[Federal Register Volume 76, Number 48 (Friday, March 11, 2011)]
[Notices]
[Pages 13404-13410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-5609]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Cancer Therapy Evaluation Program Intellectual Property Option to 
Collaborator

AGENCY: National Institutes of Health, HHS.

ACTION: Notice.

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SUMMARY: The National Cancer Institute, Division of Cancer Treatment 
and Diagnosis, is announcing the final revision of the NCI Cancer 
Therapy Evaluation Program's Intellectual Property Option to 
Collaborator.

[[Page 13405]]


SUPPLEMENTARY INFORMATION: In the Federal Register of April 6, 2010 (FR 
Vol. 65, No. 65), the National Cancer Institute, Division of Cancer 
Treatment and Diagnosis (DCT) issued a proposed revision to the Cancer 
Therapy Evaluation Program (CTEP)'s Intellectual Property Option to 
Collaborator. The proposed revision represents a major effort on the 
part of NCI CTEP to address the disposition of intellectual property 
(IP) related to data and Agent-treated specimens in studies where CTEP 
provides agents, as well as to harmonize the IP terms with standards 
currently used by the cancer research community. The background and 
description of the rationale can be found in the Background Section of 
the proposed revision issued April 6, 2010. The proposal called for 
submission of comments by May 6th, 2010. NCI CTEP received numerous 
comments in response to the proposed revision, many of which asserted 
that the proposed change would not meet its stated goals and requested 
NCI CTEP to reevaluate specific aspects of the proposal. CTEP agreed 
with some of these comments and has revised selected aspects of the 
proposed CTEP Intellectual Property Option to Collaborator to better 
reflect our stated goals.

I. Rationale for the Changes to the IP Option

    The Cancer Therapy Evaluation Program (CTEP) of the National Cancer 
Institute's (NCI) Division of Cancer Treatment and Diagnosis (DCTD) 
obtains proprietary ``Agents'' from biotechnology and pharmaceutical 
companies (hereinafter ``Collaborators'') for use in NCI-supported 
clinical trials under funding agreements. As part of the arrangement 
with these Collaborators to use their proprietary Agents and to make 
conducting such clinical research possible, Collaborators will often 
require, as a condition of collaboration, that the NCI funded 
recipients receiving the Agent (``Institutions'') agree to certain 
conditions, including the willingness to provide notice of and grant 
options to certain intellectual property rights arising from research 
involving the Agent under the scope of an NCI funding agreement. The IP 
Option will apply to inventions generated from clinical studies for 
which CTEP provided Agent(s) and for inventions generated under any 
other NCI CTEP-approved studies that use CTEP- provided Agent(s), non-
publicly released clinical data or Agent(s)-treated specimens from 
those clinical studies.
    The previous IP option language was silent as to the disposition of 
intellectual property developed from data and Agent-treated samples. As 
a result, both Collaborators and Institutions claimed an ownership 
interest in inventions generated from these data and materials. This 
lack of clarity has become a major impediment in NCI CTEP's ability to 
obtain proprietary Agents from collaborators for use in NCI CTEP-
sponsored clinical studies. This has resulted in delays and threatens 
the continuing ability of CTEP to provide proprietary Agents to NCI-
funded investigators for important clinical studies to advance the 
treatment of cancer. The lack of Agents for these clinical studies 
jeopardizes NCI CTEP's ability to support these research activities. 
The revised CTEP IP Option and Institution Notification is intended to 
offer appropriate incentives and assurance for both Collaborators and 
Institutions to participate in CTEP-sponsored clinical studies.

II. The Proposed Revision to the CTEP Intellectual Property Option to 
the Collaborator

    The following is the proposed revision to the CTEP IP Option that 
was published in the Federal Register on April 6th:
    The Cancer Therapy Evaluation Program (CTEP) of the National Cancer 
Institute's (NCI) Division of Cancer Treatment and Diagnosis (DCTD) 
obtains ``Agents'' from biotechnology and pharmaceutical companies 
(hereinafter ``Collaborators'') through Cooperative Research and 
Development Agreements (``CRADAs'') and other means, for use in NCI-
funded research conducted via extramural funding agreements. As part of 
the arrangement with these Collaborators to use their Agents and to 
make the collaborative research possible, NCI CTEP would agree not to 
provide Agents to Institutions unless they provide Collaborators with 
the IP Options and Institution Notifications described below. The 
specific terms of the IP Options depend on the types of inventions that 
arise out of the NCI CTEP funded research (Section A Inventions, 
Section B Inventions, or Unauthorized Inventions). NCI CTEP is 
requesting applicants include assurances of agreement with the terms of 
the IP Options and Institutional Notification described below in their 
funding applications to NCI CTEP.
    References to ``Institution'' mean the funding recipient conducting 
the research described herein. The Intellectual Property Options (IP 
Options) and Institution Notification described below will apply to 
inventions arising from research involving the Agent(s) under the scope 
of an NCI CTEP funding agreement.
    A. The IP Option described in this Section A would apply to 
inventions that use or incorporate the Agent(s) and that are conceived 
or first actually reduced to practice pursuant to NCI CTEP-funded 
clinical or non-clinical studies utilizing the Agent(s) (``Section A 
Inventions''):
    Institution agrees to grant Collaborator(s): (i) A royalty-free, 
worldwide, non-exclusive license for commercial purposes; and (ii) a 
time limited first option to negotiate an exclusive, or co-exclusive, 
if applicable, world-wide, royalty bearing license for commercial 
purposes, including the right to grant sub licenses, subject to any 
rights of the Government of the United States of America, on terms to 
be negotiated in good faith by the Collaborator(s) and Institution. If 
Collaborator accepts the non-exclusive commercial license, the 
Collaborator agrees to pay all out of pocket patent prosecution and 
maintenance costs which will be pro-rated and divided equally among all 
licensees. If Collaborator obtains an exclusive commercial license, in 
addition to any other agreed upon licensing arrangements such as 
royalties and due diligence requirements, the Collaborator agrees to 
pay all out of pocket patent prosecution and maintenance costs. 
Collaborator(s) will notify Institution, in writing, if it is 
interested in obtaining a commercial license to any Section A Invention 
within three (3) months of Collaborator's receipt of a patent 
application or six (6) months of receipt of an invention report 
notification of such Section A Invention. In the event Collaborator 
fails to so notify Institution, or elects not to obtain an exclusive 
license, then Collaborator's option expires with respect to that 
Section A Invention, and Institution will be free to dispose of its 
interests in accordance with its policies. If Institution and 
Collaborator fail to reach agreement within ninety (90) days, (or such 
additional period as Collaborator and Institution may agree) on the 
terms for an exclusive license for a particular Section A Invention, 
then for a period of three (3) months thereafter Institution agrees not 
to offer to license the Section A Invention to any third party on 
materially better terms than those last offered to Collaborator without 
first offering such terms to Collaborator, in which case Collaborator 
will have a period of thirty (30) days in which to accept or reject the 
offer. If Collaborator elects to negotiate an exclusive commercial 
license to a Section A Invention, then Institution agrees to file

[[Page 13406]]

and prosecute patent application(s) diligently and in a timely manner 
and to give Collaborator an opportunity to comment on the preparation 
and filing of any such patent application(s). Notwithstanding the 
above, Institution is under no obligation to file or maintain patent 
prosecution for any Section A Invention.
    For all Section A Inventions, regardless of Collaborator's decision 
to seek a commercial license, Institution agrees to grant Collaborator 
a paid-up, nonexclusive, royalty-free, world-wide license for research 
purposes only. Institution retains the right to make and use any 
Section A Invention for all non-profit research, including for 
educational purposes and to permit other educational and non-profit 
institutions to do so.
    B. The IP Option described in this Section B would apply to 
inventions that do not use or incorporate the Agent(s) but that are 
conceived or first actually reduced to practice pursuant to NCI CTEP 
clinical or non-clinical studies utilizing the Agent(s). It also 
applies to inventions that are conceived or first actually reduced to 
practice pursuant to NCI CTEP studies utilizing clinical data or 
specimens from patients treated with the Agent (including specimens 
obtained from NCI CTEP-funded tissue banks) (``Section B Inventions''):
    Institution agrees to grant to Collaborator(s): (i) A paid-up 
nonexclusive, nontransferable, royalty-free, world-wide license to all 
Section B Inventions for research purposes only; (ii) a time-limited 
first option to negotiate a non-exclusive, exclusive, or co-exclusive, 
if applicable, world-wide royalty-bearing license for commercial 
purposes, including the right to grant sub-licenses, subject to any 
rights of the Government of the United States of America, on terms to 
be negotiated in good faith by the Collaborator(s) and Institution; and 
(iii) a nonexclusive, royalty-free, world-wide license either to (a) 
disclose Section B Inventions to a regulatory authority when seeking 
marketing authorization of the Agent, or (b) disclose Section B 
Inventions on a product insert or other promotional material regarding 
the Agent after having obtained marketing authorization from a 
regulatory authority. Collaborator will notify Institution, in writing, 
of its interest in obtaining an exclusive commercial license to any 
Section B Invention within one year of Collaborator's receipt of a 
patent application or eighteen months of receipt of an invention report 
notifying Collaborator of such Section B Invention(s). In the event 
that Collaborator fails to so notify Institution, or elects not to 
obtain an exclusive license, then Collaborator's option expires with 
respect to that Section B Invention, and Institution will be free to 
dispose of its interests in such Section B Invention in accordance with 
Institution's policies. If Institution and Collaborator fail to reach 
agreement within ninety (90) days, (or such additional period as 
Collaborator and Institution may agree) on the terms for an exclusive 
license for a particular Subject B Invention, then for a period of six 
(6) months thereafter Institution agrees not to offer to license the 
Section B Invention to any third party on materially better terms than 
those last offered to Collaborator without first offering such terms to 
Collaborator, in which case Collaborator will have a period of thirty 
(30) days in which to accept or reject the offer. Institution retains 
the right to make and use any Section B Inventions for all non-profit 
research, including for educational purposes and to permit other 
educational and non-profit institutions to do so. If Collaborator 
elects to negotiate an exclusive commercial license to a Section B 
Invention, then Institution agrees to file and prosecute patent 
application(s) diligently and in a timely manner and to give 
Collaborator an opportunity to comment on the preparation and filing of 
any such patent application(s). Notwithstanding the above, Institution 
is under no obligation to file or maintain patent prosecution for any 
Section B Invention.
    Inventions arising more than five years after the release of data 
on the primary end point of the NCI CTEP clinical trial that generated 
the clinical data and/or specimens will not be subject to the Section 
B(ii) IP Option.
    C. The IP Option described in this Section C would apply to 
inventions made by Institution's investigator(s) or any other employees 
or agents of Institution, which are or may be patentable or otherwise 
protectable, as a result of research utilizing the Agent(s) outside the 
scope of the NCI CTEP funding agreement (Unauthorized Inventions):
    Institution agrees, at Collaborator's request and expense, to grant 
to Collaborator a royalty-free exclusive or co-exclusive license to 
Unauthorized Inventions.

D. Institution Notification

    Institution agrees to promptly notify NCI CTEP 
([email protected]) and Collaborator(s) in writing of any 
Section A Inventions, Section B Inventions, and Unauthorized Inventions 
upon the earlier of: (i) Any submission of any invention disclosure to 
Institution of a Section A, Section B, or Unauthorized Invention, or 
(ii) the filing of any patent applications of a Section A, Section B, 
or Unauthorized Invention. Institution agrees to provide a copy of 
either the invention disclosure or the patent application to the 
Collaborator and to NCI CTEP which will treat it in accordance with 37 
CFR part 401. These requirements do not replace any applicable 
reporting requirements under the Bayh-Dole Act, 35 U.S.C. 200-212, and 
implementing regulations at 37 CFR part 401.

III. Comments on the Proposed Revision and NCI CTEP's Response and 
Modifications to the Proposed Option Based on Feedback

    The NCI CTEP received 24 responses to the proposed revision to the 
CTEP Intellectual Property Option. Comments were received from 
pharmaceutical and biotechnology companies, diagnostic companies, 
industry groups, the cooperative groups, universities, hospitals and 
the Council on Government Relations.
    To make it easier to identify comments and our responses, the word 
``Comment'' in parentheses, appears before the comment's description 
and the word ``Response,'' in parentheses, appears before our response. 
Similar comments are grouped together under the same number. Due to the 
detail of some responses as well as space and time limitations, we will 
not address every point brought up by every Commenter, but will focus 
on major concerns expressed by a variety of Commenter's and the issues 
that were addressed in the final version of the CTEP IP Option. We have 
condensed some responses into topic areas, especially areas where there 
were a wide range of conflicting suggestions. The number assigned to 
each comment is purely for organizational purposes and does not signify 
the comment's value or importance or the order in which it was 
received. For ease of use comments will be divided by Section and 
follow a generalized order of the proposed Option itself:
1. Overall Scope of the IP Option and Situations in Which the IP Option 
Would Be Applied
    (Comment) A recurring issue among many respondents was that the 
document itself was unclear as to the scope of the IP Option, 
specifically to which studies the IP Option must be applied.
    (Response) NCI has endeavored to properly clarify the scope in the 
final revision. The NCI CTEP IP option will

[[Page 13407]]

apply to inventions generated from: (a) Clinical studies for which CTEP 
provided Agent(s), (b) other NCI CTEP-approved studies that use CTEP-
Provided Agent(s), and (c) non-publicly released clinical data or 
Agent(s)-treated specimens from those clinical studies.
2. The Definition of Inventions, Was too Vague and Ambiguous in Both 
Sections A and B
    (Comment) Many respondents from all groups commented that the 
definition of inventions as those that ``use or incorporate'' Agent was 
too vague. Several respondents offered suggestions as to language that 
would clarify the intended meaning and narrow the scope.
    (Response) NCI concurs that this language was vague, and in the 
final Option has modified the language to more appropriately clarify 
the scope. The final Option replaces ``use or incorporates'' with the 
statement that the Option will apply to ``inventions that would be 
described in patent disclosures that claim the use and/or the 
composition of the Agent(s).''
3. Invention Language Should State That the Scope Should Cover 
Inventions That Are ``Conceived AND Reduced to Practice'' Under the 
Clinical Studies as Opposed to ``Conceived OR Reduced to Practice''
    (Comment) Several respondents suggested altering this language 
based on the following reasoning: While this language is consistent 
with the Bayh-Dole Act scope of ``subject inventions'' for Federal 
funding purposes, Bayh-Dole only speaks to the rights to inventions 
provided to funding recipients and the government. The IP option, 
however applies to rights that funding recipients grant to third party 
Collaborators, therefore the Bayh-Dole scope does not apply to theses 
inventions. Since the Bayh-Dole scope does not apply this language 
should not be considered. Use of ``OR'' language was purported to have 
substantial risk to create conflicting obligations, as the Collaborator 
would have rights to prior conceptions (that are reduced to practice 
under the clinical study) and future reductions to practice (of 
conceptions made under this clinical study). This would require 
institutions to carefully monitor and possibly restrict other 
agreements and funding related to follow on research.
    (Response) NCI CTEP finds this argument unpersuasive. While it may 
not be necessary to apply the Bayh-Dole scope to the inventions covered 
under this Option, NCI CTEP feels that there is value in maintaining a 
consistent standard that reflects the intent of Bayh-Dole. This 
language is also consistent with the terms offered to collaborators 
under Federal Cooperative Research and Development Agreements. More 
importantly this change would be inconsistent with programmatic policy 
and the manner in which clinical studies are reviewed and approved. 
Many of the clinical study proposals are in response to an NCI CTEP-
solicitation that has been formulated with the Collaborator so it would 
be difficult for the investigator to have ``conceived'' the invention. 
However, the investigator could be the first to ``reduce it to 
practice.'' ``Conceived or reduced to practice'' benefits the 
investigators submitting unsolicited proposals since, even if the 
Collaborator disapproved a proposal, the investigator would still have 
``conceived'' the invention.
    In regards to future reductions to practice, NCI CTEP wants to 
reinforce that the Section A is only applicable to studies wherein CTEP 
provides Agent, which limits the application of this clause 
sufficiently that future reductions are not a concern. If an 
Institution is utilizing NCI CTEP provided agent, any invention 
generated is by definition not a future reduction to practice, but 
rather part of an ongoing study.
4. The Section A and B Licenses Should be an Assignment of all 
Intellectual Property (Including Copyright and Trademarks) to the 
Collaborator, With an Offer to Provide an Automatic Non-Exclusive 
Research Use License Back to the Inventing Institution
    (Comment) Several respondents felt that an outright assignment of 
all intellectual property to collaborators would provide a better 
incentive for participation in NCI CTEP clinical studies.
    (Response) NCI believes that while this would provide greater 
incentives for participation on the part of Industry, such assignment 
would have a chilling effect on the participation of academic 
researchers and on the business model of downstream diagnostic 
companies. In addition, NCI CTEP feels that the rights offered in the 
CTEP IP Option should pertain solely to patents.
5. The Section A Non-Exclusive Royalty Free Commercialization License 
Should be Sub-Licensable
    (Comment) Several respondents felt that the Section A non-exclusive 
license needed to be sub-licensable in order to have any real value. In 
today's market place, collaborators often partner with several other 
entities when undertaking development efforts, so the non-exclusive 
license is effectively worthless without the ability to sub-license.
    (Response) NCI believes that there is merit to this position; 
however we are cognizant that an unfettered right to sub-license would 
destroy all value for inventing institutions. NCI CTEP has included new 
language indicating that the Section A license is sublicensable, 
however it may only be sub-licensed to affiliates or Collaborators for 
the purposes of development.
6. Patent Expenses Related to all Licensing Options
    (Comment) There were several distinct and competing views in the 
comments related to the disposition of patent expenses. Some 
respondents felt that it was inappropriate for the Institutions to 
receive reimbursement of any patent expenses for non exclusive 
licenses. Conversely, other respondents felt that the Option should 
clearly state that the Collaborator is responsible for all patent 
expenses, including expenses associated with the exclusive licensing 
option.
    (Response) NCI believes that the proposed IP option strikes an 
appropriate balance in regards to patent expenses. Since the proposed 
option represents an expansion of rights relative to the current 
option, NCI believes it is entirely appropriate for Collaborators to 
shoulder patent expenses (in a pro-rated manner) if they wish to 
exercise their option to the NERF or the Exclusive licensing option in 
Section A. If Collaborator is not interested in shouldering patent 
expenses related to Section A inventions, they are in no way obligated 
to and will still receive a research use license.
    In regard to Section B inventions, NCI CTEP feels that the granted 
licenses are sufficiently narrow in scope and consistent with the free 
research use license of Section A. NCI CTEP will remain silent in 
regard to any exclusive or non-exclusive licenses that parties may wish 
to negotiate in addition to the licenses described in this section. The 
Institution and the Collaborator are in the best position to determine 
the most appropriate terms for an exclusive or a non exclusive license 
on any Section B invention, should they decide to negotiate such a 
license. While it is a standard convention in exclusive licensing 
negotiations for the licensee to cover the cost of patents, there may 
be instances, particularly with regard to smaller companies 
participating in the program, where it would be to the benefit of both 
the Institution and the Collaborator to have the flexibility to 
negotiate other licensing terms.

[[Page 13408]]

7. Time Frames On Negotiation of Section A Exclusive Licensing Options 
as Well as Most-Favored Nation Period
    (Comment) This was an area of broad discussion where comments 
varied substantially based on the position of the commenter. In general 
Industry responders felt the time period for negotiation and most 
favored nation status was too short, and asked for a time frame double 
what the proposed Option provided. Arguments focused on the difficulty 
of properly valuating the IP in such a short time frame. Conversely, 
Institutions and diagnostic company respondents felt the time frame for 
negotiation was too long, and that the most favored nation provisions 
should be removed entirely. Arguments focused on the delay that these 
terms engender and the ability of a Collaborator to use them to 
``halt'' development of associated technologies.
    (Response) NCI believes that the current time frame for negotiation 
of Section A inventions appropriately balances the concerns expressed 
by both Collaborators and Institutions. While neither side is 
completely satisfied with the time frames, they are consistent with 
previous policy, and our experience indicates they are at the very 
least functional.
8. Section B Inventions: Clarity Regarding the Scope of Data to Which 
the Option Will Apply
    (Comment) Several respondents felt that the description of data in 
Section B was ambiguous and overly broad, and that it could be 
interpreted to apply to data that had been published or had otherwise 
entered the public domain.
    (Response) NCI CTEP agrees that the language in this Section B 
pertaining to data required more clarity. We have added language 
specifying that it only applies to confidential data from clinical 
studies that used NCI CTEP-provided Agent or data from such studies 
that has not yet been published. The Option is not intended to read on 
publicly available or published data.
9. Section B(ii) Inventions (ii): Exclusive Licensing Option
    (Comment) In general the inclusion of the Section B(ii) exclusive 
licensing option was the source of greatest controversy within the 
proposed Option. Institutions and diagnostic company respondents felt 
strongly that the proposed B(ii) exclusive licensing option:
    a. Was overly broad and included reach-through that would stifle 
the development of Inventions that are critical to the treatment of 
cancer patients. In particular the Option would make it difficult, if 
not impossible, for diagnostic companies to develop companion 
diagnostics to a particular treatment in a timely manner.
    b. Had time frames for negotiation of these licenses that were 
overly generous and needed to be reduced.
    c. Should not have a 5 year time limitation as this was both overly 
long and logistically impractical to implement.
    d. Was fundamentally unfair, would constrain the ability of 
Institutions to collaborate on diagnostics, and thus, it would have a 
chilling effect on participation in CTEP studies.
    (Response) NCI believes that Institution, and particularly 
Diagnostic company respondents made a compelling argument for the 
removal of this clause from the proposed option. The NCI's goal in 
promulgating the revision was to encourage participation in CTEP 
studies by ensuring that Collaborators receive enough rights to protect 
their ability to successfully manufacture and commercially market any 
therapeutic they supply to the CTEP program (freedom to operate).
    The NCI believes that freedom to operate is protected by the more 
narrowly tailored Section B(iii) option, and that the B(ii) option as 
presented in the proposed option is overbroad and unnecessary to 
achieve NCI's goals. In response, the NCI has removed the Section B(ii) 
option in its entirety from the final Option.
10. Section B(iii) Inventions Use of ``and'' Instead of ``or''
    (Comment) Several respondents felt that it was unclear whether 
Collaborators would receive both the right to use Invention data for 
regulatory purposes and the right to include Invention data on product 
insert information.
    (Response) NCI agrees that this language was unnecessarily vague. 
The intent was for Collaborator to have both rights and as such the 
wording has been amended to replace ``or'' with ``and.''
11. Section C Inventions: Recommendations That the NCI Remain Silent on 
Unauthorized Inventions
    (Comment) Several respondents felt that that section was unduly 
harsh and should be removed altogether, with any action regarding 
unauthorized use to be left for the parties to resolve. Respondents 
also felt that this language may be in conflict with the Bayh-Dole Act.
    (Response) The NCI finds this argument unpersuasive. The removal of 
this section would effectively make it more attractive to develop an 
invention outside the scope of approved studies than under the scope 
and would provide a strong incentive for participants to breach the 
agreement. The NCI feels that there must be some form of penalty for 
breaching the agreement in order to maintain our ability to obtain 
proprietary Agents for clinical studies.
    In regards to Bayh-Dole, NCI has discussed this with our legal 
counsel at OGC. These unauthorized studies are, by definition, not done 
under the scope of a government funding agreement (the party is in fact 
in breach of a government funding agreement) therefore Bayh-Dole does 
not apply to these inventions. This language provides consequences in 
the event that a party steps outside of the agreed upon scope of work.
12. Section C Inventions: Recommendation That the NCI include a Non-
Exclusive Research Use License Back to the Inventing Institution
    (Comment) Several respondents felt that while the unauthorized use 
language was appropriate, the institution should retain a license to 
use any inventions generated, including those through unauthorized use, 
for internal research purposes.
    (Response) The NCI believes that this argument has merit and has 
included this language in the final Option. While we do not believe it 
is appropriate for Institutions to benefit from misuse of Agent, data 
or Agent-treated samples, we feel that we also have an obligation to 
support the scientific endeavor and avoid blocking important research 
in the case of inadvertent breach.

IV. The Final Revision to the CTEP IP Option

    The following is the revision in its final form, with alterations 
made based on comments received to the April 6th Federal Register 
notice:
    The Cancer Therapy Evaluation Program (CTEP) of the National Cancer 
Institute's (NCI) Division of Cancer Treatment and Diagnosis (DCTD) 
obtains ``Agents'' from biotechnology and pharmaceutical companies 
(hereinafter ``Collaborators'') through Cooperative Research and 
Development Agreements (``CRADAs'') and other means, for use in NCI-
funded research conducted via extramural funding agreements. As part of 
the arrangement with these Collaborators to use their Agents and to 
make the collaborative research possible, NCI CTEP would agree not to 
provide Agents to Institutions unless they provide Collaborators with 
the IP Options and

[[Page 13409]]

Institution Notifications described below. The specific terms of the IP 
Option depend on the types of inventions that arise out of the studies 
wherein Agent is supplied by NCI CTEP pursuant to an agreement with a 
Collaborator (Section A Inventions, Section B Inventions, or 
Unauthorized Inventions). NCI CTEP is requesting that applicants 
include assurances of agreement with the terms of the IP Options and 
Institutional Notification described below in applicable funding 
applications to NCI.
    References to ``Institution'' mean the funding recipient conducting 
the research described herein. The Intellectual Property Options (IP 
Options) and Institution Notification described below will apply to 
inventions arising from research involving the Agent(s) under the scope 
of an NCI funding agreement.
    A. The IP Option described in this Section A would apply to 
inventions that would be described in patent disclosures that claim the 
use and/or the composition of the Agent(s) and that are conceived or 
first actually reduced to practice pursuant to clinical or non-clinical 
studies utilizing the NCI CTEP provided Agent(s) (``Section A 
Inventions''):
    Institution agrees to grant to Collaborator(s): (i) a royalty-free, 
worldwide, non-exclusive license for commercial purposes with the right 
to sub license to affiliates or collaborators working on behalf of 
Collaborator for Collaborator's development purposes; and (ii) a time 
limited first option to negotiate an exclusive, or co-exclusive, if 
applicable, world-wide, royalty bearing license for commercial 
purposes, including the right to grant sub licenses, subject to any 
rights of the Government of the United States of America, on terms to 
be negotiated in good faith by the Collaborator(s) and Institution. If 
Collaborator accepts the non-exclusive commercial license, the 
Collaborator agrees to pay all out-of-pocket patent prosecution and 
maintenance costs which will be pro-rated and divided equally among all 
licensees. If Collaborator obtains an exclusive commercial license, in 
addition to any other agreed upon licensing arrangements such as 
royalties and due diligence requirements, the Collaborator agrees to 
pay all out-of-pocket patent prosecution and maintenance costs. 
Collaborator(s) will notify Institution, in writing, if it is 
interested in obtaining a commercial license to any Section A Invention 
within three (3) months of Collaborator's receipt of a patent 
application or six (6) months of receipt of an invention report 
notification of such a section A invention. In the event that 
Collaborator fails to so notify Institution, or elects not to obtain an 
exclusive license, then Collaborator's option expires with respect to 
that Section A Invention, and Institution will be free to dispose of 
its interests in accordance with its policies. If Institution and 
Collaborator fail to reach agreement within ninety (90) days, (or such 
additional period as Collaborator and Institution may agree) on the 
terms for an exclusive license for a particular Section A Invention, 
then for a period of three (3) months thereafter Institution agrees not 
to offer to license the Section A Invention to any third party on 
materially better terms than those last offered to Collaborator without 
first offering such terms to Collaborator, in which case Collaborator 
will have a period of thirty (30) days in which to accept or reject the 
offer. If Collaborator elects to negotiate an exclusive commercial 
license to a Section A Invention, then Institution agrees to file and 
prosecute patent application(s) diligently and in a timely manner and 
to give Collaborator an opportunity to comment on the preparation and 
filing of any such patent application(s). Notwithstanding the above, 
Institution is under no obligation to file or maintain patent 
prosecution for any Section A Invention.
    For all Section A Inventions, regardless of Collaborator's decision 
to seek a commercial license, Institution agrees to grant Collaborator 
a paid-up, nonexclusive, royalty-free, world-wide license for research 
purposes only. Institution retains the right to make and use any 
Section A Invention for all non-profit research, including for 
educational purposes and to permit other educational and non-profit 
institutions to do so.
    B. The IP Option described in this Section B would apply to 
inventions not covered by Section A, but are nevertheless conceived or 
first actually reduced to practice pursuant to clinical or non-clinical 
studies utilizing the CTEP-provided Agent(s). It also applies to 
inventions that are conceived or first actually reduced to practice 
pursuant to NCI CTEP-approved studies that use non-publicly available 
clinical data or specimens from patients treated with the CTEP-provided 
Agent (including specimens obtained from NCI CTEP-funded tissue banks) 
(``Section B Inventions''):
    Institution agrees to grant to Collaborator(s): (i) a paid-up 
nonexclusive, nontransferable, royalty-free, world-wide license to all 
Section B Inventions for research purposes only; and (ii) a 
nonexclusive, royalty-free, world-wide license to (a.) disclose Section 
B Inventions to a regulatory authority when seeking marketing 
authorization of the Agent, and (b.) disclose Section B Inventions on a 
product insert or other promotional material regarding the Agent after 
having obtained marketing authorization from a regulatory authority. 
Notwithstanding the above, Institution is under no obligation to file 
or maintain patent prosecution for any Section B Invention.
    C. The IP Option described in this Section C would apply to 
inventions made by Institution's investigator(s) or any other employees 
or agents of Institution, which are or may be patentable or otherwise 
protectable, as a result of research utilizing the CTEP-provided 
Agent(s), unreleased or non-publicly available clinical data or Agent 
treated specimens outside the scope of approval granted by the NCI CTEP 
(Unauthorized Inventions):
    Institution agrees, at Collaborator's request and expense, to grant 
to Collaborator a royalty-free exclusive or co-exclusive license to 
Unauthorized Inventions. Institution will retain a non-exclusive, non-
sub-licensable royalty free license to practice the invention for 
research use purposes.

D. Institution Notification

    Institution agrees to promptly and confidentially notify NCI CTEP 
([email protected]) and Collaborator(s) in writing of any 
Section A Inventions, Section B Inventions, and Unauthorized Inventions 
upon the earlier of: (i) Any submission of any invention disclosure to 
Institution of a Section A, Section B, or Unauthorized Invention, or 
(ii) the filing of any patent applications of a Section A, Section B, 
or Unauthorized Invention. Institution agrees to provide a copy of 
either the invention disclosure or the patent application to the 
Collaborator and to NCI CTEP which will treat it in accordance with 37 
CFR Part 401. These requirements do not replace any applicable 
reporting requirements under the Bayh-Dole Act, 35 U.S.C. 200-212, and 
implementing regulations at 37 CFR part 401.

V. Conclusion

    NCI and NIH would like to offer our thanks to all respondents for 
their articulate and well thought out comments, and their willingness 
to participate in this process.


[[Page 13410]]


    Dated: March 8, 2011.
Jeffrey Abrams,
Associate Director, Cancer Therapy Evaluation Program, Division of 
Cancer Treatment and Diagnosis, National Cancer Institute.
[FR Doc. 2011-5609 Filed 3-10-11; 8:45 am]
BILLING CODE 4140-01-P