[Federal Register Volume 81, Number 205 (Monday, October 24, 2016)]
[Rules and Regulations]
[Pages 73024-73026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25355]



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DEPARTMENT OF COMMERCE

National Institutes of Standards and Technology

15 CFR Part 17

[Docket No.: 160311228-6788-02]
RIN 0693-AB62


Technology Innovation--Personnel Exchanges

AGENCY: National Institute of Standards and Technology (NIST), United 
States Department of Commerce.

ACTION: Final rule.

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SUMMARY: This final rule clarifies the appropriate use of Cooperative 
Research and Development Agreement (CRADA) authority by a Federal 
laboratory for personnel exchanges where the Federal laboratory has an 
existing relationship with the potential partner through another legal 
mechanism, as well as in the context of joint research projects or the 
development of existing laboratory technology, and through use of the 
General Services Administration's Presidential Innovation Fellows 
program for Federal laboratory Entrepreneur-In-Residence programs. 
Another objective of this rulemaking is to remove outdated regulations 
addressing the licensing of inventions owned by the Department of 
Commerce.

DATES: Effective Date: This rule is effective November 23, 2016.

FOR FURTHER INFORMATION CONTACT: Courtney Silverthorn, via email: 
[email protected], or by telephone: 301-975-4189.

SUPPLEMENTARY INFORMATION: 
    The Stevenson-Wydler Technology Innovation Act of 1980, Public Law 
96-480, as amended (codified at title 15 of the United States Code 
(U.S.C.), Section 3701 et seq.) (the Stevenson-Wydler Act), sets forth 
a national policy to promote cooperation among academia, Federal 
laboratories, labor, and industry in order to facilitate the transfer 
of innovative federal technologies to United States and world markets. 
In furtherance of that policy, the Administration's Lab to Market 
initiative seeks to ``significantly accelerate and improve technology 
transfer by streamlining administrative processes, facilitating 
partnerships with industry, evaluating impact, and opening federal 
research and development (R&D) assets as a platform for innovation and 
economic growth.'' (Lab to Market: Cross Agency Priority Goal Quarterly 
Progress Update, Fiscal Year 2015 Quarter 4). One proven method to 
ensure that federal innovations are made available to industry and the 
public is to encourage frequent interactions among Federal 
laboratories, academic institutions, and industry, including small 
businesses.
    The final rule clarifies the appropriate use of CRADA authority 
under 15 U.S.C. 3710a for personnel exchanges where a Federal 
laboratory has an existing relationship with the potential partner 
through another legal mechanism, such as a grant or cooperative 
agreement. The final rule also promotes the use of existing authorities 
to implement personnel exchange programs at Federal Laboratories: (1) 
By utilizing the existing CRADA authority to transfer personnel to and 
from a Federal laboratory for joint research projects or the 
development of existing laboratory technology; and (2) by utilizing the 
General Services Administration (GSA)'s Presidential Innovation Fellows 
program to offer Federal laboratories additional options for 
implementing Entrepreneur-In-Residence programs.
    The final rule also provides for the deletion of all existing 
provisions in part 17 of title 15 of the Code of Federal Regulations 
(CFR), ``Licensing of Government-Owned Inventions in the Custody of the 
Department of Commerce,'' which are outdated. Outdated subpart A 
implemented for the Department of Commerce licensing rules found at 41 
CFR part 101-4, which were themselves removed at 50 FR 28402, July 12, 
1985. Outdated subpart B was reserved. Outdated subpart C set forth 
appeal procedures addressed to the outdated licensing rules of subpart 
A. All subparts are obsolete, and the rules governing the licensing of 
government-owned inventions are today found in 37 CFR part 404. The 
heading of part 17 will be revised to read ``Personnel Exchanges 
Between Federal Laboratories and Non-Federal Entities,'' and five new 
sections are added.
    Section 17.1, Scope, sets forth the scope of revised part 17, which 
is to implement 15 U.S.C. 3712 and clarifies the appropriate use of 
personnel exchanges in relation to Federal laboratory CRADAs under the 
authority of 15 U.S.C. 3710a(a)(1), including CRADAs involving as 
parties recipients of Federal funding under grants (including 
cooperative agreements) and contracts, which could include National 
Network for Manufacturing Innovation awardees.
    Section 17.2, Definitions, provides definitions for certain terms 
used in this part.
    Section 17.3, Exchange of Federal Laboratory Personnel with 
Recipients of Federal Funding, provides in paragraph (a) that the 
existence of a funding agreement (as defined in 35 U.S.C. 201(b)) 
between a Federal laboratory and a contractor shall not preclude a 
CRADA with that contractor, where the Federal laboratory director makes 
a determination that the technical subject matter of the funding 
agreement is sufficiently distinct from that of the CRADA. Paragraph 
(a) also provides that a contractor which is a collaborating party 
shall in no event transfer funds to a Federal laboratory under a CRADA 
using funds awarded to the contractor by that laboratory.
    Paragraph (b) of Sec.  17.3 provides that a Federal laboratory may 
exchange personnel with a contractor under a CRADA where the 
determination required under paragraph (a) cannot be made, provided 
that the CRADA includes at least one collaborating party in addition to 
the Federal laboratory and that contractor. In that circumstance, the 
Federal laboratory shall not provide services, property, or other 
resources to that contractor under the CRADA, and if any individual 
terms of that contractor's funding agreement conflict with the terms of 
the multi-party CRADA, then the funding agreement terms will control as 
applied to that contractor and the Federal laboratory only.
    Paragraph (c) of Sec.  17.3 sets forth a number of factors which 
may be taken into account in making the ``sufficiently distinct'' 
determination required under paragraph (a), including whether the 
conduct of specified research or development efforts under the CRADA 
would require the contractor to perform tasks identical to those 
required under the funding agreement; whether existing intellectual 
property to be provided by the Federal laboratory or the contractor 
under the CRADA is the same as that provided under, or referenced in, 
the funding agreement; whether the contractor's employees performing 
the specified research or development efforts under the CRADA are the 
same employees performing the tasks required under the funding 
agreement; and whether services, property or other resources 
contemplated by the Federal Laboratory to be provided to the contractor 
for the specified research or development efforts under the CRADA would 
materially benefit the contractor in the performance of tasks required 
under the funding agreement.
    Section 17.4, Personnel Exchanges from a Federal Laboratory, 
provides in paragraph (a)(1) that a Federal laboratory may exchange its 
personnel with a collaborating party under a CRADA where no invention 
currently exists. Under paragraph (a)(2), a Federal laboratory may 
exchange personnel with

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a non-Federal collaborating party for the purposes of developing or 
commercializing an invention in which the Federal government has an 
ownership interest, including an invention made by an employee or 
former employee while in the employment or service of the Federal 
government, and such personnel exchanged may include such employee who 
is an inventor. Paragraph (a)(2) also provides that funding may be 
provided by the non-federal collaborating party to the Federal 
laboratory for the participation of the Federal employee in developing 
or commercializing an invention, including costs for salary and other 
expenses, such as benefits and travel. Consistent with guidance in the 
Office of Legal Counsel's Memorandum for Gary Davis, Acting Director, 
Office of Government Ethics, September 7, 2000, ``Application of 18 
U.S.C. 209 to Employee-Inventors Who Receive Outside Royalty 
Payments,'' \1\ paragraph (a)(2) also sets forth that royalties from 
inventions received through a license agreement negotiated with the 
Federal laboratory and paid by the laboratory to an inventor who is a 
Federal employee are considered Federal compensation. Paragraph (a)(3) 
provides that where an employee leaves Federal service in order to 
receive salary or other compensation from a non-Federal organization, a 
Federal laboratory may use reinstatement authority in accordance with 5 
CFR 315.401, or other applicable authorities, to rehire the former 
Federal employee at the conclusion of the exchange.
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    \1\ https://www.oge.gov/web/oge.nsf/Legal%20Interpretation/
604EE82C4CA3404A85257EF200502488/$FILE/op-olc-v024-p0170_0.pdf?open.
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    In exchanging personnel with a collaborating party under a CRADA, 
as in any other exercise of the CRADA authority, a Federal Laboratory 
should take into account the provisions of 15 U.S.C. 3710a(c)(3) 
regarding standards of conduct for its employees for resolving 
potential conflicts of interest.
    Section 17.5, Personnel Exchanges to a Federal laboratory, provides 
that a Federal laboratory may provide funds for non-federal personnel 
exchanged in order to bring into a Federal laboratory outside personnel 
with expertise in scientific commercialization through the Presidential 
Innovation Fellows program, and that a laboratory will engage with the 
General Services Administration (GSA) to transfer funding for exchanged 
personnel and to select and place Entrepreneurs-In-Residence at the 
laboratory for the purposes of evaluating the laboratory's 
technologies, and providing technical consulting to facilitate readying 
a technology for commercialization by an outside entity.

Response to Comments

    During the proposed rule comment period, NIST received one written 
comment that noted that the changes likely posed no additional burden 
to universities, but requested additional time to provide comments due 
to the academic schedule of university staff.
    Discussion: NIST appreciates the interest of the academic community 
in the rule. It is anticipated that these clarifications will 
strengthen the ability of Federal laboratories and partners through 
other agreements to work together with a third party, often a 
university, to support economic development and commercialization in 
the United States. NIST conducted extensive outreach to multiple groups 
that support universities to note the availability of the proposed 
rulemaking, and provided a link to the proposed rulemaking to the 
National Academies of Science Government-University-Industry Research 
Roundtable, which was distributed to their mailing list. We believe, as 
noted within the comment, that these changes are clarifications and 
that the lack of substantive comments from academia, as well as 
industry, is indicative of a lack of specific concerns rather than a 
lack of time and therefore do not believe an extended comment period is 
warranted.

Changes From the Proposed Rule

    The final rule contains no substantive changes from the proposed 
rule.

Classification

    NIST has determined that the final rule is consistent with the 
Stevenson-Wydler Act of 1980 and its amendments and other applicable 
law.

Executive Order 12866

    This final rule was determined to be not significant for purposes 
of Executive Order 12866.

Executive Order 13132

    This final rule does not contain policies with Federalism 
implications as defined in Executive Order 13132.

Regulatory Flexibility Act

    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration during the proposed rule stage that this action would 
not have a significant economic impact on a substantial number of small 
entities. The factual basis for the certification was published in the 
proposed rule and is not repeated here. No comments were received 
regarding this certification. As a result, a regulatory flexibility 
analysis was not required and none was prepared.

Paperwork Reduction Act

    This final rule contains no new collection of information subject 
to the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

National Environmental Policy Act

    This rule will not significantly affect the quality of the human 
environment. Therefore, an environmental assessment or Environmental 
Impact Statement is not required to be prepared under the National 
Environmental Policy Act of 1969.

List of Subjects in 15 CFR Part 17

    Federal employees, Inventions and patents, Laboratories, Research 
and development, Science and technology, Technology transfer.

Kent Rochford,
Associate Director for Laboratory Programs, National Institute of 
Standards and Technology.

    For the reasons stated in the preamble, the National Institute of 
Standards and Technology revises 15 CFR part 17 as follows:

PART 17--PERSONNEL EXCHANGES BETWEEN FEDERAL LABORATORIES AND NON-
FEDERAL ENTITIES

Sec.
17.1 Scope.
17.2 Definitions.
17.3 Exchange of Federal laboratory personnel with recipients of 
Federal funding.
17.4 Personnel exchanges from a Federal laboratory.
17.5 Personnel exchanges to a Federal laboratory.

    Authority:  15 U.S.C. 3712.


Sec.  17.1  Scope.

    (a) The Stevenson-Wydler Technology Innovation Act of 1980, Public 
Law 96-480, as amended (codified at title 15 of the United States Code 
(U.S.C.), section 3701 et seq.) (the Stevenson-Wydler Act), sets forth 
a national policy to renew, expand, and strengthen cooperation among 
academia, Federal laboratories, labor, and industry, in forms including 
personnel exchanges (15 U.S.C. 3701(3)). One proven method to ensure 
that Federal innovations are passed to industry and the public is to 
encourage frequent interactions among Federal laboratories, academic 
institutions, and industry, including both large and small businesses. 
In

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accordance with applicable ethics regulations and Agency policies, 
exchanges of personnel between Federal laboratories and outside 
collaborators should be encouraged (15 U.S.C. 3702(5)). Models that 
include Federal funding, as well as those that are executed without 
Federal funding, are encouraged.
    (b) This part implements 15 U.S.C. 3712 and provides clarification 
regarding the appropriate use of personnel exchanges in relation to 
Federal laboratory Cooperative Research and Development Agreements 
(CRADAs) under the authority of 15 U.S.C. 3710a.
    (c) This part is applicable to exchanges of personnel between 
Federal laboratories and parties to a CRADA under 15 U.S.C. 
3710a(a)(1).


Sec.  17.2  Definitions.

    (a) The term funding agreement shall have the meaning according to 
it under 35 U.S.C. 201(b).
    (b) The term contractor shall have the meaning according to it 
under 35 U.S.C. 201(c).
    (c) The term Federal laboratory shall have the meaning according to 
it under 15 U.S.C. 3703(4).


Sec.  17.3  Exchange of Federal laboratory personnel with recipients of 
Federal funding.

    (a) In accordance with 15 U.S.C. 3710a(b)(3)(A) and 3710a(d)(1), a 
Federal laboratory may provide personnel, services, property, and other 
resources to a collaborating party, with or without reimbursement (but 
not funds to non-Federal parties) for the conduct of specified research 
or development efforts under a CRADA which are consistent with the 
missions of the Federal laboratory. The existence of a funding 
agreement between a Federal laboratory and a contractor shall not 
preclude the Federal laboratory from using its authority under 15 
U.S.C. 3710a to enter into a CRADA with the contractor as a 
collaborating party for the conduct of specified research or 
development efforts, where the director of the Federal laboratory 
determines that the technical subject matter of the funding agreement 
is sufficiently distinct from that of the CRADA. In no event shall a 
contractor which is a collaborating party transfer funds to a Federal 
laboratory under a CRADA using funds awarded to the contractor by that 
laboratory.
    (b) (1) A Federal laboratory may enter into a CRADA with a 
contractor as a collaborating party for the purpose of exchange of 
personnel for the conduct of specified research or development efforts 
where the determination required under paragraph (a) of this section 
could not be made, provided that:
    (i) The CRADA includes at least one collaborating party in addition 
to the Federal laboratory and that contractor; and
    (ii) The Federal laboratory shall not provide services, property or 
other resources to that contractor under the CRADA.
    (2) Where a Federal laboratory enters into a CRADA with a 
contractor under this paragraph (b), the terms of that contractor's 
funding agreement shall normally supersede the terms of the CRADA, to 
the extent that any individual terms conflict, as applied to that 
contractor and the Federal laboratory only.
    (c) In making the determination required under paragraph (a) of 
this section, the director of a Federal laboratory may consider factors 
including the following:
    (1) Whether the conduct of specified research or development 
efforts under the CRADA would require the contractor to perform tasks 
identical to those required under the funding agreement;
    (2) Whether existing intellectual property to be provided by the 
Federal laboratory or the contractor under the CRADA is the same as 
that provided under, or referenced in, the funding agreement;
    (3) Whether the contractor's employees performing the specified 
research or development efforts under the CRADA are the same employees 
performing the tasks required under the funding agreement; and
    (4) Whether services, property or other resources contemplated by 
the Federal laboratory to be provided to the contractor for the 
specified research or development efforts under the CRADA would 
materially benefit the contractor in the performance of tasks required 
under the funding agreement.


Sec.  17.4  Personnel exchanges from a Federal laboratory.

    (a) For personnel exchanges in which a Federal laboratory maintains 
funding for Federal personnel provided to a collaborating party--
    (1) in accordance with 15 U.S.C. 3710a(b)(3)(A), a Federal 
laboratory may exchange personnel with a collaborating party for the 
purposes of specified scientific or technical research towards a mutual 
goal consistent with the mission of the Agency, where no invention 
currently exists, or
    (2) in accordance with 15 U.S.C. 3710a(b)(3)(C), a Federal 
laboratory may exchange personnel with a non-Federal collaborating 
party for the purposes of developing or commercializing an invention in 
which the Federal government has an ownership interest, including an 
invention made by an employee or former employee while in the 
employment or service of the Federal government, and such personnel 
exchanged may include such employee who is an inventor.
    (i) Funding may be provided under a CRADA by the non-Federal 
collaborating party to the Federal laboratory for the participation of 
the Federal employee in developing or commercializing an invention, 
including costs for salary and other expenses, such as benefits and 
travel.
    (ii) Royalties from inventions received through a license agreement 
negotiated with the Federal laboratory and paid by the Federal 
laboratory to an inventor who is a Federal employee are considered 
Federal compensation.
    (3) Where an employee leaves Federal service in order to receive 
salary or other compensation from a non-Federal organization, a Federal 
laboratory may use reinstatement authority in accordance with 5 CFR 
315.401, or other applicable authorities, to rehire the former Federal 
employee at the conclusion of the exchange.


Sec.  17.5  Personnel exchanges to a Federal laboratory.

    For exchanges in which a Federal laboratory provides funds for the 
non-federal personnel--
    (a) Outside personnel with expertise in scientific 
commercialization may be brought in to a Federal laboratory through the 
Presidential Innovation Fellows program or related programs (see 5 CFR 
213.3102(r)) for Entrepreneur-In-Residence programs or similar, related 
programs run by the General Services Administration (GSA) or other 
Federal Agencies.
    (b) A laboratory may engage with the GSA or other relevant Agency 
to transfer funding for exchanged personnel, and may work with such 
agency to select and place Entrepreneurs-In-Residence at the laboratory 
for the purposes of evaluating the laboratory's technologies, and 
providing technical consulting to facilitate readying a technology for 
commercialization by an outside entity.

Phillip Singerman,
Associate Director for Innovations and Industry Services.
[FR Doc. 2016-25355 Filed 10-21-16; 8:45 am]
 BILLING CODE 3510-13-P