[Federal Register Volume 59, Number 60 (Tuesday, March 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7112]


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[Federal Register: March 29, 1994]


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DEPARTMENT OF ENERGY

48 CFR Parts 927, 952, and 970

RIN 1991-AA23

 

Acquisition Regulation; Updating of Patent Regulations

AGENCY: Department of Energy (DOE).

ACTION: Notice of proposed rule.

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SUMMARY: The Department proposes to amend the Department of Energy 
Acquisition Regulation (DEAR) to base the DOE patent regulations on the 
Federal Acquisition Regulation (FAR) patent regulations and associated 
FAR patent clauses to the extent that the FAR coverage is consistent 
with the DOE statutory patent requirements.

DATES: Written comments must be received by May 31, 1994.

ADDRESSES: Comments should be addressed to: Robert M. Webb, Procurement 
Policy Division (PR-12), U.S. Department of Energy, 1000 Independence 
Avenue SW., Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT:
Robert M. Webb, Procurement Policy Division (PR-121), U.S. Department 
of Energy, 1000 Independence Avenue SW., Washington, DC 20585, (202) 
586-8264
Sue Hagarman, Office of the Assistant General Counsel for Intellectual 
Property (GC-42), U.S. Department of Energy, 1000 Independence Avenue 
SW., Washington, DC 20585, (202) 586-2802

SUPPLEMENTARY INFORMATION:

I. Background.
    A. Discussion.
    B. Section-by-Section Analysis.
II. Procedural Requirements.
    A. Regulatory Review.
    B. Review Under the Regulatory Flexibility Act.
    C. Review Under the Paperwork Reduction Act.
    D. Review Under the National Environmental Policy Act.
    E. Review Under Executive Order 12612.
    F. Review Under Executive Order 12778.
III. Public Comments.

I. Background

A. Discussion

    Under the Atomic Energy Act (AEA) of 1954, as amended, 42 U.S.C. 
2011 et seq., title to inventions conceived or first actually reduced 
to practice in the course of or under Department of Energy (DOE) 
contracts vests in DOE. By vesting title in DOE, the AEA helped ensure 
that no one company gained a market advantage from a taxpayer-funded 
invention. The AEA also gave DOE the discretion to waive title to such 
inventions.
    In 1974, Congress enacted the Federal Non-Nuclear Energy Research 
and Development Act (Act), 42 U.S.C. 5901 et seq. This Act provided for 
a similar disposition of title to inventions. In addition, the Act 
provided explicit criteria which must be considered in waiver 
determinations.
    These statutory requirements were reflected in the DOE patent 
regulations, which were last published in 1979 as part of the DOE 
Procurement Regulations. In March of 1984, DOE published the Department 
of Energy Acquisition Regulations (DEAR). The DEAR required that the 
patent provisions of the DOE Procurement Regulations be used in all 
contracts. The patent coverage for the uniform Federal procurement 
regulation, the Federal Acquisition Regulation (FAR), was promulgated 
in 1984 and underwent one major amendment, in 1989. Therefore, all DOE 
contracts were additionally subject to the FAR.
    Since publication of the DEAR patent regulations in 1979, Congress 
has enacted two significant pieces of legislation affecting DOE patent 
policy. Congress first enacted the Bayh-Dole Act in 1980 (35 U.S.C. 200 
et seq.), which specifically overrode DOE previous statutory patent 
policy legislation with respect to small business firms and non-profit 
organizations by allowing them to elect title to any subject invention 
arising under a funding agreement with the Government.
    The second piece of legislation, the Trademark Clarification Act of 
1984, amended the Bayh-Dole Act to extend its coverage to nonprofit 
organizations managing and operating DOE research and development 
facilities. These amendments set very precise limits on the 
Department's ability to obtain title to inventions of the nonprofit 
managing and operating contractors. The circumstances in which DOE 
could take title to such inventions were limited to certain categories 
of inventions, e.g., those involving nuclear weapons and naval nuclear 
propulsion. These amendments gave the implementation authority to the 
Department of Commerce.
    The following proposed rule amends the DEAR to reflect the changes 
necessitated by the intervening legislation. The rule is based on FAR 
patent provisions, varying only to the extent necessary to fulfill DOE 
statutory and programmatic duties.

B. Section-by-Section Analysis

    A new section 927.200 is proposed to be added to reflect that the 
DOE mission with regard to energy includes ``demonstration'' along with 
``research and development'' or ``R&D'' as those terms are used in FAR 
Subpart 27.200.
    At 927.201-1 a paragraph is proposed to be added on authorization 
and consent to allow modification of the clause for research and 
development to deal with situations in which a contract may be affected 
by a third party patent holder.
    A new section 927.206 is proposed to be added to discuss the use of 
the refund of royalties clause and to prescribe its use. Section 
927.207-1 has been proposed to recognize the DOE authorities rising 
from the Atomic Energy Act of 1954, as amended.
    Paragraphs at 927.300 are proposed to be added to reflect the 
research, development, demonstration, weapons, and environmental 
missions of the Department, along with the system of patent waivers.
    At 927.302 DOE statutory patent policy is proposed to be explained. 
Also, there is proposed to be added a discussion on DOE need for 
licenses to background patents. A new section 927.303 is proposed to be 
added to direct the use of the appropriate patent rights clause.
    A new section 927.304 is proposed to be added to provide for 
retention of rights by the inventor where the contractor, under the 
terms of the clause at 952.227-11, has elected not to retain title to a 
subject invention.
    At 952.227-9, a Refund of Royalties clause, is proposed to be 
added. The clause is produced in full text; however, it consists of the 
clause at FAR 52.227 with sentences added at the end of paragraphs (b) 
and (d), respectively, to ensure that any royalties related to 
technical data and copyrighted material are identified and to include a 
disclaimer. Also, at 952.227-11 the patent clause for contracts with 
small businesses and nonprofit organizations, formerly at 952.227-71, 
is proposed. It would consist of the clause at FAR 52.227-11 with 
changes made to tailor the clause to DOE, including the completion of 
paragraph (l) and a minor change to paragraph (g)(2) affecting flowdown 
of the clause.
    At 952.227-13 the patent clause for use in all other contracts is 
proposed. It would consist of the clause at FAR 52.227-13 by tailoring 
it to DOE and replacing paragraph (d)(4) to recognize the DOE waiver 
application process and the license required by sec. 9(h) of Pub. L. 
93-577 (42 U.S.C. 5908(h)) in instances in which the Department has 
waived title. An associated additions are proposed to be made at 
(g)(1)(i) and (h)(5). A replacement subcontracting provision is 
proposed for paragraph (h)(1). Also, proposed for addition are 
paragraphs (j) dealing with atomic energy, (k) dealing with background 
patents, (l) dealing with publication limitations, and (m) forfeiture 
of rights in unreported inventions.
    The coverage of patent rights for management and operating 
contracts is proposed to be changed. Currently, the coverage consists 
of a reference back to the Department of Energy Procurement 
Regulations, the predecessor regulation to the DEAR. Current portions 
of the DEAR at 970.2701 and 970.2702, dealing essentially with rights 
in technical data under management and operating contracts, are 
proposed to be redesignated as 970.2705 and 927.2706. There are no 
changes to the text dealing with rights in technical data. Portions of 
this material require updating and will be the subject of a subsequent 
rulemaking.
    At 970.2701 through 970.2704 regulatory discussion of patent rights 
under DOE management and operating contracts is proposed to be added. 
The treatment of Exceptional Circumstances Determinations and weapons 
related and naval nuclear propulsion inventions when the contractor is 
a nonprofit organization and the relationship of technology transfer 
activities of the contractor to the patent rights clause are discussed 
there.
    The coverage at 970.5204-XX is proposed to be altered to prescribe 
the patent clause for small businesses and nonprofit organizations of 
the proposed 952.227-11 with the replacement of paragraph (e)(1) to 
provide that a nonprofit managment and operating contractor must 
request a license from DOE in instances in which it chooses not to 
elect to take title originally. Also, paragraphs (m) and (n) are 
proposed to be added to reflect the nature of all intellectual property 
rights under management and operating contracts, i.e., that they exist 
for the benefit of the laboratory as an institution, not the 
contractor, by providing for assignment of patent rights and 
obligations to a successor contractor and for a facilities license to 
DOE. There is likewise proposed to be added a patent rights clause for 
all other management and operating contracts at 970.5204-YY, which 
would consist of the proposed clause at 952.227-13 with the addition of 
a paragraph (j) requiring the assignment of patent related rights to a 
successor contractor and paragraph (k) providing for a facilities 
license to DOE.

II. Procedural Requirements

A. Regulatory Review

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993). 
Accordingly, today's action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs.

B. Review Under the Regulatory Flexibility Act

    This proposed rule was reviewed under the Regulatory Flexibility 
Act of 1980, Public Law 96-354, which requires preparation of a 
regulatory flexibility analysis for any rule which is likely to have 
significant economic impact on a substantial number of small entities. 
DOE certifies that this rule will not have a significant economic 
impact on a substantial number of small entities and, therefore, no 
regulatory flexibility analysis has been prepared.

C. Review Under the Paperwork Reduction Act

    No new information collection or recordkeeping requirements are 
imposed by this proposed rulemaking. Accordingly, no OMB clearance is 
required by the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et 
seq.).

D. Review Under NEPA

    The DOE has concluded that promulgation of this rule would not 
represent a major Federal action having significant impact on the human 
environment under the National Environmental Policy Act (NEPA) of 1969 
(42 U.S.C. 4321, 4331-4335, 4341-4347 (1976)), the Council on 
Environmental Quality regulations (40 CFR parts 1500-1508), or the DOE 
guidelines (10 CFR part 1021), and, therefore, does not require an 
environmental impact statement or an environmental assessment pursuant 
to NEPA.

E. Review Under Executive Order 12612

    Executive Order 12612, 52 FR 41685 (October 30, 1987), requires 
that regulations, rules, legislation, and any other policy actions be 
reviewed for any substantial direct effects on States, on the 
relationship between the national Government and the States, and in the 
distribution of power and responsibilities among various levels of 
Government. If there are sufficient substantial direct effects, then 
the Executive Order requires preparation of a federalism assessment to 
be used in all decisions involved in promulgating and implementing a 
policy action.
    Today's proposed rule, when finalized, will revise certain policy 
and procedural requirements. However, DOE has determined that none of 
the revisions will have a substantial direct effect on the 
institutional interests or traditional functions of States.

F. Review Under Executive Order 12778

    Section 2 of Executive Order 12778 instructs each agency subject to 
Executive Order 12291 to adhere to certain requirements in promulgating 
new regulations and reviewing existing regulations. These requirements, 
set forth in sections 2 (a) and (b)(2), include eliminating drafting 
errors and needless ambiguity, drafting the regulations to minimize 
litigation, providing clear and certain legal standards for affected 
conduct, and promoting simplification and burden reduction. Agencies 
are also instructed to make every reasonable effort to ensure that the 
regulation: Specifies clearly any preemptive effect, effect on existing 
Federal law or regulation, and retroactive effect; describes any 
administrative proceedings to be available prior to judicial review and 
any provisions for the exhaustion of such administrative proceedings; 
and defines key terms. This proposed rule would, when adopted as a 
final rule, have no preemptive effect, will not have any effect on 
existing Federal laws, and would only clarify the existing regulations 
on this subject. The revised clauses would apply only to contracts 
which would be awarded after the effective date of the final rule, and, 
thus, would have no retroactive effect. Therefore, DOE certifies that 
this final rule meets the requirements of sections 2 (a) and (b) of 
Executive Order 12778.

III. Public Comments

    Interested persons are invited to participate by submitting data, 
views, or arguments with respect to the proposed DEAR amendments set 
forth in this notice. Three copies of written comments should be 
submitted to the address indicated in the ADDRESSES section of this 
notice. All comments received will be available for public inspection 
in the DOE Reading Room, Room 1E-190, Forrestal Building, 1000 
Independence Avenue SW., Washington, DC 20585, between the hours of 9 
a.m. and 4 p.m., Monday through Friday, except Federal holidays. All 
written comments received by the date indicated in the DATES section of 
this notice and all other relevant information will be fully considered 
by DOE before taking final. Comments received after that date will be 
considered to the extent that time allows. Any information considered 
to be confidential must be so identified and submitted in writing, one 
copy only. DOE reserves the right to determine the confidential status 
of the information and to treat it according to our determinations.
    DOE has concluded that this proposed rule does not involve a 
substantial issue of fact or law, and that the proposed rule should not 
have substantial impact on the nation's economy or a large number of 
individuals or businesses. Therefore, pursuant to Public Law 95-91, the 
DOE Organization Act, and the Administrative Procedure Act (5 U.S.C. 
553), the Department does not plan to hold a public hearing on this 
proposed rule.

List of Subjects in 48 CFR Parts 927, 952, 970

    Government procurement, Patents.

    For the reasons set out in the preamble, Chapter 9 of Title 48 of 
the Code of Federal Regulations is proposed to be amended as set forth 
below.

    Issued in Washington, DC, on January 26, 1994.
G.L. Allen
Acting Deputy Assistant Secretary for Procurement and Assistance 
Management.

PART 927--PATENTS, DATA, AND COPYRIGHTS

    1. The authority citation continues to read as follows:

    Authority: Sec. 644 of the Department of Energy Organization 
Act, Pub. L. 95-91 (42 U.S.C. 7254); Sec. 148 of the Atomic Energy 
Act of 1954, as amended (42 U.S.C. 2168); Federal Nonnuclear Energy 
Research and Development Act of 1974, sec. 9, (42 U.S.C. 5908); 
Atomic Energy Act of 1954, as amended, sec. 152, (42 U.S.C. 2182); 
Department of Energy National Security and Military Applications of 
Nuclear Energy Authorization Act of 1987, as amended, sec. 3131(a), 
(42 U.S.C. 7261a.)

    2. Subpart 927.2 is added to read as follows:

Subpart 927.2--Patents

Sec.
927.200  Scope of subpart.
927.201  Authorization and consent.
927.201-1  General.
927.206  Refund of royalties.
927.206-1  General.
927.206-2  Clause for refund of royalties.
927.207  Classified contracts.
927.207-1  General.

Subpart 927.2--Patents


927.200  Scope of subpart.

    When consulting subpart 27.2 of the FAR, consider ``research, 
development, and demonstration'' to replace the phrase ``research and 
development'' or ``R&D,'' for the purposes of DOE actions.


927.201  Authorization and consent.


927.201-1  General.

    In certain contracting situations, such as those involving 
research, development, or demonstration projects, consideration should 
be given to the impact of third party-owned patents covering technology 
that may be incorporated in the project which patents may ultimately 
affect widespread commercial use of the project results. In such 
situations, Patent Counsel shall be consulted to determine what 
modifications, if any, are to be made to the utilization of the 
Authorization and Consent and Patent Indemnity provisions or what other 
action might be deemed appropriate.


927.206  Refund of Royalties.


927.206-1  General.

    The clause at 952.227-9, Refund of Royalties, obligates the 
contractor to inform DOE of the payment of royalties pertaining to the 
use of intellectual property, either patent or data related, in the 
performance of the contract. This information may result in 
identification of instances in which the Government already has a 
license for itself or others acting in its behalf or the right to 
sublicense others. Also, there may be pending anti-trust actions or 
challenges to the validity of a patent or the proprietary nature of the 
data, or the contractor may be able to gain unrestricted access to the 
same data through other sources. In such situations the contractor may 
avoid the payment of a royalty in its entirety or may be charged a 
reduced royalty.


927.206-2  Clause for refund of royalties.

    The contracting officer shall insert the clause at 952.227-9, 
Refund of Royalties, in solicitations and contracts for experimental, 
research, developmental, or demonstration work or other solicitations 
and contracts in which the contracting officer believes royalties will 
have to be paid by the contractor or a subcontractor of any tier.


927.207  Classified contracts.


927.207-1  General.

    Unauthorized disclosure of classified subject matter, whether in a 
patent application or resulting from the issuance of a patent, may be a 
violation of the Atomic Energy Act of 1954, as amended, other laws 
relating to espionage and national security, and provisions of the 
proposed contract pertaining to disclosure of information.
    3. Section 927.300 is revised to read as follows:


927.300  General.

    (a) One of the primary missions of the Department of Energy is the 
use of its procurement process to ensure the conduct of research, 
development, and demonstration leading to the ultimate 
commercialization of efficient sources of energy. Accordingly, DOE 
mission is not generally oriented toward procurement for Government 
use, except where procurements are involved with special classified 
programs or the construction, improvement, or the environmental 
restoration and waste management aspects of Government-owned 
facilities. To accomplish its mission, DOE must work in cooperation 
with industry in the development of new energy sources and in achieving 
the ultimate goal of widespread commercial use of those energy sources. 
To this end, Congress has provided DOE with the authority to invoke an 
array of incentives to secure the commercialization of new technologies 
developed for DOE. One such important incentive is provided by the 
patent system.
    (b) Pursuant to 42 U.S.C. 2182 and 42 U.S.C. 5908, DOE takes title 
to all inventions conceived or first actually reduced to practice in 
the course of or under contracts with large, for-profit companies, 
foreign organizations, and others not beneficiaries of Pub. L. 96-517. 
As set forth in regulations in this subpart, DOE may waive the 
Government's patent rights in appropriate situations at the time of 
contracting to encourage industrial participation, foster commercial 
utilization and competition, and make the benefits of DOE activities 
widely available to the public. In addition to considering the waiver 
of patent rights at the time of contracting, DOE will also consider the 
incentive of a waiver of patent rights upon the reporting of an 
identified invention when requested by such entities or by the 
employee-inventor with the permission of the contractor. These requests 
can be made whether or not a waiver request was made at the time of 
contracting. Waivers for identified inventions will be granted where it 
is determined that the patent waiver will be a meaningful incentive to 
achieving the development and ultimate commercial utilization of 
inventions. Where DOE grants a waiver of the Government's patent 
rights, either at the time of contracting or after an invention is 
made, certain minimum rights and obligations will be required by DOE to 
protect the public interest.
    (c) Another major DOE mission is to manage the nation's nuclear 
weapons and other classified programs, where research and development 
procurements are directed toward processes and equipment not available 
to the public. To accomplish DOE programs for bringing private industry 
into these and other special programs to the maximum extent permitted 
by national security and policy considerations, it is desirable that 
the technology developed in these programs be made available on a 
selected basis for use in the particular fields of interest and under 
controlled conditions by properly cleared industrial and scientific 
research institutions. To ensure such availability and control, the 
grant of waivers in these programs may necessarily be more limited, 
either by the imposition of field of use restrictions or national 
security measures, than in other DOE programs.
    4. Section 927.302 is added to read as follows:


927.302  Policy.

    (a) In contracts having as a purpose the conduct of research, 
development, or demonstration work and in other special contracts with 
large, for-profit companies, foreign organizations, and others not 
beneficiaries of Public Law 96-517, DOE shall normally acquire title in 
and to any invention or discovery conceived or first actually reduced 
to practice in the course of or under the contract, allowing the 
contractor to retain a nonexclusive, revocable, paid-up license in the 
invention and the right to request permission to file an application 
for a patent and retain title to any ensuing patent in any foreign 
country in which DOE does not elect to secure patent rights. DOE may 
approve the request if it determines that such approval would be in the 
national interest. The contractor's nonexclusive license may be revoked 
or modified by DOE only to the extent necessary to achieve expeditious 
practical application of the invention pursuant to any application for 
and the grant of an exclusive license in the invention to another 
party.
    (b) In contracts having as a purpose the conduct of research, 
development, or demonstration work and in certain other contracts, DOE 
may need to require those contractors that are not the beneficiaries of 
Public Law 96-517 to license background patents to ensure reasonable 
public availability and accessibility necessary to practice the subject 
of the contract in the fields of technology specifically contemplated 
in the contract effort. That need may arise where the contractor is not 
attempting to take the technology resulting from the contract to the 
commercial marketplace or is not meeting market demands. The need for 
background patent rights and the particular rights that should be 
obtained for either the Government or the public will depend upon the 
type, purpose, and scope of the contract effort, impact on the DOE 
program, and the cost to the Government of obtaining such rights.
    (c) Provisions to deal specifically with DOE background patent 
rights are contained in paragraph (k) of the clause at 952.227-13. That 
paragraph may be modified with the concurrence of Patent Counsel in 
order to reflect the equities of the parties in particular contracting 
situations. Paragraph (k) should normally be deleted for contracts with 
an estimated cost and fee or price of $250,000 or less and may not be 
appropriate for certain types of study contracts, planning contracts, 
contracts with educational institutions, or contracts for specialized 
equipment for in-house Government use, for use by the public, or for 
contracts where the contract work product will not be the subject of 
future procurements by the Government or its contractors.
    5. Section 927.303 is added to read as follows:


927.303  Contract clauses.

    (a) In solicitations and contracts for experimental, research, 
developmental, or demonstration work (but see (FAR) 48 CFR 27.304-3 
regarding contracts for construction work or architect-engineer 
services), the contracting officer shall include the clause: (1) At 
952.227-13, Patent Rights Acquisition by the Government, in all such 
contracts other than those described in paragraphs (a) (2) and (3) of 
this section;
    (2) At 952.227-11, Patent Rights by the Contractor (Short Form), in 
contracts in which the contractor is a domestic small business or 
nonprofit organization as defined at (FAR) 48 CFR 27.301, except where 
the work of the contract is subject to an Exceptional Circumstances 
Determination by DOE; and
    (3) Discussed in 970.27, Patent, Data, and Copyrights, in contracts 
for the management and operation of DOE laboratories and production 
facilities.
    (b) DOE shall not use the clause at (FAR) 48 CFR 52.227-12. In 
instances in which DOE grants an advance waiver or waives its rights in 
an identified invention, contracting officers shall consult with patent 
counsel for the appropriate modifications to the clause at 952.227-13.
    6. Section 927.304 is added to read as follows:


927.304  Procedures.

    Where the contract contains the clause at 952.227-11 and the 
contractor does not elect to retain title to a subject invention, DOE 
may consider and, after consultation with the contractor, grant 
requests for retention of rights by the inventor subject to the 
provisions of 35 U.S.C. 200 et seq. This statement is in lieu of (FAR) 
48 CFR 27.304-1(c).

PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    7. The authority citation for part 952 continues to read as 
follows:

    Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

    8. Subsection 952.227-9 is added to read as follows:


952.227-9  Refund of royalties.

    As prescribed in 927.206-2, insert the following clause:

Refund of Royalties (XXX 199X)

    (a) The contract price includes certain amounts for royalties 
payable by the Contractor or subcontractors or both, which amounts 
have been reported to the Contracting Officer.
    (b) The term ``royalties'' as used in this clause refers to any 
costs or charges in the nature of royalties, license fees, patent or 
license amortization costs, or the like, for the use of or for 
rights in patents and patent applications in connection with 
performing this contract or any subcontract hereunder. The term also 
includes any costs or charges associated with the access to, use of, 
or other right pertaining to data that is represented to be 
proprietary and is related to the performance of this contract or 
the copying of such data or data that is copyrighted.
    (c) The Contractor shall furnish to the Contracting Officer, 
before final payment under this contract, a statement of royalties 
paid or required to be paid in connection with performing this 
contract and subcontracts hereunder together with the reasons.
    (d) The Contractor will be compensated for royalties reported 
under paragraph (c) above, only to the extent that such royalties 
were included in the contract price and are determined by the 
Contracting Officer to be properly chargeable to the Government and 
allocable to the contract. To the extent that any royalties that are 
included in the contract price are not, in fact, paid by the 
Contractor or are determined by the Contracting Officer not to be 
properly chargeable to the government and allocable to the contract, 
the contract price shall be reduced. Repayment or credit to the 
Government shall be made as the Contracting Officer directs. The 
approval by DOE of any individual payments or royalties shall not 
prevent the Government from contesting at any time the 
enforceability, validity, scope of, or title to, any patent or the 
proprietary nature of data pursuant to which a royalty or other 
payment is to be or has been made.
    (e) If, at any time within 3 years after final payment under 
this contract, the Contractor for any reason is relieved in whole or 
in part from the payment of the royalties included in the final 
contract price as adjusted pursuant to paragraph (d) above, the 
Contractor shall promptly notify the Contracting Officer of that 
fact and shall reimburse the Government in a corresponding amount.
    (f) The substance of this clause, including this paragraph (f), 
shall be included in any subcontract in which the amount of 
royalties reported during negotiation of the subcontract exceeds 
$250.

(End of clause)

    9. Subsection 952.227-11 is added to read as follows:


952.227-11  Patent rights-retention by the contractor (short form).

    As prescribed in 927.303(a), insert the following clause:

Patent Rights-Retention by the Contractor (Short Form) (XXX 19XX)

    (a) Definitions. (1) Invention means any invention or discovery 
which is or may be patentable or otherwise protectable under title 
35 of the United States Code, or any novel variety of plant which is 
or may be protected under the Plant Variety Protection Act (7 U.S.C. 
2321, et seq.).
    (2) Made when used in relation to any invention means the 
conception of first actual reduction to practice of such invention.
    (3) Nonprofit organization means a university or other 
institution of higher education or an organization of the type 
described in section 501(c)(3) of the Internal Revenue Code of 1954 
(26 U.S.C. 501(c)) and exempt from taxation under section 501(a) of 
the Internal Revenue Code (26 U.S.C. 501(a)) or any nonprofit 
scientific or educational organization qualified under a state 
nonprofit organization statute.
    (4) Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in 
each case, under such conditions as to establish that the invention 
is being utilized and that its benefits are, to the extent permitted 
by law or Government regulations, available to the public on 
reasonable terms.
    (5) Small business firm means a small business concern as 
defined at section 2 of Pub. L. 85-536 (15 U.S.C. 632) and 
implementing regulations of the Administrator of the Small Business 
Administration. For the purpose of this clause, the size standards 
for small business concerns involved in Government procurement and 
subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, 
will be used.
    (6) Subject invention means any invention of the contractor 
conceived or first actually reduced to practice in the performance 
of work under this contract, provided that in the case of a variety 
of plant, the date of determination (as defined in section 41(d) of 
the Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur 
during the period of contract performance.
    (7) Agency licensing regulations and agency regulations 
concerning the licensing of Government-owned inventions mean the 
Department of Energy patent licensing regulations at 10 CFR part 
781.
    (b) Allocation of principal rights. The Contractor may retain 
the entire right, title, and interest throughout the world to each 
subject invention subject to the provisions of this clause and 35 
U.S.C. 203. With respect to any subject invention in which the 
Contractor retains title, the Federal Government shall have a 
nonexclusive, nontransferable, irrevocable, paid-up license to 
practice or have practiced for or on behalf of the United States the 
subject invention throughout the world.
    (c) Invention disclosure, election of title, and filing of 
patent application by Contractor. (1) The Contractor will disclose 
each subject invention to the Department of Energy (DOE) within 2 
months after the inventor discloses it in writing to Contractor 
personnel responsible for patent matters. The disclosure to DOE 
shall be in the form of a written report and shall identify the 
contract under which the invention was made and the inventor(s). It 
shall be sufficiently complete in technical detail to convey a clear 
understanding to the extent known at the time of the disclosure, of 
the nature, purpose, operation, and the physical, chemical, 
biological or electrical characteristics of the invention. The 
disclosure shall also identify any publication, on sale or public 
use of the invention and whether a manuscript describing the 
invention has been submitted for publication and, if so, whether it 
publication at the time of disclosure. In addition, after disclosure 
to the DOE, the Contractor will promptly notify that agency of the 
acceptance of any manuscript describing the invention for 
publication or of any on sale or public use planned by the 
Contractor.
    (2) The Contractor will elect in writing whether or not to 
retain title to any such invention by notifying DOE within 2 years 
of disclosure to that agency. However, in any case where 
publication, on sale or public use has initiated the l-year 
statutory period wherein valid patent protection can still be 
obtained in the United States, the period for election of title may 
be shortened by DOE to a date that is no more than 60 days prior to 
the end of the statutory period.
    (3) The Contractor will file its initial patent application on a 
subject invention to which it elects to retain title within 1 year 
after election of title or, if earlier, prior to the end of any 
statutory period wherein valid patent protection can be obtained in 
the United States after a publication, on sale, or public use. The 
Contractor will file patent applications in additional countries or 
international patent offices within either 10 months of the 
corresponding initial patent application or 6 months from the date 
permission is granted by the Commissioner of Patents and Trademarks 
to file foreign patent applications where such filing has been 
prohibited by a Secrecy Order.
    (4) Requests for extension of the time for disclosure election, 
and filing under subparagraphs (c)(l), (2), and (3) of this clause 
may, at the discretion of the agency, be granted.
    (d) Conditions when the Government may obtain title. The 
Contractor will convey to the Federal agency, upon written request, 
title to any subject invention--
    (1) If the Contractor fails to disclose or elect title to the 
subject invention within the times specified in paragraph (c) of 
this clause, or elects not to retain title; provided, That DOE may 
only request title within 60 days after learning of the failure of 
the Contractor to disclose or elect within the specified times.
    (2) In those countries in which the Contractor fails to file 
patent applications within the times specified in paragraph (c) of 
this clause; provided, however, That if the Contractor has filed a 
patent application in a country after the times specified in 
paragraph (c) of this clause, but prior to its receipt of the 
written request of the Federal agency, the Contractor shall continue 
to retain title in that country.
    (3) In any country in which the Contractor decides not to 
continue the prosecution of any application for, to pay the 
maintenance fees on, or defend in reexamination or opposition 
proceeding on, a patent on a subject invention.
    (e) Minimum rights to Contractor and protection of the 
Contractor right to file. (1) The Contractor will retain a 
nonexclusive royalty-free license throughout the world in each 
subject invention to which the Government obtains title, except if 
the Contractor fails to disclose the invention within the times 
specified in paragraph (c) of this clause. The Contractor's license 
extends to its domestic subsidiary and affiliates, if any, within 
the corporate structure of which the Contractor is a party and 
includes the right to grant sublicenses of the same scope to the 
extent the Contractor was legally obligated to do so at the time the 
contract was awarded. The license is transferable only with the 
approval of the Federal agency, except when transferred to the 
successor of that part of the Contractor's business to which the 
invention pertains.
    (2) The Contractor's domestic license may be revoked or modified 
by DOE to the extent necessary to achieve expeditious practical 
application of subject invention pursuant to an application for an 
exclusive license submitted in accordance with applicable provisions 
at 37 CFR part 404 and agency licensing regulations. This license 
will not be revoked in that field of use or the geographical areas 
in which the Contractor has achieved practical application and 
continues to make the benefits of the invention reasonably 
accessible to the public. The license in any foreign country may be 
revoked or modified at the discretion of DOE to the extent the 
Contractor, its licensees, or the domestic subsidiaries or 
affiliates have failed to achieve practical application in that 
foreign country.
    (3) Before revocation or modification of the license, DOE will 
furnish the Contractor a written notice of its intention to revoke 
or modify the license, and the Contractor will be allowed 30 days 
(or such other time as may be authorized by DOE for good cause shown 
by the Contractor) after the notice to show cause why the license 
should not be revoked or modified. The Contractor has the right to 
appeal, in accordance with applicable regulations in 37 CFR part 404 
and agency regulations concerning the licensing of Government owned 
inventions, any decision concerning the revocation or modification 
of the license.
    (f) Contractor action to protect the Government's interest. (1) 
The Contractor agrees to execute or to have executed and promptly 
deliver to DOE all instruments necessary to (i) establish or confirm 
the rights the Government has throughout the world in those subject 
inventions to which the Contractor elects to retain title, and (ii) 
convey title to DOE when requested under paragraph (d) of this 
clause and to enable the government to obtain patent protection 
throughout the world in that subject invention.
    (2) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in a format suggested 
by the Contractor each subject invention made under contract in 
order that the Contractor can comply with the disclosure provisions 
of paragraph (c) of this clause, and to execute all papers necessary 
to file patent applications on subject inventions and to establish 
the Government's rights in the subject inventions. This disclosure 
format should require, as a minimum, the information required by 
subparagraph (c)(1) of this clause. The Contractor shall instruct 
such employees, through employee agreements or other suitable 
educational programs, on the importance of reporting inventions in 
sufficient time to permit the filing of patent applications prior to 
U.S. or foreign statutory bars.
    (3) The Contractor will notify DOE of any decisions not to 
continue the prosecution of a patent application, pay maintenance 
fees, or defend in a reexamination or opposition proceeding on a 
patent, in any country, not less than 30 days before the expiration 
of the response period required by the relevant patent office.
    (4) The Contractor agrees to include, within the specification 
of any United States patent application and any patent issuing there 
on covering a subject invention, the following statement, ``This 
invention was made with Government support under (identify the 
contract) awarded by the United States Department of Energy. The 
Government has certain rights in the invention.''
    (g) Subcontracts. (1) The Contractor will include this clause, 
suitably modified to identify the parties, in all subcontracts, 
regardless of tier, for experimental, developmental, or research 
work to be performed by a small business firm or domestic nonprofit 
organization. The subcontractor will retain all rights provided for 
the Contractor in this clause, and the Contractor will not, as part 
of the consideration for awarding the subcontract, obtain rights in 
the subcontractor's subject inventions.
    (2) The contractor shall include in all other subcontracts, 
regardless of tier, for experimental, developmental, demonstration, 
or research work the patent rights clause at 952.227-13.
    (3) In the case of subcontracts, at any tier, DOE, 
subcontractor, and the Contractor agree that the mutual obligations 
of the parties created by this clause constitute a contract between 
the subcontractor and DOE with respect to the matters covered by the 
clause; provided, however, that nothing in this paragraph is 
intended to confer any jurisdiction under the Contract Disputes Act 
in connection with proceedings under paragraph (j) of this clause.
    (h) Reporting on utilization of subject inventions. The 
Contractor agrees to submit, on request, periodic reports no more 
frequently than annually on the utilization of a subject invention 
or on efforts at obtaining such utilization that are being made by 
the Contractor or its licensees or assignees. Such reports shall 
include information regarding the status of development, date of 
first commercial sale or use, gross royalties received, by the 
Contractor, and such other data and information as DOE may 
reasonably specify. The Contractor also agrees to provide additional 
reports as may be requested by DOE in connection with any march-in 
proceeding undertaken by that agency in accordance with paragraph 
(j) of this clause. As required by 35 U.S.C. 202(c)(5), DOE agrees 
it will not disclose such information to persons outside the 
Government without permission of the Contractor.
    (i) Preference for United States industry. Notwithstanding any 
other provision of this clause, the Contractor agrees that neither 
it nor any assignee will grant to any person the exclusive right to 
use or sell any subject invention in the United States unless such 
person agrees that any product embodying the subject invention or 
produced through the use of the subject invention will be 
manufactured substantially in the United States. However, in 
individual cases, the requirement for such an agreement may be 
waived by DOE upon a showing by the Contractor or its assignee that 
reasonable but unsuccessful efforts have been made to grant licenses 
on similar terms to potential licensees that would be likely to 
manufacture substantially in the United States or that under the 
circumstances domestic manufacture is not commercially feasible.
    (j) March-in rights. The Contractor agrees that, with respect to 
any subject invention in which it has acquired title, DOE has the 
right in accordance with the procedures in 37 CFR 401.6 and any 
supplemental regulations of the agency to require the Contractor, an 
assignee or exclusive licensee of a subject invention to grant a 
nonexclusive, partially exclusive, or exclusive license in any field 
of use to a responsible applicant or applicants, upon terms that are 
reasonable under the circumstances, and, if the Contractor, 
assignee, or exclusive licensee refuses such a request, DOE has the 
right to grant such a license itself if DOE determines that--
    (1) Such action is necessary because the Contractor or assignee 
has not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or 
their licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this clause has not been obtained or waived or 
because a licensee of the exclusive right to use or sell any subject 
invention in the United States is in breach of such agreement.
    (k) Special provisions for contracts with nonprofit 
organizations. If the Contractor is a nonprofit organization, it 
agrees that--
    (1) Rights to a subject invention in the United States may not 
be assigned without the approval of the Federal agency, except where 
such assignment is made to an organization which has as one of its 
primary functions the management of inventions; provided, that such 
assignee will be subject to the same provisions as the Contractor;
    (2) The Contractor will share royalties collected on a subject 
invention with the inventor, including Federal employee co-inventors 
(when DOE deems it appropriate) when the subject invention is 
assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
    (3) The balance of any royalties or income earned by the 
Contractor with respect to subject inventions, after payment of 
expenses (including payments to inventors) incidental to the 
administration of subject inventions will be utilized for the 
support of scientific research or education; and
    (4) It will make efforts that are reasonable under the 
circumstances to attract licensees of subject inventions that are 
small business firms, and that it will give a preference to a small 
business firm when licensing a subject invention if the Contractor 
determines that the small business firm has a plan or proposal for 
marketing the invention which, if executed, is equally as likely to 
bring the invention to practical application as any plans or 
proposals from applicants that are not small business firms; 
provided, that the Contractor is also satisfied that the small 
business firm has the capability and resources to carry out its plan 
or proposal. The decision whether to give a preference in any 
specific case will be at the discretion of the contractor. However, 
the Contractor agrees that the Secretary of Commerce may review the 
Contractor's licensing program and decisions regarding small 
business applicants, and the Contractor will negotiate changes to 
its licensing policies, procedures, or practices with the Secretary 
of Commerce when that Secretary's review discloses that the 
Contractor could take reasonable steps to more effectively implement 
the requirements of this subparagraph (k)(4).
    (l) Communications. (1) The contractor shall direct any 
notification, disclosure, or request to DOE provided for in this 
clause to the DOE patent counsel assisting the DOE contracting 
activity, with a copy of the communication to the Contracting 
Officer.
    (2) Each exercise of discretion or decision provided for in this 
clause, except paragraph (k)(4), is reserved for the DOE Patent 
Counsel and is not a claim or dispute and is not subject to the 
Contract Disputes Act of 1978.
    (3) Upon request of the DOE Patent Counsel or the contracting 
officer, the contractor shall provide any or all of the following:
    (i) A copy of the patent application, filing date, serial number 
and title, patent number, and issue date for any subject invention 
in any country in which the contractor has applied for a patent;
    (ii) A report, not more often than annually, summarizing all 
subject inventions which were disclosed to DOE individually during 
the reporting period specified; or
    (iii) A report, prior to closeout of the contract, listing all 
subject inventions or stating that there were none.

(End of clause)

    10. Subsection 952.227-13 is added to read as follows: 952.227-13 
Patent Rights-Acquisition by the Government. As prescribed at 
927.303(c), insert the following clause:

Patent Rights-Acquisition by the Government (XXX 199X)

    (a) Definitions. Invention, as used in this clause, means any 
invention or discovery which is or may be patentable or otherwise 
protectable under title 35 of the United States Code or any novel 
variety of plant that is or may be protectable under the Plant 
Variety Protection Act (7 U.S.C. 2321, et seq.).
    Practical application, as used in this clause, means to 
manufacture, in the case of a composition or product; to practice, 
in the case of a process or method; or to operate, in the case of a 
machine or system; and, in each case, under such conditions as to 
establish that the invention is being utilized and that its benefits 
are, to the extent permitted by law or Government regulations, 
available to the public on reasonable terms.
    Subject invention, as used in this clause, means any invention 
of the Contractor conceived or first actually reduced to practice in 
the performance of work under this contract; provided, that in the 
case of a variety of plant, the date of determination (as defined in 
section 41(d) of the Plant Variety Protection Act, 7 U.S.C. 2401(d)) 
must also occur during the period of contract performance.
    Head of the Contracting Agency means the Secretary of Energy.
    Agency licensing regulations and applicable agency licensing 
regulations mean the Department of Energy patent licensing 
regulations at 10 CFR part 781.
    (b) Allocations of principal rights--(1) Assignment to the 
Government. The Contractor agrees to assign to the Government the 
entire right, title, and interest throughout the world in and to 
each subject invention, except to the extent that rights are 
retained by the Contractor under subparagraph (b)(2) and paragraph 
(d) below.
    (2) Greater rights determinations. (i) The Contractor, or an 
employee-inventor after consultation with the Contractor, may retain 
greater rights than the nonexclusive license provided in paragraph 
(d) below, in accordance with the procedures of paragraph 27.304-
1(a) of the Federal Acquisition Regulation (FAR). A request for a 
determination of whether the Contractor or the employee-inventor is 
entitled to retain such greater rights must be submitted to the 
Secretary of Energy or designee at the time of the first disclosure 
of the invention pursuant to subparagraph (e)(2) below, or not later 
than 8 months thereafter, unless a longer period is authorized in 
writing by the Contracting Officer for good cause shown in writing 
by the Contractor. Each determination of greater rights under this 
contract normally shall be subject to paragraph (c) below, and to 
the reservations and conditions deemed to be appropriate by the 
Secretary of Energy or designee.
    (ii) Upon request, the Contractor shall provide the filing date, 
serial number and title, a copy of the patent application (including 
an English-language version if filed in a language other than 
English), and patent number and issue date for any subject invention 
in any country for which the Contractor has retained title.
    (iii) Upon request, the Contractor shall furnish the Government 
an irrevocable power to inspect and make copies of the patent 
application file.
    (c) Minimum rights acquired by the Government. (1) With respect 
to each subject invention to which the Contractor retains principal 
or exclusive rights, the Contractor agrees as follows:
    (i) The Contractor hereby grants to the Government a 
nonexclusive, nontransferable, irrevocable, paid-up license to 
practice or have practiced each subject invention throughout the 
world by or on behalf of the Government of the United States 
(including any Government agency).
    (ii) The Contractor agrees that with respect to any subject 
invention in which it has acquired title, DOE has the right in 
accordance with the procedures in (FAR) 48 CFR 27.304-1(g) to 
require the Contractor, an assignee, or exclusive licensee of a 
subject invention to grant a nonexclusive, partially exclusive, or 
exclusive license in any field of use to a responsible applicant or 
applicants, upon terms that are reasonable under the circumstances, 
and if the Contractor, assignee, or exclusive licensee refuses such 
a request, DOE has the right to grant such a license itself if it 
determines that--
    (A) Such action is necessary because the Contractor or assignee 
has not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (B) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or 
their licensees;
    (C) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (D) Such action is necessary because the agreement required by 
paragraph (i) of this clause has neither been obtained nor waived or 
because a licensee of the exclusive right to use or sell any subject 
invention in the United States is in breach of such agreement
    (iii) The Contractor agrees to submit on request periodic 
reports no more frequently than annually on the utilization of a 
subject invention or on efforts at obtaining such utilization of a 
subject invention or on efforts at obtaining such utilization that 
are being made by the Contractor or its licensees or assignees. Such 
reports shall include information regarding the status of 
development, date of first commercial sale or use, gross royalties 
received by the Contractor, and such other data and information as 
DOE may reasonably specify. The Contractor also agrees to provide 
additional reports as may be requested by DOE in connection with any 
march-in proceedings undertaken by that agency in accordance with 
subdivision (ii) above. To the extent data or information supplied 
under this section is considered by the Contractor, its licensee, or 
assignee to be privileged and confidential and is so marked, the 
Department of Energy agrees that, to the extent permitted by law, it 
will not disclose such information to persons outside the 
Government.
    (iv) The Contractor agrees, when licensing a subject invention, 
to arrange to avoid royalty charges on acquisitions involving 
Government funds, including funds derived through a Military 
Assistance Program of the Government or otherwise derived through 
the Government, to refund any amounts received as royalty charges on 
a subject invention in acquisitions for, or on behalf of, the 
Government, and to provide for such refund in any instrument 
transferring rights in the invention to any party.
    (v) The Contractor agrees to provide for the Government's paid-
up license pursuant to subdivision (i) above in any instrument 
transferring rights in a subject invention and to provide for the 
granting of licenses as required by subdivision (ii) above, and for 
the reporting of utilization information as required by subdivision 
(iii) above, whenever the instrument transfers principal or 
exclusive rights in a subject invention.
    (2) Nothing contained in this paragraph (c) shall be deemed to 
grant to the Government any rights with respect to any invention 
other than a subject invention.
    (d) Minimum rights to the Contractor. (1) The Contractor is 
hereby granted a revocable nonexclusive, royalty-free license in 
each patent application filed in any country on a subject invention 
and any resulting patent in which the Government obtains title, 
unless the Contractor fails to disclose the subject invention within 
the times specified in subparagraph (e)(2) below. The Contractor's 
license extends to its domestic subsidiaries and affiliates, if any, 
within the corporate structure of which the Contractor is a part and 
includes the right to grant sublicenses of the same scope to the 
extent the Contractor was legally obligated to do so at the time the 
contract was awarded. The license is transferable only with the 
approval of DOE except when transferred to the successor of that 
part of the Contractor's business to which the invention pertains.
    (2) The Contractor's domestic license may be revoked or modified 
by DOE to the extent necessary to achieve expeditious practical 
application of the subject invention pursuant to an application for 
an exclusive license submitted in accordance with applicable 
provisions in 37 CFR Part 404 and agency licensing regulations. This 
license will not be revoked in that field of use or the geographical 
areas in which the Contractor has achieved practical applications 
and continues to make the benefits of the invention reasonably 
accessible to the public. The license in any foreign country may be 
revoked or modified at the discretion of DOE to the extent the 
Contractor, its licensees, or its domestic subsidiaries or 
affiliates have failed to achieve practical application in that 
foreign country.
    (3) Before revocation or modification of the license, DOE will 
furnish the Contractor a written notice of its intention to revoke 
or modify the license, and the Contractor will be allowed 30 days 
(or such other time as may be authorized by DOE for good cause shown 
by the Contractor) after the notice to show cause why the license 
should not be revoked or modified. The Contractor has the right to 
appeal, in accordance with applicable agency licensing regulations 
and 37 CFR part 404 concerning the licensing of Government-owned 
inventions, any decision concerning the revocation or modification 
of its license.
    (4) The Contractor may request the right to retain patent rights 
to a subject invention in any foreign country where the Government 
has elected not to secure such rights, subject to the conditions in 
paragraphs (d)(4)(i) through (d)(4)(vii) of this clause. Such 
request must be made in writing to the Patent Counsel as part of the 
disclosure required by paragraph (e)(2) of this clause, with a copy 
to the DOE contracting officer. DOE approval, if given, will be 
based on a determination that this would best serve the national 
interest.
    (i) The recipient of such rights, when specifically requested by 
DOE, and three years after issuance of a foreign patent disclosing 
the subject invention, shall furnish DOE a report stating:
    (A) The commercial use that is being made, or is intended to be 
made, of said invention, and
    (B) The steps taken to bring the invention to the point of 
practical application or to make the invention available for 
licensing.
    (ii) The Government shall retain at least an irrevocable, 
nonexclusive, paid-up license to make, use, and sell the invention 
throughout the world by or on behalf of the Government (including 
any Government agency) and States and domestic municipal 
governments, unless the Secretary of Energy or designee determines 
that it would not be in the public interest to acquire the license 
for the States and domestic municipal governments.
    (iii) If noted elsewhere in this contract as a condition of the 
grant of an advance waiver of the Government's title to inventions 
under this contract, or, if no advance waiver was granted but a 
waiver of the Government's title to an identified invention is 
granted pursuant to paragraph (d)(2) of this contract upon a 
determination by the Secretary of Energy that it is in the 
Government's best interest, this license shall include the right of 
the Government to sublicense foreign governments pursuant to any 
existing or future treaty or agreement with such foreign 
governments.
    (iv) Subject to the rights granted in paragraphs (d)(1), (2), 
and (3) of this clause, the Secretary of Energy or designee shall 
have the right to terminate the foreign patent rights granted in 
this paragraph (d)(4) in whole or in part unless the recipient of 
such rights demonstrates to the satisfaction of the Secretary of 
Energy or designee that effective steps necessary to accomplish 
substantial utilization of the invention have been taken or within a 
reasonable time will be taken.
    (v) Subject to the rights granted in paragraphs (d)(1), (2), and 
(3) of this clause, the Secretary of Energy or designee shall have 
the right, commencing four years after foreign patent rights are 
accorded under this paragraph (d)(4), to require the granting of a 
nonexclusive or partially exclusive license to a responsible 
applicant or applicants, upon terms reasonable under the 
circumstances, and in appropriate circumstances to terminate said 
foreign patent rights in whole or in part, following a hearing upon 
notice thereof to the public, upon a petition by an interested 
person justifying such hearing: (A) If the Secretary or designee 
determines, upon review of such material as he deems relevant, and 
after the recipient of such rights or other interested person has 
had the opportunity to provide such relevant and material 
information as the Secretary or designee may require, that such 
foreign patent rights have tended substantially to lessen 
competition or to result in undue market concentration in any 
section of the United States in any line of commerce to which the 
technology relates; or
    (B) Unless the recipient of such rights demonstrates to the 
satisfaction of the Secretary or designee at such hearing that the 
recipient has taken effective steps, or within a reasonable time 
thereafter is expected to take such steps, necessary to accomplish 
substantial utilization of the invention.
    (vi) If the contractor is to file a foreign patent application 
on a subject invention, the Government agrees, upon written request, 
to use its best efforts to withhold publication of such invention 
disclosures until the expiration of the time period specified in 
paragraph (d)(1) of this clause, but in no event shall the 
Government or its employees be liable for any publication thereof.
    (vii) Subject to the license specified in paragraphs (d)(1), 
(2), and (3) of this clause, the contractor or inventor agrees to 
convey to the Government, upon request, the entire right, title, and 
interest in any foreign country in which the contractor or inventor 
fails to have a patent application filed in accordance with 
paragraph (d)(3) of this clause, or decides not to continue 
prosecution or to pay any maintenance fees covering the invention. 
To avoid forfeiture of the patent application or patent, the 
contractor or inventor shall, not less than 60 days before the 
expiration period for any action required by any patent office, 
notify the Patent Counsel of such failure or decision, and deliver 
to the Patent Counsel, the executed instruments necessary for the 
conveyance specified in this paragraph.
    (e) Invention identification, disclosures, and reports. (1) The 
Contractor shall establish and maintain active and effective 
procedures to assure that subject inventions are promptly identified 
and disclosed to Contractor personnel responsible for patent matters 
within 6 months of conception and/or first actual reduction to 
practice, whichever occurs first in the performance of work under 
this contract. These procedures shall include the maintenance of 
laboratory notebooks or equivalent records and other records as are 
reasonably necessary to document the conception and/or the first 
actual reduction to practice of subject inventions, and records that 
show that the procedures for identifying and disclosing the 
inventions are followed. Upon request, the Contractor shall furnish 
the Contracting Officer a description of such procedures for 
evaluation and for determination as to their effectiveness.
    (2) The Contractor shall disclose each subject invention to the 
Contracting Officer within 2 months after the inventor discloses it 
in writing to Contractor personnel responsible for patent matters 
or, if earlier, within 6 months after the Contractor becomes aware 
that a subject invention has been made, but in any event before any 
on sale, public use, or publication of such invention known to the 
Contractor. The disclosure to DOE shall be in the form of a written 
report and shall identify the contract under which the invention was 
made and the inventor(s). It shall be sufficiently complete in 
technical detail to convey a clear understanding, to the extent 
known at the time of the disclosure, of the nature, purpose, 
operation, and physical, chemical, biological, or electrical 
characteristics of the invention. The disclosure shall also identify 
any publication, on sale, or public use of the invention and whether 
a manuscript describing the invention has been submitted for 
publication and, if so, whether it has been accepted for publication 
at the time of disclosure. In addition, after disclosure to DOE, the 
Contractor shall promptly notify that agency of the acceptance of 
any manuscript describing the invention for publication or of any on 
sale or public use planned by the Contractor.
    (3) The Contractor shall furnish the Contracting Officer the 
following: (i) Interim reports every 12 months (or such longer 
period as may be specified by the Contracting Officer) from the date 
of the contract, listing subject inventions during that period, and 
certifying that all subject inventions have been disclosed (or that 
there are not such inventions) and that the procedures required by 
subparagraph (e)(1) above have been followed.
    (ii) A final report, within 3 months after completion of the 
contracted work listing all subject inventions or certifying that 
there were no such inventions, and listing all subcontracts at any 
tier containing a patent rights clause or certifying that there were 
no such subcontracts.
    (4) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in a format suggested 
by the Contractor each subject invention made under contract in 
order that the Contractor can comply with the disclosure provisions 
of paragraph (c) above, and to execute all papers necessary to file 
patent applications on subject inventions and to establish the 
Government's rights in the subject inventions. This disclosure 
format should require, as a minimum, the information required by 
subparagraph (2) above.
    (5) The Contractor agrees subject to (FAR) 48 CFR 27.302(i) that 
the Government may duplicate and disclose subject invention 
disclosures and all other reports and papers furnished or required 
to be furnished pursuant to this clause.
    (f) Examination of records relating to inventions. (1) The 
Contracting Officer or any authorized representative shall, until 3 
years after final payment under this contract, have the right to 
examine any books (including laboratory notebooks), records, and 
documents of the Contractor relating to the conception or first 
actual reduction to practice of inventions in the same field of 
technology as the work under this contract to determine whether--
    (i) Any such inventions are subject inventions;
    (ii) The Contractor has established and maintains the procedures 
required by subparagraphs (e)(1) and (4) of this clause; and
    (iii) The Contractor and its inventors have complied with the 
procedures.
    (2) If the Contracting Officer learns of an unreported 
Contractor invention which the Contracting Officer believes may be a 
subject invention, the Contractor may be required to disclose the 
invention to DOE for a determination of ownership rights.
    (3) Any examination of records under this paragraph will be 
subject to appropriate conditions to protect the confidentiality of 
the information involved.
    (g) Withholding of payment (this paragraph does not apply to 
subcontracts). (1) Any time before final payment under this 
contract, the Contracting Officer may, in the Government's interest, 
withhold payment until a reserve not exceeding $50,000 or 5 percent 
of the amount of this contract, whichever is less, shall have been 
set aside if, in the Contracting Officer's opinion, the Contractor 
fails to--
    (i) Convey to the Government, using a DOE-approved form, the 
title and/or rights of the Government in each subject invention as 
required by this clause.
    (ii) Establish, maintain, and follow effective procedures for 
identifying and disclosing subject inventions pursuant to 
subparagraph (e)(1) above;
    (iii) Disclose any subject invention pursuant to subparagraph 
(e)(2) above;
    (iv) Deliver acceptable interim reports pursuant to subdivision 
(e)(3)(i) above; or
    (v) Provide the information regarding subcontracts pursuant to 
subparagraph (h)(4) below.
    (2) Such reserve or balance shall be withheld until the 
Contracting Officer has determined that the Contractor has rectified 
whatever deficiencies exist and has delivered all reports, 
disclosures, and other information required by this clause.
    (3) Final payment under this contract shall not be made before 
the Contractor delivers to the Contracting Officer all disclosures 
of subject inventions required by subparagraph (e)(2) above, and 
acceptable final report pursuant to subdivision (e)(3)(ii) above, 
and all past due confirmatory instruments.
    (4) The Contracting Officer may decrease or increase the sums 
withheld up to the maximum authorized above. No amount shall be 
withheld under this paragraph while the amount specified by this 
paragraph is being withheld under other provisions of the contract. 
The withholding of any amount or the subsequent payment thereof 
shall not be construed as a waiver of any Government rights.
    (h) Subcontracts. (1) The contractor shall include the clause at 
48 CFR 952.227-11 (suitably modified to identify the parties) in all 
subcontracts, regardless of tier, for experimental, developmental, 
demonstration, or research work to be performed by a small business 
firm or domestic nonprofit organization, except where the work of 
the subcontract is subject to an Exceptional Circumstances 
Determination by DOE. In all other subcontracts, regardless of tier, 
for experimental, developmental, demonstration, or research work, 
the contractor shall include this clause (suitably modified to 
identify the parties). The contractor shall not, as part of the 
consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.
    (2) In the event of a refusal by a prospective subcontractor to 
accept such a clause the Contractor--
    (i) Shall promptly submit a written notice to the Contracting 
Officer setting forth the subcontractor's reasons for such refusal 
and other pertinent information that may expedite disposition of the 
matter; and
    (ii) Shall not proceed with such subcontract without the written 
authorization of the Contracting Officer.
    (3) In the case of subcontracts at any tier, DOE, the 
subcontractor, and Contractor agree that the mutual obligations of 
the parties created by this clause constitute a contract between the 
subcontractor and DOE with respect to those matters covered by this 
clause.
    (4) The Contractor shall promptly notify the Contracting Officer 
in writing upon the award of any subcontract at any tier containing 
a patent rights clause by identifying the subcontractor, the 
applicable patent rights clause, the work to be performed under the 
subcontract, and the dates of award and estimated completion. Upon 
request of the Contracting Officer, the Contractor shall furnish a 
copy of such subcontract, and, no more frequently than annually, a 
listing of the subcontracts that have been awarded.
    (5) The contractor shall identify all subject inventions of the 
subcontractor of which it acquires knowledge in the performance of 
this contract and shall notify the Patent Counsel, with a copy to 
the contracting officer, promptly upon identification of the 
inventions.
    (i) Preference United States industry. Unless provided 
otherwise, no Contractor that receives title to any subject 
invention and no assignee of any such Contractor shall grant to any 
person the exclusive right to use or sell any subject invention in 
the United States unless such person agrees that any products 
embodying the subject invention will be manufactured substantially 
in the United States. However, in individual cases, the requirement 
may be waived by the Government upon a showing by the Contractor or 
assignee that reasonable but unsuccessful efforts have been made to 
grant licenses on similar terms to potential licensees that would be 
likely to manufacture substantially in the United States or that 
under the circumstances domestic manufacture is not commercially 
feasible.
    (j) Atomic energy. (1) No claim for pecuniary award of 
compensation under the provisions of the Atomic Energy Act of 1954, 
as amended, shall be asserted with respect to any invention or 
discovery made or conceived in the course of or under this contract.
    (2) Except as otherwise authorized in writing by the Contracting 
Officer, the Contractor will obtain patent agreements to effectuate 
the provisions of paragraph (e)(1) of this clause from all persons 
who perform any part of the work under this contract, except 
nontechnical personnel, such as clerical employees and manual 
laborers.
    (k) Background patents. (1) Background Patent means a domestic 
patent covering an invention or discovery which is not a subject 
invention and which is owned or controlled by the Contractor at any 
time through the completion of this contract: (i) Which the 
contractor, but not the Government, has the right to license to 
others without obligation to pay royalties thereon, and
    (ii) Infringement of which cannot reasonably be avoided upon the 
practice of any specific process, method, machine, manufacture, or 
composition of matter (including relatively minor modifications 
thereof) which is a subject of the research, development, or 
demonstration work performed under this contract.
    (2) The Contractor agrees to and does hereby grant to the 
Government a royalty-free, nonexclusive license under any background 
patent for purposes of practicing a subject of this contract by or 
for the Government in research, development, and demonstration work 
only.
    (3) The Contractor also agrees that upon written application by 
DOE, it will grant to responsible parties, for purposes of 
practicing a subject of this contract, nonexclusive licenses under 
any background patent on terms that are reasonable under the 
circumstances. If, however, the Contractor believes that exclusive 
rights are necessary to achieve expeditious commercial development 
or utilization, then a request may be made to DOE for DOE approval 
of such licensing by the contractor.
    (4) Notwithstanding paragraph (k)(3) of this clause, the 
contractor shall not be obligated to license any background patent 
if the Contractor demonstrates to the satisfaction of the Secretary 
of Energy or designee that: (i) A competitive alternative to the 
subject matter covered by said background patent is commercially 
available or readily introducible from one or more other sources; or
    (ii) The Contractor or its licensees are supplying the subject 
matter covered by said background patent in sufficient quantity and 
at reasonable prices to satisfy market needs, or have taken 
effective steps or within a reasonable time are expected to take 
effective steps to so supply the subject matter.
    (l) Publication. It is recognized that during the course of the 
work under this contract, the Contractor or its employees may from 
time to time desire to release or publish information regarding 
scientific or technical developments conceived or first actually 
reduced to practice in the course of or under this contract. In 
order that public disclosure of such information will not adversely 
affect the patent interests of DOE or the Contractor, patent 
approval for release of publication shall be secured from Patent 
Counsel prior to any such release or publication.
    (m) Forfeiture of rights in unreported subject inventions. (1) 
The Contractor shall forfeit and assign to the Government, at the 
request of the Secretary of Energy or designee, all rights in any 
subject invention which the Contractor fails to report to Patent 
Counsel (with notification by Patent Counsel to the Contracting 
Officer) within six months after the time the Contractor: (i) Files 
or causes to be filed a United States or foreign patent application 
thereon; or
    (ii) Submits the final report required by paragraph (e)(2)(ii) 
of this clause, whichever is later.
    (2) However, the Contractor shall not forfeit rights in a 
subject invention if, within the time specified, in paragraph 
(m)(1)(i) or (m)(1)(ii) of this clause, the Contractor: (i) Prepares 
a written decision based upon a review of the record that the 
invention was neither conceived nor first actually reduced to 
practice in the course of or under the contract and delivers the 
decision to Patent Counsel (with notification by Patent Counsel to 
the Contracting Officer); or
    (ii) Contending that the invention is not a subject invention, 
the Contractor nevertheless discloses the invention and all facts 
pertinent to this contention to the Patent Counsel (with 
notification by Patent Counsel to the Contracting Officer); or
    (iii) Establishes that the failure to disclose did not result 
from the Contractor's fault or negligence.
    (3) Pending written assignment of the patent application and 
patents on a subject invention determined by the Secretary or 
designee to be forfeited (such determination to be a final decision 
under the Disputes clause of this contract), the Contractor shall be 
deemed to hold the invention and the patent applications and patents 
pertaining thereto in trust for the Government. The forfeiture 
provision of this paragraph (m) shall be in addition to and shall 
not supersede other rights and remedies which the Government may 
have with respect to subject inventions.

(End of clause)

    11. Remove and reserve 952.227-71.

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

Subpart 970.27--Patents, Data, and Copyrights

    12. The authority citation for Part 970 continues to read as 
follows:

    Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C. 
2201), sec. 644 of the Department of Energy Organization Act, Pub. 
L. 95-91 (42 U.S.C. 7254), sec. 201 of the Federal Civilian Employee 
and Contractor Travel Expenses Act of 1985 (41 U.S.C. 420) and sec. 
1534 of the Department of Defense Authorization Act, 1986, Pub. L. 
99-145 (42 U.S.C. 7256a), as amended.

    13. Revise section 970.2701 to read as follows:


970.2701  General.

    This subpart applies to negotiation of patent rights and rights in 
technical data provisions for the Department of Energy contracts for 
the management and operation of its research and development and 
production facilities.
    14. Revise 970.2702 to read as follows:


970.2702  Patent rights.

    (a) Whenever a contract has as a purpose, the design, construction, 
or operation of a Government-owned research, development, demonstration 
or production facility, it is necessary that the Government be accorded 
certain rights with respect to further use of the facility by or on 
behalf of the Government upon termination of the contract, including 
the right to make, use, transfer, or otherwise dispose of all articles, 
materials, products, or processes embodying inventions or discoveries 
used or embodied in the facility regardless of whether or not conceived 
or first actually reduced to practice under or in the course of such a 
contract. Thus, both versions of the patent rights clause for managment 
and operating contracts contain a facilities license.
    (b) In the case of contractors operating and managing DOE research 
and development or production facilities, that are not the 
beneficiaries of Public Law 96-517, the Department is statutorily 
obligated to take title to inventions conceived or first actually 
reduced to practice in the performance of the contracts. Here, as in 
all other circumstances, the contractors may request a waiver at the 
time of contracting for a class of inventions or during contract 
performance for identified inventions. DOE includes the considerations 
at 927.300 in its determination as to whether to approve the request.
    (c) While no contractor that manages and operates a DOE research 
and development or production facility is a small business, several 
have historically been nonprofit organizations. As such, they are the 
beneficiaries of Bayh-Dole Act (35 U.S.C. 200 et seq., as amended) and, 
therefore, receive the right to acquire title to inventions conceived 
or first actually reduced to practice in the performance of their 
contracts with the Department, except in areas of technology covered by 
Exceptional Circumstances Determinations made by DOE or of nuclear 
weapons and naval nuclear propulsion. In these latter two areas, the 
contractor may request that the Department waive its title and, 
therefore, subject to the exceptions identified below, receive the 
right to acquire title to inventions conceived or first actually 
reduced to practice in the performance of its contract with the 
Department.
    (d) DOE has exercised statutory authority granted under 35 U.S.C. 
202(a)(ii) and 202(a)(iv). In accordance with 35 U.S.C. 202(a)(ii), DOE 
has issued several Exceptional Circumstances Determinations pursuant to 
which DOE nonprofit management and operating contractors have no right 
to elect title to inventions within areas of technology described 
therein, conceived or first actually reduced to practice in the course 
of or under their contracts. However, those contractors may be given 
some lesser property right in an invention within limits set by DOE in 
a particular Exceptional Circumstances Determination so that the 
contractor can effectively assist with a mission of DOE, such as 
technology transfer. As new technologies evolve, DOE will issue 
additional Exceptional Circumstances Determinations, as appropriate.
    (e) In accordance with 35 U.S.C. 202(a)(iv), the Department of 
Energy has exempted its weapons related and naval nuclear propulsion 
programs from the broad Bayh-Dole right of its management and operating 
contractors to elect title to inventions conceived or first actually 
reduced to practice in the course of or under their contracts. The 
effect of this exemption is that the contractors' right of election is 
subject to a case-by-case determination by DOE that the contractor has 
met all procedural requirements unilaterally set by DOE to insure that 
all national security concerns of DOE relating to the contractor's use 
of an invention in either of these two areas for commercialization have 
been met.
    15. Section 970.2703 is added to read as follows:


970.2703  Technology transfer.

    The National Competitiveness Technology Transfer Act of 1989 
(NCTTA) (Pub. L. 101-189) established technology transfer as a mission 
for Government-owned, contractor-operated laboratories and authorizes 
those laboratories to negotiate and award cooperative research and 
development agreements with public and private entities for purposes of 
conducting research and development and transferring technology beyond 
the assignments made by this Department. In implementing the NCTTA, DOE 
has negotiated technology transfer clauses with the contractors 
managing and operating its laboratories. Those technology transfer 
clauses must be read in concert with the patent rights clause required 
by this subpart. Thus, each management and operating contractor holds 
title to subject inventions for the benefit of the laboratory or 
facility being managed and operated by that contractor.
    16. Section 970.2704 is added to read as follows:


970.2704  Patent clauses.

    (a) Contracting officers shall insert the clause at 970.5204-XX in 
all management and operating contracts with nonprofit organizations.
    (b) Contracting officers shall insert the clause at 970.5204-YY in 
all management and operating contracts with profit-making entities.
    17. Add section 970.2705, Rights in Technical Data--General, and 
section 970.2706, Rights in Technical Data--Procedures, as follows:


970.2705  Rights in technical data--general.

    (a) A management and operating contractor's obligations for 
protection of information and data received from DOE and other 
contractors or subcontractors, and for the contractor's private use of 
contract data first produced in the performance of the contract, are 
set forth in paragraph (b)(2) of each Rights in Technical Data clause 
in 952.227. This subparagraph provides that the contractor may, subject 
to patent, security, or other provisions of the contract, use for its 
private purposes, contract data it first produces in the performance of 
the contract, provided that the contractor has met its data 
requirements (e.g., delivery of data in the form of progress or status 
reports specified to be delivered) as of the date of private use of 
such data. It is not necessary that a ``Final Report'' be submitted in 
order to privately use data if all required progress and interim 
reports and other technical data then due have been delivered. 
Paragraph (b)(2) further provides that technical or other data received 
by the contractor in the performance of the contract must be held in 
confidence by the contractor in accordance with restrictions 
accompanying the data.
    (b) Contractors should be aware that technical information which is 
reported to DOE by DOE contractors may be disseminated by DOE to 
others, subject to the restrictions included in the ``Rights to 
Technical Data'' clause.
    (c) Employees of contractors operating DOE facilities may not be 
used to assist in the preparation of a proposal or bid for the 
performance of private commercial services similar or related to those 
being performed under the DOE contract unless such employee has been 
separated, with DOE approval, from performance of work under the DOE 
contract for such period as the Head of the Contracting Activity or 
designee shall direct consistent with the purpose of this section.
    (d) Contractors operating DOE facilities and performing services as 
a part of their contract work for other Government agencies or private 
organizations should not be permitted to utilize information which is 
furnished by such customers for their own private activities unless it 
is generally available to others, or unless the customer authorizes 
such use.


970.2706  Rights in technical data--procedures.

    (a) General. It is essential that DOE maintain continuity in its 
programs which are implemented by contracts for the operation of 
Government-owned facilities. Contract data first produced or 
specifically used in the performance of such contracts must be 
considered as integral to and remaining with the facility or plant 
after termination of such contracts and thus available to DOE and its 
future contractors for the continued use of the facility or plant. 
However, it is recognized that these contracts by their nature cannot 
always be subject to one set of prescribed contract provisions which 
will always apply. Accordingly, the Rights in Technical Data--Facility 
clause set forth in 952.227-78 is to be used as a basic or minimal 
clause which may be modified or expanded with the concurrence of patent 
counsel to meet particular contract situations.
    (b) Whenever a contract has as a purpose the operation of a 
Government-owned research or production facility, the clause set forth 
at 952.227-78 shall normally be included in the contract. Inasmuch as 
this clause secures to the Government ownership, access to, and, if 
requested, delivery of all technical data first produced in the 
performance of the contract and access to and delivery of technical 
data which are specifically used in the performance of the contract, 
there is no need to include the Additional Technical Data Requirements 
Clause of 952.227-73.
    (c) Subcontracting. Unless otherwise directed by the contracting 
officer, the contractor shall be required to follow the policy and 
procedures of 927.402-1, 927.402-2, and 927.402-3 and shall employ the 
provisions of the Additional Technical Data Requirements clause of 
952.227-73 and the Rights in Technical Data (Long Form) clause of 
952.227-75, where appropriate, except in subcontracts for the design of 
special production plants or facilities or specially designed equipment 
for facilities or plants, in which instances contractors shall include 
the provisions of the Rights in Technical Data--Facility clause of 
952.227-78.
    (d) Optional clause--Limited rights in proprietary data. In 
contracts where it is determined that delivery of proprietary data is 
necessary with limited rights in the Government, the Rights in 
Technical Data clause of this section shall be supplemented by the 
additional paragraph (e), set forth in 952.227-79. Paragraph (e) 
provides that technical data may be specified in the contract as being 
excluded from the delivery requirements thereof. Alternatively, 
paragraph (e) may be limited or made applicable to only those classes 
of proprietary data determined as being necessary for delivery with 
limited rights. In addition, when furnishing proprietary data with the 
limited rights legend, paragraphs (a), (b) and (c) thereunder may be 
modified as follows. When proprietary data is to be furnished only for 
evaluation, paragraph (a) of the limited rights legend shall be used, 
and paragraphs (b) and (c), if otherwise inapplicable, may be deleted. 
When there is a programmatic requirement that proprietary data be 
disclosed to other DOE contractors only for information or use in 
connection with work performed under their contracts, paragraph (b) of 
the limited rights legend shall be used, and paragraphs (a) and (c) may 
be deleted if otherwise inapplicable. In either of the foregoing 
examples, the contractor may, if it can show the possibility of a 
conflict of interest because of disclosure of such data to certain 
contractors or evaluators, exclude contractors or evaluators from 
paragraph (a) or (b). If the data is required solely for emergency 
repair or overhaul, paragraph (c) of the limited rights legend shall be 
retained, and paragraphs (a) and (b) may, unless otherwise applicable, 
be deleted. In the event that it is determined that all of the 
paragraphs (a), (b) and (c) of the limited rights legend are to be 
deleted, the word ``none'' shall be inserted in the legend after the 
colon (:).
    (e) For contracts involving access to certain categories of DOE-
owned restricted data, as set forth in 10 CFR part 725, see 927.402-
1(h).
    18. Subsection 970.5204-XX is added to read as follows:

970.5204-XX  Patent Rights--Nonprofit Management and Operating 
Contractors

    As prescribed at 970.2703, insert the clause at 952.227-11, Patent 
Rights-Retention by the Contractor (Short Form) with the following 
changes:

Patent Rights--Nonprofit Management and Operating Contractors (XXX 
199X)

    1. Replace paragraph (e)(1) with the following:
    (e)(1) The contractor may request the right to reserve a 
revocable, nonexclusive, royalty-free license throughout the world 
in each subject invention to which the Government obtains title, 
except if the contractor fails to disclose the invention within the 
times specified in paragraph (c) of this clause. When DOE approves 
such reservation, the contractor's license will extend to its 
domestic subsidiary and affiliates, if any, within the corporate 
structure of which the contractor is a party and includes the right 
to grant sublicenses of the same scope to the extent the contractor 
was legally obligated to do so at the time the contract was awarded. 
The license is transferable only with the approval of DOE, except 
when transferred to the successor of that part of the contractor's 
business to which the invention pertains.
    2. Add the following paragraphs (m) and (n):
    (m) Transfer to successor contractor. (1) In the event of 
termination or expiration of this contract, the contractor shall 
transfer any unexpended balance of income received relating to 
intellectual property, in accordance with instructions from the 
contracting officer, to a successor contractor, or in the absence of 
a successor contractor, to such other entity as designated by the 
contracting officer. The contractor shall also transfer title, as 
one package, in all patents and patent applications, license 
agreements, accounts containing royalty revenues from such license 
agreements, including equity positions in third-party entities, and 
other intellectual property that arose under the performance of this 
contract, to the successor contractor or to the Government, as 
directed by the contracting officer.
    (2) The Government agrees that the recipient of such title shall 
assume any remaining obligations and liabilities in connection with 
the patents and patent applications.
    (n) Facilities license. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first 
actually reduced to practice in the course of or under this 
contract, the contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up license in and to 
any inventions or discoveries regardless of when conceived or 
actually reduced to practice or acquired by the contractor at any 
time through completion of this contract and which are incorporated 
or embodied in the construction of the facility or which are 
utilized in the operation of the facility or which cover articles, 
materials, or products manufactured at the facility (1) to practice 
or have practiced by or for the Government at the facility, and (2) 
to transfer such license with the transfer of that facility. The 
acceptance or exercise by the Government of these rights shall not 
prevent the Government at any time from contesting the 
enforceability, validity or scope of, or title to, any rights or 
patents herein licensed.

    19. Subsection 970.5204-YY is added to read as follows:

970.5204-YY  Patent Rights--Profit-Making Management and Operating 
Contractors

    As prescribed at 970.2703, insert the clause at 952.227-13, Patent 
Rights--Retention by the Government, with the following changes:

Patent Rights--Profit-Making Management and Operating Contractors (XXX 
199X)

    1. Add the following paragraphs (j) and (k):
    (j) Transfer to successor contractor.
    (1) In the event of termination or expiration of this contract, 
the contractor shall transfer any unexpended balance of income 
received relating to intellectual property, in accordance with 
instructions from the contracting officer, to a successor 
contractor, or in the absence of a successor contractor, to such 
other entity as designated by the contracting officer. The 
contractor shall also transfer title, as one package, in all patents 
and patent applications, license agreements, accounts containing 
royalty revenues from such license agreements, including equity 
positions in third-party entities, and other intellectual property 
that arose under the performance of this contract, to the successor 
contractor or to the Government, as directed by the contracting 
officer.
    (2) The Government agrees that the recipient of such title shall 
assume any remaining obligations and liabilities in connection with 
the patents and patent applications.
    (k) Facilities license.
    In addition to the rights of the parties with respect to 
inventions or discoveries conceived or first actually reduced to 
practice in the course of or under this contract, the contractor 
agrees to and does hereby grant to the Government an irrevocable, 
nonexclusive, paid-up license in and to any inventions or 
discoveries regardless of when conceived or actually reduced to 
practice or acquired by the contractor at any time through 
completion of this contract and which are incorporated or embodied 
in the construction of the facility or which are utilized in the 
operation of the facility or which cover articles, materials, or 
products manufactured at the facility (1) to practice or have 
practiced by or for the Government at the facility, and (2) to 
transfer such license with the transfer of that facility. The 
acceptance or exercise by the Government of these rights shall not 
prevent the Government at any time from contesting the 
enforceability, validity or scope of, or title to, any rights or 
patents herein licensed.

[FR Doc. 94-7112 Filed 3-28-94; 8:45 am]
BILLING CODE 6450-01-P