[Code of Federal Regulations]
[Title 32, Volume 5]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR746.7]

[Page 382-383]
 
                       TITLE 32--NATIONAL DEFENSE
 
                   CHAPTER VI--DEPARTMENT OF THE NAVY
 
PART 746_LICENSING OF GOVERNMENT INVENTIONS IN THE CUSTODY OF THE 
DEPARTMENT OF THE NAVY--Table of Contents
 
Sec. 746.7  Limited exclusive license.

    (a) Availability of licenses. Each government invention may be made 
available for the granting of a limited exclusive license, provided 
that:
    (1) The invention has been published as available for licensing 
pursuant to paragraph (a) of Sec. 746.11 for a period of at least six 
months;
    (2) The Chief of Naval Research has determined that:
    (i) The invention may be brought to the point of practical 
application in certain fields of use and/or in certain geographical 
locations by exclusive licensing;
    (ii) The desired practical application has not been achieved under 
any nonexclusive license granted on the invention; and
    (iii) The desired practical application is not likely to be achieved 
expeditiously in the public interest under a nonexclusive license or as 
a result of further government-funded research or development;
    (3) The notice of the prospective licensee has been published, 
pursuant to paragraph (d) of Sec. 746.11 for at least 60 days; and
    (4) After termination of the period set forth in paragraph (a)(3) of 
Sec. 746.7 the Chief of Naval Research has determined that no applicant 
for a nonexclusive license has brought or will bring, within a 
reasonable period, the invention to the point of practical application, 
as specified in the exclusive license, and that to grant the exclusive 
license would be in the public interest.
    (b) Selection of exclusive licensee. An exclusive licensee will be 
selected on bases consistent with the policy set forth in Sec. 746.2 
and in accordance with the procedures set forth in Sec. 746.11.
    (c) Terms of grant. (1) The license may be granted for all or less 
than all fields of use of the government invention, and throughout the 
United States of America, its territories and possessions, the 
Commonwealth of Puerto Rico, and the District of Columbia, or in any 
lesser geographic portion thereof.
    (2) Subject to the rights reserved to the Government in paragraphs 
(c)(6) and (c)(7) of Sec. 746.7, the licensee shall be granted the 
exclusive right to practice the invention in accordance with the terms 
and conditions specified in the license.
    (3) The duration of the license shall be negotiated but shall be for 
a period less than the terminal portion of the patent, the period 
remaining being sufficient to make the invention reasonably available 
for the grant of a nonexclusive license; and such period of exclusivity 
shall not exceed 5 years unless the Chief of Naval Research determines, 
on the basis of a written submission supported by a factual showing, 
that a longer period is reasonably necessary to permit the licensee to 
enter the market and recoup his reasonable costs in so doing.
    (4) The license shall require the licensee to bring the invention to 
the point of practical application within a period specified in the 
license, or within a longer period as approved by the Chief of Naval 
Research, and to continue to make the benefits of the invention 
reasonably accessible to the public.
    (5) The license shall require the licensee to expend a specified 
minimum amount of money and/or take other specified actions, within a 
specified period of time after the effective date of the license, in an 
effort to bring the invention to the point of practical application.
    (6) The license shall be subject to the irrevocable, royalty-free 
right of the Government of the United States to practice and have 
practiced the invention throughout the world, by or on behalf of the 
Government of the United

[[Page 383]]

States, and by or on behalf of any foreign government or 
intergovernmental organization pursuant to any existing or future treaty 
or agreement with the United states. If the Chief of Naval Research 
finds it to be in the public interest, this license may also be 
expressly subject to this same royalty-free right by or on behalf of 
state and municipal governments.
    (7) The license shall reserve to the Chief of Naval Research the 
right to require the licensee to grant sublicenses to responsible 
applicants on terms that are reasonable in the circumstances:
    (i) The extent that the invention is required for public use by 
government regulations, or
    (ii) As may be necessary to fulfill health or safety needs, or
    (iii) For other public purposes stipulated in the license.
    (8) The license may extend to subsidiaries and affiliates of the 
licensee but shall be nonassignable without approval of the Chief of 
Naval Research, except to successors of that part of the licensee's 
business to which the invention pertains.
    (9) An exclusive licensee may grant sublicenses under his license, 
subject to the approval of the Chief of Naval Research. Each sublicense 
granted by an exclusive licensee shall make reference to the exclusive 
license, including the rights retained by the Government under the 
exclusive license, and a copy of such sublicense shall be furnished to 
the Chief of Naval Research.
    (10) The license may be subject to such other terms as may be in the 
public interest.
    (11) The Government shall make no representation or warranty as to 
validity of any licensed application(s) or patent(s), or of the scope of 
any of the claims contained therein, or that the exercise of the license 
will not result in the infringement of any other patent(s), nor shall 
the Government assume any liability whatsoever resulting from the 
exercise of the license.