[106th Congress Public Law 404]
[From the U.S. Government Printing Office]


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[DOCID: f:publ404.106]


[[Page 1741]]

            TECHNOLOGY TRANSFER COMMERCIALIZATION ACT OF 2000

[[Page 114 STAT. 1742]]

Public Law 106-404
106th Congress

                                 An Act


 
    To improve the ability of Federal <<NOTE: Nov. 1, 2000 -  [H.R. 
         209]>> agencies to license federally owned inventions.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in <<NOTE: Technology Transfer Commercializa- 
tion Act of 2000.>> Congress assembled,

SECTION 1. <<NOTE: 15 USC 3701 note.>> SHORT TITLE.

    This Act may be cited as the ``Technology Transfer Commercialization 
Act of 2000''.

SEC. 2. <<NOTE: 15 USC 3701 note.>> FINDINGS.

    The Congress finds that--
            (1) the importance of linking our unparalleled network of 
        over 700 Federal laboratories and our Nation's universities with 
        United States industry continues to hold great promise for our 
        future economic prosperity;
            (2) the enactment of the Bayh-Dole Act in 1980 was a 
        landmark change in United States technology policy, and its 
        success provides a framework for removing bureaucratic barriers 
        and for simplifying the granting of licenses for inventions that 
        are now in the Federal Government's patent portfolio;
            (3) Congress has demonstrated a commitment over the past 2 
        decades to fostering technology transfer from our Federal 
        laboratories and to promoting public/private sector partnerships 
        to enhance our international competitiveness;
            (4) Federal technology transfer activities have strengthened 
        the ability of United States industry to compete in the global 
        marketplace; developed a new paradigm for greater collaboration 
        among the scientific enterprises that conduct our Nation's 
        research and development--government, industry, and 
        universities; and improved the quality of life for the American 
        people, from medicine to materials;
            (5) the technology transfer process must be made ``industry 
        friendly'' for companies to be willing to invest the significant 
        time and resources needed to develop new products, processes, 
        and jobs using federally funded inventions; and
            (6) Federal technology licensing procedures should balance 
        the public policy needs of adequately protecting the rights of 
        the public, encouraging companies to develop existing government 
        inventions, and making the entire system of licensing government 
        technologies more consistent and simple.

SEC. 3. COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS.

    Section 12(b)(1) of the Stevenson-Wydler Technology Innovation Act 
of 1980 (15 U.S.C. 3710a(b)(1)) is amended by inserting ``or, subject to 
section 209 of title 35, United States Code, may grant

[[Page 114 STAT. 1743]]

a license to an invention which is federally owned, for which a patent 
application was filed before the signing of the agreement, and directly 
within the scope of the work under the agreement,'' after ``under the 
agreement,''.

SEC. 4. LICENSING FEDERALLY OWNED INVENTIONS.

    (a) Amendment.--Section 209 of title 35, United States Code, is 
amended to read as follows:

``Sec. 209. Licensing federally owned inventions

    ``(a) Authority.--A Federal agency may grant an exclusive or 
partially exclusive license on a federally owned invention under section 
207(a)(2) only if--
            ``(1) granting the license is a reasonable and necessary 
        incentive to--
                    ``(A) call forth the investment capital and 
                expenditures needed to bring the invention to practical 
                application; or
                    ``(B) otherwise promote the invention's utilization 
                by the public;
            ``(2) the Federal agency finds that the public will be 
        served by the granting of the license, as indicated by the 
        applicant's intentions, plans, and ability to bring the 
        invention to practical application or otherwise promote the 
        invention's utilization by the public, and that the proposed 
        scope of exclusivity is not greater than reasonably necessary to 
        provide the incentive for bringing the invention to practical 
        application, as proposed by the applicant, or otherwise to 
        promote the invention's utilization by the public;
            ``(3) the applicant makes a commitment to achieve practical 
        application of the invention within a reasonable time, which 
        time may be extended by the agency upon the applicant's request 
        and the applicant's demonstration that the refusal of such 
        extension would be unreasonable;
            ``(4) granting the license will not tend to substantially 
        lessen competition or create or maintain a violation of the 
        Federal antitrust laws; and
            ``(5) in the case of an invention covered by a foreign 
        patent application or patent, the interests of the Federal 
        Government or United States industry in foreign commerce will be 
        enhanced.

    ``(b) Manufacture in United States.--A Federal agency shall normally 
grant a license under section 207(a)(2) to use or sell any federally 
owned invention in the United States only to a licensee who agrees that 
any products embodying the invention or produced through the use of the 
invention will be manufactured substantially in the United States.
    ``(c) Small Business.--First preference for the granting of any 
exclusive or partially exclusive licenses under section 207(a)(2) shall 
be given to small business firms having equal or greater likelihood as 
other applicants to bring the invention to practical application within 
a reasonable time.
    ``(d) Terms and Conditions.--Any licenses granted under section 
207(a)(2) shall contain such terms and conditions as the granting agency 
considers appropriate, and shall include provisions--
            ``(1) retaining a nontransferrable, irrevocable, paid-up 
        license for any Federal agency to practice the invention or

[[Page 114 STAT. 1744]]

        have the invention practiced throughout the world by or on 
        behalf of the Government of the United States;
            ``(2) requiring periodic reporting on utilization of the 
        invention, and utilization efforts, by the licensee, but only to 
        the extent necessary to enable the Federal agency to determine 
        whether the terms of the license are being complied with, except 
        that any such report shall be treated by the Federal agency as 
        commercial and financial information obtained from a person and 
        privileged and confidential and not subject to disclosure under 
        section 552 of title 5 of the United States Code; and
            ``(3) empowering the Federal agency to terminate the license 
        in whole or in part if the agency determines that--
                    ``(A) the licensee is not executing its commitment 
                to achieve practical application of the invention, 
                including commitments contained in any plan submitted in 
                support of its request for a license, and the licensee 
                cannot otherwise demonstrate to the satisfaction of the 
                Federal agency that it has taken, or can be expected to 
                take within a reasonable time, effective steps to 
                achieve practical application of the invention;
                    ``(B) the licensee is in breach of an agreement 
                described in subsection (b);
                    ``(C) termination is necessary to meet requirements 
                for public use specified by Federal regulations issued 
                after the date of the license, and such requirements are 
                not reasonably satisfied by the licensee; or
                    ``(D) the licensee has been found by a court of 
                competent jurisdiction to have violated the Federal 
                antitrust laws in connection with its performance under 
                the license agreement.

    ``(e) Public Notice.--No exclusive or partially exclusive license 
may be granted under section 207(a)(2) unless public notice of the 
intention to grant an exclusive or partially exclusive license on a 
federally owned invention has been provided in an appropriate manner at 
least 15 days before the license is granted, and the Federal agency has 
considered all comments received before the end of the comment period in 
response to that public notice. This subsection shall not apply to the 
licensing of inventions made under a cooperative research and 
development agreement entered into under section 12 of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a).
    ``(f ) Plan.--No Federal agency shall grant any license under a 
patent or patent application on a federally owned invention unless the 
person requesting the license has supplied the agency with a plan for 
development or marketing of the invention, except that any such plan 
shall be treated by the Federal agency as commercial and financial 
information obtained from a person and privileged and confidential and 
not subject to disclosure under section 552 of title 5 of the United 
States Code.''.
    (b) Conforming Amendment.--The item relating to section 209 in the 
table of sections for chapter 18 of title 35, United States Code, is 
amended to read as follows:

``209. Licensing federally owned inventions.''.

[[Page 114 STAT. 1745]]

SEC. 5. MODIFICATION OF STATEMENT OF POLICY AND OBJECTIVES FOR CHAPTER 
            18 OF TITLE 35, UNITED STATES CODE.

    Section 200 of title 35, United States Code, is amended by striking 
``enterprise;'' and inserting ``enterprise without unduly encumbering 
future research and discovery;''.

SEC. 6. TECHNICAL AMENDMENTS TO BAYH-DOLE ACT.

    Chapter 18 of title 35, United States Code (popularly known as the 
``Bayh-Dole Act''), is amended--
            (1) by amending section 202(e) to read as follows:

    ``(e) In any case when a Federal employee is a coinventor of any 
invention made with a nonprofit organization, a small business firm, or 
a non-Federal inventor, the Federal agency employing such coinventor 
may, for the purpose of consolidating rights in the invention and if it 
finds that it would expedite the development of the invention--
            ``(1) license or assign whatever rights it may acquire in 
        the subject invention to the nonprofit organization, small 
        business firm, or non-Federal inventor in accordance with the 
        provisions of this chapter; or
            ``(2) acquire any rights in the subject invention from the 
        nonprofit organization, small business firm, or non-Federal 
        inventor, but only to the extent the party from whom the rights 
        are acquired voluntarily enters into the transaction and no 
        other transaction under this chapter is conditioned on such 
        acquisition.''; and
            (2) in section 207(a)--
                    (A) by striking ``patent applications, patents, or 
                other forms of protection obtained'' and inserting 
                ``inventions'' in paragraph (2); and
                    (B) by inserting ``, including acquiring rights for 
                and administering royalties to the Federal Government in 
                any invention, but only to the extent the party from 
                whom the rights are acquired voluntarily enters into the 
                transaction, to facilitate the licensing of a federally 
                owned invention'' after ``or through contract'' in 
                paragraph (3).

SEC. 7. TECHNICAL AMENDMENTS TO THE STEVENSON-WYDLER TECHNOLOGY 
            INNOVATION ACT OF 1980.

    The Stevenson-Wydler Technology Innovation Act of 1980 is amended--
            (1) in section 4(4) (15 U.S.C. 3703(4)), by striking 
        ``section 6 or section 8'' and inserting ``section 7 or 9'';
            (2) in section 4(6) (15 U.S.C. 3703(6)), by striking 
        ``section 6 or section 8'' and inserting ``section 7 or 9'';
            (3) in section 5(c)(11) (15 U.S.C. 3704(c)(11)), by striking 
        ``State of local governments'' and inserting ``State or local 
        governments'';
            (4) in section 9 (15 U.S.C. 3707), by--
                    (A) striking ``section 6(a)'' and inserting 
                ``section 7(a)'';
                    (B) striking ``section 6(b)'' and inserting 
                ``section 7(b)''; and
                    (C) striking ``section 6(c)(3)'' and inserting 
                ``section 7(c)(3)'';
            (5) in section 11(e)(1) (15 U.S.C. 3710(e)(1)), by striking 
        ``in cooperation with Federal Laboratories'' and inserting ``in 
        cooperation with Federal laboratories'';

[[Page 114 STAT. 1746]]

            (6) in section 11(i) (15 U.S.C. 3710(i)), by striking ``a 
        gift under the section'' and inserting ``a gift under this 
        section'';
            (7) in section 14 (15 U.S.C. 3710c)--
                    (A) in subsection (a)(1)(A)(i), by inserting ``, 
                other than payments of patent costs as delineated by a 
                license or assignment agreement,'' after ``or other 
                payments'';
                    (B) in subsection (a)(1)(A)(i), by inserting ``, if 
                the inventor's or coinventor's rights are assigned to 
                the United States'' after ``inventor or coinventors'';
                    (C) in subsection (a)(1)(B), by striking 
                ``succeeding fiscal year'' and inserting ``2 succeeding 
                fiscal years'';
                    (D) in subsection (a)(2), by striking ``Government-
                operated laboratories of the''; and
                    (E) in subsection (b)(2), by striking ``inventon'' 
                and inserting ``invention''; and
            (8) in section 22 (15 U.S.C. 3714), by striking ``sections 
        11, 12, and 13'' and inserting ``sections 12, 13, and 14''.

SEC. 8. <<NOTE: 15 USC 3701a note.>> REVIEW OF COOPERATIVE RESEARCH AND 
            DEVELOPMENT AGREEMENT PROCEDURES.

    (a) Review.--Within <<NOTE: Deadline.>> 90 days after the date of 
the enactment of this Act, each Federal agency with a federally funded 
laboratory that has in effect on that date of the enactment one or more 
cooperative research and development agreements under section 12 of the 
Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a) 
shall report to the Committee on National Security of the National 
Science and Technology Council and the Congress on the general policies 
and procedures used by that agency to gather and consider the views of 
other agencies on--
            (1) joint work statements under section 12(c)(5)(C) or (D) 
        of the Stevenson-Wydler Technology Innovation Act of 1980 (15 
        U.S.C. 3710a(c)(5)(C) or (D)); or
            (2) in the case of laboratories described in section 
        12(d)(2)(A) of the Stevenson-Wydler Technology Innovation Act of 
        1980 (15 U.S.C. 3710a(d)(2)(A)), cooperative research and 
        development agreements under such section 12,

with respect to major proposed cooperative research and development 
agreements that involve critical national security technology or may 
have a significant impact on domestic or international competitiveness.
    (b) Procedures.--Within 1 <<NOTE: Deadline.>> year after the date of 
the enactment of this Act, the Committee on National Security of the 
National Science and Technology Council, in conjunction with relevant 
Federal agencies and national laboratories, shall--
            (1) determine the adequacy of existing procedures and 
        methods for interagency coordination and awareness with respect 
        to cooperative research and development agreements described in 
        subsection (a); and
            (2) establish and distribute to appropriate Federal 
        agencies--
                    (A) specific criteria to indicate the necessity for 
                gathering and considering the views of other agencies on 
                joint work statements or cooperative research and 
                development agreements as described in subsection (a); 
                and
                    (B) additional procedures, if any, for carrying out 
                such gathering and considering of agency views with 
                respect

[[Page 114 STAT. 1747]]

                to cooperative research and development agreements 
                described in subsection (a).

Procedures established under this subsection shall be designed to the 
extent possible to use or modify existing procedures, to minimize 
burdens on Federal agencies, to encourage industrial partnerships with 
national laboratories, and to minimize delay in the approval or 
disapproval of joint work statements and cooperative research and 
development agreements.
    (c) Limitation.--Nothing in this Act, nor any procedures established 
under this section shall provide to the Office of Science and Technology 
Policy, the National Science and Technology Council, or any Federal 
agency the authority to disapprove a cooperative research and 
development agreement or joint work statement, under section 12 of the 
Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a), of 
another Federal agency.

SEC. 9. INCREASED FLEXIBILITY FOR FEDERAL LABORATORY PARTNERSHIP 
            INTERMEDIARIES.

    Section 23 of the Stevenson-Wydler Technology Innovation Act of 1980 
(15 U.S.C. 3715) is amended--
            (1) in subsection (a)(1) by inserting ``, institutions of 
        higher education as defined in section 1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a)), or educational 
        institutions within the meaning of section 2194 of title 10, 
        United States Code'' after ``small business firms''; and
            (2) in subsection (c) by inserting ``, institutions of 
        higher education as defined in section 1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a)), or educational 
        institutions within the meaning of section 2194 of title 10, 
        United States Code,'' after ``small business firms''.

SEC. 10. REPORTS ON UTILIZATION OF FEDERAL TECHNOLOGY.

    (a) Agency Activities.--Section 11 of the Stevenson-Wydler 
Technology Innovation Act of 1980 (15 U.S.C. 3710) is amended--
            (1) by striking the last sentence of subsection (b);
            (2) by inserting after subsection (e) the following:

    ``(f ) Agency Reports on Utilization.--
            ``(1) In general.--Each Federal agency which operates or 
        directs one or more Federal laboratories or which conducts 
        activities under sections 207 and 209 of title 35, United States 
        Code, shall report annually to the Office of Management and 
        Budget, as part of the agency's annual budget submission, on the 
        activities performed by that agency and its Federal laboratories 
        under the provisions of this section and of sections 207 and 209 
        of title 35, United States Code.
            ``(2) Contents.--The report shall include--
                    ``(A) an explanation of the agency's technology 
                transfer program for the preceding fiscal year and the 
                agency's plans for conducting its technology transfer 
                function, including its plans for securing intellectual 
                property rights in laboratory innovations with 
                commercial promise and plans for managing its 
                intellectual property so as to advance the agency's 
                mission and benefit the competitiveness of United States 
                industry; and
                    ``(B) information on technology transfer activities 
                for the preceding fiscal year, including--
                          ``(i) the number of patent applications filed;
                          ``(ii) the number of patents received;

[[Page 114 STAT. 1748]]

                          ``(iii) the number of fully-executed licenses 
                      which received royalty income in the preceding 
                      fiscal year, categorized by whether they are 
                      exclusive, partially-exclusive, or non-exclusive, 
                      and the time elapsed from the date on which the 
                      license was requested by the licensee in writing 
                      to the date the license was executed;
                          ``(iv) the total earned royalty income 
                      including such statistical information as the 
                      total earned royalty income, of the top 1 percent, 
                      5 percent, and 20 percent of the licenses, the 
                      range of royalty income, and the median, except 
                      where disclosure of such information would reveal 
                      the amount of royalty income associated with an 
                      individual license or licensee;
                          ``(v) what disposition was made of the income 
                      described in clause (iv);
                          ``(vi) the number of licenses terminated for 
                      cause; and
                          ``(vii) any other parameters or discussion 
                      that the agency deems relevant or unique to its 
                      practice of technology transfer.
            ``(3) Copy to secretary; attorney general; congress.--The 
        agency shall transmit a copy of the report to the Secretary of 
        Commerce and the Attorney General for inclusion in the annual 
        report to Congress and the President required by subsection 
        (g)(2).
            ``(4) Public availability.--Each Federal agency reporting 
        under this subsection is also strongly encouraged to make the 
        information contained in such report available to the public 
        through Internet sites or other electronic means.'';
            (3) by striking subsection (g)(2) and inserting the 
        following:
            ``(2) Reports.--
                    ``(A) Annual report required.--The Secretary, in 
                consultation with the Attorney General and the 
                Commissioner of Patents and Trademarks, shall submit 
                each fiscal year, beginning 1 year after the enactment 
                of the Technology Transfer Commercialization Act of 
                2000, a summary report to the President, the United 
                States Trade Representative, and the Congress on the use 
                by Federal agencies and the Secretary of the technology 
                transfer authorities specified in this Act and in 
                sections 207 and 209 of title 35, United States Code.
                    ``(B) Content.--The report shall--
                          ``(i) draw upon the reports prepared by the 
                      agencies under subsection (f );
                          ``(ii) discuss technology transfer best 
                      practices and effective approaches in the 
                      licensing and transfer of technology in the 
                      context of the agencies' missions; and
                          ``(iii) discuss the progress made toward 
                      development of additional useful measures of the 
                      outcomes of technology transfer programs of 
                      Federal agencies.
                    ``(C) Public availability.--The Secretary shall make 
                the report available to the public through Internet 
                sites or other electronic means.''; and
            (4) by inserting after subsection (g) the following:

    ``(h) Duplication of Reporting.--The reporting obligations imposed 
by this section--

[[Page 114 STAT. 1749]]

            ``(1) are not intended to impose requirements that duplicate 
        requirements imposed by the Government Performance and Results 
        Act of 1993 (31 U.S.C. 1101 note);
            ``(2) are to be implemented in coordination with the 
        implementation of that Act; and
            ``(3) are satisfied if an agency provided the information 
        concerning technology transfer activities described in this 
        section in its annual submission under the Government 
        Performance and Results Act of 1993 (31 U.S.C. 1101 note).''.

    (b) Royalties.--Section 14(c) of the Stevenson-Wydler Technology 
Innovation Act of 1980 (15 U.S.C. 3710c(c)) is amended to read as 
follows:
    ``(c) Reports.--The Comptroller General shall transmit a report to 
the appropriate committees of the Senate and House of Representatives on 
the effectiveness of Federal technology transfer programs, including 
findings, conclusions, and recommendations for improvements in such 
programs. The report shall be integrated with, and submitted at the same 
time as, the report required by section 202(b)(3) of title 35, United 
States Code.''.

SEC. 11. <<NOTE: 42 USC 7261c.>> TECHNOLOGY PARTNERSHIPS OMBUDSMAN.

    (a) Appointment of Ombudsman.--The Secretary of Energy shall direct 
the director of each national laboratory of the Department of Energy, 
and may direct the director of each facility under the jurisdiction of 
the Department of Energy, to appoint a technology partnership ombudsman 
to hear and help resolve complaints from outside organizations regarding 
the policies and actions of each such laboratory or facility with 
respect to technology partnerships (including cooperative research and 
development agreements), patents, and technology licensing.
    (b) Qualifications.--An ombudsman appointed under subsection (a) 
shall be a senior official of the national laboratory or facility who is 
not involved in day-to-day technology partnerships, patents, or 
technology licensing, or, if appointed from outside the laboratory or 
facility, function as such a senior official.
    (c) Duties.--Each ombudsman appointed under subsection (a) shall--
            (1) serve as the focal point for assisting the public and 
        industry in resolving complaints and disputes with the national 
        laboratory or facility regarding technology partnerships, 
        patents, and technology licensing;
            (2) promote the use of collaborative alternative dispute 
        resolution techniques such as mediation to facilitate the speedy 
        and low-cost resolution of complaints and disputes, when 
        appropriate; and
            (3) report quarterly on the number and nature of complaints 
        and disputes raised, along with the ombudsman's assessment of 
        their resolution, consistent with the protection of confidential 
        and sensitive information, to--
                    (A) the Secretary;
                    (B) the Administrator for Nuclear Security;
                    (C) the Director of the Office of Dispute Resolution 
                of the Department of Energy; and
                    (D) the employees of the Department responsible for 
                the administration of the contract for the operation of 
                each national laboratory or facility that is a subject 
                of

[[Page 114 STAT. 1750]]

                the report, for consideration in the administration and 
                review of that contract.

    Approved November 1, 2000.

LEGISLATIVE HISTORY--H.R. 209:
---------------------------------------------------------------------------

HOUSE REPORTS: No. 106-129, Pt. 1 (Comm. on Science).
CONGRESSIONAL RECORD:
                                                        Vol. 145 (1999):
                                    May 11, considered and passed House.
                                                        Vol. 146 (2000):
                                    Oct. 5, considered and passed 
                                        Senate, amended.
                                    Oct. 17, House concurred in Senate 
                                        amendment.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 36 (2000):
            Nov. 1, Presidential statement.

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