[Federal Register Volume 81, Number 240 (Wednesday, December 14, 2016)]
[Rules and Regulations]
[Pages 90185-90186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29988]



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 Rules and Regulations
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  Federal Register / Vol. 81, No. 240 / Wednesday, December 14, 2016 / 
Rules and Regulations  

[[Page 90185]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1250

[Doc. No. AMS-LPS-15-0042]


Amendment to the Egg Research and Promotion Rules and Regulations 
To Update Patents, Copyrights, Trademarks, and Information Provisions

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Patents, Copyrights, Trademarks, 
Publications, and Product Formulations (IP) language of the Egg 
Research and Promotion Rules and Regulations (Regulations) to conform 
with commodity research and promotion program orders created under the 
Commodity Promotion, Research, and Information Act of 1996 (1996 Act).

DATES: Effective January 13, 2017.

FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Research and 
Promotion Division; Livestock, Poultry, and Seed Program; AMS, USDA; 
1400 Independence Avenue SW., Room 2610-S; Washington, DC 20250; 
telephone (202) 720-5705; fax (202) 720-1125; or email 
[email protected].

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    The Office of Management and Budget (OMB) has waived the review 
process required by Executive Order 12866 for this action.

Executive Order 12988

    This rule was reviewed under Executive Order 12988, Civil Justice 
Reform. It is not intended to have a retroactive effect. This action 
will not preempt any state or local laws, regulations, or policies 
unless they present an irreconcilable conflict with this rule. The Egg 
Research and Consumer Information Act (Act) [7 U.S.C. 2701 et seq.] 
provides that administrative proceedings be filed before parties may 
consider suit in court. Under section 14 of the Act [7 U.S.C. 2713], a 
person subject to the Egg Promotion and Research Order (Order) may file 
a petition with the Department of Agriculture (USDA) stating that the 
Order, any provision of the Order, or any obligation imposed in 
connection with the Order, is not in accordance with the law and 
request a modification of the Order or an exemption from the Order. The 
petitioner is afforded the opportunity for a hearing on the petition. 
After a hearing, USDA would rule on the petition. The Act provides that 
district courts of the U.S. in any district in which such person is an 
inhabitant, or has their principal place of business, has jurisdiction 
to review USDA's ruling on the petition, if a complaint for this 
purpose is filed within 20 days after the date of the entry of the 
ruling.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601-612], the Agricultural Marketing Service (AMS) has determined that 
this rule will not have a significant economic impact on a substantial 
number of small entities as defined by RFA. The purpose of RFA is to 
fit regulatory action to scale on businesses subject to such action so 
that small businesses will not be disproportionately burdened. As such, 
these changes will not impose a significant impact on persons subject 
to the program.
    According to the American Egg Board (Board), in 2015, approximately 
181 egg producers were subject to the provisions of the Order, 
including paying assessments. Under the current Order, producers in the 
48 contiguous States of the U.S. and the District of Columbia who own 
more than 75,000 laying hens currently pay a mandatory assessment of 10 
cents per 30-dozen case of eggs sold. Egg handlers are responsible for 
collecting and remitting assessments to the Board. According to the 
Board, of those 181 egg producers, about 138 egg handlers collect 
assessments. Assessments under the program are used by the Board to 
finance promotion, research, and consumer information programs designed 
to increase consumer demand for eggs in domestic and international 
markets.
    In 13 CFR part 121, the Small Business Administration (SBA) defines 
small agricultural producers as those having annual receipts of no more 
than $750,000 and small agricultural service firms as those having 
annual receipts of no more than $7 million. Under this definition, the 
vast majority of egg producers that would be affected by this rule 
would not be considered small entities. Producers owning 75,000 or 
fewer laying hens are eligible to be exempt from this program. This 
rule does not impose additional recordkeeping requirements on egg 
producers or handlers. There are no Federal rules that duplicate, 
overlap, or conflict with this rule.

Paperwork Reduction Act

    In accordance with OMB regulation 5 CFR part 1320, which implements 
the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the 
information collection and recordkeeping requirements that are imposed 
by the Order and Rules and Regulations have been approved previously 
under OMB control number 0581-0093. This rule does not result in a 
change to those information collection and recordkeeping requirements.

Background

    The Act established a national egg research and promotion program--
administered by the Board--that is financed through industry 
assessments and subject to oversight by USDA's AMS. This program of 
promotion, research, and consumer information is designed to strengthen 
the position of eggs in the marketplace and to establish, maintain, and 
expand markets for eggs.
    Under the current Regulations initially established in 1976, any IP 
financed by assessment funds or other revenues of the Board shall 
become property of the U.S. Government as represented by the Board. The 
language does not allow for alternative ownership arrangements. In 
addition, there is no explicit allowance for alternative ownership 
arrangements in cases where the Board is not providing all of the 
funding for a project. According to the Board, the current language in 
the Order has made negotiating contracts for

[[Page 90186]]

shared ownership of IP rights with research entities difficult and in 
some cases impossible. Specifically, a majority of university policies 
typically reflect a requirement for the university to own any IP 
created under research projects they conduct, even if the project is 
funded with outside money. These university policies have made it 
difficult for the Board to contract with universities for research due 
to the IP ownership requirements contained in the Order.
    As a result, USDA is amending Sec.  1250.542 of the Regulations to 
incorporate language utilized by research and promotion boards created 
under the 1996 Act that would provide the Board with flexibility in 
negotiating over the ownership of IP rights. The research and promotion 
boards created under the 1996 Act have utilized this language to 
negotiate ownership rights over IP to effectively expend assessment 
funds to promote agricultural commodities.

Summary of Comments

    AMS published the notice of proposed rulemaking in the Federal 
Register on March 16, 2016 [81 FR 14021]. The comment period ended on 
May 16, 2016. AMS received one timely comment from a university. The 
commenter expressed that it is the policy of the university to retain 
ownership of intellectual property generated through research funded by 
external parties and encouraged AMS to adopt policies and rules that 
closely follow the standard approaches articulated in Federal 
Government grants. However, the egg research and promotion program is 
not a grant program and is not subject to Federal grants policy. In 
addition, the Board does not receive Federal funding. All funds are 
received from egg producers required under the enabling legislation to 
pay an assessment to the Board to fund programs designed to increase 
demand for eggs and egg products both domestically and internationally. 
Accordingly, AMS did not incorporate the Federal grants policy into the 
final rule.

List of Subjects in 7 CFR Part 1250

    Administrative practice and procedure, Advertising, Agricultural 
research, Eggs and egg products, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 1250 is 
amended as follows:

PART 1250--EGG RESEARCH AND PROMOTION

0
1. The authority citation of 7 CFR part 1250 continues to read as 
follows:

    Authority: 7 U.S.C. 2701-2718; 7 U.S.C. 7401.


0
2. Revise Sec.  1250.542 to read as follows:


Sec.  1250.542  Patents, Copyrights, Inventions, Trademarks, 
Information, Publications, and Product Formulations.

    (a) Except as provided in paragraph (b) of this section, any 
patents, copyrights, inventions, trademarks, information, publications, 
or product formulations developed through the use of funds collected by 
the Board under the provisions of this subpart shall be the property of 
the U.S. Government, as represented by the Board, and shall, along with 
any rents, royalties, residual payments, or other income from the 
rental, sales, leasing, franchising, or other uses of such patents, 
copyrights, inventions, trademarks, information, publications, or 
product formulations, inure to the benefit of the Board; shall be 
considered income subject to the same fiscal, budget, and audit 
controls as other funds of the Board; and may be licensed subject to 
approval by the Secretary. Upon termination of this subpart, Sec.  
1250.358 shall apply to determine disposition of all such property.
    (b) Should patents, copyrights, inventions, trademarks, 
information, publications, or product formulations be developed through 
the use of funds collected by the Board under this subpart and funds 
contributed by another organization or person, the ownership and 
related rights to such patents, copyrights, inventions, trademarks, 
information, publications, or product formulations shall be determined 
by an agreement between the Board and the party contributing funds 
towards the development of such patents, copyrights, inventions, 
trademarks, information, publications, or product formulations in a 
manner consistent with paragraph (a) of this section.

    Dated: December 8, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-29988 Filed 12-13-16; 8:45 am]
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