thank you, Mr. Chairman. I would just like to
add something which applies not just to the amendment, but to
the bill itself, and I certainly support both the amendment and
the bill.
Last Friday I spoke at the University of Chicago at a 50th
anniversary of two of their major scientific institutes. And
also on the program was the associate director of Argonne
Laboratory, who in the course of his speech, talked about
technology transfer, spoke about all the various programs that
have been tried through the years for technology transfer, the
applied technology programs, things of this sort.
And concluded by saying that in his 20-odd years of
experience in dealing with this, no other program began to
approach the effectiveness of the Cooperative Research and
Development Agreements. And I'm pleased to see this bill
reinforce those agreements, and in fact, improve them.
But he made the point by specific numbers in terms of the
companies they had helped, the jobs that were created. He said
it was a tremendously successful program for the amount of
Federal money involved. The industry provided much more of the
money.
And furthermore, he said, it was not only beneficial to the
companies that engaged in CRADAs, but also beneficial to the
scientists of the laboratory. Because it gave them a focus for
some of their research.
So Mr. Chairman, I just wanted to pass those comments on to
you. And I think they are appropriate to this bill and I think
indicate the importance of CRADAs.
Thank you.
The Chairman. Thank you, Mr. Ehlers. Is there additional
discussion on the amendment of the gentlelady from Maryland?
[No response.]
The Chairman. If not, the Chair would put the question.
Those in favor will say aye.
[Chorus of ayes.]
The Chairman. Those opposed will say no.
[No response.]
The Chairman. The ayes have it. The amendment is adopted.
Mrs. Morella, you have an additional amendment?
Mrs. Morella. Yes, thank you, Mr. Chairman. This amendment
accomplishes two objectives. First, it codifies the present
requirements of OMB Circular A119. It was originally
promulgated in 1982 and revised in 1993, which requires Federal
agencies to adopt and use standards developed by voluntary
standards bodies and work closely with consensual standards
bodies to ensure that the standards developed by those bodies
are consistent with agency needs.
And secondly, it requires agencies to annually report to
Congress on the reasons for deviating from voluntary consensual
standards when the head of the agency deems that consensual
standards aren't appropriate to the agency needs.
So adherence to OMB Circular A119 is a matter of great
concern to industry as the Federal record with regard to the
utilization of voluntary consensual standards is mixed, at
best. The amendment will have the effect of assisting agencies
in focusing their attention on the need to work with these
consensual standards bodies wherever and whenever appropriate.
And it would assist Congress in monitoring the agencies'
efforts to implement the OMB Circular A119.
The amendment is consistent with recommendations that were
made to our Committee as part of the testimony of the National
Research Council and quite frankly, it essentially came out of
their report that was issued in June of this year, on standards
and conformity assessment in the 21st century.
Thank you, Mr. Chairman. I urge adoption.
[The amendment offered by Mrs. Morella follows:]
The Chairman. I thank the gentlelady. Is there additional
discussion of the gentlelady's amendment?
[No response.]
The Chairman. If not, the Chair will put the question.
Those in favor of the amendment will say aye.
[Chorus of ayes.]
The Chairman. Those opposed will say no.
[No response.]
The Chairman. The ayes have it. The amendment is agreed to.
Are there additional amendments?
Mr. Brown. Mr. Chairman?
The Chairman. Mr. Brown.
Mr. Brown. Mr. Chairman, I have two additional amendments.
The first would strike the fastener provisions. And I ask that
that be distributed at this time.
The Chairman. The Clerk will distribute the amendment. The
gentleman will explain his amendment.
Mr. Brown. Mr. Chairman, as I mentioned in my opening
remarks, I am seriously concerned about section 11, which
amends the Fastener Quality Act. While it's universally
accepted that the Act has some technical problems and a few
changes are necessary, these changes go much further than what
was agreed to last year.
Earlier this month on the floor of the House, when
confronted with last minute changes in the Fastener amendments,
I pointed out that there's very little understanding in the
Congress of what we are being asked to do, and indicated my
desire that the Committee thoroughly investigate the
consequences of our action before we agree to a final version.
Today, after receiving calls from the president of a trade
association, the general counsel of a standards organization
and the director of standards for a major engineering society,
we are correcting our corrections. I wonder how many other
changes we would want to make if we had given this bill a
thorough airing.
And as I think is the case, we have not had a full hearing
on this in recent months. And I think that a matter of this
complexity deserves at least some public hearing.
I have learned in the past couple of days that some of
these changes are quite controversial among fastener
distributors. And I ask unanimous consent at this point to
insert in the record a position paper of the Fastener Quality
Association which details their concern with this section and
some miscellaneous material from others who have expressed
concern.
The Chairman. Without objection.
[The position paper of the Fastener Quality Association
follows:]
Mr. Brown. Some distributors are also concerned about the
extent to which the campaign to change the Fastener Quality Act
has been financed by foreign companies with a vested interest
in lowering the quality standards they have to meet to export
their wares to the United States.
Mr. Chairman, I have trouble understanding why we are
risking making serious mistakes by rushing through changes in
the Fastener Quality Act before hearing from all sides. I am
certainly willing to do what I can to reform the statute after
we know what direction we should be heading.
Most of our Committee membership were not in Congress the
last time we held fastener hearings. I hope they share my
desire to understand the problem before we have to act. And I
urge support for my amendment.
[The amendment offered by Mr. Brown follows:]
The Chairman. Thank you, Mr. Brown. The Chair wishes to
state that this particular language is somewhat different from
the language that we had on the floor. We have been attempting
to work with the industry and with the Advisory Council on
these matters. And I must admit that it is a somewhat moving
target, as they attempt to deal with some of the issues.
But I am, I am told National Institutes of Standards and
Technology does support the amendments that we have in the
bill, that these are broadly agreed to by the industry, and
that this is something where, if we do not do the appropriate
kinds of reforms in this area, that we are going to have a
tremendous cost to U.S. business. The estimate is about a
billion dollars of cost to U.S. business if in fact we do not
approve some of these standards.
I think that where the Federal Government is involved--in
regulations that are harmful to the overall profitability of an
industry within the world economy, and we have the opportunity
to do something here that changes the standards, so that we can
be assured of increased competitiveness--I think that's exactly
the role of this Committee and exactly what we should be doing.
Now, the gentleman makes the point that there have not been
hearings in recent months. As the gentleman well knows, this
has been a longstanding question before this Committee that
goes back several years, and it has been an evolving kind of
issue. What we are doing here is essentially using the
processes that the Committee set forward some years ago for
understanding the complexities of this problem, namely the
Advisory Committee, and trying to bring those issues in front
of us with a, with specific language that has been agreed to.
I think it would be a mistake for this Committee today to
pull this language out of the bill and thereby consign this
language to further investigation, which may in fact result in
hundreds of millions of dollars of expense to a very vital
industry. And so I would hope that the Committee would reject
the gentleman from California's amendment and move ahead with
something where industry is very much of a mind that these
reforms are needed.
Mrs. Morella. Mr. Chairman?
The Chairman. Mrs. Morella?
Mrs. Morella. I just want to echo what you said and point
out the fact that NIST, the National Institute of Standards and
Technology, has been having many meetings, been in close
consultation with the Advisory Board, and feel that this is
appropriate in this bill and would certainly favorably assess
it.
The Chairman. Thank you, Mrs. Morella.
Mr. Brown. Mr. Chairman, may I--
The Chairman. Mr. Brown?
Mr. Brown. I just wanted a brief response, but not to
preclude other members who may want to talk.
The Chairman. I yield to the gentleman.
Mr. Brown. Mr. Chairman, I would be happy if I knew that
NIST was supporting this current language. I do not have
documentation to that effect, and of course, that may be merely
because there hasn't been time enough to get it up here or some
other reason of that sort, which is perfectly innocuous.
The last communication I have in connection with this Act
was last year's letter from NIST to Chairman, then-Chairman
Dingle, expressing opposition to the commingling amendment to
the Fastener Quality Act. And I don't know whether that's the
same language as we have here, or is different language.
I'm merely pointing out that we really do need to be clear,
since our efforts two weeks ago to amend the Act on the floor
are now being superseded by another effort to change the Act
here in Committee on a separate bill, which hopefully would
correct any mistakes we made in then bill that we took up on
the floor.
Now, I would like to expedite this process. I'm not trying
to delay it. My effort to strike the language at this point
would merely allow us a reasonable opportunity to see in
writing everything that we have, and who supports it, and who
has questions about it. And if we resolve these, we could
easily add this as an amendment on the floor.
If you choose to bring this up on suspension, and I think
it's worthy of suspension, you could unilaterally add the
agreed language before you take the bill up on the floor. And
we could deal with it in that fashion. I would not object to
that kind of a process.
The Chairman. Well, I would simply say to the gentleman
that NIST has literally been involved in all the drafting
sessions on this language. The most recent session they were
involved in, it was their hope to be able to get a letter up
here today. They weren't certain how they were going to be able
to internally take care of that. And therefore, we do not have
that letter.
But I want to assure the gentleman that our reason for
saying that NIST is in fact in favor of this is because they
literally have been sitting with this as the language has been
drafted, and have worked with us on coming up with the language
that's before the Committee today.
Mr. Brown. If the gentleman would yield further.
The Chairman. I'd be happy to yield.
Mr. Brown. I commend the gentleman for following that
course. And normally, having followed that course, I would
fully support it. But as you have indicated, I have no personal
knowledge of what's taken place here. And I have seen the
efforts to remedy this bill fall afoul of circumstances before.
Now, if you choose to oppose my amendment and it's
defeated, which is a logical anticipation, I hope that the
gentleman would continue to provide, would provide assurance
that he will continue to give us the information indicating
that NIST has approved this language, and that the major
objections from the fastener industry have been addressed in
some reasonable fashion.
The Chairman. Obviously, as soon as we receive any kind of
communication of that type, we would share that with the
gentleman. The gentleman from Minnesota?
Mr. Gutknecht. Thank you, Mr. Chairman. I would like to
speak in opposition to the amendment. This is going to sound a
bit parochial. I represent in my district one of the largest
fastener companies in the United States. And this was brought
to my attention last year. And frankly, they told me from a
personal business perspective, this law actually works to their
advantage. It tends to fence out certain people, particularly
as it relates to some contracts.
But they said, this is another classic example of a $50
solution to a $5 problem. I hope that we can proceed at least
with some amendments. As a matter of fact, I think this
particular firm would like to see this entire fastener language
eliminated altogether. Because they said it really doesn't
achieve the goals it was intended to, creates an awful lot of
paperwork. And so I hope that we can proceed with the language
that is in the bill now, and will vote against the Brown
amendment.
The Chairman. Thank you, Mr. Gutknecht. Are there
additional members that wish to be heard on the amendment of
the gentleman from California?
Mr. Brown?
Mr. Brown. Was the gentleman supporting my amendment?
Mr. Gutknecht. No, the gentleman was opposing your
amendment. I'd like to see the law repealed altogether. And
this is only an amendment, apparently that has been agreed to
by most of the people who are involved.
Mr. Brown. I see. Thank you very much for that
clarification.
The Chairman. The Chair will put the question if there is
no further discussion. Those in favor of the amendment will say
aye.
[Chorus of ayes.]
The Chairman. Those opposed will say no.
[Chorus of noes.]
The Chairman. In the opinion of the Chair, the nos have it.
The nos have it. The amendment is not agreed to. Does the
gentleman have an additional amendment?
Mr. Brown. Mr. Chairman, I have an additional amendment.
The Chairman. The Clerk will distribute the amendment.
Mr. Brown. This is an amendment which I trust will be
accepted by everyone. If I can find it.
Mr. Chairman, this amendment clearly expresses the sense of
the Congress that the Malcolm Baldridge National Quality Award
program offers substantial benefits to U.S. industry and that
all funds appropriated for such programs should be sent in
support of the goals of the program.
The Chairman. Would the gentleman yield?
Mr. Brown. Yes, certainly.
The Chairman. The Chair is prepared to accept the amendment
and know of no opposition to it.
Mr. Brown. The Chair is very kind. I certainly accept the
support.
[The amendment offered by Mr. Brown follows:]
The Chairman. I don't want to preclude other people. Is
there additional discussion on the amendment?
[No response.]
The Chairman. If not, the Chair will put the question.
Those in favor of the amendment will say aye.
[Chorus of ayes.]
The Chairman. Those opposed will say no.
[No response.]
The Chairman. The ayes have it. The amendment is agreed to.
Are there any further amendments?
[No response.]
The Chairman. Hearing none, the question is on the bill,
H.R. 2196, the National Technology Transfer and Advancement Act
of 1995, as amended. Those in favor will say aye.
[Chorus of ayes.]
The Chairman. Those opposed will say no.
[No response.]
The Chairman. In the opinion of the Chair, the ayes have
it.
Mr. Brown. Mr. Chairman, I move that the Committee report
the bill, H.R. 2196, the National Technology Transfer and
Advancement Act of 1995, as amended. And furthermore, I move to
instruct the staff to prepare the legislative report and make
technical and conforming amendments and the Chairman take all
necessary steps to bring the bill before the House for
consideration.
The Chairman. The Committee has heard the motion. Those in
favor will say aye.
[Chorus of ayes.]
The Chairman. Those opposed will say no.
[No response.]
The Chairman. The ayes have it, the motion is agreed to.
Without objection, the motion to reconsider is laid upon the
table.
Mr. Sensenbrenner. Mr. Chairman?
The Chairman. Mr. Sensenbrenner?
Mr. Sensenbrenner. Mr. Chairman, I move pursuant to Clause
1 of Rule 20 of the Rules of the House of Representatives that
the Committee authorize the Chairman to offer such motions as
may be necessary in the House to go to conference with the
Senate on the bill.
The Chairman. You've heard the motion. Those in favor will
say aye.
[Chorus of ayes.]
The Chairman. Those opposed will say no.
[No response.]
The Chairman. The ayes have it. This concludes the markup
of H.R. 2196.
[The Amendment Roster follows:]