35 U.S.C. § 209 — Licensing federally owned inventions

Page 96 TITLE 35—PATENTS § 208 5. The functions and duties of the Secretary of Com- merce and the Department of Commerce under the pro- visions of Executive Order No. 9865 of June 14, 1947 [set out above] are hereby transferred to the Chairman and the whole or any part of such functions and duties may be delegated by him to any Government agency or offi- cer: Provided, That said Executive Order No. 9865 shall not be deemed to be amended or affected by any provi- sion of this Executive order other than this paragraph 5. 6. Each Government agency shall take all steps ap- propriate to effectuate this order, including the pro- mulgation of necessary regulations which shall not be inconsistent with this order or with regulations issued pursuant to paragraph 4(b) hereof. 7. As used in this Executive order, the next stated terms, in singular and plural, are defined as follows for the purposes hereof: (a) ‘‘Government agency’’ includes any executive de- partment and any independent commission, board, of- fice, agency, authority, or other establishment of the Executive Branch of the Government of the United States (including any such independent regulatory commission or board, any such wholly-owned corpora- tion, and the Smithsonian Institution), but excludes the Atomic Energy Commission. (b) ‘‘Government employee’’ includes any officer or employee, civilian or military, of any Government agency, except such part-time consultants or employ- ees as may be excluded by regulations promulgated pursuant to paragraph 4(b) hereof. (c) ‘‘Invention’’ includes any art, machine, manufac- ture, design, 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. EX. ORD. NO. 10695. TRANSFER OF RECORDS TO DEPARTMENT OF COMMERCE Section 2 of Ex. Ord. 10695, Jan. 16, 1957, 22 F.R. 365, provided that: ‘‘The Chairman of the Government Pat- ents Board is hereby authorized to transfer to the De- partment of Commerce any or all of the records here- tofore prepared by the Board pursuant to paragraph 2(b) of Executive Order No. 10096 [set out above].’’ EX. ORD. NO. 10930. ABOLITION OF GOVERNMENT PATENTS BOARD Ex. Ord. No. 10930, Mar. 24, 1961, 26 F.R. 2583, provided: By virtue of the authority vested in me as President of the United States, it is ordered as follows: SECTION 1. The Government Patents Board, estab- lished by section 3(a) of Executive Order No. 10096 of January 23, 1950 [set out above], and all positions estab- lished thereunder or pursuant thereto are hereby abol- ished. SEC. 2. All functions of the Government Patents Board and of the Chairman thereof under the said Exec- utive Order No. 10096, except the functions of con- ference and consultation between the Board and the Chairman, are hereby transferred to the Secretary of Commerce, who may provide for the performance of such transferred functions by such officer, employee, or agency of the Department of Commerce as he may des- ignate. SEC. 3. The Secretary of Commerce shall make such provision as may be necessary and consonant with law for the disposition or transfer of property, personnel, records, and funds of the Government Patents Board. SEC. 4. Except to the extent that they may be incon- sistent with this order, all determinations, regulations, rules, rulings, orders, and other actions made or issued by the Government Patents Board, or by any Govern- ment agency with respect to any function transferred by this order, shall continue in full force and effect until amended, modified, or revoked by appropriate au- thority. SEC. 5. Subsections (a) and (c) of section 3 of Execu- tive Order No. 10096 are hereby revoked, and all other provisions of that order are hereby amended to the ex- tent that they are inconsistent with the provisions of this order. JOHN F. KENNEDY. § 208. Regulations governing Federal licensing The Secretary of Commerce is authorized to promulgate regulations specifying the terms and conditions upon which any federally owned in- vention, other than inventions owned by the Tennessee Valley Authority, may be licensed on a nonexclusive, partially exclusive, or exclusive basis. (Added Pub. L. 96–517, § 6(a), Dec. 12, 1980, 94 Stat. 3024; amended Pub. L. 98–620, title V, § 501(12), Nov. 8, 1984, 98 Stat. 3367.) Editorial Notes AMENDMENTS 1984—Pub. L. 98–620 substituted ‘‘Secretary of Com- merce’’ for ‘‘Administrator of General Services’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective July 1, 1981, but implementing regu- lations authorized to be issued earlier, see section 8(f) of Pub. L. 96–517, set out as an Effective Date of 1980 Amendment note under section 41 of this title. § 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 uti- lization 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 great- er than reasonably necessary to provide the incentive for bringing the invention to prac- tical application, as proposed by the applicant, or otherwise to promote the invention’s utili- zation 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 un- reasonable; (4) granting the license will not tend to sub- stantially 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 inter- ests of the Federal Government or United States industry in foreign commerce will be enhanced. Page 97 TITLE 35—PATENTS § 210 1 See References in Text note below. (b) MANUFACTURE IN UNITED STATES.—A Fed- eral 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 embody- ing the invention or produced through the use of the invention will be manufactured substan- tially 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 in- vention to practical application within a reason- able time. (d) TERMS AND CONDITIONS.—Any licenses granted under section 207(a)(2) shall contain such terms and conditions as the granting agen- cy considers appropriate, and shall include pro- visions— (1) retaining a nontransferable, irrevocable, paid-up license for any Federal agency to prac- tice the invention or have the invention prac- ticed throughout the world by or on behalf of the Government of the United States; (2) requiring periodic reporting on utiliza- tion of the invention, and utilization efforts, by the licensee, but only to the extent nec- essary to enable the Federal agency to deter- mine whether the terms of the license are being complied with, except that any such re- port shall be treated by the Federal agency as commercial and financial information ob- tained from a person and privileged and con- fidential and not subject to disclosure under section 552 of title 5; and (3) empowering the Federal agency to termi- nate the license in whole or in part if the agency determines that— (A) the licensee is not executing its com- mitment to achieve practical application of the invention, including commitments con- tained in any plan submitted in support of its request for a license, and the licensee cannot otherwise demonstrate to the satis- faction 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 agree- ment described in subsection (b); (C) termination is necessary to meet re- quirements for public use specified by Fed- eral regulations issued after the date of the license, and such requirements are not rea- sonably 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 pro- vided in an appropriate manner at least 15 days before the license is granted, and the Federal agency has considered all comments received be- fore 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 agree- ment entered into under section 12 of the Ste- venson-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 per- son and privileged and confidential and not sub- ject to disclosure under section 552 of title 5. (Added Pub. L. 96–517, § 6(a), Dec. 12, 1980, 94 Stat. 3024; amended Pub. L. 106–404, § 4(a), Nov. 1, 2000, 114 Stat. 1743; Pub. L. 107–273, div. C, title III, § 13206(a)(15), Nov. 2, 2002, 116 Stat. 1905; Pub. L. 112–29, § 20(i)(3), Sept. 16, 2011, 125 Stat. 335.) Editorial Notes AMENDMENTS 2011—Subsec. (d)(1). Pub. L. 112–29 substituted ‘‘non- transferable’’ for ‘‘nontransferrable’’. 2002—Subsecs. (d)(2), (f). Pub. L. 107–273 struck out ‘‘of the United States Code’’ after ‘‘title 5’’. 2000—Pub. L. 106–404 amended section catchline and text generally, restructuring and revising provisions setting forth criteria, terms, and conditions relating to granting of licenses on federally owned inventions. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2011 AMENDMENT Amendment by Pub. L. 112–29 effective upon the expi- ration of the 1-year period beginning on Sept. 16, 2011, and applicable to proceedings commenced on or after that effective date, see section 20(l) of Pub. L. 112–29, set out as a note under section 2 of this title. EFFECTIVE DATE Section effective July 1, 1981, but implementing regu- lations authorized to be issued earlier, see section 8(f) of Pub. L. 96–517, set out as an Effective Date of 1980 Amendment note under section 41 of this title. § 210. Precedence of chapter (a) This chapter shall take precedence over any other Act which would require a disposition of rights in subject inventions of small business firms or nonprofit organizations contractors in a manner that is inconsistent with this chapter, including but not necessarily limited to the fol- lowing: (1) section 10(a) of the Act of June 29, 1935, as added by title I of the Act of August 14, 1946 (7 U.S.C. 427i(a); 60 Stat. 1085); 1 (2) section 205(a) of the Act of August 14, 1946 (7 U.S.C. 1624(a); 60 Stat. 1090); (3) section 501(c) of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 951(c); 83 Stat. 742); (4) section 30168(e) 1 of title 49; (5) section 12 of the National Science Foun- dation Act of 1950 (42 U.S.C. 1871(a); 1 82 Stat. 360); (6) section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182; 68 Stat. 943);