(a)(1) A license may be granted only if the applicant has supplied
the Federal agency with a satisfactory plan for
[[Page 737]]
development or marketing of the invention, or both, and with information
about the applicant's capability to fulfill the plan. The plan for a
non-exclusive research license may be limited to describing the research
phase of development.
(2) A license granting rights to use or sell under a Government
owned invention in the United States shall normally be granted 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. However, this condition may be
waived or modified if reasonable but unsuccessful efforts have been made
to grant licenses to potential licensees that would be likely to
manufacture substantially in the United States or if domestic
manufacture is not commercially feasible.
(b) Licenses shall contain such terms and conditions as the Federal
agency determines are appropriate for the protection of the interests of
the Federal Government and the public and are not in conflict with law
or this part. The following terms and conditions apply to any license:
(1) The duration of the license shall be for a period specified in
the license agreement, unless sooner terminated in accordance with this
part.
(2) Any patent license may grant the licensee the right of
enforcement of the licensed patent without joining the Federal agency as
a party as determined appropriate in the public interest.
(3) The license may extend to subsidiaries of the licensee or other
parties if provided for in the license but shall be nonassignable
without approval of the Federal agency, except to the successor of that
part of the licensee's business to which the invention pertains.
(4) The license may provide the licensee the right to grant
sublicenses under the license, subject to the approval of the Federal
agency. Each sublicense shall make reference to the license, including
the rights retained by the Government, and a copy of such sublicense
with any modifications thereto, shall be promptly furnished to the
Federal agency.
(5) The license shall require the licensee to carry out the plan for
development or marketing of the invention, or both, to bring the
invention to practical application within a reasonable time as specified
in the license, and continue to make the benefits of the invention
reasonably accessible to the public.
(6) The license shall require the licensee to report periodically on
the utilization or efforts at obtaining utilization that are being made
by the licensee, with particular reference to the plan submitted but
only to the extent necessary to enable the agency to determine
compliance with the terms of the license.
(7) Where an agreement is obtained pursuant to Sec. 404.5(a)(2)
that any products embodying the invention or produced through the use of
the invention will be manufactured substantially in the United States,
the license shall recite such an agreement.
(8) The license shall provide for the right of the Federal agency to
terminate the license, in whole or in part, if the agency determines
that:
(i) 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;
(ii) 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;
(iii) The licensee has willfully made a false statement of or
willfully omitted a material fact in the license application or in any
report required by the license agreement;
(iv) The licensee commits a substantial breach of a covenant or
provision contained in the license agreement, including the requirement
in Sec. 404.5(a)(2); or
(v) The licensee has been found by a court of competent jurisdiction
to have
[[Page 738]]
violated the Federal antitrust laws in connection with its performance
under the license agreement.
(9) The license may be modified or terminated, consistent with this
part, upon mutual agreement of the Federal agency and the licensee.
(10) The license may be modified or terminated, consistent with this
part, upon mutual agreement of the Federal agency and the licensee.
(11) Nothing relating to the grant of a license, nor the grant
itself, shall be construed to confer upon any person any immunity from
or defenses under the antitrust laws or from a charge of patent misuse,
and the acquisition and use of rights pursuant to this part shall not be
immunized from the operation of state or Federal law by reason of the
source of the grant.
[50 FR 9802, Mar. 12, 1985, as amended at 71 FR 11512, Mar. 8, 2006]
