35/ National Patent Planning Commission report. The Commission, created 36/ by President Franklin D. Roosevelt at the end of 1941, was to investigate patent abuses spotlighted by the Temporary National Economic Committee. The Commission recommended that the Government should not normally assert full ownership of patents, except in the public health or safety field. The Commission urged that patents should be available on an exclusive basis, as "It often happens, 11371 The title policy advocates found support in the U.S. Attorney 38/ General's Report on Government Patent Practices and Policies. The report urged the establishment of a Government Patents Administrator 35/ Report of the National Patent Planning Commission, H.R. Doc. 239, 78th Cong., 1st Sess. (1943); Second Report of the National Patent Planning Commission, H. R. Doc. 22, 79th Cong., 1st Sess. (1945); Third Report of the National Patent Planning Commission, H.R. Doc. 283, 79th Cong., 1st Sess. (1945). 36/ Investigation of Concentration of Economic Power: Final Report and Recommendation of the Temporary Economic Committee (Pursuant to Public Resolution No. 113, 75th Congress), No. 35, 77th Cong., 1st Sess. (1941). 371 Second Report of the National Patent Planning Commission, supra note 35, at 5. 38/ to administer a uniform patent policy. The basic policy recommended was that all government contracts for research and development should contain a requirement that the Government be entitled to all rights to inventions produced in the performance of the contract. However, this report did recognize a need in certain situations. that exceptions could be made. Specifically, if the contractor prior to the contract has already made a substantial independent contribution, and other qualified organizations were unavailable, or in the case of cooperative research projects, exceptions could be made. In such cases the contractor should grant the United States a nonexclusive royaltyfree license to make, have made, use and dispose of any invention. addition, the contractor was to agree to place these inventions in adequate commercial use within a designated period, and, if such use not being made, to license all applicants at a reasonable royalty. The report also recommended royalty-free licensing or dedication of all government patents. In was The Attorney General, Tom Clark, advised President Truman to publish the report and wait for a more favorable moment to implement its recommendations.39/ The military departments strenuously objected to the proposed title policy. In contrast, the Secretaries of Commerce and Interior, and the Federal Security Agency urged the adoption of this 39/ Supra note 33, Collins et al., at 25 (except for the government employee rights question which resulted in Executive Order 10096). The basic issue is whether the Government should acquire title (sometimes called the principal or exclusive rights) to the inventions resulting from government contract work, commonly referred to as the "title policy", or merely a royalty-free license for governmental purposes, commonly referred to as the "license policy". This has remained one of the oldest, most studied, debated, and unresolved policy issues in Government. It has been studied and debated by Congress, the Executive Branch, and the public for over 30 years. More specifically, over the last fifteen years there have been: - 12 congressional hearings directly bearing on this issue; - more than 30 congressional reports and studies; - at least three study groups appointed by the Executive Branch of the Government; and - a congressional commission which considered this subject as one of their topics relating to procurement. Most arguments, positions and proposed solutions took the form of either one extreme or the other-that the Government should always acquire title to resulting inventions, or should always acquire only a license for Government use. 41/ A listing of hearings, studies and articles up to 1967 is contained in the Federal Council of Science and Technology (FCST) Annual Report of the Committee on Government Patent Policy. Since 1967, the only major congressional action on this subject concerned the Nonnuclear Energy Act. The Commission on Government Procurement, Pub. L. 92-129, is the Congressional Commission referred to. The title advocates supported their position with the argument that resulting inventions were no different from the end product which was produced under the research contract, i.e., the Government paid for the invention just as it paid for the end result. The Government should own it, for to do otherwise would be to give away government property. The license advocates contended that the Government did not contract for the making of inventions but rather for R&D work performed in a particular technological area, or for specific hardware. The contractor was paid for the work whether or not an invention was made. If inventions did result, they were incidental to the performance of the contract. Further, it was argued that the Government does not totally pay for the R&D involved, since the contractor was selected to perform the research program because of his substantial amount of background knowledge, know-how and expertise, as well as a substantial investment in the form of facilities and trained personnel. It was also asserted that the license policy was the most effective policy since it provided the maximum use of patent incentives, and induced prospective contractors to bring their background knowledge and commercial experience to bear on government tasks; thereby tending to reduce the cost of government research. With a title policy, it was argued, the most competent contractors would refuse to perform R&D work for the Government, or even worse, if they did perform such work, a title policy would tend to isolate their commercial know-how and competence from their governmental tasks. On the other hand, title advocates argued that permitting the contractor to retain exclusive rights to inventions was tantamount to requiring the public to pay twice in order to utilize the invention; first, through the Government's support for R&D and, second, as a royalty charge in the commercial marketplace. Accordingly, this argument concluded that these inventions should be made freely available to the public, since broad-scale availability of such inventions would provide the public with a wider base of products and processes. The counterargument of the license advocates is that when an invention is freely available to all, there is no incentive for anyone to use it. Since one of the primary inducements of the patent system is to encourage the investment of risk capital in the development and marketing of an invention, patents freely available to all do not provide such encouragement. It was contended that no one would be willing to risk such an investment without some degree of exclusivity. The title advocates also stated that permitting contractors to retain exclusive commercial rights tends to increase the concentration of economic power, because the large corporations receive by far the greatest portion of the Government's funds for R&D. This was, in turn, countered by license advocates with the assertion that patent rights are much more critical to small businesses than to large ones, and that a title policy would further reduce the ability of small corporations to compete. Accordingly, it was argued that a title policy, not a license policy, would tend to restrict competition. |