[Federal Register Volume 79, Number 193 (Monday, October 6, 2014)]
[Proposed Rules]
[Pages 60119-60123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23739]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

14 CFR Part 1245

[Docket No: 2700-0010]
RIN 2700-AE02


Patents and Other Intellectual Property Rights

AGENCY: National Aeronautics and Space Administration.

ACTION: Proposed rule.

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SUMMARY: NASA is proposing to amend its patent waivers regulations to 
update citations and the patent waiver policy, and to clarify and 
update the patent waiver procedures, so they are more in line with the 
National Aeronautics and

[[Page 60120]]

Space Act (Space Act), the authorizing statute.

DATES: Submit comments on or before November 5, 2014.

ADDRESSES: Comments must be identified with RIN 2700-AE02 and may be 
sent to NASA via the Federal E-Rulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting 
comments. Please note that NASA will post all comments on the internet 
with changes, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Helen M. Galus, Office of the General 
Counsel, NASA Headquarters, telephone (202) 358-3437.

SUPPLEMENTARY INFORMATION:

Background

    The National Aeronautics and Space Act (the Space Act), at 51 
U.S.C. 20135(b) states that an invention made in the performance of any 
work under any contract of the National Aeronautics and Space 
Administration (NASA) shall be the exclusive property of the United 
States if the person who made the invention was (A) employed or 
assigned to perform research, development, or exploration work and the 
invention is related to the work or was within the scope of that 
person's employment duties; or (B) was not employed to perform 
research, development, or exploration work but the invention is 
nevertheless related to the contract, or to the work or duties the 
person was employed or assigned to perform, and was made during working 
hours, or with a contribution from the Government. 51 U.S.C. 20135(g), 
authorizes the Administrator of the National Aeronautics and Space 
Administration (NASA) to waive all or any part of the rights of the 
United States, under section 20135 of the Space Act, with respect to 
any invention or class of inventions made or which may be made by any 
person or class of persons in the performance of any work required by 
any contract of the Administration, if the Administrator determines 
that the interests of the U.S. will be served thereby. Any such waiver 
may be made upon such terms and conditions as the Administrator 
determines necessary for the protection of U.S. interests. The enabling 
regulations, setting forth these terms and conditions are set forth in 
Title 14 of the Code of Federal Regulations, Part 1245, Subpart 1.
    NASA is revising its regulations at 14 CFR sections 1245.100 
through 1245.104, 1245.106, 1245.107, 1245.110, 1245.112, 1245.116 and 
1245.117 to update citations to the United States Code; to clarify the 
requirements and procedures for petitioning for a patent waiver, so 
they follow more closely the terms of the Space Act; and to add grounds 
for denial of a petition for waiver of foreign rights. The revisions 
include (1) clarification that NASA only has authority under the Space 
Act to waive rights in ``inventions or classes of inventions;'' (2) a 
definition for what a ``class of invention'' includes; and (3) a 
requirement that petitions for advance waiver of rights to identify 
what inventions or classes of inventions the Contractor believes will 
be made under the contract and for which waiver of rights is being 
requested.
    The current language of 14 CFR 1245.100 to 1245.103, and 1245.116, 
is amended to update the citations to the National Aeronautics and 
Space Act, which now is codified in Title 51 of the United States Code. 
Also, the current definition of ``invention'' in Sec.  1245.102 is 
amended to better conform with the definition of invention set forth in 
35 U.S.C. 101 (``Inventions Patentable''), and to add language defining 
the term ``class of Inventions'' so that the regulations better define 
and implement the Space Act (51 U.S.C. 20135(g)) which permits NASA to 
``waive all or any part of the rights of the United States under this 
section with respect to any invention or class of inventions made or 
which may be made by any person or class of persons in the performance 
of any work required by any contract of the Administration if the 
Administrator determines that the interests of the United States will 
be served thereby. . .''.
    The current language of 14 CFR 1245.103 is revised in several 
places to set forth the ``invention or class of invention'' limitation 
on NASA's waiver authority. Also, paragraph (a) is revised to expand 
upon the objectives and policies upon which NASA will be guided in the 
implementation of the provisions of section 20135(g) of the National 
Aeronautics and Space Act (51 U.S.C. Chapter 201), and in determining 
when the interests of the United States would be served by waiver of 
all or any part of the rights of the United States in an invention or 
class of inventions (see paragraph immediately above). Additionally, 
the language ``Any such waiver may be made upon such terms and under 
such conditions as the Administrator shall determine to be required for 
the protection of the interests of the United States'' has been added, 
this language is taken directly from the Space Act (51 U.S.C. 
20135(g)).
    The current language in 14 CFR 1245.104 is also amended to include 
the ``invention or class of invention'' limitation on NASA's waiver 
authority, and additionally to make more accurate the terminology being 
used (e.g., replacing the phrase ``elimination of right to retain 
title'' with ``denial of the requested rights''). Also, a new paragraph 
(c)(2) is added to require an advance waiver petition content meet the 
National Aeronautics and Space Act requirement of waiving rights to 
``any invention or class of inventions,'' by identifying the 
invention(s) and/or class(es) of inventions that the Contractor 
believes will be made under the contract and for which waiver of rights 
is being requested. Additionally, paragraph (d) has been clarified and 
original paragraph (e) has been deleted so that the petitioners' 
reconsideration rights will now solely be found in section 1245.112, 
rather than in two potentially conflicting sections.
    As to 14 CFR 1245.106, the language has been revised to permit the 
Board to review and recommend a partial grant or denial on the same 
grounds as are currently used for the partial granting or denial of 
domestic waiver petitions. Additionally, a clarification was made to 
make clear that the Board recommends action to the Administrator.
    Only minor clarifying revisions were made to the current language 
in 14 CFR 1245.107 and 14 CFR 1245.117.
    As to the current language of 14 CFR 1245.110, it is revised to add 
the requirement that ``Advance waiver petitions shall also identify the 
invention(s) and/or class(es) of inventions that the Contractor 
believes will be made under the contract and for which waiver of rights 
is being requested, in accordance with Sec.  1245.104(c)(2) above.''
    Finally, as to 14 CFR 1245.112, the language has been revised such 
that the petitioner will be given notice only of proposed Board actions 
that are adverse or different from the waiver of rights requested, as 
it is these types of actions that trigger the right to request 
reconsideration and an oral hearing, as set forth in this section.
    The regulations have been modified in multiple places to make them 
conform more closely with the specific waiver authority NASA has under 
the National Aeronautics and Space Act (51 U.S.C. 20135(g)), which 
states ``the Administrator may waive all or any part of the rights of 
the United States under this section with respect to any invention or 
class of inventions made or which may be made by any person or class of 
persons in the performance of any work required by any contract of the 
Administration if the Administrator

[[Page 60121]]

determines that the interests of the United States will be served 
thereby.'' Specifically, the proposed amendments to the regulations now 
make clear the limitation on NASA's authority to waive only 
``inventions'' and ``classes'' of inventions and, in particular, to 
more directly address how this affects advance waiver petitions.

Statutory Authority

    The National Aeronautics and Space Act (the Space Act), 51 U.S.C. 
20113(a), authorizes the Administrator of the National Aeronautics and 
Space Administration (NASA) to make, promulgate, issue, rescind, and 
amend rules and regulations governing the manner of its operations and 
the exercise of the powers vested in it by law.

Regulatory Analysis Section

Paperwork Reduction Act Statement

    This rule does not contain an information collection requirement 
subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.).

Executive Order 12866 and Executive Order 13563

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has not been designated a ``significant 
regulatory action'' under section 3(f) of Executive Order 12866.

Regulatory Flexibility Act

    It has been certified that this rule is not subject to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities. The rule sets forth policies and procedures for 
submitting and reviewing petitions for waiver of the Government's 
rights to certain inventions made under government funded contracts, 
pursuant to section 20135(b)(1) of the National Aeronautics and Space 
Act, 51 U.S.C. 20135(b)(1). The provisions do not apply to inventions 
made under any contract, grant, or cooperative agreement with a 
nonprofit organization or small business firm that are afforded the 
disposition of rights as provided in 35 U.S.C. 200-204 (Pub. L. 96-517, 
94 Stat. 3019, 3020, 3022 and 3023; and Pub. L. 98-620, 98 Stat. 3364-
3367). Therefore, the rule will not have a significant economic impact 
on a substantial number of small entities.

List of Subjects in 14 CFR Part 1245

    Inventions, patents and waivers.

    Accordingly, 14 CFR Part 1245 is proposed to be amended as follows:

PART 1245--PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS

Subpart 1--Patent and Waiver Regulations

0
1. The authority citation for Part 1245, Subpart 1, is revised to read 
as follows:

    Authority: 51 U.S.C. 20135, 35 U.S.C. 200 et seq.

0
2. Section 1245.100 is revised to read as follows:


Sec.  1245.100  Scope.

    This subpart prescribes regulations for the waiver of rights of the 
Government of the United States to inventions made under NASA contract 
in conformity with section 20135 of the National Aeronautics and Space 
Act (51 U.S.C. Chapter 201).
0
3. Section 1245.101 is revised to read as follows:


Sec.  1245.101  Applicability.

    The provisions of the subpart apply to all inventions made or which 
may be made under conditions enabling the Administrator to determine 
that the rights therein reside in the Government of the United States 
under section 20135(b)(1) of the National Aeronautics and Space Act, 51 
U.S.C. 20135(b)(1). The provisions do not apply to inventions made 
under any contract, grant, or cooperative agreement with a nonprofit 
organization or small business firm that are afforded the disposition 
of rights as provided in 35 U.S.C. 200-204 (Pub. L. 96-517, 94 Stat. 
3019, 3020, 3022 and 3023; and Pub. L. 98-620, 98 Stat. 3364-3367).
0
4. Section 1245.102 is amended by revising paragraph (c) adding new 
paragraph (d), and re-lettering paragraphs (d) through (j), to read as 
follows:


Sec.  1245.102  Definitions and terms.

* * * * *
    (c) Invention means any, new and useful process, machine, 
manufacture, or composition of matter, or any new and useful 
improvement thereof, or any variety of plant, which is or may be 
patentable under the Patent Laws of the United States of America or any 
foreign country.
    (d) Class of inventions means inventions directed to a particular 
process, machine, manufacture, or composition of matter, or to a 
narrowly-drawn, focused area of technology.
    (e) Made, when used in relation to any invention, means the 
conception or first actual reduction to practice of such invention.
    (f) Practical application means to manufacture in the case of a 
composition or product, to practice in the case of a process or method, 
or to operate in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being 
utilized and that its benefits are to the extent permitted by law or 
Government regulations available to the public on reasonable terms.
    (g) Board means the NASA Inventions and Contributions Board 
established by the Administrator of NASA within the Administration 
under section 20135(g) of the National Aeronautics and Space Act (51 
U.S.C. 20135(g)).
    (h) Chairperson means Chairperson of the NASA Inventions and 
Contributions Board.
    (i) Petitioner means a contractor or prospective contractor who 
requests that the Administrator waive rights in an invention or class 
of inventions made or which may be made under a NASA contract. In the 
case of an identified invention, the petitioner may be the inventor(s).
    (j) Government agency includes any executive department, 
independent commission, board, office, agency, administration, 
authority, Government corporation, or other Government establishment of 
the executive branch of the Government of the United States of America.
    (k) Administrator means the Administrator of the National 
Aeronautics and Space Administration or the Administrator's duly 
authorized representative.
0
5. Section 1245.103 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  1245.103  Policy.

    (a) In implementing the provisions of section 20135(g) of the 
National Aeronautics and Space Act (51 U.S.C. Chapter 201), and in 
determining when the interests of the United States would be served by 
waiver of all or any part of the rights of the United States in an 
invention or class of inventions made in the performance of work under 
NASA contracts, the Administrator will be guided by the objectives set 
forth in the National Aeronautics and Space Act, by the basic policy of 
the Presidential Memorandum and Statement of

[[Page 60122]]

Government Patent Policy to the Heads of the Executive Departments and 
agencies dated February 18, 1983, by the goals and objectives of its 
current Authorization Act, Strategic Plan, and other pertinent National 
policies or laws, such as the National Space Policy of the United 
States of America. Any such waiver may be made upon such terms and 
under such conditions as the Administrator shall determine to be 
required for the protection of the interests of the United States. 
Among the most important goals are to provide incentives to foster 
inventiveness and encourage the reporting of inventions made under NASA 
contracts, to provide for the widest practicable dissemination of new 
technology resulting from NASA programs, and to promote early 
utilization, expeditious development, and continued availability of 
this new technology for commercial purposes and the public benefit. In 
applying this regulation, both the need for incentives to draw forth 
private initiatives and the need to promote healthy competition in 
industry must be weighed.
    (b) Several different situations arise when waiver of all or any 
part of the rights of the United States with respect to an invention or 
class of invention may be requested and are prescribed in Sec. Sec.  
1245.104-1245.106. Under Sec.  1245.104, advance waiver of any or all 
of the rights of the United States with respect to any invention or 
class of inventions which may be made under a contract may be requested 
prior to the execution of the contract, or within 30 days after 
execution of the contract. Waiver of rights to an identified invention 
made and reported under a contract are to be requested under Sec.  
1245.105, and may be requested under this provision even though a 
request under Sec.  1245.104 was not made, or if made, was not granted. 
Waiver of foreign rights under Sec.  1245.106 may be requested 
concurrently with domestic rights under Sec.  1245.104 or Sec.  
1245.105, or may be made independently.
* * * * *
0
6. Section 1245.104 is amended by revising paragraphs (a), (b), (b)(2), 
(b)(3), (b)(3)(v), (c)(1-4), and (d), and deleting paragraph (e) and 
re-lettering original paragraph (f) accordingly to read as follows:


Sec.  1245.104  Advance waivers.

    (a) The provisions of this section apply to petitions for waiver of 
domestic rights of the United States with respect to any invention or 
class of inventions which may be made under a contract.
    (b) The NASA Inventions and Contributions Board normally will 
recommend grant of a request for advance waiver of domestic rights 
submitted prior to execution of contract or within 30 days after 
execution of the contract unless the Board finds that the interests of 
the United States will be better served by restricting or denying all 
or part of the requested rights in one or more of the following 
situations:
    (1) * * *
    (2) When a determination has been made by Government authority 
which is authorized by statute or Executive order to conduct foreign 
intelligence or counter-intelligence activities that the restriction or 
denial of the requested rights to any inventions made in the 
performance of work under the contract is necessary to protect the 
security of such activities; or
    (3) Where the Board finds that exceptional circumstances exist, 
such that restriction or denial of the requested rights will better 
promote one or more of the following objectives:
    (i) * * *
    (ii) * * *
    (iii) * * *
    (iv) * * *
    (v) Ensuring that the Government retains sufficient rights in 
federally-supported inventions to meet the needs of the Government and 
protect the public against nonuse or unreasonable use of inventions.
    (c)(1) An advance waiver, when granted, will be subject to the 
reservations set forth in Sec.  1245.107. Normally, the reservations of 
Sec.  1245.107(a), License to the Government, and Sec.  1245.107(b), 
March-in rights, will apply. However, should one or more of the 
situations set forth in paragraphs (b)(1) through (b)(3), of this 
section exist, rather than denying the advance waiver request, the 
Board may recommend granting to the contractor only part of the 
requested rights, to the extent necessary to address the particular 
situation, consistent with the policy and goals of Sec.  1245.103. In 
that event, the waiver grant will be subject to additional reservations 
as provided for in Sec.  1245.107(c).
    (2) To meet the National Aeronautics and Space Act standard of 
``any invention or class of inventions,'' for advance waivers, the 
petition shall identify the invention(s) and/or class(es) of inventions 
that the Contractor believes will be made under the contract and for 
which waiver of rights is being requested. Therefore, the petition must 
be directed to a specific invention(s) or to inventions directed to a 
particular process, machine, manufacture, or composition of matter, or 
to a narrowly-drawn, focused area(s) of technology.
    (3) An advance waiver, when granted, will apply only to inventions 
reported to NASA under the applicable terms of the contract and a 
designation made within 6 months of the time of reporting (or a 
reasonable time thereafter permitted for good cause shown) that the 
contractor elects title to the invention and intends to file or has 
filed a U.S. patent application. Such election will be made by 
notification in writing to the patent representative designated in the 
contract. Title to all other inventions made under the contract are 
subject to section 20135(b)(1) of the National Aeronautics and Space 
Act, 51 U.S.C. 20135(b)(1). The granting of the advance waiver does not 
otherwise relieve a contractor of any of the invention identification 
or reporting requirements set forth in the applicable patent rights 
clause in the contract.
    (4) The advance waiver shall extend to the invention claimed in any 
patent application filed on the reported invention, including any 
subsequent divisional or continuation application thereof, provided the 
claims of the subsequent application do not substantially change the 
scope of the reported invention.
    (d) When a petition for waiver is submitted under paragraph (b) of 
this section, prior to contract execution, it will be processed 
expeditiously so that a decision on the petition may be reached prior 
to execution of the contract. However, if there is insufficient time or 
insufficient information is presented, or for other reasons which do 
not permit a recommendation to be made without unduly delaying 
execution of the contract, the Board will inform the contracting 
officer that no recommendation can be made prior to contract execution 
and the reasons therefor. The contracting officer will then notify the 
petitioner of the Board's action.
    (e) A waiver granted pursuant to a petition submitted under this 
section shall extend to any contract changes, modifications, or 
supplemental agreements, so long as the purpose of the contract or the 
scope of work to be performed is not substantially changed.
0
7. Section 1245.106 is amended by revising paragraph (c) and (d) to 
read as follows:


Sec.  1245.106  Waiver of foreign rights.

* * * * *
    (c) The Board will normally recommend the waiver of foreign rights 
be granted under paragraph (a) or paragraph (b) of this section in any 
designated country unless: (1) The Board finds that exceptional 
circumstances exist, such that restriction or denial of the requested

[[Page 60123]]

foreign rights will better promote one or more of the objectives set 
forth in Sec.  1245.104(b)(3)(i) through (v); or (2) The Board finds 
that the economic interests of the United States will not be served 
thereby; or unless (3) in the case of an individual identified 
invention under paragraph (b) of this section, NASA has determined, 
prior to the request, to file a patent application in the designated 
country.
    (d) If, subsequent to the granting of the petition for foreign 
rights, the petitioner requests and designates additional countries in 
which it wishes to secure patents, the Chairperson may recommend such 
request, in whole or in part, without further action by the Board.
0
8. Section 1245.107 is amended by revising introductory paragraph (b) 
to read as follows:


Sec.  1245.107  Reservations.

* * * * *
    (b) March-in rights. For any invention for which waiver of rights 
has been granted under this subpart, NASA has the same right as set 
forth in 35 U.S.C. 203 and 210, with the procedures set forth in Sec.  
1245.117 and 37 CFR 401.6, to require the contractor, an assignee, or 
exclusive licensee of the invention to grant a nonexclusive, partially 
exclusive, or exclusive license in any field of use to a responsible 
applicant or applicants, upon terms that are reasonable under the 
circumstances, and if the contractor, assignee, or exclusive licensee 
refuses such a request, NASA has the right to grant such a license 
itself if NASA determines that:
* * * * *
0
9. Section 1245.110 is amended by adding new paragraph (b) and re-
lettering original paragraph (b) and (c) accordingly to read as 
follows:


Sec.  1245.110  Content of petitions.

* * * * *
    (b) Advance waiver petitions shall also identify the invention(s) 
and/or class(es) of inventions that the Contractor believes will be 
made under the contract and for which waiver of rights is being 
requested, in accordance with Sec.  1245.104(c)(2) above.
    (c) No specific forms need be used. Requests for advanced waiver 
should, preferably, be included with the proposal, but in any event in 
advance of negotiations.
    (d) Petitions for waiver under contracts funded by another agency. 
The content of the petitions for waiver of title to inventions made 
under contracts awarded by NASA on behalf of the Department of Energy 
under Sec.  1245.103(c) shall follow the procedures and form prescribed 
by and shall be acted on by that agency. Petitions under contracts 
awarded by NASA on behalf of other agencies will be coordinated with 
the agency before action is taken by the Board.
0
10. Section 1245.112 is amended by revising paragraph (a) deleting 
subparagraph (1)(i), and renumber original subparagraphs (1)(ii) 
and(1)(iii) accordingly, and revising paragraph (a)(2) to read as 
follows:


Sec.  1245.112  Notice of proposed Board action and reconsideration.

    (a) Notice. Except as provided by Sec.  1245.104(d), the Board will 
notify the petitioner, through the contracting officer, with respect to 
petitions for advance waiver prior to contract execution, and directly 
to the petitioner for all other petitions:
    (1) When it proposes to recommend to the Administrator that the 
petition be:
    (i) Granted in an extent different from that requested; or
    (ii) Denied.
    (2) Of the reasons for the recommended action adverse to or 
different from the waiver of rights requested by the petitioner.
* * * * *
0
11. Section 1245.116 is amended by revising paragraph (b) to read as 
follows:


Sec.  1245.116  Miscellaneous provisions.

* * * * *
    (b) Statement of Government rights. The waiver recipient shall 
include, within the specification of any United States patent 
application and any patent issuing thereon for a waived invention, the 
following statement:
    The invention described herein was made in the performance of work 
under NASA Contract No. __--, and is subject to the provisions of 
Section 20135 of the National Aeronautics and Space Act (51 U.S.C. 
Chapter 201).
* * * * *
0
12. Section 1245.117 is amended by revising paragraph (a) to read as 
follows:


Sec.  1245.117  March-in and waiver revocation procedures.

    (a) The exercise of march-in procedures shall be in conformance 
with 35 U.S.C. 203 and the applicable provisions of 37 CFR 401.6, 
entitled ``Exercise of march-in rights for inventions made by nonprofit 
organizations and small business firms.''
* * * * *

Cheryl E. Parker,
NASA Federal Register Liaison Officer.
[FR Doc. 2014-23739 Filed 10-3-14; 8:45 am]
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