(1) The Harbridge House study results conclusively demonstrate that a single presumption of ownership of a patent is not in the public interest, applied either government-wide, to a single agency, or to a particular government program. (2) The Harbridge House study results identify factors which, when properly considered, can affect commercial utilization of government-sponsored inventions, participation of industry in government R&D programs, and competition in commercial markets. The most critical factors are: -the mission of the research sponsoring agency; -the purpose and nature of the contract; -the commercial applicability of and market -the extent to which the invention was developed -the promotional activities of the sponsoring -the prior commercial experience of the contractor in the field of the invention; -the size of the contractor's privately financed -the contractor's attitude towards and capability -the size, nature and research orientation of (3) The Harbridge House study results and the operating experience of the government agencies indicate that the principles underlying the Presidential Policy, and, with minor exceptions, the criteria established by the Policy for allocating patent rights take into consideration the above listed factors. in a manner which: -properly balances the Policy objectives of -provides the operational flexibility needed by -within the differing mission constraints of the federal agencies, promotes consistent application of patent policies and practices in similar contracting situations. In view of these conclusions, the Committee recommended the continuation of a flexible, government-wide patent policy following the basic principles and criteria of the 1963 Presidential Patent Policy Statement. More specifically, the Committee suggested that such a policy should be continued either by making minor modifications to the Presidential Patent Policy or by proposing legislation based on similar principles and criteria which would be applicable to all agencies. The Department of Justice, although concurring in recommendations to make minor changes in the Presidential Patent Policy and to continue the policy in effect as an interim measure, believed that the Harbridge House Report provided evidence that more. extensive changes were justified. 55/ The FCST adopted the suggestion of its Committee on Government Patent Policy for a modification of the Presidential Patent Policy 541 55/ The unpublished Report and Recommendations of Committee on Government The Department of Justice submitted a minority report which is 56/ and recommended these changes to the President. new policy statement were designed to: The changes made by the (a) increase commercial utilization of government-developed (c) generally eliminate ambiguities in the original Policy both the Government and its contractors. The basic change to increase commercial utilization of government-owned inventions is found in Section 2 of the President's Statement. This section, for the first time, directed the Executive Branch to include exclusive licensing as a mechanism to be used in making government-owned patents available to the public. Another change intended to assist the licensing of government-owned patents is found in Section 1(i) which provided that whenever the Government acquired principal rights to an invention, the nonexclusive license normally retained by the contractor may be made revocable so that the Government may be in a position to grant exclusive licenses in the invention. A corollary change was made to Sections 1(f) and 1(g) of the original Statement containing the so-called "march-in" rights. These sections define the rights acquired 56/ On August 23, 1971, President Nixon reissued the Presidential by the Government whenever the contractor retained title to inventions. These rights include the requirement that the contractor license others in certain specific situations. The licensing requirement referred to in these two sections was changed to provide that this license could be on either an exclusive or nonexclusive basis. The changes intended to increase the Government's flexibility in allocating rights to inventions are found in the latter part of Section 1(a), which identifies the circumstances under which a contractor may retain the principal rights to an identified invention even though the contract under which the invention was made falls in those areas where the presumption at the time of contracting was that the Government would acquire principal rights. The original policy permitted the contractor, in exceptional situations, to retain principal or exclusive rights at the time of contracting, but did not provide the authority to grant such rights as to certain inventions after they were identified. The 1971 Statement provided this authority whenever such rights were determined to be necessary to commercialize the invention, or in other equitable situations. Primarily, Section 1(h) and Section 1(i) also eliminated a series of omissions and ambiguities that were present in the original statement. these sections specified the minimum rights that will be retained by either the Government or the contractor whenever the other party acquires title to the inventions. Also, Section 1(h) clarified past confusion regarding the scope of the license rights granted by the Government whenever the contractor retained the exclusive rights in an invention. 5. Implementation And Challenge Of Presidential Regulations governing federal procurement for the civilian agencies are contained in the Federal Procurement Regulations (F.P.R.), whereas military procurement requirements are governed by the Armed Services Procurement Regulations (A.S.P.R.). Since the F.P.R. had never implemented the 1963 Presidential Statement, government agencies guided by the F.P.R. provided their own interpretation of this policy, and each drafted patent rights clauses which implemented either the Presidential Statement or the requirements of applicable legislation. The result was a prolifIn order to rectify this 571 eration of procedures and clause language. Government Procurement- to bring the procurement policies and clause 571 For example, until the recent issue of the FPR, the following regulations were issued to implement the 1971 Statement and statutory patent provisions: DOT issued regulations containing patent clauses (41 C.F.R. 12-9.61; 37 Fed. Reg. 4868-4875 (1972); the Office of Saline Water issued their regulations on November 30, 1971 (36 Fed. Reg. 22744-22750); a department-wide regulation was proposed by Interior but was never fully promulgated (37 Fed. Reg. 28513-28521 (1972); EPA regulations on patent rights as to grants were issued on November 27, 1971, (36 Fed. Reg. 2272522728). NSF promulgated their regulations on December 4, 1974, (39 Fed. Reg. 41973 41985); NASA's revised regulations were published on August 30, 1972, (37 Fed. Reg. 17547-17558; 39 Fed. Reg. 13130-13132 (1974) [contracts]; 38 Fed. Reg. 8136-8147 (1973) [Grants]). A number of agencies did not issue such regulations under the 1971 Statement but continued to use the regulations or policy they had adopted for the 1963 Statement while they awaited the F.P.R. patent provisions. A complete listing of agency patent regulations can be found in Appendix H of the FCST Annual Report, note 59, infra. 58/ The Commission's Recommendation I-1 stated: Implement the revised Presidential Statement of Government |