[Federal Register Volume 64, Number 100 (Tuesday, May 25, 1999)]
[Notices]
[Pages 28205-28209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13044]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

National Institutes of Health


Principles for Recipients of NIH Research Grants and Contracts on 
Obtaining and Disseminating Biomedical Research Resources: Request for 
Comments

AGENCY: National Institutes of Health (NIH), Public Health Service, 
DHHS.

ACTION: Notice.

-----------------------------------------------------------------------

    Introduction: The National Institutes of Health (NIH) is seeking 
comments on a proposed policy entitled SHARING BIOMEDICAL RESEARCH 
RESOURCES: Principles and Guidelines for Recipients of NIH Research 
Grants and Contracts. This policy represents part of the overall 
implementation of recommendations made by the Advisory Committee to the 
Director (ACD) to Dr. Harold Varmus, Director, NIH. Dr. Varmus 
requested that a Working Group of the ACD look into problems 
encountered in the dissemination and use of proprietary research tools, 
the competing interests of intellectual property owners and research 
users underlying these problems, and possible NIH responses. One of the 
recommendations in the Report was that NIH issue guidance to the 
recipients of NIH funding.
    Purpose: This policy is a two-part document, consisting of 
Principles to set forth the fundamental concepts and Guidelines to 
provide specific information to patent and license professionals for 
implementation. The purpose of these Principles and Guidelines is to 
assist NIH funding recipients in determining (1) reasonable terms and 
conditions for making NIH-funded research resources available to 
scientists in other institutions in the public and private sectors 
(disseminating research tools), and (2) restrictions to accept as a 
condition of receiving access to research tools for use in NIH-funded 
research (importing research tools). The intent is to help Recipients 
ensure that the conditions they impose and accept on the transfer of 
research tools will facilitate further biomedical research, consistent 
with the requirements of the Bayh-Dole Act and NIH funding agreements.
    Request for Comments: NIH is seeking comment not only from NIH 
grantees, but from the full range of academic, not-for-profit, 
government, and private sector participants in biomedical research and 
development. Widespread comment and participation by varied 
stakeholders in the biomedical research and development enterprise is 
critical if these Principles, and their implementing Guidelines, are to 
be effective in guiding the interactions of NIH funding recipients with 
these sectors. It is also hoped that these Principles and Guidelines 
will be adopted by the wider research community so that all biomedical 
research and development can be synergistic and accelerated.
    The NIH welcomes public comment on the full text of the Principles 
and Guidelines, set forth below. Comments should be addressed to: 
Research Tool Guidelines Project, Ms. Barbara M. McGarey, J.D., NIH 
Office of Technology Transfer, 6011 Executive Boulevard, Suite 325 
Rockville, MD 20852-3804. Comments may also be sent by facsimile 
transmission to the Research Tool Guidelines Project, Ms. Barbara M. 
McGarey, at (301) 402-3257, or by e-mail to [email protected].

DATES: Comments must be received by NIH on or before August 23, 1999.

    Dated: May 18, 1999.
Maria C. Freire,
Director, Office of Technology Transfer, National Institutes of Health.

Sharing Biomedical Research Resources

Principles and Guidelines for Recipients of NIH Research Grants and 
Contracts

Introduction

    The National Institutes of Health is dedicated to the advancement 
of health through science. As a public sponsor of biomedical research, 
NIH has a dual interest in accelerating scientific discovery and 
facilitating product development. In 1997, Dr. Harold Varmus, Director, 
NIH requested that a Working Group of the Advisory Committee to the 
Director look into problems encountered in the dissemination and use of 
unique research resources, the competing interests of intellectual 
property owners and research tool users, and possible NIH responses.\1\ 
The Working Group

[[Page 28206]]

found that intellectual property restrictions can stifle the broad 
dissemination of new discoveries and limit future avenues of research 
and product development.
---------------------------------------------------------------------------

    \1\ The term ``unique research resource'' is used in its 
broadest sense to embrace the full range of tools that scientists 
use in the laboratory, including cell lines, monoclonal antibodies, 
reagents, animal models, growth factors, combinatorial chemistry and 
DNA libraries, clones and cloning tools (such as PCR), methods, 
laboratory equipment and machines. The terms ``research tools'' and 
``materials'' are used throughout this document interchangeably with 
``unique research resources.'' Databases and materials subject to 
copyright, such as software, are also research tools in many 
contexts. Although the information provided here may be applicable 
to such resources, the NIH recognizes that databases and software 
present unique questions which cannot be fully explored in this 
document.
---------------------------------------------------------------------------

    At the same time, reasonable restrictions on the dissemination of 
research tools are sometimes necessary to protect legitimate 
proprietary interests and to preserve incentives for commercial 
development. One of the recommendations of the Working Group was that 
NIH issue guidance to its funding recipients to assist them to achieve 
the appropriate balance. This two-part document, consisting of 
Principles to set forth the fundamental concepts and Guidelines to 
provide specific information to patent and license professionals for 
implementation, represents that guidance.
    A copy of the full Report of the Working Group, with more detailed 
background information, is available at the NIH web site, www.nih.gov/
welcome/forum, or from the NIH Office of the Director.

Principles

1. Ensure Academic Freedom and Publication

    Academic research freedom based upon collaboration, and the 
scrutiny of research findings within the scientific community, are at 
the heart of the scientific enterprise. Institutions that receive NIH 
research funding through grants or contracts (``Recipients'') have an 
obligation to preserve research freedom and ensure timely disclosure of 
their scientists' research findings through, for example, publications 
and presentations at scientific meetings. Recipients are expected to 
avoid signing agreements that unduly limit the freedom of investigators 
to collaborate and publish.
    Reasonable restrictions on collaboration by academic researchers 
involved in sponsored research agreements with an industrial partner 
that avoid conflicting obligations to other industrial partners, are 
understood and accepted. Similarly, brief delays in publication may be 
appropriate to permit the filing of patent applications and to ensure 
that confidential information obtained from a sponsor or the provider 
of a research tool is not inadvertently disclosed. However, excessive 
publication delays or requirements for editorial control, approval of 
publications, or withholding of data all undermine the credibility of 
research results and are unacceptable.

2. Ensure Appropriate Implementation of the Bayh-Dole Act

    When a Recipient's research work is funded by NIH, the activity is 
subject to various laws and regulations, including the Bayh-Dole Act 
(Public Law 96-517). Generally, Recipients must maximize the use of 
their research findings by making them available to the research 
community and the public, and through their timely transfer to industry 
for commercialization.
    The right of Recipients to retain title to inventions made with NIH 
funds comes with the corresponding obligations to promote utilization, 
commercialization, and public availability of these inventions. The 
Bayh-Dole Act encourages Recipients to patent and license subject 
inventions as one means of fulfilling these obligations. However, the 
use of patents and exclusive licenses is not the only, nor in some 
cases the most appropriate, means of implementing the Act. Where the 
subject invention is useful primarily as a research tool, inappropriate 
licensing practices are likely to thwart rather than promote 
utilization, commercialization and public availability of the 
invention.
    Restrictive licensing, especially when coupled with indiscriminate 
use of the patent system, can be antithetical to the goals of the Bayh-
Dole Act, such as where these are employed primarily for financial 
gain. Utilization, commercialization and public availability of 
technologies that are useful primarily as research tools rarely require 
patent protection; further research, development and private investment 
are not needed to realize their usefulness as research tools. In such 
cases, the goals of the Act can be met through publication, deposit in 
an appropriate databank or repository, widespread non-exclusive 
licensing for nominal or cost-recovery fees, or any other number of 
dissemination techniques.
    In addition, commercialization and product development becomes more 
encumbered as the number of stakeholders laying claim to prospective 
revenues increases. Proprietary rights in research tools that do not 
require further development may function more as a tax on commercial 
development than as a source of rights to preserve the viability of end 
products and to motivate further investment. While such a tax may 
benefit the public by providing a financial return on the research 
investment, it may not always represent the appropriate valuation of a 
research tool and therefore serve as a disincentive to private sector 
use of the invention.

3. Minimize Administrative Impediments to Academic Research

    Each iteration in a negotiation over the terms of a license 
agreement or materials transfer agreement delays the moment when a 
research tool may be put to use in the laboratory. Recipients should 
take every reasonable step to streamline the process of transferring 
their own research tools freely to other academic research institutions 
using either no formal agreement, a cover letter, the Simple Letter 
Agreement of the Uniform Biological Materials Transfer Agreement 
(UBMTA), or the UBMTA itself.
    Recipients should also examine and, where possible and appropriate, 
simplify the transfer of materials developed with NIH funds to for-
profit institutions for internal use by those institutions. NIH 
endorses distinguishing internal use by for-profit institutions from 
the right to commercial development and sale or provision of services. 
Recipients are encouraged to transfer research tools developed with NIH 
funding to for-profit institutions with the fewest encumbrances 
possible in instances where the for-profit institution is seeking 
access for internal use purposes. Examples of such internal uses are 
research, screening, and the use of methods or devices for product 
development.
    Where they have not already done so, Recipients should develop and 
implement clear policies which articulate acceptable conditions for 
importing resources, and refuse to yield on unacceptable conditions. 
NIH acknowledges the concern of some for-profit organizations that the 
concept of purely academic research may be diluted by the close ties of 
some not-for-profit organizations with for-profit entities, such as 
research sponsors and spin-off companies in which such organizations 
take equity. Of concern to would-be providers is the loss of control 
over a proprietary research tool that, once shared with a not-for-
profit Recipient for academic research, results in commercialization 
gains to the providers' for-profit competitors. Recipients must be 
sensitive to this legitimate concern if for-profit organizations are 
expected to share tools freely.

[[Page 28207]]

    For-profit organizations, in turn, must minimize the encumbrances 
they seek to impose upon not-for-profit organizations for the academic 
use of their tools. Reach-through royalty or product rights, 
unreasonable restraints on publication and academic freedom, and 
improper valuation of tools impede the scientific process whether 
imposed by a not-for-profit or for-profit provider of research tools. 
While these Principles are directly applicable only to recipients of 
NIH funding, it is hoped that other not-for-profit and for-profit 
organizations will adopt similar policies and refrain from seeking 
unreasonable restrictions or conditions when sharing materials.

4. Ensure Dissemination of Research Resources Developed With NIH Funds

    Progress in science depends upon prompt access to the unique 
research resources that arise from biomedical research laboratories 
throughout government, academia, and industry. Ideally, these new 
resources flow to others conducting further research, advancing science 
and serving as the new standard which itself will be improved upon and 
ultimately replaced. This is accomplished by wide distribution on a 
nonexclusive basis, although wide distribution on reasonable terms by 
an exclusive distributor may meet these objectives as well. When 
research tools are used only within one or a small number of 
institutions, there is a great risk that fruitful avenues of research 
will be neglected.
    Unique research resources arising from NIH funded research must be 
made available to the scientific research community. Recipients are 
expected to manage interactions with third parties that have the 
potential to restrict Recipients' ability to disseminate research tools 
developed with NIH funds. For example, a Recipient might co-mingle NIH 
funds with funds from one or more third party sponsors, or import a 
research tool from a third party provider for use in an NIH-funded 
research project. Either situation may result in a Recipient incurring 
obligations to a third party that conflict with Recipient's obligations 
to the NIH. To avoid inconsistent obligations, Recipients are 
encouraged to share these Principles with potential co-sponsors of 
research projects and third party providers of materials.

Summary

    Access to research tools is a prerequisite to continuing scientific 
advancement. Ensuring broad access while preserving opportunities for 
product development requires thoughtful, strategic implementation of 
the Bayh-Dole Act. The NIH urges Recipients to develop patent, license, 
and material sharing policies with this goal in mind, realizing both 
product development as well as the continuing availability of new 
research tools to the scientific community.

Appendix--Guidelines for Implementation

    The following Guidelines provide specific information to patent and 
license professionals at Recipient institutions for implementing the 
Principles on Obtaining and Disseminating Biomedical Resources.

Guidelines for Disseminating Research Resources Arising Out of NIH-
Funded Research

     Recipients must ensure that unique research resources 
arising from NIH funded research are made available to the 
scientific research community. Although some licensing of research 
tools to for-profit companies is necessary and appropriate, the 
majority of transfers, to both not-for-profit entities and for-
profit entities, should be implemented under terms no more 
restrictive than the UBMTA. In particular, Recipients are expected 
to use the Simple Letter Agreement of the UBMTA (text below), or 
other comparable document with no more restrictive terms, to readily 
transfer unpatented tools developed with NIH funds to other 
Recipients for use in NIH funded projects. If the materials are 
patented (or licensed to an exclusive provider), other arrangements 
such as a simple license agreement may be used, but 
commercialization option rights, royalty reach-through, or product 
reach-through rights back to the provider are inappropriate.
    Simple Letter Agreement for Transfer of Non-Proprietary 
Biological Material
PROVIDER

Authorized Official:---------------------------------------------------

Organization:----------------------------------------------------------

Address:---------------------------------------------------------------

RECIPIENT

Authorized Official:---------------------------------------------------

Organization:----------------------------------------------------------

Address:---------------------------------------------------------------

    In response to the RECIPIENT's request for the BIOLOGICAL 
MATERIAL identified as [insert description of material] the PROVIDER 
asks that the RECIPIENT and the RECIPIENT SCIENTIST agree to the 
following before the RECIPIENT receives the BIOLOGICAL MATERIAL:
    1. The above BIOLOGICAL MATERIAL is the property of the provider 
and is made available as a service to the research community.
    2. The BIOLOGICAL MATERIAL will be used for teaching and 
academic research purposes only.
    3. The BIOLOGICAL MATERIAL will not be further distributed to 
others without the PROVIDER'S written consent. The RECIPIENT shall 
refer any request for the BIOLOGICAL MATERIAL to the PROVIDER. To 
the extent supplies are available, the PROVIDER or the PROVIDER 
SCIENTIST agrees to make the BIOLOGICAL MATERIAL available, under a 
separate Simple Letter Agreement, to other scientists (at least 
those at nonprofit organizations or government agencies) who wish to 
replicate the RECIPIENT SCIENTIST'S research.
    4. The RECIPIENT agrees to acknowledge the source of the 
BIOLOGICAL MATERIAL in any publications reporting use of it.
    5. Any BIOLOGICAL MATERIAL delivered pursuant to this simple 
letter agreement is understood to be experimental in nature and may 
have hazardous properties. THE PROVIDER MAKES NO REPRESENTATIONS AND 
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED. 
THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR 
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE BIOLOGICAL 
MATERIAL WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR 
OTHER PROPRIETARY RIGHTS. Except to the extent prohibited by law, 
the RECIPIENT assumes all liability for damages which may arise from 
its use, storage or disposal of the BIOLOGICAL MATERIAL. The 
PROVIDER will not be liable to the RECIPIENT for any loss, claim or 
demand made by the RECIPIENT, or made against the RECIPIENT by any 
other party, due to or arising from the use of the MATERIAL by the 
RECIPIENT, except to the extent permitted by law when caused by the 
gross negligence or willful misconduct of the PROVIDER.
    6. The RECIPIENT agrees to use the BIOLOGICAL MATERIAL in 
compliance with all applicable statutes and regulations, including, 
for example, those relating to research involving the use of human 
and animal subjects or recombinant DNA.
    7. The BIOLOGICAL MATERIAL is provided at no cost, or with an 
optional transmittal fee solely to reimburse the PROVIDER for its 
preparation and distribution costs. If a fee is requested, the 
amount will be indicated here: [insert fee].

The RECIPIENT and the RECIPIENT SCIENTIST should sign both copies of 
this letter and return one signed copy to the PROVIDER SCIENTIST. 
The PROVIDER will then forward the BIOLOGICAL MATERIAL.

PROVIDER SCIENTIST
Organization:----------------------------------------------------------

Address:---------------------------------------------------------------

Name:------------------------------------------------------------------

Title:-----------------------------------------------------------------

Signature:-------------------------------------------------------------

Date:------------------------------------------------------------------

RECIPIENT SCIENTIST
Organization:----------------------------------------------------------

Address:---------------------------------------------------------------

Name:------------------------------------------------------------------

Title:-----------------------------------------------------------------

Signature:-------------------------------------------------------------

Date:------------------------------------------------------------------

RECIPIENT ORGANIZATION APPROVAL
Authorized Official:---------------------------------------------------

Title:-----------------------------------------------------------------


[[Page 28208]]

-----------------------------------------------------------------------
Address:---------------------------------------------------------------

Signature:-------------------------------------------------------------

Date:------------------------------------------------------------------

[Source: 60 FR 12771, March 8, 1995]

     Recipients must ensure that obligations to other 
sources of funding of projects in which NIH funds are co-mingled are 
consistent with the Bayh-Dole Act and NIH funding requirements. 
Unique research resources generated under such projects are expected 
to be made available to the research community. Recipients are 
encouraged to share these Guidelines with potential co-sponsors. Any 
agreements covering projects in which NIH funds will be used along 
with other funds are expected to contain language to address the 
issue of dissemination of unique research resources. Examples of 
possible language follow. The paragraphs are presented in a ``mix 
and match'' format:
    ``The project covered by this agreement is supported with 
funding from the National Institutes of Health, which requires that 
unique research resources arising out of NIH-funded research be made 
widely available to third parties for further research. Provider 
agrees that upon publication, unpatented unique research resources 
arising out of this project may be freely redistributed.''
    ``In the event an invention is primarily useful as a research 
tool, any option granted shall either be limited to a non-exclusive 
license or the terms of any resulting exclusive license shall 
include provisions that ensure that the research tool will be 
available to the academic research community on reasonable terms.''
    ``Provider agrees that Recipient shall have the right to make 
any materials and inventions developed by Recipient in the course of 
the collaboration (including materials and inventions developed 
jointly with Provider, but not including any Provider materials (or 
parts thereof) or Provider sole inventions) available to other 
scientists at not-for-profit organizations for use in research, 
subject to Provider's independent intellectual property rights.''
    ``Subject to Recipient's obligations to the U.S. government, 
including 37 CFR 401, the PHS Grants Policy Statement, and the NIH 
Guidelines for Obtaining and Disseminating Biomedical Research 
Resources, Recipient grants to Sponsor the following rights: * * *''
     Exclusive licenses for research tools should generally 
be avoided except in cases where the licensee undertakes to make the 
research tool widely available at moderate cost to researchers 
through unrestricted sale or the licensor retains rights to make the 
research tool widely available. When an exclusive license is 
necessary to promote investment in commercial applications of a 
subject invention that is also a research tool, the Recipient should 
ordinarily limit the exclusive license to the commercial field of 
use, retaining rights regarding use and distribution as a research 
tool. Examples of possible language include:
    `` ``Research License'' means a nontransferable, nonexclusive 
license to make and to use the Licensed Products or Licensed 
Processes as defined by the Licensed Patent Rights for purposes of 
research and not for purposes of commercial manufacture, 
distribution, or provision of services, or in lieu of purchase, or 
for developing a directly related secondary product that can be 
sold. Licensor reserves the right to grant such nonexclusive 
Research Licenses directly or to require Licensee to grant 
nonexclusive Research Licenses on reasonable terms. The purpose of 
this Research License is to encourage basic research, whether 
conducted at an academic or corporate facility. In order to 
safeguard the Licensed Patent Rights, however, Licensor shall 
consult with Licensee before granting to commercial entities a 
Research License or providing to them research samples of the 
materials.''
    ``Licensor reserves the right to provide the Biological 
Materials and to grant licenses under Patent Rights to not-for-
profit and governmental institutions for their internal research and 
scholarly use.''
    ``Notwithstanding anything above to the contrary, Licensor shall 
retain a paid-up, nonexclusive, irrevocable license to practice, and 
to sublicense other not-for-profit research organizations to 
practice, the Patent Rights for internal research use.''
    ``The grant of rights provided herein is subject to the rights 
of the United States government and limited by the right of the 
Licensor to use Patent Rights for its own research and educational 
purposes and to freely distribute Materials to not-for-profit 
entities for internal research purposes.''
    ``Licensor reserves the right to supply any or all of the 
Biological Materials to academic research scientists, subject to 
limitation of use by such scientists for research purposes and 
restriction from further distribution.''
    ``Licensor reserves the right to practice under the Patent 
Rights and to use and distribute to third parties the Tangible 
Property for Licensor's own internal research purposes.''

Guidelines for Importing Research Resources for Use in NIH-Funded 
Research

     Agreements importing materials for use in NIH funded 
research are expected to address the timely dissemination of 
research results. Recipients should not agree to significant 
publication delays, any interference with the full disclosure of 
research findings, or any undue influence on the objective reporting 
of research results. A delay of thirty days to allow for patent 
filing or review for confidential proprietary information is 
generally viewed as reasonable.
     Under the Bayh-Dole Act and its implementing 
regulations, agreements importing materials for use in NIH funded 
projects cannot require that title to resulting inventions be 
assigned to the provider. For this reason, definitions of 
``materials'' that include all derivatives or all modifications are 
unacceptable. Conversely, it is important for providers of materials 
to be aware that a Recipient does not gain any ownership or interest 
in a provider's material by virtue of the Recipient using the 
material in an NIH-funded activity. Examples of acceptable 
definitions for ``materials'' include:
    `` ``Materials'' means the materials provided as specified in 
this document.''
    `` ``Materials'' means the materials provided as specified in 
this document. Materials may also include Unmodified Derivatives of 
the materials provided, defined as substances created by the 
Recipient which constitute an unmodified functional subunit or 
product expressed by the original material, such as subclones of 
unmodified cell lines, purified or fractionated subsets of the 
original material, proteins expressed by DNA/RNA supplied by the 
Provider, or monoclonal antibodies secreted by a hybridoma cell 
line.''
    `` ``Materials'' means the materials provided as specified in 
this document. Materials may also include Progeny and Unmodified 
Derivatives of the materials provided. Progeny is an unmodified 
descendant from the original material, such as virus from virus, 
cell from cell, or organism from organism. Unmodified Derivatives 
are substances created by the Recipient which constitute an 
unmodified functional subunit or product expressed by the original 
material, such as subclones of unmodified cell lines, purified or 
fractionated subsets of the original material, proteins expressed by 
DNA/RNA supplied by the Provider, or monoclonal antibodies secreted 
by a hybridoma cell line.''
    `` ``Materials'' means the material being transferred as 
specified in this document. Materials shall not include: (a) 
Modifications, or (b) other substances created by the recipient 
through the use of the Material which are not Modifications, 
Progeny, or Unmodified Derivatives. Progeny is an unmodified 
descendant from the Material, such as virus from virus, cell from 
cell, or organism from organism. Unmodified Derivatives are 
substances created by the Recipient which constitute an unmodified 
functional subunit or product expressed by the original Material, 
such as subclones of unmodified cell lines, purified or fractionated 
subsets of the original Material, proteins expressed by DNA/RNA 
supplied by the Provider, or monoclonal antibodies secreted by a 
hybridoma cell line.'' [Source: Uniform Biological Materials 
Transfer Agreement; terms defined therein]
     Recipients are expected to avoid signing agreements to 
import research tools that are likely to restrict Recipients' 
ability to promote broad dissemination of additional tools that may 
arise from the research. This might occur when an agreement gives a 
provider an exclusive license option to any new intellectual 
property arising out of the project. A new transgenic mouse 
developed during the project could fall under this license option 
and become unavailable to third party scientists as a result. 
Examples of agreements to examine include material transfer 
agreements (MTAs), memoranda of understanding (MOU), research or 
collaboration agreements, and sponsored research agreements. 
Recipients should consider adopting standard language to place in 
such agreements to address this issue. The following are examples of 
possible language to include in MTAs, sponsored research agreements, 
and other agreements that either import materials from or co-mingle 
funds with non-government sources. The paragraphs are presented in a 
``mix and match'' format:

[[Page 28209]]

    ``The project covered by this agreement is supported with 
funding from the National Institutes of Health, which requires that 
unique research resources arising out of NIH-funded research be made 
widely available to third parties for further research. Provider 
agrees that after publication, unpatented unique research resources 
arising out of this project may be freely redistributed.''
    ``In the event an invention is primarily useful as a research 
tool, any option granted shall either be limited to a non-exclusive 
license or the terms of any resulting exclusive license shall 
include provisions which insure that the research tool will be 
available to the academic research community on reasonable terms.''
    ``Provider agrees that Recipient shall have the right to make 
any materials and inventions developed by Recipient in the course of 
the collaboration (including materials and inventions developed 
jointly with Provider, but not including any Provider materials (or 
parts thereof) or Provider sole inventions) available to other 
scientists at not-for-profit organizations for use in research, 
subject to Provider's independent intellectual property rights.''
    ``Subject to Recipient's obligations to the U.S. government, 
including 37 CFR 401, the PHS Grants Policy Statement, and the NIH 
Guidelines for Obtaining and Disseminating Biomedical Research 
Resources, Recipient grants to Sponsor the following rights: * * *''
     Agreements importing materials from for-profit entities 
for use in NIH funded research may provide a grant back of non-
exclusive, royalty-free rights to the provider to use improvements 
and new uses of the material that, if patented, would infringe any 
patent claims held by the provider. They may also provide an option 
for an exclusive or non-exclusive license to new inventions arising 
directly from use of the material. These should be limited to 
circumstances where the material sought to be imported is unique, 
such as a patented proprietary material, and not reasonably 
available from any other source. A non-exclusive ``grant-back'' 
might be used, for example, to protect a for-profit entity that 
provides a proprietary compound from being blocked from using new 
uses of that compound discovered during the NIH-funded project. In 
providing license options, Recipients must ensure that licenses 
granted to providers under such options are consistent with Bayh-
Dole requirements, including the preference for U.S. industry 
requirements and reservation of government rights under 37 CFR Part 
401.
     In determining the scope of license or option rights 
that are granted in advance to a provider of materials, Recipient 
should balance the relative value of the provider's contribution 
against the value of the rights granted, cost of the research, and 
importance of the research results. The rights granted to providers 
should be limited to inventions that have been made directly through 
the use of the materials provided. In addition, Recipients should 
reserve the right to negotiate license terms that will ensure: (1) 
continuing availability to the research community if the new 
invention is a unique research resource; (2) that the provider has 
the technical and financial capability and commitment to bring all 
potential applications to the marketplace in a timely manner; and 
(3) that if an exclusive license is granted, the provider will 
provide a commercial development plan and agree to benchmarks and 
milestones for any fields of use granted.
     It is expected that agreements importing NIH-funded 
materials from not-for-profit entities for use in NIH funded 
research will not provide commercialization option rights, royalty 
reach-through, or product reach-through rights back to the provider. 
Such materials should be imported under the UBMTA, or, if the 
materials are patented, a simple license agreement that does not 
request reach-through to either future products or royalties. If the 
providing not-for-profit organization is constrained in sharing the 
material due to a pre-existing sponsored research agreement or 
license, NIH expects the not-for-profit provider to negotiate a 
suitable resolution with the private research sponsor or licensee. 
The co-mingling of NIH and sponsored research funds is allowed, 
however, Recipient is responsible for ensuring that the sponsored 
funds do not interfere with NIH funding requirements such as open 
dissemination of research tools.

[FR Doc. 99-13044 Filed 5-24-99; 8:45 am]
BILLING CODE 4140-01-U