§ 202. — Disposition of rights.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 35USC202]
TITLE 35--PATENTS
PART II--PATENTABILITY OF INVENTIONS AND GRANT OF PATENTS
CHAPTER 18--PATENT RIGHTS IN INVENTIONS MADE WITH FEDERAL ASSISTANCE
Sec. 202. Disposition of rights
(a) Each nonprofit organization or small business firm may, within a
reasonable time after disclosure as required by paragraph (c)(1) of this
section, elect to retain title to any subject invention: Provided,
however, That a funding agreement may provide otherwise (i) when the
contractor is not located in the United States or does not have a place
of business located in the United States or is subject to the control of
a foreign government, (ii) in exceptional circumstances when it is
determined by the agency that restriction or elimination of the right to
retain title to any subject invention will better promote the policy and
objectives of this chapter (iii) when it is determined by a Government
authority which is authorized by statute or Executive order to conduct
foreign intelligence or counter-intelligence activities that the
restriction or elimination of the right to retain title to any subject
invention is necessary to protect the security of such activities or,
(iv) when the funding agreement includes the operation of a Government-
owned, contractor-operated facility of the Department of Energy
primarily dedicated to that Department's naval nuclear propulsion or
weapons related programs and all funding agreement limitations under
this subparagraph on the contractor's right to elect title to a subject
invention are limited to inventions occurring under the above two
programs of the Department of Energy. The rights of the nonprofit
organization or small business firm shall be subject to the provisions
of paragraph (c) of this section and the other provisions of this
chapter.
(b)(1) The rights of the Government under subsection (a) shall not
be exercised by a Federal agency unless it first determines that at
least one of the conditions identified in clauses (i) through (iv) of
subsection (a) exists. Except in the case of subsection (a)(iii), the
agency shall file with the Secretary of Commerce, within thirty days
after the award of the applicable funding agreement, a copy of such
determination. In the case of a determination under subsection (a)(ii),
the statement shall include an analysis justifying the determination. In
the case of determinations applicable to funding agreements with small
business firms, copies shall also be sent to the Chief Counsel for
Advocacy of the Small Business Administration. If the Secretary of
Commerce believes that any individual determination or pattern of
determinations is contrary to the policies and objectives of this
chapter or otherwise not in conformance with this chapter, the Secretary
shall so advise the head of the agency concerned and the Administrator
of the Office of Federal Procurement Policy, and recommend corrective
actions.
(2) Whenever the Administrator of the Office of Federal Procurement
Policy has determined that one or more Federal agencies are utilizing
the authority of clause (i) or (ii) of subsection (a) of this section in
a manner that is contrary to the policies and objectives of this
chapter, the Administrator is authorized to issue regulations describing
classes of situations in which agencies may not exercise the authorities
of those clauses.
(3) At least once every 5 years, the Comptroller General shall
transmit a report to the Committees on the Judiciary of the Senate and
House of Representatives on the manner in which this chapter is being
implemented by the agencies and on such other aspects of Government
patent policies and practices with respect to federally funded
inventions as the Comptroller General believes appropriate.
(4) If the contractor believes that a determination is contrary to
the policies and objectives of this chapter or constitutes an abuse of
discretion by the agency, the determination shall be subject to the \1\
section 203(b).
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\1\ So in original. The word ``the'' probably should not appear.
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(c) Each funding agreement with a small business firm or nonprofit
organization shall contain appropriate provisions to effectuate the
following:
(1) That the contractor disclose each subject invention to the
Federal agency within a reasonable time after it becomes known to
contractor personnel responsible for the administration of patent
matters, and that the Federal Government may receive title to any
subject invention not disclosed to it within such time.
(2) That the contractor make a written election within two years
after disclosure to the Federal agency (or such additional time as
may be approved by the Federal agency) whether the contractor will
retain title to a subject invention: Provided, That in any case
where publication, on sale, or public use, has initiated the one
year statutory period in which valid patent protection can still be
obtained in the United States, the period for election may be
shortened by the Federal agency to a date that is not more than
sixty days prior to the end of the statutory period: And provided
further, That the Federal Government may receive title to any
subject invention in which the contractor does not elect to retain
rights or fails to elect rights within such times.
(3) That a contractor electing rights in a subject invention
agrees to file a patent application prior to any statutory bar date
that may occur under this title due to publication, on sale, or
public use, and shall thereafter file corresponding patent
applications in other countries in which it wishes to retain title
within reasonable times, and that the Federal Government may receive
title to any subject inventions in the United States or other
countries in which the contractor has not filed patent applications
on the subject invention within such times.
(4) With respect to any invention in which the contractor elects
rights, the Federal agency shall have a nonexclusive,
nontransferrable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States any subject
invention throughout the world: Provided, That the funding agreement
may provide for such additional rights, including the right to
assign or have assigned foreign patent rights in the subject
invention, as are determined by the agency as necessary for meeting
the obligations of the United States under any treaty, international
agreement, arrangement of cooperation, memorandum of understanding,
or similar arrangement, including military agreement relating to
weapons development and production.
(5) The right of the Federal agency to require periodic
reporting on the utilization or efforts at obtaining utilization
that are being made by the contractor or his licensees or assignees:
Provided, That any such information as well as any information on
utilization or efforts at obtaining utilization obtained as part of
a proceeding under section 203 of this chapter 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.
(6) An obligation on the part of the contractor, in the event a
United States patent application is filed by or on its behalf or by
any assignee of the contractor, to include within the specification
of such application and any patent issuing thereon, a statement
specifying that the invention was made with Government support and
that the Government has certain rights in the invention.
(7) In the case of a nonprofit organization, (A) a prohibition
upon the assignment of rights to a subject invention in the United
States without the approval of the Federal agency, except where such
assignment is made to an organization which has as one of its
primary functions the management of inventions (provided that such
assignee shall be subject to the same provisions as the contractor);
(B) a requirement that the contractor share royalties with the
inventor; (C) except with respect to a funding agreement for the
operation of a Government-owned-contractor-operated facility, a
requirement that the balance of any royalties or income earned by
the contractor with respect to subject inventions, after payment of
expenses (including payments to inventors) incidental to the
administration of subject inventions, be utilized for the support of
scientific research or education; (D) a requirement that, except
where it proves infeasible after a reasonable inquiry, in the
licensing of subject inventions shall be given to small business
firms; and (E) with respect to a funding agreement for the operation
of a Government-owned-contractor-operated facility, requirements (i)
that after payment of patenting costs, licensing costs, payments to
inventors, and other expenses incidental to the administration of
subject inventions, 100 percent of the balance of any royalties or
income earned and retained by the contractor during any fiscal year
up to an amount equal to 5 percent of the annual budget of the
facility, shall be used by the contractor for scientific research,
development, and education consistent with the research and
development mission and objectives of the facility, including
activities that increase the licensing potential of other inventions
of the facility; provided that if said balance exceeds 5 percent of
the annual budget of the facility, that 75 percent of such excess
shall be paid to the Treasury of the United States and the remaining
25 percent shall be used for the same purposes as described above in
this clause (D); and (ii) that, to the extent it provides the most
effective technology transfer, the licensing of subject inventions
shall be administered by contractor employees on location at the
facility.
(8) The requirements of sections 203 and 204 of this chapter.
(d) If a contractor does not elect to retain title to a subject
invention in cases subject to this section, the Federal agency may
consider and after consultation with the contractor grant requests for
retention of rights by the inventor subject to the provisions of this
Act and regulations promulgated hereunder.
(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.
(f)(1) No funding agreement with a small business firm or nonprofit
organization shall contain a provision allowing a Federal agency to
require the licensing to third parties of inventions owned by the
contractor that are not subject inventions unless such provision has
been approved by the head of the agency and a written justification has
been signed by the head of the agency. Any such provision shall clearly
state whether the licensing may be required in connection with the
practice of a subject invention, a specifically identified work object,
or both. The head of the agency may not delegate the authority to
approve provisions or sign justifications required by this paragraph.
(2) A Federal agency shall not require the licensing of third
parties under any such provision unless the head of the agency
determines that the use of the invention by others is necessary for the
practice of a subject invention or for the use of a work object of the
funding agreement and that such action is necessary to achieve the
practical application of the subject invention or work object. Any such
determination shall be on the record after an opportunity for an agency
hearing. Any action commenced for judicial review of such determination
shall be brought within sixty days after notification of such
determination.
(Added Pub. L. 96-517, Sec. 6(a), Dec. 12, 1980, 94 Stat. 3020; amended
Pub. L. 98-620, title V, Sec. 501(3)-(8), Nov. 8, 1984, 98 Stat. 3364-
3366; Pub. L. 102-204, Sec. 10, Dec. 10, 1991, 105 Stat. 1641; Pub. L.
106-113, div. B, Sec. 1000(a)(9) [title IV, Sec. 4732(a)(12)], Nov. 29,
1999, 113 Stat. 1536, 1501A-583; Pub. L. 106-404, Sec. 6(1), Nov. 1,
2000, 114 Stat. 1745; Pub. L. 107-273, div. C, title III,
Sec. 13206(a)(13), Nov. 2, 2002, 116 Stat. 1905.)
References in Text
This Act, referred to in subsec. (d), probably means Pub. L. 96-517,
Dec. 12, 1980, 94 Stat. 3015, which enacted sections 200 to 211 and 301
to 307 of this title, amended sections 41, 42, and 154 of this title,
section 1113 of Title 15, Commerce and Trade, sections 101 and 117 of
Title 17, Copyrights, and sections 2186, 2457, and 5908 of Title 42, The
Public Health and Welfare, and enacted provisions set out as notes under
sections 13 and 41 of this title. For complete classification of this
Act to the Code, see Tables.
Amendments
2002--Subsec. (b)(4). Pub. L. 107-273, Sec. 13206(a)(13)(A),
substituted ``section 203(b)'' for ``last paragraph of section 203(2)''.
Subsec. (c)(4). Pub. L. 107-273, Sec. 13206(a)(13)(B)(i),
substituted ``additional rights,'' for ``additional rights;''.
Subsec. (c)(5). Pub. L. 107-273, Sec. 13206(a)(13)(B)(ii), struck
out ``of the United States Code'' after ``section 552 of title 5''.
2000--Subsec. (e). Pub. L. 106-404 amended subsec. (e) generally.
Prior to amendment, subsec. (e) read as follows: ``In any case when a
Federal employee is a coinventor of any invention made under a funding
agreement with a nonprofit organization or small business firm, the
Federal agency employing such coinventor is authorized to transfer or
assign whatever rights it may acquire in the subject invention from its
employee to the contractor subject to the conditions set forth in this
chapter.''
1999--Subsec. (a). Pub. L. 106-113, in first sentence, substituted
``(iv)'' for ``iv)'' and struck out a second period at end.
1991--Subsec. (b)(3). Pub. L. 102-204 substituted ``every 5 years''
for ``each year''.
1984--Subsec. (a). Pub. L. 98-620, Sec. 501(3), substituted ``when
the contractor is not located in the United States or does not have a
place of business located in the United States or is subject to the
control of a foreign government'' for ``when the funding agreement is
for the operation of a Government-owned research or production
facility'', struck out ``or'' before ``(ii)'', which was executed by
striking out ``or'' before ``(iii)'' as the probable intent of Congress,
and added cl. (iv).
Subsec. (b)(1). Pub. L. 98-620, Sec. 501(4), gave to the Department
of Commerce oversight of agency use of the exceptions to small business
or nonprofit organization invention ownership.
Subsec. (b)(2). Pub. L. 98-620, Sec. 501(4), substituted provisions
authorizing the Administrator of the Office of Federal Procurement
Policy to issue regulations describing situations in which agencies may
not exercise the authorities of clauses (i) or (ii) of subsec. (a),
whenever the Administrator has determined that one or more agencies are
utilizing such authority in violation of this chapter for provisions
which gave to the Comptroller General oversight of agency actions under
this chapter.
Subsec. (b)(4). Pub. L. 98-620, Sec. 501(4A), added par. (4).
Subsec. (c)(1). Pub. L. 98-620, Sec. 501(5), substituted provisions
requiring disclosure of each invention within a reasonable time after it
becomes known to contractor personnel responsible for the administration
of patent matters for provision requiring disclosure of each invention
within a reasonable time after it is made.
Subsec. (c)(2). Pub. L. 98-620, Sec. 501(5), substituted provisions
requiring the contractor to make a written election within two years
after disclosure to the Federal agency (or such additional time as may
be approved by the Federal agency) whether the contractor will retain
title to a subject invention for provision requiring election to retain
title within a reasonable time after disclosure, and inserted provision
authorizing the Federal agency to shorten the period for election under
certain circumstances.
Subsec. (c)(3). Pub. L. 98-620, Sec. 501(5), substituted provisions
requiring a contractor electing rights in a subject invention to file a
patent application prior to any statutory bar date that may occur under
this title due to publication, on sale, or public use, and thereafter to
file corresponding patent applications in other countries in which it
wishes to retain title within reasonable times for provisions requiring
the contractor to file patent applications within a reasonable time.
Subsec. (c)(4). Pub. L. 98-620, Sec. 501(5), substituted provision
that the funding agreement may provide for such additional rights,
including the right to assign or have assigned foreign patent rights in
the subject invention, as are determined by the agency as necessary for
meeting the obligations of the United States under any treaty,
international agreement, arrangement of cooperation, memorandum of
understanding, or similar arrangement, including any military agreement
relating to weapons development and production for provision that the
agency could, if provided in the funding agreement, have additional
rights to sublicense any foreign government or international
organization pursuant to any existing or future treaty or agreement.
Subsec. (c)(5). Pub. L. 98-620, Sec. 501(6), substituted ``as well
as any information on utilization or efforts at obtaining utilization
obtained as part of a proceeding under section 203 of this chapter shall
be treated'' for ``may be treated''.
Subsec. (c)(7)(A). Pub. L. 98-620, Sec. 501(7), struck out provision
which made an exception for organizations which were not themselves
engaged in or did not hold a substantial interest in other organizations
engaged in the manufacture or sales of products or the use of processes
that might utilize the invention or be in competition with embodiments
of the invention.
Subsec. (c)(7)(B). Pub. L. 98-620, Sec. 501(8), redesignated cl. (C)
as (B). Former cl. (B), relating to a prohibition against the granting
of exclusive licenses under United States Patents or Patent Applications
in a subject invention by the contractor to persons other than small
business firms for periods in excess of certain specified periods and
relating to commercial sales, was struck out.
Subsec. (c)(7)(C). Pub. L. 98-620, Sec. 501(8), added cl. (C).
Former cl. (C) redesignated (B).
Subsec. (c)(7)(D). Pub. L. 98-620, Sec. 501(8), added cl. (D).
Former cl. (D) redesignated (E).
Subsec. (c)(7)(E). Pub. L. 98-620, Sec. 501(8), redesignated former
cl. (D) as (E) and inserted provisions placing a limit on the amount of
royalties that the contract operators of Government-owned laboratories
are entitled to retain after paying patent administrative expenses and a
share of the royalties to inventors, requiring payment of amounts in
excess of such limits to the United States Treasury, and requiring that,
to the extent it provides the most effective technology transfer, the
licensing of subject inventions shall be administered by contractor
employees on location at the facility.
Effective Date of 1999 Amendment
Amendment by Pub. L. 106-113 effective 4 months after Nov. 29, 1999,
see section 1000(a)(9) [title IV, Sec. 4731] of Pub. L. 106-113, set out
as a note under section 1 of this title.
Section Referred to in Other Sections
This section is referred to in sections 203, 206, 210 of this title;
title 15 section 3710c; title 42 section 7261a.
