Comments on S.414, the University and Small Business Patent Procedures Act

B-140660: Published: Oct 9, 1979. Publicly Released: Jun 4, 1985.

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An evaluation was requested concerning proposed legislation that would establish a government-wide patent policy for federal agencies to follow in dealing with small businesses and nonprofit organizations performing government-supported research and development. It would also establish a framework for the licensing of government-owned inventions. The bill represents a positive step toward achieving a uniform patent policy for the federal government. The suggestion was made that agencies should prepare evaluation plans for assessing the impact of the legislation after its implementation. These plans would serve to aid Congress in conducting oversight hearings and in considering whether to legislate a government-wide patent policy applicable to all contractors. Substantial administrative and paperwork burdens can result from the process of petitioning, negotiating, and determining rights in inventions developed under federally supported research efforts; by granting small businesses and nonprofit organizations the option to take title to such inventions, these burdens should be reduced under the proposed legislation. One exception was noted, however. Small businesses and nonprofit organizations receiving $250,000 in after-tax profits from licensing or in excess of $2,000,000 from sales would be required to return a negotiated share of such amounts to the United States up to the amount of the federal funding. This provision is tied to two separate 10-year periods, and would require the maintenance of extensive accounting records over a long period of time.

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