[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 209 Enrolled Bill (ENR)]
H.R.209
One Hundred Sixth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday,
the twenty-fourth day of January, two thousand
An Act
To improve the ability of Federal agencies to license federally owned
inventions.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

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

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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.

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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 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,''.

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(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 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.''.

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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;''.

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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).

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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'';
(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''.

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PROCEDURES.
(a) Review.--Within 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 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 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.

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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''.

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(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;
``(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--
``(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.''.

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(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 the
report, for consideration in the administration and review of
that contract.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.

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Technology Transfer Commercialization Act of 1999 — HR. 209

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