Policy Statement, promulgated patent licensing regulations providing for limited exclusive licenses. In 1970, a report submitted to the FCST by the Patent Management Subcommittee of the Committee on Government Patent Policy recommended that the FCST endorse the practice of granting limited exclusive 80/ licenses to inventions resulting from government-sponsored R&D efforts where it is determined that such exclusivity is required to effectively promote the development and utilization of such inventions, subject to 81/ existing statutory limitations.- The report included two memoranda from Assistant Attorney General Wozencraft to the effect that the proposed limited exclusive license would not constitute an unauthorized alienation of government property but the proper management of valuable government patent rights which would not require additional statutory 82/ authority. 80/ The term "limited exclusive license" refers to an exclusive license which is subject to a number of limitations, e.g., the duration of exclusivity; the retention of the Government of a nontransferable, royalty-free right to practice the invention and the right to require the licensee to license others to the extent the invention is needed to satisfy governmental regulations or to fulfill health needs; the licensee would have to invest a specified minimum amount for development and bring the invention to the point of practical application within a specified time period; and the licensee could not assign the license or grant sublicenses without the Government's approval. See FCST Annual Report on Government Patent Policy, Appendix D, 120-123, 132, 133 (Combined December 1969 and December 1970). Apparently based on the recommendations of this FCST report, the updated 1971 Government Patent Policy Statement provided in Section 2: Under regulations prescribed by the Administrator of General Services, Government-owned patents shall be made available and the technological advances covered thereby brought into being in the shortest time possible through dedication or licensing, either exclusive or nonexclusive, and shall be listed in official Government publications or otherwise. Pursuant to this statement, GSA circulated a draft government-wide patent licensing regulation as a part of the Federal Property Management Regula83/ tions (F.P.M.R.) for comment- and ultimately amended the F.P.M.R. to include the licensing of government-owned inventions. 84/ These patent licensing regulations provided for the grant of both nonexclusive and limited exclusive licenses to further the policy of developing governmentowned inventions to practical application in the shortest time possible. The AEC85/ issued licensing regulations following the issuance of the GSA patent licensing regulations. 83/ 84/ 85/ Id. at 129-136. These regulations were issued under the property management authority of the Federal Property and Administrative Services Act of 1949. This Act also provided authority to GSA to dispose of government property including patents. However, such disposals require a procedure different than that adopted by the F.P.M.R. patent licensing regulations. AEC issued its domestic patent licensing regulations, 10 C.F.R. Part 81, 38 Fed. Reg. 7318-7323 (1973); and a foreign patent licensing regulation, 10 C.F.R. Part 81.6, 38 Fed. Reg. 8240-8242 (1973). These regulations were issued under the authority of Sections 156 and 161(g) of the Atomic Energy Act. These regulations have been redesignated as 10 C.F. R. Part 781 to coincide with the transfer of AEC responsibilities to ERDA. 40 Fed. Reg. 8794 (1975). See Appendix A.9. After the promulgation of the GSA patent licensing regulations, Public Citizen, Inc. (a Nader organization) and eleven Congressmen brought a civil action against the GSA Administrator Arthur Sampson to set aside these regulations for two reasons: (1) the issuance of the regulations had not been in compliance with Section 4 of the Administrative Procedures Act86/ which requires that notice of a proposed rule be published in the 87/ a dis Federal Register with an opportunity for public comment prior to the rule becoming effective; and (2) the grant of an exclusive license was posal of government property without Congressional authority. District Court granted plaintiffs' motion for summary judgment directed the defendant to take immediate steps to void the Regulations. 88/ The and 89/ On appeal, this judgment was reversed on the ground that the plaintiffs 90/ lacked standing. Prior to the appeal, GSA announced a proposed amendment to the licensing regulations and delayed the effective date of these 87/ 88/ 89/ 90/ U.S. Const. art. IV, §3. cl.2 provides in pertinent part: "The Congress shall have Power to dispose of and make all need ful Rules and Regulations respecting the territory or other Property belonging to the United States.... 11 Public Citizen, Inc. v. Sampson, 180 USPQ 497 (D.C.D.C. 1974). GSA issued a notice of suspension for their licensing regulations, 39 Fed. Reg. 6110 (February 19, 1974). Decided without published opinion, 515 F.2d 1018 (D.C. Cir. 1975). regulations until the conclusion of this litigation.91/ Upon the dis missal of this suit by the Circuit Court, GSA made these regulations 92/ effective. During the period when the F.M.P.R. licensing regulations were under attack, the Nonnuclear Energy Act was enacted prescribing ERDA's patent policy for its nonnuclear activities and specifically providing the Administrator with authority to grant both nonexclusive and exclusive licenses "in any invention to which title is vested in the United States. "93/ The Nonnuclear Conference Report accompanying this legislation indicated that the authority to grant "exclusive or partially exclusive licenses is vested in the Administrator to assure flexibility; but only in conformity with specific minimum considerations which have been adopted primarily from the NASA and AEC regulations, and the Presi1194/ dential Patent Policy Statement. This is the first Congressional statement that specifically provides authority to grant exclusive li censes in government-owned patents.95/ 91/ 39 Fed. Reg. 23288 (August 6, 1974), Appendix A.8. 94/ 95/ H.R. Rep. No. 1563, 93d. Cong., 2d. Sess. (1974). Specific mention of exclusive licensing authority is generally not considered necessary for an agency to undertake such licensing of its patents. See notes 73 to 76 supra. Three main issues have surrounded the licensing of government-owned patents. The first two involve the scope of authority of a government agency to license government-owned patents. The third involves policy considerations relating to how the existing authority should be exercised to achieve the greatest public benefit. The Government's constitutional right to effective ownership of patents has been questioned by some and defended by others. 96/ 97/ There appears to be nothing in the nature of a patent which is inconsistent with government ownership. The constitutional power of the United States to acquire and exercise patent rights is either assumed or provided 96/ 971 98/ 99/ 100/ 101/ Ewing, Government Owned Patents, 10 J.P.O.S. 149 (1928); Wills, Forman, "Patents: Their Ownership and Administration by the U.S. See generally Executive Orders 9865 and 10096, issued June 14, 1947, and January 23, 1950, respectively; Presidential Patent Policy Statements, Supra notes 52 and 56. Supra notes 72-76. United States v. Chemical Foundation, 272 U.S. 1 (1926); See also Forman, Supra note 97 at 26, on the elimination of a paragraph from the official report of the decision in United States v. Dubilier Condenser Corporation, 289 U.S. 178, 706 (1933) to the effect that such elimination inferentially gave recognition to the Government's right to acquire and dispose of patents. 31 Ops. Att'y Gen. 463 (1919); 32 Id. 321 (1920); 34 Id. 320 (1924); 37 Id. 180 (1933); 38 Id. 425, 534 (1936); 37 Id. 164 (1938). |