[Code of Federal Regulations]

[Title 37, Volume 1]

[Revised as of July 1, 2006]

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

[CITE: 37CFR401.7]



[Page 705]

 

              TITLE 37--PATENTS, TRADEMARKS, AND COPYRIGHTS

 

  CHAPTER IV--ASSISTANT SECRETARY FOR TECHNOLOGY POLICY, DEPARTMENT OF 

                                COMMERCE

 

PART 401_RIGHTS TO INVENTIONS MADE BY NONPROFIT ORGANIZATIONS AND SMALL 

BUSINESS FIRMS UNDER GOVERNMENT GRANTS, CONTRACTS, AND COOPERATIVE 

AGREEMENTS--Table of Contents

 

Sec.  401.7  Small business preference.



    (a) Paragraph (k)(4) of the clauses at Sec.  401.14 Implements the 

small business preference requirement of 35 U.S.C. 202(c)(7)(D). 

Contractors are expected to use efforts that are reasonable under the 

circumstances to attract small business licensees. They are also 

expected to give small business firms that meet the standard outlined in 

the clause a preference over other applicants for licenses. What 

constitutes reasonable efforts to attract small business licensees will 

vary with the circumstances and the nature, duration, and expense of 

efforts needed to bring the invention to the market. Paragraph (k)(4) is 

not intended, for example, to prevent nonprofit organizations from 

providing larger firms with a right of first refusal or other options in 

inventions that relate to research being supported under long-term or 

other arrangements with larger companies. Under such circumstances it 

would not be resonable to seek and to give a preference to small 

business licensees.

    (b) Small business firms that believe a nonprofit organization is 

not meeting its obligations under the clause may report their concerns 

to the Secretary. To the extent deemed appropriate, the Secretary will 

undertake informal investigation of the concern, and, if appropriate, 

enter into discussions or negotiations with the nonprofit organization 

to the end of improving its efforts in meeting its obligations under the 

clause. However, in no event will the Secretary intervene in ongoing 

negotiations or contractor decisions concerning the licensing of a 

specific subject invention. All the above investigations, discussions, 

and negotiations of the Secretary will be in coordination with other 

interested agencies, including the Small Business Administration; and in 

the case of a contract for the operation of a government-owned, 

contractor operated research or production facility, the Secretary will 

coordinate with the agency responsible for the facility prior to any 

discussions or negotiations with the contractor.



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