[Federal Register Volume 61, Number 135 (Friday, July 12, 1996)]
[Rules and Regulations]
[Pages 36611-36620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17431]


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DEPARTMENT OF ENERGY

10 CFR Part 784


Patent Waiver Regulation

AGENCY: Department of Energy.

ACTION: Final rule.

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SUMMARY: The Department of Energy (DOE) is publishing a final rule to 
recodify and update a patent waiver regulation that was incorporated in 
the Department of Energy Acquisition Regulations (DEAR) in 1984 
(applicable to contracts) and the DOE Assistance Regulations 
(applicable to grants and cooperative agreements). The final rule 
contains changes that conform the regulation provisions to post-1984 
statutory amendments, including the addition of terms and conditions 
for contractor retention of patent rights required by 35 U.S.C. 210. 
The rule also contains some new clarifying provisions and minor 
procedural changes to the DOE patent waiver process.
    This final rule will govern waiver of the Department's rights in 
inventions made under contracts, grants, cooperative agreements, 
understandings, or other DOE arrangements with entities other than 
small businesses and non-profit organizations. This rule will also 
apply to all participants in cooperative research and development 
agreements (CRADAs), with both Bayh-Dole entities and non-Bayh-Dole 
entities. Rights in inventions made under DOE funding agreements with 
small businesses and nonprofit organizations are generally controlled 
by 35 U.S.C. 202, which provides, with certain exceptions, for 
contractor retention of title to inventions. However, this rule does 
apply to waiver of rights in inventions when DOE has reserved title and 
other rights in funding agreements with nonprofit organizations and 
small business firms pursuant to the exceptions in 35 U.S.C. 202.

EFFECTIVE DATE: August 12, 1996.

FOR FURTHER INFORMATION CONTACT: Michael P. Hoffman, Office of 
Assistant General Counsel for Technology Transfer and Intellectual 
Property, 1000 Independence Avenue, S.W., Washington, D.C. 20585. 
Telephone (202) 586-3441.

SUPPLEMENTARY INFORMATION:

I. Background
II. Section-by-Section Discussion of Final Rule
III. Procedural Requirements
    A. Applicable Procedures
    B. Review Under Executive Order 12886
    C. Review Under Regulatory Flexibility Act
    D. Review Under NEPA

[[Page 36612]]

    E. Review Under Paperwork Reduction Act
    F. Review Under Executive Order 12612
    G. Review Under Executive Order 12778
    H. Review Under the Unfunded Mandates Reform Act

I. Background

    The Government is required by law to acquire title to inventions 
made under DOE contracts, grants, agreements, understandings, or other 
arrangements with entities other than small businesses or nonprofit 
organizations pursuant to section 152 of the Atomic Energy Act of 1954, 
42 U.S.C. 2182, and section 9 of the Federal Nonnuclear Energy Research 
and Development Act of 1974, 42 U.S.C. 5908. Both of these acts provide 
that the Secretary of Energy may waive rights to such inventions under 
certain circumstances.
    The DOE regulations covering waiver of patent rights are in the DOE 
Procurement Regulation at 41 CFR Part 9-9, principally at 41 CFR 9-
9.109-6. After the Federal Acquisition Regulations System became 
effective in 1984, the DOE patent waiver regulation was continued in 
effect with regard to procurements and financial assistance in the 
DEAR, 48 CFR 927.300, and in DOE Assistance Regulations, 10 CFR 600.33, 
respectively. Today's final rule will recodify and publish these 
regulations and make them conveniently available to the public.
    In today's final rule, DOE also is updating the patent waiver 
regulation to make changes required by post-1984 statutory amendments 
(as explained below), and is using this opportunity to make clarifying 
and minor procedural changes to the regulation. The revised regulation 
is being codified in a part of the Code of Federal Regulations that is 
separate from the DEAR, because patent waivers may be requested in 
connection with DOE arrangements other than procurement contracts, such 
as grants, cooperative agreements and CRADAs.
    Today's final rule reflects statutory changes that are not 
referenced in the regulation at 41 CFR part 9-9. Specifically, patent 
waiver terms and conditions in the Federal Nonnuclear Energy Research 
and Development Act of 1974 were repealed by the Bayh-Dole patent and 
trademark amendments of 1980, Pub. L. 96-517, Sec. 7 (94 Stat. 3027). 
Subsequently, a requirement for certain terms and conditions when a 
non-Bayh-Dole contractor retains title to inventions, pursuant to 35 
U.S.C. 202, was imposed by the Trademark Clarification Act of 1984, 
Pub. L. 98-620, title V (98 Stat. 3367). Accordingly, today's final 
rule deletes the waiver terms and conditions repealed by the Bayh-Dole 
patent and trademark amendments of 1980, and sets forth waiver terms 
and conditions for contractor retention of rights required by 35 U.S.C. 
210 and set forth in the DEAR at 48 CFR 952.227-11.

II. Section-by-Section Discussion of Final Rule

    Section 784.1 of today's regulation presents the scope and 
applicability of the regulation. Today's regulation covers waiver of 
the Government's rights in inventions made under DOE contracts, grants, 
agreements, understandings, or other arrangements with entities other 
than small businesses or nonprofit organizations, as well as agreements 
with small businesses or non profit organizations where the agreement 
is not a funding agreement. Allocation of rights to inventions made 
under DOE contracts, grants and other funding agreements with small 
businesses or nonprofit organizations is controlled by 35 U.S.C. 200 et 
seq., but today's regulation also governs waivers of rights in 
inventions falling within exceptions to the policy of that law. The 
scope of the regulation at 41 CFR 9-9.100 included policies and 
procedures with respect to inventions made under arrangements with DOE, 
and is not, as here, limited to policies and procedures regarding 
waiver of the Government's invention rights.
    Section 784.3 summarizes the law underlying the regulation (42 
U.S.C. 2182 and 42 U.S.C. 5908), i.e., that while title to inventions 
under DOE contracts or other arrangements with entities other than 
small businesses or nonprofit organizations vests in the Government, 
the Department may waive its rights to such inventions if such waiver 
is determined to be in the public interest. Such determinations are to 
be made in accordance with statutorily prescribed objectives. The 
regulation, at 41 CFR 9-9.109-6(a), is similar, but it does not have an 
exclusion for contracts with small businesses or nonprofit 
organizations which under 35 U.S.C. 202, may, with certain exceptions, 
elect to retain invention rights without a waiver.
    Section 784.3(c) clarifies that references to ``contract'' in the 
regulation include grants, cooperative agreements, and other 
arrangements, consistent with the definition of ``contract'' provided 
in the regulation at 41 CFR 9-9.107-5(a)(a)(2) and in the statute at 42 
U.S.C. 5908(m), although not consistent with the definition of 
``contract'' elsewhere, such as at 10 CFR 600.3.
    Section 784.4 recites considerations, specified by statute, that 
are to be included in making determinations to grant advance patent 
waivers. For clarity, a definition of an advance waiver is provided in 
today's regulation. Considerations (l) and (m) have been modified to 
reflect 35 U.S.C. 202.
    Section 784.5 recites statutory considerations to be included in 
Government determinations to waive title rights in a particular 
identified invention. Considerations (k) and (l) have been modified to 
reflect 35 U.S.C. 202.
    Section 784.6 recites additional national security related 
considerations for waiver of certain sensitive inventions, as provided 
in Pub. L. 99-661 (42 U.S.C. 7261a).
    Section 784.7 provides guidance for requesting a class waiver, 
i.e., a waiver that applies to a class of persons or a class of 
inventions. Pertinent objectives and considerations set forth in 
sections 784.3 through 784.6 are to be included in class waiver 
determinations. Class waivers are authorized by statute (42 U.S.C. 
5908) and are provided for in the regulation at 41 CFR 9-9.109-6(a)(1).
    Section 784.8 provides general procedures concerning the patent 
waiver process, including timeliness requirements for requesting 
waivers, information concerning DOE's processing of waiver requests, 
information concerning implementation of a waiver, and information 
concerning requests for reconsideration of waiver denials. These 
regulations track those in 41 CFR 9-9.109-6.
    Section 784.8(a) has been modified slightly from the regulation at 
41 CFR 9-9.109-6(a)(1) to reflect class waiver requests.
    Section 784.8(b) provides reference to a patent waiver clause to be 
included when advance waivers are granted, based on the clause provided 
in the Federal Acquisition Regulation at 48 CFR 952.227-13; and 
includes guidance for seeking an advance waiver for an identified 
invention provided in 41 CFR 9-9.109-6(a)(1).
    Section 784.8(c) reduces from 9 months to 8 months the time period 
for requesting waiver for an identified invention to allow for a longer 
time period (from three months to four months) for the Government to 
perfect rights within the one-year time period, where a statutory bar 
may arise due to public disclosure of an invention for which a waiver 
request is not submitted. It also adds further guidance regarding 
timeliness for submitting waiver requests and requirements for 
reimbursement of patent costs to conform to current practice.
    Section 784.8(d) adds a sentence regarding obtaining of an 
agreement to

[[Page 36613]]

waiver terms and conditions to conform to current practice.
    Sections 784.8 (e), (f) and (g), regarding processing by DOE of 
waiver requests, have been modified slightly to better reflect current 
DOE practice.
    Section 784.8(h) discusses the right of a waiver requestor to 
request reconsideration when a waiver request has been denied.
    Section 784.8(I) has been added to provide guidance regarding 
submission of an instrument confirming the Government's rights in 
waived inventions, to conform to current practice, and as provided for 
generally in the current regulation at 41 CFR 9-9.109-1(b).
    Section 784.9 provides detailed direction concerning the content of 
waiver requests. A self-explanatory form for requesting waivers is 
available from the Contracting Officer or DOE Patent Counsel. 
Generally, waiver requests must include identification of the 
requestor, identification of the pertinent contract, including a 
description of the contract effort, the nature of the requested waiver, 
and information addressing waiver policies and considerations set forth 
in the regulation. In addition, for an identified invention waiver 
request, information concerning the specific invention, including names 
of all inventors and patent status of the invention, is required. The 
source of the language for this section is 41 CFR 9-9.109-6(e).
    Section 784.9(a) adds a reference to the OMB control number for the 
forms that persons must use to request advance and identified invention 
waivers.
    Section 784.9(c) adds a reference to a statutory provision (35 
U.S.C. 205) enacted since issuance of the current regulation that 
relates to treatment of proprietary information that may be contained 
in waiver requests.
    Section 784.10 provides for public availability of records of 
waiver determinations, as required by 42 U.S.C. 5908(c). This section 
replaces 41 CFR 9-9.109-6(f). The Assistant General Counsel for 
Technology Transfer and Intellectual Property will be responsible for 
maintaining and updating the publicly available record of waiver 
determinations.
    Section 784.11 describes typical situations that may be appropriate 
for advance waivers, including cost-shared contracts, situations where 
DOE is providing relatively modest increased funding to a substantially 
privately-sponsored program, and situations where a waiver is necessary 
to obtain the participation of a particular contractor. In addition, 
the section describes possible limitations on the scope of waivers 
depending on circumstances surrounding a particular waiver, e.g., 
restrictions to fields of use that are not the primary object of the 
contract effort. Further, the section addresses the issue of a prime 
contractor's obtaining rights to inventions made by a subcontractor. 
This section has been slightly modified from its counterpart in 41 CFR 
9.109-6(g) to reflect current practice and the enactment of, and 
amendments to, 35 U.S.C. 202. In addition, section 784.11(b)(ii), 
regarding rights in subcontractor inventions, and contained in the 
current regulations at 41 CFR 9-9.107-4(h)(2), has been incorporated 
into this regulation. Subsection (c) is derived from 41 CFR 9-9.109-
6(g)(3).
    Section 784.12 sets forth the ``Patent Rights--Waiver'' clause 
containing the terms and conditions for waivers. The current regulation 
does not contain a patent waiver clause, but instead contains a 
section, 41 CFR 9-9.109-6(I) entitled ``Terms and conditions of 
waivers.'' The clause of the final regulation is based on the 
contractor retention of rights clause contained in the Federal 
Acquisition Regulation at 48 CFR 52.227-12, with certain additions. A 
section (k), Background Patents; a section (p), Waiver Termination; a 
section (q), Atomic Energy; a section (r), Publication; and a section 
(s), Forfeiture of Rights in Unreported Subject Inventions, are 
included, representing a continuation of previous DOE policy contained 
in the current regulation at 41 CFR 9-9.107-5(a)(k), 41 CFR 9-9.109-
6(j), 41 CFR 9-9.107-5(a)(l)(1), 41 CFR 9-9.107-5(a)(f) and 41 CFR 9-
9.107-5(a)(g), respectively. Subsection (a) incorporates definitions 
from 35 U.S.C. 201(d), 42 U.S.C. 5908(m) and 41 CFR 9-9.107-5. A 
sentence has been added to (p) referring to the ``Contractor's minimum 
license'' provision, Subsection (e).
    Section 784.13 provides effective dates for various types of 
waivers. This has been taken from 41 CFR 9-9.109-6(k).

III. Procedural Requirements

A. Applicable Procedures

    This final rule recodifies and updates DOE's patent waiver 
regulations. The rule does not change any DOE substantive policies or 
establish new requirements affecting the rights and obligations of the 
public in this area. The rule does include several procedural changes, 
but DOE has determined that these changes will not have a significant 
impact on contractors, grantees, or other persons who may request 
waiver of the Government's rights in inventions made under contracts, 
grants, and other DOE agreements and arrangements. Therefore, DOE has 
determined that prior notice and an opportunity for public comment on 
the rule is not required.

B. Review Under Executive Order 12886

    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.

C. Review Under Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, requires, 
in part, that an agency prepare an initial regulatory flexibility 
analysis for any rule, unless it determines that the rule will not have 
a ``significant economic impact'' on a substantial number of small 
entities. The final rule concerns policy and procedures for patent 
waivers affecting entities that are generally not small businesses 
because there is separate statutory authority governing disposition of 
invention rights of Government contractors that are small businesses. 
The final rule imposes no significant burdens or impact on small 
entities. Therefore, as required by Section 605(b), DOE certifies that 
the final rule will not have a significant economic impact on a 
substantial number of small entities.

D. Review Under NEPA

    DOE has determined that issuance of this final rule is not a major 
federal action significantly affecting the quality of the human 
environment within the meaning of the National Environmental Policy Act 
of 1969 (NEPA), 42 U.S.C. 4321 et seq., and therefore that neither an 
environmental assessment nor an environmental impact statement is 
required. Categorical exclusion A2 in DOE's regulations implementing 
NEPA, appendix A of subpart D of 10 CFR part 102, applies to this 
rulemaking. Categorical exclusion A2 encompasses clarifying or 
administrative modifications of rules pertaining to contracts.

E. Review Under Paperwork Reduction Act

    The reporting requirements contained in 41 CFR 9-9.109-6 were 
approved by OMB and assigned control no. 1901-

[[Page 36614]]

0800. This final rule imposes no new reporting requirement.

F. 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 action sets forth DOE policies and procedures 
governing requests for waiver of the Government's rights to inventions 
made in the course of contracts, grant agreements, cooperative 
agreements, and other arrangements that further DOE's mission. DOE has 
determined that the final rule will not have a substantial direct 
effect on the institutional interests or traditional functions of 
States.

G. Review Under Executive Order 12778

    Section 2 of Executive Order 12778, 56 FR 55195 (October 25, 1991), 
instructs each agency to adhere to certain requirements in promulgating 
new regulations. These requirements, set forth in section 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 legal conduct, and promoting 
simplification and burden reduction. Agencies are also instructed to 
make every reasonable effort to ensure that regulations define key 
terms and are clear on such matters as exhaustion of administrative 
remedies and preemption. DOE certifies that today's regulatory action 
meets the requirements of section 2(a) and (b)(2) of Executive Order 
12778.

H. Review Under the Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (the Act), 
enacted as Pub. L. 104-4 on March 22, 1995, requires each Federal 
agency, to the extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. 
Section 204(a) of the Act, 2 U.S.C. 1534(a), requires the Federal 
agency to develop an effective process to permit timely input by 
elected officers (or their designees) of State, local, and tribal 
governments on a proposed ``significant intergovernmental mandate.'' A 
``significant intergovernmental mandate'' under the Act is any 
provision in a Federal agency regulation that: (1)would impose an 
enforceable duty upon State, local, and tribal governments, in the 
aggregate, of $100 million (adjusted annually for inflation) in any one 
year. Section 203 of the Act, 2 U.S.C. 1533, which supplements section 
204(a), provides that before establishing any regulatory requirements 
that might significantly or uniquely affect small governments, the 
agency shall have developed a plan that, among other things, provides 
for notice to potentially affected small governments, if any, and for a 
meaningful and timely opportunity to provide input in the development 
of regulatory proposals.
    This rule does not contain any Federal intergovernmental or private 
sector mandate. Therefore, the requirements of title II of the Unfunded 
Mandates Reform Act of 1995 do not apply.

List of Subjects in 10 CFR Part 784

    Government contracts, Inventions and patents.

    Issued in Washington, D.C., on July 2, 1996.
Robert R. Nordhaus,
General Counsel.

    For the reasons set forth in the preamble, Chapter III of Title 10 
of the Code of Federal Regulations is amended by adding new Part 784 to 
read as set forth below.

PART 784--PATENT WAIVER REGULATION

Sec.
784.1  Scope and applicability.
784.2  Definitions.
784.3  Policy.
784.4  Advance waiver.
784.5  Waiver of identified inventions.
784.6  National security considerations for waiver of certain 
sensitive inventions.
784.7  Class waiver.
784.8  Procedures.
784.9  Content of waiver requests.
784.10  Record of waiver determinations.
784.11  Bases for granting waivers.
784.12  Terms and conditions of waivers.
784.13  Effective dates.

    Authority: 42 U.S.C. 7151; 42 U.S.C. 5908; 42 U.S.C. 2182; 35 
U.S.C. 202 and 210; 42 U.S.C. 7261a.

PART 784--PATENT WAIVER REGULATION


Sec. 784.1  Scope and applicability.

    (a) This part states the policy and establishes the procedures, 
terms and conditions governing waiver of the Government's rights in 
inventions made under contracts, grants, agreements, understandings or 
other arrangements with the Department of Energy (DOE).
    (b) This part applies to all inventions conceived or first actually 
reduced to practice in the course of or under any contract, grant, 
agreement, understanding, or other arrangement with or for the benefit 
of DOE (including any subcontract, subgrant, or subagreement), the 
patent rights disposition of which is governed by section 152 of the 
Atomic Energy Act of 1954, 42 U.S.C. 2182, or section 9 of the Federal 
Nonnuclear Energy Research and Development Act of 1974, 42 U.S.C. 5908. 
In funding agreements with nonprofit organizations or small business 
firms, when title or other rights are reserved to the Government under 
the authority of 35 U.S.C. 202(a), this part will apply to any waiver 
of such rights. The patent waiver provisions in this part supersede the 
patent waiver regulations previously included with patent regulations 
at 41 CFR Part 9-9.100.


Sec. 784.2  Definitions.

    As used in this Part:
    Contract means procurement contracts, grants, agreements, 
understandings and other arrangements (including Cooperative Research 
and Development Agreements [CRADAs], Work for Others and User Facility 
agreements, which includes research, development, or demonstration 
work, and includes any assignment or substitution of the parties, 
entered into, with, or for the benefit of DOE.
    Contractor means entities performing under contracts as defined 
above.
    Patent Counsel means the DOE Patent Counsel assisting the 
contracting activity.


Sec. 784.3  Policy.

    (a) Section 6 of Public Law 96-517 (the Bayh-Dole patent and 
trademark amendments of 1980), as amended, as codified at 35 U.S.C. 
200--212, provides that title to inventions conceived or first actually 
reduced to practice in the course of or under any contract, grant, 
agreement, understanding, or other arrangement entered into with or for 
the benefit of the Department of Energy (DOE) vests in the United 
States, except where 35 U.S.C. 202 provides otherwise for nonprofit 
organizations or small

[[Page 36615]]

business firms. However, where title to such inventions vests in the 
United States, the Secretary of Energy (hereinafter Secretary) or 
designee may waive all or any part of the rights of the United States, 
subject to required terms and conditions, with respect to any invention 
or class of inventions made or which may be made by any person or class 
of persons in the course of or under any contract of DOE if it is 
determined that the interests of the United States and the general 
public will best be served by such waiver. In making such 
determinations, the Secretary or designee shall have the following 
objectives:
    (1) Making the benefits of the energy research, development, and 
demonstration program widely available to the public in the shortest 
practicable time;
    (2) Promoting the commercial utilization of such inventions;
    (3) Encouraging participation by private persons in DOE's energy 
research, development, and demonstration programs; and
    (4) Fostering competition and preventing undue market concentration 
or the creation or maintenance of other situations inconsistent with 
the antitrust laws.
    (b) If it is not possible to attain the objectives in paragraphs 
(a)(1) through (4) immediately and simultaneously for any specific 
waiver determination, the Secretary or designee will seek to reconcile 
these objectives in light of the overall purposes of the DOE patent 
waiver policy, as set forth in section 152 of the Atomic Energy Act of 
1954, 42 U.S.C. 2182, section 9 of the Federal Nonnuclear Energy 
Research and Development Act of 1974, 42 U.S.C. 5908, Public Law 99-
661, 42 U.S.C. 7261a, and, where not inconsistent therewith, the 
Presidential Memorandum to the Heads of Executive Departments and 
Agencies on Government Patent Policy issued February 18, 1983 and 
Executive Order No. 12591 issued April 10, 1987.
    (c) The policy set forth in this section is applicable to all types 
of contracts as defined in Sec. 784.2 of this part.


Sec. 784.4  Advance waiver.

    This section covers inventions that may be conceived or first 
actually reduced to practice in the course of or under a particular 
contract. In determining whether an advance waiver will best serve the 
interests of the United States and the general public, the Secretary or 
designee (currently the Assistant General Counsel for Technology 
Transfer and Intellectual Property) shall, at a minimum, specifically 
include as considerations the following:
    (a) The extent to which the participation of the contractor will 
expedite the attainment of the purposes of the program;
    (b) The extent to which a waiver of all or any part of such rights 
in any or all fields of technology is needed to secure the 
participation of the particular contractor;
    (c) The extent to which the work to be performed under the contract 
is useful in the production or utilization of special nuclear material 
or atomic energy;
    (d) The extent to which the contractor's commercial position may 
expedite utilization of the research, development, and demonstration 
results;
    (e) The extent to which the Government has contributed to the field 
of technology to be funded under the contract;
    (f) The purpose and nature of the contract, including the intended 
use of the results developed thereunder;
    (g) The extent to which the contractor has made or will make 
substantial investment of financial resources or technology developed 
at the contractor's private expense which will directly benefit the 
work to be performed under the contract;
    (h) The extent to which the field of technology to be funded under 
the contract has been developed at the contractor's private expense;
    (i) The extent to which the Government intends to further develop 
to the point of commercial utilization the results of the contract 
effort;
    (j) The extent to which the contract objectives are concerned with 
the public health, public safety, or public welfare;
    (k) The likely effect of the waiver on competition and market 
concentration;
    (l) In the case of a domestic nonprofit educational institution 
under an agreement not governed by Chapter 18 of Title 35, United 
States Code, the extent to which such institution has a technology 
transfer capability and program approved by the Secretary or designee 
as being consistent with the applicable policies of this section;
    (m) The small business status of the contractor under an agreement 
not governed by Chapter 18 of Title 35, United States Code, and
    (n) Such other considerations, such as benefit to the U.S. economy, 
that the Secretary or designee may deem appropriate.


Sec. 784.5  Waiver of identified inventions.

    This section covers the relinquishing by the Government to the 
contractor or inventor of title rights in a particular identified 
subject invention. In determining whether such a waiver of an 
identified invention will best serve the interests of the United States 
and the general public, the Secretary or designee shall, at a minimum, 
specifically include as considerations the following:
    (a) The extent to which such waiver is a reasonable and necessary 
incentive to call forth private risk capital for the development and 
commercialization of the invention;
    (b) The extent to which the plans, intentions, and ability of the 
contractor or inventor will obtain expeditious commercialization of 
such invention;
    (c) The extent to which the invention is useful in the production 
or utilization of special nuclear material or atomic energy;
    (d) The extent to which the Government has contributed to the field 
of technology of the invention;
    (e) The purpose and nature of the invention, including the 
anticipated use thereof;
    (f) The extent to which the contractor has made or will make 
substantial investment of financial resources or technology developed 
at the contractor's private expense which will directly benefit the 
commercialization of the invention;
    (g) The extent to which the field of technology of the invention 
has been developed at the contractor's expense;
    (h) The extent to which the Government intends to further develop 
the invention to the point of commercial utilization;
    (i) The extent to which the invention is concerned with the public 
health, public safety, or public welfare;
    (j) The likely effect of the waiver on competition and market 
concentration;
    (k) In the case of a domestic nonprofit educational institution 
under an agreement not governed by Chapter 18, Title 35, United States 
Code, the extent to which such institution has a technology transfer 
capability and program approved by the Secretary or designee as being 
consistent with the applicable policies of this section;
    (l) The small business status of the contractor, under an agreement 
not governed by Chapter 18 of Title 35, United States Code; and,
    (m) Such other considerations, such as benefit to the U.S. economy 
that the Secretary or designee may deem appropriate.


Sec. 784.6  National security considerations for waiver of certain 
sensitive inventions.

    (a) Whenever, in the course of or under any Government contract or 
subcontract of the Naval Nuclear

[[Page 36616]]

Propulsion Program or the nuclear weapons programs or other atomic 
energy defense activities of the Department of Energy, a contractor 
makes an invention or discovery to which title vests in the Department 
of Energy pursuant to statute, the contractor may request waiver of any 
or all of the Government's property rights. The Secretary of Energy or 
designee may decide to waive the Government's rights.
    (b) In making a decision under this section, the Secretary or 
designee shall consider, in addition to the objectives of DOE waiver 
policy as specified in Sec. 784.3(a)(1) through (4), and the 
considerations specified in Sec. 784.4 for advance waivers, and 
Sec. 784.5 for waiver of identified inventions, the following:
    (1) Whether national security will be compromised;
    (2) Whether sensitive technical information (whether classified or 
unclassified) under the Naval Nuclear Propulsion Program or the nuclear 
weapons programs or other atomic energy defense activities of the 
Department of Energy for which dissemination is controlled under 
Federal statutes and regulations will be released to unauthorized 
persons;
    (3) Whether an organizational conflict of interest contemplated by 
Federal statutes and regulations will result, and
    (4) Whether waiving such rights will adversely affect the operation 
of the Naval Nuclear Propulsion Program or the nuclear weapons programs 
or other atomic energy defense activities of the Department of Energy.
    (c) A decision under this Sec. 784.6 shall be made within 150 days 
after the date on which a complete request for waiver, as described by 
paragraph (d) of this section, has been submitted to the Patent Counsel 
by the contractor.
    (d) In addition to the requirements for content which apply 
generally to all waiver requests under paragraph (a) of this section, a 
requestor must include a full and detailed statement of facts, to the 
extent known by or available to the requestor, directed to the 
considerations set forth in paragraphs (b)(1) through (4) of this 
section, as applicable. To be considered complete, a waiver request 
must contain sufficient information, in addition to the content 
requirements under paragraphs (a) and (b) of this section, to allow the 
Secretary or designee to make a decision under this section. For 
advance waiver requests, such information shall include, at a minimum:
    (1) An identification of all of the requestor's contractual 
arrangements involving the Government (including contracts, 
subcontracts, grants, or other arrangements) in which the technology 
involved in the contract was developed or used and any other funding of 
the technology by the Government, whether direct or indirect, involving 
any other party, of which the requestor is aware;
    (2) A description of the requestor's past, current, and future 
private investment in and development of the technology which is the 
subject of the contract. This includes expenditures not reimbursed by 
the Government on research and development which will directly benefit 
the work to be performed under the instant contract, the amount and 
percentage of contract costs to be shared by the requestor, the out-of-
pocket costs of facilities or equipment to be made available by the 
requestor for performance of the contract work which are not charged 
directly or indirectly to the Government under contract, and the 
contractor's plans and intentions to further develop and commercialize 
the technology at private expense;
    (3) A description of competitive technologies or other factors 
which would ameliorate any anticompetitive effect of granting the 
waiver.
    (4) Identification of whether the contract pertains to work that is 
classified, or sensitive, i.e., unclassified but controlled pursuant to 
section 148 of the Atomic Energy Action of 1954, as amended (42 U.S.C. 
2168), or subject to export control under Chapter 17 of the Military 
Critical Technology List (MCTL) contained in Department of Defense 
Directive 5230.25 including identification of all principal uses of the 
subject matter of the contract, whether inside or outside the 
contractor program, and an indication of whether any such uses involve 
classified or sensitive technologies.
    (5) Identification of all DOE and DOD programs and projects in the 
same general technology as the contract for which the requestor intends 
to be providing program planning advice or has provided program 
planning advice within the last three years.
    (e) For identified invention requests under this section, such 
requests shall include at a minimum:
    (1) A brief description of the intentions of the requestor (or its 
present or intended licensee) to commercialize the invention. This 
description should include:
    (i) Estimated expenditures,
    (ii) Anticipated steps,
    (iii) The associated time periods to bring the invention to 
commercialization, and
    (iv) A statement that requestor (or its present or intended 
licensee) has the capability to carry out its stated intentions.
    (2) A description of any continuing Government funding of the 
development of the invention (including investigation of materials or 
processes for use therewith), from whatever Government source, whether 
direct or indirect, and, to the extent known by the requestor, any 
anticipated future Government funding to further develop the invention.
    (3) A description of competitive technologies or other factors 
which would ameliorate any anticompetitive effects of granting the 
waiver.
    (4) A statement as to whether or not the requestor would be willing 
to reimburse the Department of Energy for any and all costs and fees 
incurred by the Department in the preparation and prosecution of the 
patent applications covering the invention that is the subject of the 
waiver request.
    (5) Where applicable, a statement of reasons why the request was 
not timely filed in accordance with the applicable patent rights clause 
of the contract, or why a request for an extension of time to file the 
request was not filed in a timely manner.
    (6) Identification of whether the invention pertains to work that 
is classified, or sensitive, i.e., unclassified but controlled pursuant 
to section 148 of the Atomic Energy Act of 1954, as amended (42 U.S.C. 
2168), or subject to export control under Chapter 17 of the Military 
Critical Technology List (MCTL) contained in Department of Defense 
Directive 5230.25, including identification of all principal uses of 
the invention inside or outside the contractor program, and an 
indication of whether any such uses involve classified or sensitive 
technologies.
    (7) Identification of all DOE and DOD programs and projects in the 
same general technology as the invention for which the requestor 
intends to be providing program planning advice or has provided program 
planning advice within the last three years.
    (8) A statement of whether a classification review of the invention 
disclosure, any resulting patent application(s), and/or any reports and 
other documents disclosing a substantial portion of the invention, has 
been made, together with any determinations on the existence of 
classified or sensitive information in either the invention disclosure, 
the patent application(s), or reports or other documents disclosing a 
substantial portion of the invention; and
    (9) Identification of any and all proposals, work for other 
activities, or other arrangements submitted by the

[[Page 36617]]

requestor, DOE, or a third party, of which requestor is aware, which 
may involve further funding of the work on the invention at either the 
contractor facility where the invention arose or another facility owned 
by the Government.
    (f) Patent Counsel will notify the requestor promptly if the waiver 
request is found not to be a complete request and, in that event, will 
provide the requestor with a reasonable period, not to exceed 60 days, 
to correct any such incompleteness. If requestor does not respond 
within the allotted time period, the waiver request will be considered 
to be withdrawn. If requestor responds within the allotted time period, 
but the submittal is still deemed incomplete or insufficient, the 
waiver request may be denied.
    (g) As set forth in paragraph (c) of this section, waiver decisions 
shall be made within 150 days after the date on which a complete 
request for waiver of such rights, as specified in this section, has 
been submitted by the requestor to the DOE Patent Counsel. If the 
original waiver request does not result in a communication from DOE 
Patent Counsel indicating that the request is incomplete, the 150-day 
period for decision commences on the date of receipt of the waiver 
request. If the original waiver request results in a communication from 
DOE Patent Counsel indicating that the request is incomplete, the 150-
day period for decision commences on the date on which supplementary 
information is received by Patent Counsel sufficient to make the waiver 
request complete. For advance waiver requests, if requestor is not 
notified that the request is incomplete, the 150-day period for 
decision commences on the date of receipt of the request, or on the 
date on which negotiation of contract terms is completed, whichever is 
later.
    (h) Failure of DOE to make a patent waiver decision within the 
prescribed 150-day period shall in no way be construed as a grant of 
the waiver.


Sec. 784.7  Class waiver.

    This section covers relinquishing of patent title rights by the 
Government to a class of persons or to a class of inventions. The 
authorization for class waivers is to be found at 42 U.S.C. 5908(c). 
Class waivers may be appropriate in situations where all members of a 
particular class would likely qualify for an advance or identified 
invention waiver. Normally, class waivers are originated by the 
Department. However, any person with a direct and substantial interest 
in a DOE program may request a class waiver by forwarding a written 
request therefor to the Patent Counsel. While no particular format for 
requesting a class waiver is prescribed, any request for a class waiver 
and any resulting determination by the Secretary or designee must 
address the pertinent objectives and considerations set forth in 
Secs. 784.3(a), 784.4, 784.5, and 784.6.


Sec. 784.8  Procedures.

    (a) All requests for waivers shall be in writing. Each request for 
a waiver other than a class waiver shall include the information set 
forth in Sec. 784.9. Such requests may be submitted by existing or 
prospective contractors in the case of requests for an advance waiver 
and by contractors, including successor contractors at a facility, or 
employee-inventors in the case of requests for waiver of identified 
inventions.
    (b) A request for an advance waiver should be submitted to the 
Contracting Officer (subcontractors may submit through their prime 
contractors) at any time prior to execution of the contract or 
subcontract, or within thirty days thereafter, or within such longer 
period as may be authorized by Patent Counsel for good cause shown in 
writing. If the purpose, scope, or cost of the contract is 
substantially altered by modification or extension after the waiver is 
granted, a new waiver request will be required. When advance waivers 
are granted, the provisions of the ``Patent Rights--Waiver'' clause set 
forth in Sec. 784.12 shall be used in contracts which are the subject 
of the waivers, unless modified with the approval of the Patent Counsel 
to conform to the scope of the waiver granted. (See Sec. 784.12.) 
Advance waivers may be requested for all inventions which may be 
conceived or first actually reduced to practice under a DOE contract. 
An advance waiver may also be requested for an identified invention 
conceived by the contractor before the contract but which may be first 
actually reduced to practice under the contract. Such waiver request 
must include a copy of any patent or patent application covering the 
identified invention, or if no patent application has been filed, a 
complete description of the invention.
    (c) A request for waiver (other than an advance or class waiver) 
for an identified invention must be submitted to the Patent Counsel at 
the time the invention is to be reported to DOE or not later than eight 
months after conception and/or first actual reduction to practice, 
whichever occurs first in the course of or under the contract, or such 
longer period as may be authorized by Patent Counsel for good cause 
shown in writing by the requestor. The time for submitting a waiver 
request will not normally be extended past the time the invention has 
been advertised for licensing by DOE. If the Government has already 
filed a patent application on the invention, the requestor should 
indicate whether or not it is willing to reimburse the Government for 
the costs of searching, prosecution, filing and maintenance fees, in 
the event the waiver is granted.
    (d) If the request for waiver contains insufficient information, 
the Patent Counsel may seek additional information from the requestor 
and from other sources. The Patent Counsel will thoroughly analyze the 
request in view of each of the objectives and considerations and shall 
also consider the overall rights obtained by the Government in the 
patent, copyright, and data clauses of the contract. Where it appears 
that a waiver of a lesser part of the rights of the United States than 
requested would be more appropriate in view of the policies set forth, 
the Patent Counsel should attempt to negotiate a compromise acceptable 
to both the requestor and DOE. If approval of a waiver is recommended, 
Patent Counsel shall obtain an indication of agreement by the requestor 
to the proposed waiver scope, terms and conditions.
    (e) The Patent Counsel will prepare a Statement of Considerations 
setting forth the rationale for either approving or denying the waiver 
request and will forward the Statement to the General Counsel or 
designee for review thereof. While the Statement need not provide 
specific findings as to each and every consideration of Sec. 784.4 or 
Sec. 784.5 of this part, it will cover those that are decisive, and it 
will explain the basis for the recommended determination. There may be 
occasions when the application of the various individual considerations 
of Sec. 784.4 or Sec. 784.5 of this part to a particular case could 
conflict, and in those instances the conflict will be reconciled giving 
due regard to the overall policies set forth in 784.3(a) (1) through 
(4).
    (f) The Patent Counsel will also obtain comments from the 
appropriate DOE program organization to assist the Patent Counsel in 
the waiver determination. Additionally, if any other Federal Government 
entity has provided funding or will be providing funding, or if a 
subject invention has been made in whole or in part by an employee of 
that entity, Patent Counsel shall obtain permission to waive title to 
the undivided interest in the invention from the cognizant official of 
that entity. In situations where time does not permit a delay in 
contract negotiations for the preparation and mailing of a full written

[[Page 36618]]

statement, field Patent Counsel may submit a recommendation on the 
waiver orally to the Assistant General Counsel for Technology Transfer 
and Intellectual Property, who upon verbal consultation with the 
appropriate DOE program organization, shall provide a verbal decision 
to field Patent Counsel. All oral actions shall be promptly confirmed 
in writing. In approving waiver determinations, the Secretary or 
designee shall objectively review all requests for waiver in view of 
the objectives and considerations set forth in Secs. 784.3 through 
784.6. If the determination and the rationale therefor is not 
accurately reflected in the Statement of Considerations which has been 
submitted for approval, a new Statement of Considerations shall be 
prepared.
    (g) In the event that a request for advance waiver is approved 
after the effective date of the contract, the Patent Counsel shall 
promptly notify the requestor by letter of the determination and the 
basis therefor. The letter shall state the scope, terms and conditions 
of such waiver. If the terms and conditions of an approved advance 
waiver were not incorporated in the contract when executed, the letter 
shall inform the requestor that the advance waiver shall be effective 
as of the effective date of the contract for an advance waiver of 
inventions identified, i.e., conceived prior to the effective date of 
the contract, or as of the date the invention is reported with an 
election by the contractor to retain rights therein, i.e., for an 
invention conceived or first actually reduced to practice after the 
effective date of the contract; provided a copy of the letter is signed 
and returned to the Contracting Officer by the requestor acknowledging 
the acceptance of the scope, terms and conditions of the advance 
waiver. After acceptance by the contractor of an advance waiver, the 
Contracting Officer shall cause a unilateral no-cost modification to be 
made to the contract incorporating the terms and conditions of the 
waiver in lieu of previous patent rights provisions.
    (h) In the event that a waiver request is denied, the requestor 
may, within thirty days after notification of the denial, request 
reconsideration. Such a request shall include any additional facts and 
rationale not previously submitted which support the request. Request 
for reconsideration shall be submitted and processed in accordance with 
the procedures for submitting waiver requests set forth in this 
section.


Sec. 784.9  Content of waiver requests.

    (a) Forms (OMB No. 1901-0800) for submitting requests for advance 
and identified invention waivers, indicating the necessary information, 
may be obtained from the Contracting Officer or Patent Counsel. All 
requests for advance and identified invention waivers shall include the 
following information:
    (1) The requestor's identification, business address, and, if 
represented by Counsel, the Counsel's name and address;
    (2) An identification of the pertinent contract or proposed 
contract and a copy of the contract Statement of Work or a 
nonproprietary statement which fully describes the proposed work to be 
performed;
    (3) The nature and extent of waiver requested;
    (4) A full and detailed statement of facts, to the extent known by 
or available to the requestor, directed to each of the considerations 
set forth in Secs. 784.4 or 784.5 of this part, as applicable, and a 
statement applying such facts and considerations to the policies set 
forth in Sec. 784.3 of this part. It is important that this submission 
be tailored to the unique aspects of each request for waiver, and be as 
complete as feasible; and
    (5) The signature of the requestor or authorized representative 
with the following statement: ``The facts set forth in this request for 
waiver are within the knowledge of the requestor and are submitted with 
the intention that the Secretary or designee rely on them in reaching 
the waiver determination.''
    (b) In addition to the requirements of paragraph (a) of this 
section, requests for waiver of identified inventions shall include:
    (1) The full names of all inventors;
    (2) A statement of whether a patent application has been filed on 
the invention, together with a copy of such application if filed or, if 
not filed, a complete description of the invention;
    (3) If a patent application has not been filed, any information 
which may indicate a potential statutory bar to the patenting of the 
invention under 35 U.S.C. 102 or a statement that no such bar is known 
to exist; and
    (4) Where the requestor is the inventor, written authorization from 
the applicable contractor or subcontractor permitting the inventor to 
request a waiver.
    (c) Subject to statutes, DOE regulations, requirements, and 
restrictions on the treatment of proprietary and classified 
information; all material submitted in requests for waiver or in 
support thereof will be made available to the public after a 
determination on the waiver request has been made, regardless of 
whether a waiver is granted. Accordingly, requests for waiver should 
not normally contain information or data that the requestor is not 
willing to have made public. If proprietary or classified information 
is needed to make the waiver determination, such information shall be 
submitted only at the request of Patent Counsel.


Sec. 784.10  Record of waiver determinations.

    The Assistant General Counsel for Technology Transfer and 
Intellectual Property shall maintain and periodically update a publicly 
available record of waiver determinations.


Sec. 784.11  Bases for granting waivers.

    (a) The various factual situations which are appropriate for 
waivers cannot be categorized precisely because the appropriateness of 
a waiver will depend upon the manner in which the considerations set 
forth in Secs. 784.4 or 784.5, and 784.6 if applicable, of this part 
relate to the facts and circumstances surrounding the particular 
contracting situation or the particular invention, in order to best 
achieve the objectives set forth in Sec. 784.3 of this part. However, 
some examples where advance waivers might be appropriate are:
    (1) Cost-shared contracts;
    (2) Situations in which DOE is providing increased funding to a 
specific ongoing privately-sponsored research, development, or 
demonstration project;
    (3) Situations such as Work for Others Agreements, User Facility 
Agreements or CRADAs, involving DOE-approved private use of Government 
facilities where the waiver requestor is funding a substantial part of 
the costs; and
    (4) Situations in which the equities of the contractor are so 
substantial in relation to that of the Government that the waiver is 
necessary to obtain the participation of the contractor.
    (b) Waivers may be granted as to all or any part of the rights of 
the United States to an invention subject to certain rights retained by 
the United States as set forth in Sec. 784.12 of this part. The scope 
of the waiver will depend upon the relationship of the contractual 
situation or identified invention to considerations set forth in 
Secs. 784.4 or 784.5, and 784.6, if applicable, in order to best 
achieve the objectives set forth in Sec. 784.3. For example, waivers 
may be restricted to a particular field of use in which the contractor 
has substantial equities or a commercial position, or restricted to 
those uses that are not the primary object of the contract effort.

[[Page 36619]]

Waivers may also be made effective for a specified duration of time, 
may be limited to particular geographic locations, may require the 
contractor to license others at reduced royalties in consideration of 
the Government's contribution to the research, development, or 
demonstration effort, or may require return of a portion of the 
royalties or revenue to the Government.
    (c) Contractors shall not use their ability to award subcontracts 
as economic leverage to acquire rights for themselves in the 
subcontractor inventions, where the subcontractor(s) would prefer to 
petition for title. A waiver granted to a prime contractor is not 
normally applicable to inventions of subcontractors. However, in 
appropriate circumstances, the waiver given to the prime contractor may 
be made applicable to the waivable inventions of any or all 
subcontractors, such as where there are pre-existing special research 
and development arrangements between the prime contractor and 
subcontractor, or where the prime contractor and subcontractor are 
partners in a cooperative effort. In addition, in such circumstances, 
the prime contractor may be permitted to acquire nonexclusive licenses 
in the subcontractors' inventions when a waiver of the subcontractor 
inventions is not covered by the prime contractor's waiver.
    (d) In advance waivers of identified inventions, the invention will 
be deemed to be a subject invention and the waiver will be considered 
as being effective as of the effective date of the contract (see 
Sec. 784.13(a)). This will be true regardless of whether the identified 
invention had been first actually reduced to practice prior to the time 
of contracting or would be reduced to practice under the contract or 
after expiration of the contract. One purpose of advance waivers of 
identified inventions is to establish the rights of the parties to such 
inventions when the facts surrounding the first actual reduction to 
practice prior to or during the contract are or will be difficult to 
establish.


Sec. 784.12  Terms and conditions of waivers.

    The terms and conditions for waivers are set forth in the ``Patent 
Rights--Waiver'' clause in this section. A waiver of all foreign and 
domestic patent rights under a contract authorizes the use of this 
clause with any additions prescribed by the DOE Acquisition Regulations 
(48 CFR Chapter 9) or the terms of the waiver. This clause shall not be 
used in contracts with small business firms or nonprofit organizations 
subject to 35 U.S.C. 200 et seq. If a waiver of different scope is 
granted, the clause shall be modified to conform to the scope of the 
waiver granted. Advance waivers for arrangements other than contracts, 
grants, and cooperative agreements may use other clause provisions 
approved by the Assistant General Counsel for Technology Transfer and 
Intellectual Property, except that all waivers for funding agreements 
shall be subject to the license of clause paragraph (b) and the 
provisions of clause paragraphs (i) and (j). The terms and conditions 
of the clause shall also constitute the basis for confirmatory licenses 
regarding waivers of identified inventions. For inventions under 
advance waivers, a duly executed and approved instrument fully 
confirmatory of all rights to which the Government is entitled is 
required to be submitted promptly after filing a patent application 
thereon. If, however, a waiver request is pending, delivery of the 
confirmatory instrument may be delayed until a determination on the 
waiver request is made. In the case of a waiver of an identified 
invention pursuant to a request for greater rights, the confirmatory 
instrument shall be agreed to or submitted to Patent Counsel before or 
at the time the waiver is granted.

Patent Rights--Waiver

    Use the clause at 48 CFR 52.227-12 with the following changes:
    (1) In paragraph (a) ``Definitions'' add the following 
definitions:
    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.
    Contract means any contract, grant, agreement, understanding, or 
other arrangement, which includes research, development, or 
demonstration work, and includes any assignment or substitution of 
parties.
    DOE patent waiver regulations means the Department of Energy 
patent waiver regulations at 10 CFR part 784.
    Patent Counsel means the Department of Energy Patent Counsel 
assisting the procuring activity.
    Secretary means the Secretary of Energy.
    (2) In paragraph (a) in the definition of ``Subject invention'' 
substitute: ``course of or'' for: ``performance of work''.
    (3) In paragraph (b) ``Allocation of principal rights,'' add at 
the beginning of first sentence:
    ``Whereas DOE has granted a waiver of rights to subject 
inventions to the Contractor,''.
    (4) In paragraph (c)(1), substitute:
    ``Patent Counsel within six months after conception or first 
actual reduction to practice, whichever occurs first in the course 
of or under this contract, but in any event, prior to any sale, 
public use, or public disclosure of such invention known to the 
Contractor.'' for.
    ``Contractor officer within 2 months after the inventor 
discloses it in writing to Contractor Personnel responsible for 
Patent matters * * * earlier.''
    (5) In paragraph (c)(2) add at the end: ``The Contractor shall 
notify the Patent Counsel as to those countries (including the 
United States) in which the Contractor will retain title not later 
than 60 days prior to the end of the statutory period.''
    (6) In paragraph (c)(3) substitute: ``but not later than at 
least 60 days'' for ``or, if earlier,''
    (7) In paragraph (d) add (d)(5):
    ``(5) If the waiver authorizing the use of this clause is 
terminated as provided in paragraph (p) of this clause.''
    (8) In paragraph (e)(1) add: ``under paragraph (d) of this 
clause'' after ``Government obtains title.''
    (9) In paragraph (e)(2) substitute ``37 CFR part 404 and DOE 
licensing regulations.'' for ``the Federal Property Management 
regulations and agency licensing regulations (if any)''
    (10) In paragraph (f)(5) substitute ``the course of or'' for 
``performance of work''.
    (11) In paragraph (g) substitute paragraphs (1), (2) and (3) as 
follows:
    (1) Unless otherwise directed by the Contracting Officer, 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, or research work to be 
performed by a small business firm or 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 the patent rights 
clause at 48 CFR 952.227-13 (suitably modified to identify the 
parties).
    (2) The Contractor shall not, as part of the consideration for 
awarding the subcontract, obtain rights in the subcontractor's 
subject inventions.
    (3) In the case of subcontractors at any tier, Department, the 
subcontractor, and Contractor agree that the mutual obligations of 
the parties created by this clause constitute a contract between the 
subcontractor and the Department with respect to those matters 
covered by this clause.
    (12) Substitute the following for paragraph (k):
    (k) Background Patents
    (1) The Contractor agrees:
    (i) to grant to the Government a royalty-free, nonexclusive 
license under any Background Patent for purposes of practicing

[[Page 36620]]

a subject of this contract by or for the Government in research, 
development, and demonstration work only.
    (ii) 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 or partially 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.
    (2) Notwithstanding paragraph (k)(1)(ii), the Contractor shall 
not be obligated to license any Background Patent if the Contractor 
demonstrates to the satisfaction of the Secretary or his designee 
that:
    (i) a competitive alternative to the subject matter covered by 
said Background Patent is commercially available 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.
    (13) Add new paragraph (l) Communications as follows:
    All reports and notifications required by this clause shall be 
submitted to the Patent Counsel unless otherwise instructed.
    (14) In paragraph (m) add to end of sentence: ``, except with 
respect to Background Patents, above.''
    (15) In paragraph (n)(4) substitute ``conducted in such a manner 
as'' for ``subject to appropriate conditions.''
    (16) In paragraph (o) add at the end of the parenthetical phrase 
in the heading to the paragraph: ``or grants''.
    (17) In paragraph (o) add paragraph (o)(1)(v) as follows:
    (v) 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.
    (18) In paragraph (o), substitute the following for (o)(3):
    (3) Final payment under this contract shall not be made before 
the Contractor delivers to the Patent Counsel all disclosures of 
subject inventions required by paragraph (c)(1) of this clause, an 
acceptable final report pursuant to paragraph (f)(7)(ii) of this 
clause, and all past due confirmatory instruments, and the Patent 
Counsel has issued a patent clearance certification to the 
Contracting Officer.
    (19) Add paragraphs (p), (q), (r), and (s) as follows:
    (p) Waiver Terminations.
    Any waiver granted to the Contractor authorizing the use of this 
clause (including any retention of rights pursuant thereto by the 
Contractor under paragraph (b) of this clause) may be terminated at 
the discretion of the Secretary or his designee in whole or in part, 
if the request for waiver by the Contractor is found to contain 
false material statements or nondisclosure of material facts, and 
such were specifically relied upon by DOE in reaching the waiver 
determination. Prior to any such termination, the Contractor will be 
given written notice stating the extent of such proposed termination 
and the reasons therefor, and a period of 30 days, or such longer 
period as the Secretary or his designee shall determine for good 
cause shown in writing, to show cause why the waiver of rights 
should not be so terminated. Any waiver termination shall be subject 
to the Contractor's minimum license as provided in paragraph (e) of 
this clause.
    (q) Atomic Energy.
    No claim for pecuniary award or compensation under the 
provisions of the Atomic Energy Act of 1954, as amended, shall be 
asserted by the Contractor or its employees with respect to any 
invention or discovery made or conceived in the course of or under 
this contract.
    (r) Publication.
    It is recognized that during the course of 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, approval for release of 
publication shall be secured from Patent Counsel prior to any such 
release or publication. In appropriate circumstances, and after 
consultation with the Contractor, Patent Counsel may waive the right 
of prepublication review.
    (s) 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 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) 
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 a copy to the 
Contracting Officer; or
    (ii) Contending that the subject invention is not a subject 
invention, the Contractor nevertheless discloses the subject 
invention and all facts pertinent to this contention to the Patent 
Counsel, with a copy 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 Contracting Officer 
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 shall be in addition to and shall not 
supersede any other rights and remedies which the Government may 
have with respect to subject inventions.


Sec. 784.13  Effective dates.

    Waivers shall be effective on the following dates:
    (a) For advance waivers of identified inventions, i.e., inventions 
conceived prior to the effective date of the contract, on the effective 
date of the contract, even though the advance waiver may have been 
requested after that date;
    (b) For identified inventions under advance waivers, i.e., 
inventions conceived or first actually reduced to practice after the 
effective date of the contract, on the date the invention is reported 
with the election to retain rights as to that invention; and
    (c) For waivers of identified inventions (other than under an 
advance waiver), on the date of the letter from Patent Counsel 
notifying the requestor that the waiver has been granted.

[FR Doc. 96-17431 Filed 7-11-96; 8:45 am]
BILLING CODE 6450-01-P