[Code of Federal Regulations]

[Title 45, Volume 3]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR650.4]



[Page 201-204]

 

                        TITLE 45--PUBLIC WELFARE

 

                 CHAPTER VI--NATIONAL SCIENCE FOUNDATION

 

PART 650_PATENTS--Table of Contents

 

Sec. 650.4  Standard patent rights clause.



    (a) The following Patent Rights clause will be used in every funding 

agreement awarded by the Foundation that relates to scientific or 

engineering research unless a special patent clause has been negotiated 

(see Sec. 650.5).



                      Patent Rights (August, 2005)



    (a) Definitions--(1) Invention means any invention or discovery 

which is or may be patentable or otherwise protectable under title 35 of 

the United States Code, to any novel variety of plant which is or may be 

protected under the Plant Variety Protection Act (7 U.S.C. 2321 et 

seq.).

    (2) Subject invention means any invention of the grantee conceived 

or first actually reduced to practice in the performance of work under 

this grant, provided that in the case of a variety of plant, the date of 

determination (as defined in section 41(d) of the Plant Variety 

Protection Act (7 U.S.C. 2401(d)) must also occur during the period of 

grant performance.

    (3) Practical application means to manufacture in the case of a 

composition or product, to practice in the case of a process or method, 

or to operate in the case of a machine or system; and, in each case, 

under such conditions as to establish that the invention is being 

utilized and that its benefits are to the extent permitted by law or 

Government regulations available to the public on reasonable terms.

    (4) Made when used in relation to any invention means the conception 

or first actual reduction to practice of such invention.

    (5) Small business firm means a domestic small business concern as 

defined at section 2 of Public Law 85-536 (15 U.S.C. 632) and 

implementing regulations of the Administrator of the Small Business 

Administration. For the purpose of this Patents Rights clause, the size 

standard for small business concerns involved in Government procurement 

and subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, 

will be used.

    (6) Nonprofit organization means a domestic university or other 

institution of higher education or an organization of the type described 

in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 

501(c)) and exempt from taxation under section 501(a) of the Internal 

Revenue Code (26 U.S.C. 501(a)) or any domestic nonprofit scientific or 

educational organization qualified under a State nonprofit organization 

statute.

    (b) Allocation of Principal Rights. The grantee may retain the 

entire right, title, and interest throughout the world to each subject 

invention subject to the provisions of this Patents Rights clause and 35 

U.S.C. 203. With respect to any subject invention in which the grantee 

retains title, the Federal Government shall have a nonexclusive, 

nontransferable, irrevocable, paid-up license to practice or have 

practiced for or on behalf of the United States the subject invention 

throughout the world. If the award indicates it is subject to an 

identified international agreement or treaty, the National Science 

Foundation (NSF) also has the right to direct the grantee to convey to 

any foreign participant such patent rights to subject inventions as are 

required to comply with that agreement or treaty.

    (c) Invention Disclosure, Election of Title and Filing of Patent 

Applications by Grantee. (1) The grantee will disclose each subject 

invention to NSF within two months after the inventor discloses it in 

writing to grantee personnel responsible for the administration of 

patent matters. The disclosure to NSF will be submitted via the iEdison 

Invention Information Management System maintained by the National 

Institutes of Health and shall identify the grant under which the 

invention was made and the inventor(s). It shall be sufficiently 

complete in technical detail to convey a clear understanding of the 

nature, purpose, operation, and, to the extent known, the physical, 

chemical, biological or electrical characteristics of the invention. The 

disclosure shall also identify any publication, on sale or public use of 

the invention and whether a manuscript describing the invention has been 

submitted for publication and, if so, whether it has been accepted for 

publication at the time of disclosure. In addition, after disclosure to 

NSF, the grantee will promptly notify NSF of the acceptance of any 

manuscript describing the invention for publication or of any on sale or 

public use planned by the grantee.



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    (2) The grantee will elect in writing whether or not to retain title 

to any such invention by notifying NSF within two years of disclosure to 

NSF. However, in any case where publication, on sale, or public use has 

initiated the one year statutory period wherein valid patent protection 

can still be obtained in the United States, the period for election of 

title may be shortened by NSF to a date that is no more than 60 days 

prior to the end of the statutory period.

    (3) The grantee will file its initial patent application on an 

invention to which it elects to retain title within one year after 

election of title or, if earlier, prior to the end of any statutory 

period wherein valid patent protection can be obtained in the United 

States after a publication, on sale, or public use. The grantee will 

file patent applications in additional countries or international patent 

offices within either ten months of the corresponding initial patent 

application, or six months from the date when permission is granted by 

the Commissioner of Patents and Trademarks to file foreign patent 

applications when such filing has been prohibited by a Secrecy Order.

    (4) Requests for extension of the time for disclosure to NSF, 

election, and filing under subparagraphs (c) (1), (2), and (3) of this 

clause may, at the discretion of NSF, be granted.

    (d) Conditions When the Government May Obtain Title. The grantee 

will convey to NSF, upon written request, title to any subject 

invention:

    (1) If the grantee fails to disclose or elect the subject invention 

within the times specified in paragraph (c) above, or elects not to 

retain title; provided that NSF may only request title within 60 days 

after learning of the failure of the grantee to disclose or elect within 

the specified times.

    (2) In those countries in which the grantee fails to file patent 

applications within the times specified in paragraph (c) above; 

provided, however, that if the grantee has filed a patent application in 

a country after the times specified in paragraph (c) above, but prior to 

its receipt of the written request of NSF, the grantee shall continue to 

retain title in that country.

    (3) In any country in which the grantee decides not to continue the 

prosecution of any application for, to pay the maintenance fees on, or 

defend in a reexamination or opposition proceeding on, a patent on a 

subject invention.

    (e) Minimum Rights to Grantee. (1) The grantee will retain a 

nonexclusive royalty-free license throughout the world in each subject 

invention to which the Government obtains title, except if the grantee 

fails to disclose the subject invention within the times specified in 

paragraph (c) above. The grantee's license extends to its domestic 

subsidiaries and affiliates, if any, within the corporate structure of 

which the grantee is a party and includes the right to grant sublicenses 

of the same scope to the extent the grantee was legally obligated to do 

so at the time the grant was awarded. The license is transferable only 

with the approval of NSF except when transferred to the successor of 

that part of the grantee's business to which the invention pertains.

    (2) The grantee's domestic license may be revoked or modified by NSF 

to the extent necessary to achieve expeditious practical application of 

the subject invention pursuant to an application for an exclusive 

license submitted in accordance with applicable provisions at 37 CFR 

part 404. This license will not be revoked in that field of use or the 

geographical areas in which the grantee has achieved practical 

application and continues to make the benefits of the invention 

reasonably accessible to the public. The license in any foreign country 

may be revoked or modified at the discretion of NSF to the extent the 

grantee, its licensees, or its domestic subsidiaries or affiliates have 

failed to achieve practical application in that foreign country.

    (3) Before revocation or modification of the license, NSF will 

furnish the grantee a written notice of its intention to revoke or 

modify the license, and the grantee will be allowed thirty days (or such 

other time as may be authorized by NSF for good cause shown by the 

grantee) after the notice to show cause why the license should not be 

revoked or modified. The grantee has the right to appeal, in accordance 

with applicable regulations in 37 CFR part 404 concerning the licensing 

of Government-owned inventions, any decision concerning the revocation 

or modification of its license.

    (f) Grantee Action to Protect Government's Interest. (1) The grantee 

agrees to execute or to have executed and promptly deliver to NSF all 

instruments necessary to:

    (i) Establish or confirm the rights the Government has throughout 

the world in those subject inventions for which the grantee retains 

title, and

    (ii) Convey title to NSF when requested under paragraph (d) above, 

and to enable the Government to obtain patent protection throughout the 

world in that subject invention.

    (2) The grantee agrees to require, by written agreement, its 

employees, other than clerical and non-technical employees, to disclose 

promptly in writing to personnel identified as responsible for the 

administration of patent matters and in a format suggested by the 

grantee each subject invention made under this grant in order that the 

grantee can comply with the disclosure provisions of paragraph (c) 

above, and to execute all papers necessary to file patent applications 

on subject inventions and to establish the Government's rights in the 

subject inventions.



[[Page 203]]



The disclosure format should require, at a minimum, the information 

requested by paragraph (c)(1) above. The grantee shall instruct such 

employees through the employee agreements or other suitable educational 

programs on the importance of reporting inventions in sufficient time to 

permit the filing of patent applications prior to U.S. or foreign 

statutory bars.

    (3) The grantee will notify NSF of any decision not to continue 

prosecution of a patent application, pay maintenance fees, or defend in 

a reexamination or opposition proceeding on a patent, in any country, 

not less than thirty days before the expiration of the response period 

required by the relevant patent office.

    (4) The grantee agrees to include, within the specification of any 

United States patent application and any patent issuing thereon covering 

a subject invention, the following statement: ``This invention was made 

with Government support under (identify the grant) awarded by the 

National Science Foundation. The Government has certain rights in this 

invention.''

    (5) The grantee or its representative will complete, execute, and 

submit electronically to NSF via the iEdison Invention Information 

Management System maintained by the National Institutes of Health a 

confirmation of a License to the United States Government and the page 

of a United States patent application that contains the Federal support 

clause within two months of filing any domestic or foreign patent 

application.

    (g) Subcontracts. (1) The grantee will include this Patents Rights 

clause, suitably modified to identify the parties, in all subcontracts, 

regardless of tier, for experimental, developmental, or research work. 

The subcontractor will retain all rights provided for the grantee in 

this Patents Rights clause, and the grantee will not, as part of the 

consideration for awarding the subcontract, obtain rights in the 

subcontractor's subject inventions.

    (2) In the case of subcontracts, at any tier, when the prime award 

by the Foundation was a contract (but not a grant or cooperative 

agreement), NSF, subcontractor, and contractor agree that the mutual 

obligations of the parties created by this Patents Rights clause 

constitute a contract between the subcontractor and the Foundation with 

respect to those matters covered by this Patents Rights clause.

    (h) Reporting on Utilization of Subject Inventions. The grantee 

agrees to submit on request periodic reports no more frequently than 

annually on the utilization of a subject invention or on efforts at 

obtaining such utilization that are being made by the grantee or its 

licensees or assignees. Such reports shall include information regarding 

the status of development, date of first commercial sale or use, gross 

royalties received by the grantee, and such other data and information 

as NSF may reasonably specify. The grantee also agrees to provide 

additional reports in connection with any march-in proceeding undertaken 

by NSF in accordance with paragraph (j) of this Patents Rights clause. 

As required by 35 U.S.C. 202(c)(5), NSF agrees it will not disclose such 

information to persons outside the Government without the permission of 

the grantee.

    (i) Preference for United States Industry. Notwithstanding any other 

provision of this Patents Rights clause, the grantee agrees that neither 

it nor any assignee will grant to any person the exclusive right to use 

or sell any subject invention in the United States unless such person 

agrees that any products embodying the subject invention or produced 

through the use of the subject invention will be manufactured 

substantially in the United States. However, in individual cases, the 

requirement for such an agreement may be waived by NSF upon a showing by 

the grantee or its assignee that reasonable but unsuccessful efforts 

have been made to grant licenses on similar terms to potential licensees 

that would be likely to manufacture substantially in the United States 

or that under the circumstances domestic manufacture is not commercially 

feasible.

    (j) March-in Rights. The grantee agrees that with respect to any 

subject invention in which it has acquired title, NSF has the right in 

accordance with procedures at 37 CFR 401.6 and NSF regulations at 45 CFR 

650.13 to require the grantee, an assignee or exclusive licensee of a 

subject invention to grant a nonexclusive, partially exclusive, or 

exclusive license in any field of use to a responsible applicant or 

applicants, upon terms that are reasonable under the circumstances, and 

if the grantee, assignee, or exclusive licensee refuses such a request, 

NSF has the right to grant such a license itself if NSF determines that:

    (1) Such action is necessary because the grantee or assignee has not 

taken, or is not expected to take within a reasonable time, effective 

steps to achieve practical application of the subject invention in such 

field of use;

    (2) Such action is necessary to alleviate health or safety needs 

which are not reasonably satisfied by the grantee, assignee, or their 

licensees;

    (3) Such action is necessary to meet requirements for public use 

specified by Federal regulations and such requirements are not 

reasonably satisfied by the grantee, assignee, or licensee; or

    (4) Such action is necessary because the agreement required by 

paragraph (i) of this Patents Rights clause has not been obtained or 

waived or because a licensee of the exclusive right to use or sell any 

subject invention in the United States is in breach of such agreement.



[[Page 204]]



    (k) Special Provisions for Grants with Nonprofit Organizations. If 

the grantee is a nonprofit organization, it agrees that:

    (1) Rights to a subject invention in the United States may not be 

assigned without the approval of NSF, 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 will be subject to 

the same provisions as the grantee;

    (2) The grantee will share royalties collected on a subject 

invention with the inventor, including Federal employee co-inventors 

(when NSF deems it appropriate) when the subject invention is assigned 

in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;

    (3) The balance of any royalties or income earned by the grantee 

with respect to subject inventions, after payment of expenses (including 

payments to inventors) incidental to the administration of subject 

inventions, will be utilized for the support of scientific research or 

education; and

    (4) It will make efforts that are reasonable under the circumstances 

to attract licensees of subject inventions that are small business firms 

and that it will give preference to a small business firm if the grantee 

determines that the small business firm has a plan or proposal for 

marketing the invention which, if executed, is equally likely to bring 

the invention to practical application as any plans or proposals from 

applicants that are not small business firms; provided that the grantee 

is also satisfied that the small business firm has the capability and 

resources to carry out it plan or proposal. The decision whether to give 

a preference in any specific case will be at the discretion of the 

grantee. However, the grantee agrees that the Secretary of Commerce may 

review the grantee's licensing program and decisions regarding small 

business applicants, and the grantee will negotiate changes to its 

licensing policies, procedures, or practices with the Secretary when the 

Secretary's review discloses that the grantee could take reasonable 

steps to implement more effectively the requirements of this paragraph 

(k)(4).

    (1) Communications. All communications required by this Patents 

Rights clause must be submitted through the iEdison Invention 

Information Management System maintained by the National Institutes of 

Health unless prior permission for another form of submission is 

obtained from the Patent Assistant at patents@nsf.gov or at Office of 

the General Counsel, National Science Foundation, 4201 Wilson Boulevard, 

Arlington, VA 22230.



    (b) When the above Patent Rights clause is used in a funding 

agreement other than a grant, ``grant'' and ``grantee'' may be replaced 

by ``contract'' and ``contractor'' or other appropriate terms.



(Approved by the Office of Management and Budget under control number 

3145-0084)



[57 FR 18053, Apr. 28, 1992, as amended at 59 FR 37438, July 22, 1994; 

62 FR 49938, Sept. 24, 1997; 70 FR 43071, July 26, 2005]