15 U.S.C. § 3710c — Distribution of royalties received by Fed-

Page 2053 TITLE 15—COMMERCE AND TRADE § 3710c Editorial Notes AMENDMENTS 1988—Par. (1). Pub. L. 100–519 inserted ‘‘computer soft- ware,’’ after ‘‘inventions, innovations,’’. § 3710c. Distribution of royalties received by Fed- eral agencies (a) In general (1) Except as provided in paragraphs (2) and (4), any royalties or other payments received by a Federal agency from the licensing and assign- ment of inventions under agreements entered into by Federal laboratories under section 3710a of this title, and from the licensing of inven- tions of Federal laboratories under section 207 of title 35 or under any other provision of law, shall be retained by the laboratory which pro- duced the invention and shall be disposed of as follows: (A)(i) The head of the agency or laboratory, or such individual’s designee, shall pay each year the first $2,000, and thereafter at least 15 percent, of the royalties or other payments, other than payments of patent costs as delin- eated by a license or assignment agreement, to the inventor or coinventors, if the inven- tor’s or coinventor’s rights are assigned to the United States. (ii) An agency or laboratory may provide ap- propriate incentives, from royalties, or other payments, to laboratory employees who are not an inventor of such inventions but who substantially increased the technical value of such inventions. (iii) The agency or laboratory shall retain the royalties and other payments received from an invention until the agency or labora- tory makes payments to employees of a lab- oratory under clause (i) or (ii). (B) The balance of the royalties or other payments shall be transferred by the agency to its laboratories, with the majority share of the royalties or other payments from any in- vention going to the laboratory where the in- vention occurred. The royalties or other pay- ments so transferred to any laboratory may be used or obligated by that laboratory during the fiscal year in which they are received or during the 2 succeeding fiscal years— (i) to reward scientific, engineering, and technical employees of the laboratory, in- cluding developers of sensitive or classified technology, regardless of whether the tech- nology has commercial applications; (ii) to further scientific exchange among the laboratories of the agency; (iii) for education and training of employ- ees consistent with the research and devel- opment missions and objectives of the agen- cy or laboratory, and for other activities that increase the potential for transfer of the technology of the laboratories of the agency; (iv) for payment of expenses incidental to the administration and licensing of intellec- tual property by the agency or laboratory with respect to inventions made at that lab- oratory, including the fees or other costs for the services of other agencies, persons, or or- ganizations for intellectual property man- agement and licensing services; or (v) for scientific research and development consistent with the research and develop- ment missions and objectives of the labora- tory. (C) All royalties or other payments retained by the agency or laboratory after payments have been made pursuant to subparagraphs (A) and (B) that is unobligated and unexpended at the end of the second fiscal year succeeding the fiscal year in which the royalties and other payments were received shall be paid into the Treasury. (2) If, after payments to inventors under para- graph (1), the royalties or other payments re- ceived by an agency in any fiscal year exceed 5 percent of the budget of the agency for that year, 75 percent of such excess shall be paid to the Treasury of the United States and the re- maining 25 percent may be used or obligated under paragraph (1)(B). Any funds not so used or obligated shall be paid into the Treasury of the United States. (3) Any payment made to an employee under this section shall be in addition to the regular pay of the employee and to any other awards made to the employee, and shall not affect the entitlement of the employee to any regular pay, annuity, or award to which he is otherwise enti- tled or for which he is otherwise eligible or limit the amount thereof. Any payment made to an inventor as such shall continue after the inven- tor leaves the laboratory or agency. Payments made under this section shall not exceed $150,000 per year to any one person, unless the President approves a larger award (with the excess over $150,000 being treated as a Presidential award under section 4504 of title 5). (4) A Federal agency receiving royalties or other payments as a result of invention manage- ment services performed for another Federal agency or laboratory under section 207 of title 35, may retain such royalties or payments to the extent required to offset payments to inventors under clause (i) of paragraph (1)(A), costs and expenses incurred under clause (iv) of paragraph (1)(B), and the cost of foreign patenting and maintenance for any invention of the other agency. All royalties and other payments re- maining after offsetting the payments to inven- tors, costs, and expenses described in the pre- ceding sentence shall be transferred to the agen- cy for which the services were performed, for distribution in accordance with paragraph (1)(B). (b) Certain assignments If the invention involved was one assigned to the Federal agency— (1) by a contractor, grantee, or participant, or an employee of a contractor, grantee, or participant, in an agreement or other arrange- ment with the agency, or (2) by an employee of the agency who was not working in the laboratory at the time the invention was made, the agency unit that was involved in such as- signment shall be considered to be a laboratory for purposes of this section. (c) Reports The Comptroller General shall transmit a re- port to the appropriate committees of the Sen- Page 2054 TITLE 15—COMMERCE AND TRADE § 3710d 1 See References in Text note below. ate and House of Representatives on the effec- tiveness of Federal technology transfer pro- grams, including findings, conclusions, and rec- ommendations for improvements in such pro- grams. The report shall be integrated with, and submitted at the same time as, the report re- quired by section 202(b)(3) 1 of title 35. (Pub. L. 96–480, § 14, as added, renumbered § 13, and amended Pub. L. 99–502, §§ 7, 9(e)(1), (3), Oct. 20, 1986, 100 Stat. 1792, 1797; renumbered § 14 and amended Pub. L. 100–418, title V, §§ 5122(a)(1), 5162(a), Aug. 23, 1988, 102 Stat. 1438, 1450; Pub. L. 100–519, title III, § 303(a), Oct. 24, 1988, 102 Stat. 2597; Pub. L. 101–189, div. C, title XXXI, § 3133(c), Nov. 29, 1989, 103 Stat. 1677; Pub. L. 104–113, § 5, Mar. 7, 1996, 110 Stat. 777; Pub. L. 106–404, §§ 7(7), 10(b), Nov. 1, 2000, 114 Stat. 1746, 1749.) Editorial Notes REFERENCES IN TEXT Section 202(b)(3) of title 35, referred to in subsec. (c), was struck out and section 202(b)(4) was redesignated section 202(b)(3) by Pub. L. 111–8, div. G, title I, § 1301(h), Mar. 11, 2009, 123 Stat. 829. AMENDMENTS 2000—Subsec. (a)(1)(A)(i). Pub. L. 106–404, § 7(7)(A), (B), inserted ‘‘, other than payments of patent costs as de- lineated by a license or assignment agreement,’’ after ‘‘or other payments’’ and ‘‘, if the inventor’s or co- inventor’s rights are assigned to the United States’’ be- fore period at end. Subsec. (a)(1)(B). Pub. L. 106–404, § 7(7)(C), substituted ‘‘2 succeeding fiscal years’’ for ‘‘succeeding fiscal year’’ in introductory provisions. Subsec. (a)(2). Pub. L. 106–404, § 7(7)(D), struck out ‘‘Government-operated laboratories of the’’ before ‘‘agency for that year,’’. Subsec. (b)(2). Pub. L. 106–404, § 7(7)(E), substituted ‘‘invention’’ for ‘‘inventon’’. Subsec. (c). Pub. L. 106–404, § 10(b), amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: ‘‘(1) In making their annual budget submissions Fed- eral agencies shall submit, to the appropriate author- ization and appropriation committees of both Houses of the Congress, summaries of the amount of royalties or other income received and expenditures made (includ- ing inventor awards) under this section. ‘‘(2) The Comptroller General, five years after Octo- ber 20, 1986, shall review the effectiveness of the various royalty-sharing programs established under this sec- tion and report to the appropriate committees of the House of Representatives and the Senate, in a timely manner, his findings, conclusions, and recommenda- tions for improvements in such programs.’’ 1996—Subsec. (a)(1). Pub. L. 104–113, § 5(1), amended par. (1) generally, restructuring subpar. (A) to require head of agency or his designee to pay each year first $2,000, and thereafter at least 15 percent of royalties or other income received by agency on account of any in- vention to inventor or coinventors if they had assigned their rights in invention to United States and to au- thorize agencies to provide incentives to laboratory employees who substantially increase technical value of inventions, restructuring subpar. (B) to reorder cls. (i) to (iv), to add cl. (v), and to strike out closing provi- sions which required unobligated or unused funds to be paid into Treasury, and adding subpar. (C). Subsec. (a)(2). Pub. L. 104–113, § 5(2), in first sentence, inserted ‘‘or other payments’’ after ‘‘royalties’’ and substituted ‘‘under paragraph (1)(B)’’ for ‘‘for the pur- poses described in clauses (i) through (iv) of paragraph (1)(B) during that fiscal year or the succeeding fiscal year’’. Subsec. (a)(3). Pub. L. 104–113, § 5(3), substituted ‘‘$150,000’’ for ‘‘$100,000’’ in two places. Subsec. (a)(4). Pub. L. 104–113, § 5(4), in first sentence, substituted ‘‘other payments’’ for ‘‘other income’’, ‘‘such royalties or payments’’ for ‘‘such royalties or in- come’’, ‘‘offset payments to inventors’’ for ‘‘offset the payment of royalties to inventors’’, and ‘‘clause (iv) of paragraph (1)(B)’’ for ‘‘clause (i) of paragraph (1)(B)’’ and, in second sentence, substituted ‘‘other payments’’ for ‘‘other income’’, substituted ‘‘offsetting the pay- ments to inventors’’ for ‘‘payment of the royalties’’, and struck out ‘‘clauses (i) through (iv) of’’ before ‘‘paragraph (1)(B)’’. Subsec. (b)(1). Pub. L. 104–113, § 5(5), amended par. (1) generally. Prior to amendment, par. (1) read as follows: ‘‘by a contractor, grantee, or participant in a coopera- tive agreement with the agency, or’’. 1989—Subsec. (a)(1). Pub. L. 101–189, § 3133(c)(1), in in- troductory provisions, inserted ‘‘by Government-oper- ated Federal laboratories’’ after ‘‘entered into’’ and made technical amendment to reference to section 3710a of this title to correct reference to corresponding section of original Act, requiring no change in text. Subsec. (a)(1)(B)(ii). Pub. L. 101–189, § 3133(c)(2), in- serted ‘‘, including payments to inventors and devel- opers of sensitive or classified technology, regardless of whether the technology has commercial applications’’ after ‘‘that laboratory’’. Subsec. (a)(1)(B)(iv). Pub. L. 101–189, § 3133(c)(3), sub- stituted ‘‘technology of the laboratories’’ for ‘‘tech- nology of the Government-operated laboratories’’. 1988—Subsec. (a)(1)(A)(i). Pub. L. 100–519, § 303(a)(1), substituted ‘‘has assigned his or her rights in the inven- tion to the United States’’ for ‘‘was an employee of the agency at the time the invention was made’’. Subsec. (a)(1)(A)(ii). Pub. L. 100–519, § 303(a)(2), sub- stituted ‘‘under clause (i)’’ for ‘‘who were employed by the agency at the time the invention was made and whose names appear on licensed inventions’’. Subsec. (a)(4). Pub. L. 100–418, § 5162(a), substituted ‘‘may’’ for ‘‘shall’’ and ‘‘any invention of the other agency’’ for ‘‘such invention performed at the request of the other agency or laboratory’’ in first sentence. 1986—Subsec. (a)(1). Pub. L. 99–502, § 9(e)(3), in intro- ductory par. made technical amendment to reference to section 3710a of this title to reflect renumbering of cor- responding section of original act. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–519, title III, § 303(b), Oct. 24, 1988, 102 Stat. 2597, provided that: ‘‘This section [amending this sec- tion] shall be effective as of October 20, 1986.’’ § 3710d. Employee activities (a) In general If a Federal agency which has ownership of or the right of ownership to an invention made by a Federal employee does not intend to file for a patent application or otherwise to promote com- mercialization of such invention, the agency shall allow the inventor, if the inventor is a Government employee or former employee who made the invention during the course of employ- ment with the Government, to obtain or retain title to the invention (subject to reservation by the Government of a nonexclusive, nontransferrable, irrevocable, paid-up license to practice the invention or have the invention practiced throughout the world by or on behalf of the Government). In addition, the agency may condition the inventor’s right to title on the timely filing of a patent application in cases