Technology Transfer:

Barriers Limit Royalty Sharing's Effectiveness

RCED-93-6: Published: Dec 7, 1992. Publicly Released: Dec 7, 1992.

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Pursuant to a legislative requirement, GAO reviewed the effectiveness of royalty-sharing programs established under the Technology Transfer Act, focusing on: (1) federal scientists' interest in reporting inventions before and after the act's passage; and (2) the extent to which agencies' program implementation supports royalty-sharing incentives.

GAO found that: (1) royalty-sharing programs at federal laboratories had little impact on scientists' interest in patenting inventions; (2) 14 of 21 agencies showed no improvement in the rate of patenting after the act's passage; (3) the small licensing rate increase provided no incentive to scientists to patent inventions; (4) most inventors received an average of $1,000 in shared royalties; (5) many scientists preferred peer recognition to monetary rewards; and (6) many scientists chose federal employment because it offered more freedom, creativity, and longer time frames for research than private-sector employment. GAO also found that: (1) agencies typically used formulas that gave inventors a small percentage of royalties; (2) many scientists did not know of the royalty-sharing programs, and believed that conflict-of-interest policies would hamper collaboration with industry; (3) many agencies did not capitalize on their inventors' successes to publicize their royalty-sharing programs; (4) agencies did not have adequate systems to ensure that inventors timely received royalty payments; (5) some agencies used the laboratory-share of royalties to pay administrative costs, rather than enhance laboratory research or personnel development; and (6) patenting delayed publication of research results, which was important to scientists' professional recognition.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matter for Congressional Consideration

    Matter: To ensure that the agencies share invention income with the laboratories as Congress intended, Congress may wish to consider more specifically defining the permissible uses of "expenses incidental to the administration and licensing of inventions."

    Status: Closed - Not Implemented

    Comments: The recommendation for a threshold-style formula for royalty-sharing and the matter for congressional consideration to limit royalties used for administrative expenses for technology transfer were introduced by Senator Rockefeller in S. 1537 in October 1993. GAO appeared before the Senate Subcommittee on Science, Technology, and Space in October 1993 and submitted testimony (T-RCED-94-42) in support of the bill. Representative Morella introduced a companion bill, H.R. 3590, shortly thereafter. which was revised in September 1994 and now uses the actual recommendations from this report. The House Subcommittee on Technology, Environment, and Aviation held a hearing on the revised bill in September 1994. Witnesses from the Departments of Commerce and Energy, the National Technology Transfer Center, Institute of Electrical and Electronics Engineers, the Federal Laboratory Consortium, Martin Marietta Energy Systems, and Lawrence Livermore National Laboratory endorsed the revised bill.

    Recommendations for Executive Action

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of the Interior: Bureau of Mines

    Status: Closed - Implemented

    Comments: Agency officials' comments indicate that they will not undertake changes to adopt GAO's recommendation.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Transportation: Federal Highway Traffic Safety Administration

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Commerce: National Institute of Standards and Technology

    Status: Closed - Implemented

    Comments: The agency is in compliance per ARTS report dated August 9, 1994. Reference Case Number 9145.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Health and Human Services: Alcohol, Drug Abuse, and Mental Health Administration

    Status: Closed - Implemented

    Comments: Although NIH concurred with the GAO recommendation, it stated that there was limited flexibility in the allowed uses of royalty income by the laboratory which were set forth in FTTA. The allowed uses did not include expenditures for supplies, services, equipment, and other general costs of research, areas that are highly visible to federal scientists. Draft guidelines submitted to OTT will include provisions for tangible benefits (equipment, space, travel funds, personnel) to the scientists and laboratories.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Agriculture: Agricultural Research Service

    Status: Closed - Implemented

    Comments: Although NIH concurred with the GAO recommendation, it stated that there was limited flexibility in the allowed uses of royalty income by the laboratory which were set forth in FTTA. The allowed uses did not include expenditures for supplies, services, equipment, and other general costs of research, areas that are highly visible to federal scientists. Draft guidelines submitted to OTT include provisions for tangible benefits (equipment, space, travel funds, personnel) to the scientists and laboratories.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of the Interior: Bureau of Mines

    Status: Closed - Implemented

    Comments: Procedures for payment were established during FY 1993. DFM is responsible for these procedures, which include: (1) maintenance of a database with current addresses and inventors; (2) verification of new inventions with the OTT ITS database for inventors' names, patent application numbers, and personal information required for check disbursement; and (3) preparation and distribution of a preliminary report of royalty income and inventor awards to budget directors and TDCs twice each fiscal year. In September 1993 OTT sent royalty reports to DFM for confirmation and verification. OTT planned to: (1) establish new procedures to obtain information on inventions at the time a license is negotiated and enter this information in the ITS database; and (2) review all procedures to determine if further evaluation and refinement is necessary as part of an overall corrective action plan.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Health and Human Services: Public Health Service: Centers for Disease Control and Prevention

    Status: Closed - Implemented

    Comments: While the Department planned to establish a working group to make recommendations to agency officials, it had not done so as of August 1995.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: As a result of the recommendation, Army began appropriate financial control procedures.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Commerce: National Oceanic and Atmospheric Administration

    Status: Closed - Implemented

    Comments: Procedures for receiving and accounting for royalty income and for disbursing payments to inventors were implemented February 17, 1994. The Commerce Technology Administration considers this recommendation closed.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: National Aeronautics and Space Administration

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the (royalty-sharing) formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Health and Human Services: Public Health Service: National Institutes of Health

    Status: Closed - Implemented

    Comments: Procedures for receiving and accounting for royalty income and for disbursing payments to inventors were implemented February 17, 1994. The Commerce Technology Administration considers this recommendation closed.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Transportation: United States Coast Guard

    Status: Closed - Implemented

    Comments: The Department of Energy agrees with the GAO recommendation to establish procedures for ensuring that inventors receive an appropriate share of revenue received. The Department is very serious about rewarding inventors for licensed patents (and other commercially valuable intellectual property) and desires to demonstrate the financial rewards to inventors whose patents are commercialized. In addition to royalty payment guidelines, the Department supports additional (non-monetary) recognition for these accomplishments, such as a plaque of the title page of the patent, a ceremony, or a similar recognition.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Transportation: Federal Aviation Administration

    Status: Closed - Implemented

    Comments: As a direct result of the recommendation, the Air Force established a royalty payment procedure that provides a cross-check for receipt of payment.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Transportation: Federal Highway Traffic Safety Administration

    Status: Closed - Implemented

    Comments: Agency officials' comments indicate that they will not undertake changes to adopt GAO's recommendation.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Agriculture: Agricultural Research Service

    Status: Closed - Implemented

    Comments: While the Department planned to establish a working group to make recommendations to agency officials, it had not done so as of August 1995.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Health and Human Services: Public Health Service: Centers for Disease Control and Prevention

    Status: Closed - Implemented

    Comments: Although NIH concurred with the GAO recommendation, it stated that there was limited flexibility in the allowed uses of royalty income by the laboratory which were set forth in FTTA. The allowed uses did not include expenditures for supplies, services, equipment, and other general costs of research, areas that are highly visible to federal scientists. Draft guidelines submitted to OTT include revisions for tangible benefits (equipment, space, travel funds, personnel) to the scientists and laboratories.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: The Department of Energy generally agrees with the recommendation. However, since the income received by DOE on such activities has been fairly small to date, it is unrealistic to expect the laboratories to provide at this time, and for the immediate future, both an acceptable royalty sharing payment to inventors and sufficient funds to cover significant additional incentives. It is desirable, as income streams to the laboratories increase, to ensure that funds are distributed in such a fashion as to stimulate the desired activity. The invention income that has been received thus far on DOE's two cases has largely been used to enable more researchers to attend meetings and seminars related to technology transfer. This method is visible and fair as it encourages others who are active in the technology transfer process, including inventors. Other intended uses of royalty funds include supporting the programs from which the patent was generated and other general technology transfer needs.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Commerce: National Oceanic and Atmospheric Administration

    Status: Closed - Implemented

    Comments: Although NIH concurred with the GAO recommendation, it stated that there was limited flexibility in the allowed uses of royalty income by the laboratory which were set forth in FTTA. The allowed uses did not include expenditures for supplies, services, equipment, and other general costs of research, which are highly visible to federal scientists. Draft guidelines submitted to OTT include provisions for tangible benefits (equipment, space, travel funds, personnel) to the scientists and laboratories.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: National Aeronautics and Space Administration

    Status: Closed - Implemented

    Comments: Commerce laboratories agree with the recommendation, but because of limited budget funds for technology transfer activities, most of their share has been used to pay expenses related to patenting and licensing. The Commerce Technology Administration (TA) considers this recommendation completed. As stated previously, if funds become available in the future, TA may review this issue and consider other methods of increasing public recognition of inventors.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Health and Human Services: Public Health Service: National Institutes of Health

    Status: Closed - Implemented

    Comments: The agency is in compliance per ARTS report dated August 9, 1994. Reference Case number 9145.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Transportation: United States Coast Guard

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Transportation: Federal Aviation Administration

    Status: Closed - Implemented

    Comments: According to EPA's September 8, 1994 response, EPA laboratory directors are encouraged to keep their scientists and engineers aware of how FTTA royalties are used to further the laboratory missions and promote technology transfer activities. However, this does not mean that EPA scientists' research will benefit from the laboratories' share of royalties.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Tennessee Valley Authority

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Defense: Department of the Navy

    Status: Closed - Implemented

    Comments: Commerce laboratories agree with the recommendation, but because of limited budget funds for technology transfer activities, most of their share has been used to pay expenses related to patenting and licensing. The Commerce Technology Administration (TA) considers this recommendation completed. As stated previously, if funds become available in the future, TA may review this issue and consider other methods of increasing public recognition of inventors.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Agriculture: Forest Service

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should channel a major part of the laboratory's share of invention income to areas in laboratories that are visible to federal scientists.

    Agency Affected: Department of Defense: Department of the Air Force

    Status: Closed - Implemented

    Comments: The agency is in compliance per ARTS report dated August 9, 1994. Reference Case number 9145.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Tennessee Valley Authority

    Status: Closed - Implemented

    Comments: While the Department planned to establish a working group to make recommendations to agency officials, it had not done so as of August 1995.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Defense: Department of the Navy

    Status: Closed - Not Implemented

    Comments: EPA agrees with this recommendation and has formed a working group to develop such financial control procedures. The working group is in the Office of Administration and Resources Management, Grants Administration Division. The financial control procedures are scheduled to be completed by the end of FY 1995.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Agriculture: Forest Service

    Status: Closed - Implemented

    Comments: Such procedures for payment were established during FY 1993. NIH DFM is responsible for these procedures, which include: (1) maintenance of a database with current addresses and inventors; (2) verification of new inventions with the OTT ITS database for inventors' names, patent application numbers, and personal information required for check disbursement; and (3) preparation and distribution of a preliminary report of royalty income and inventor awards to participating Institute budget directors and TDCs twice each fiscal year. In September 1993, OTT sent royalty reports to DFM for confirmation and verification. OTT planned to: (1) establish new procedures to obtain information on inventions at the time the license is negotiated and enter this information in the ITS database; and (2) review all procedures to determine if further evaluation and refinement is necessary as part of the overall corrective action plans.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Health and Human Services: Public Health Service: National Institutes of Health

    Status: Closed - Implemented

    Comments: In September 1993, NIH established a Royalties and Awards Committee that would develop recommendations for review and approval by ICDs' TDCs and science directors in 1994. The recommendations on royalty sharing would then be forwarded to TTPB and subsequently to the Office of Science Policy and Technology Transfer for approval and adoption.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Transportation: United States Coast Guard

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Transportation: Federal Aviation Administration

    Status: Closed - Not Implemented

    Comments: The agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Tennessee Valley Authority

    Status: Closed - Implemented

    Comments: This recommendation was intended to prevent inventors from getting small sums of money for their lifelong efforts. The Environmental Protection Agency's (EPA) formula does not meet that objective. A September 8, 1994 response from EPA indicates that the action taken is not fully responsive.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Defense: Department of the Navy

    Status: Closed - Not Implemented

    Comments: The Department agrees that royalty-sharing formulas may be set to more adequately reward inventors for their work rather than the minimum percentages provided in FTTA. As a result, the Department has established its royalty-sharing formula to provide 25 percent of the first $50,000, 20 percent of the next $50,000, and 15 percent of any amount over $100,000. However, as a result of GAO's report, the Department plans to review the formula applied to small annual royalties to encourage researchers to make patentable inventions.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Agriculture: Forest Service

    Status: Closed - Implemented

    Comments: Agency officials' comments indicate that unless the prior legislation was passed and this change was mandated, they would not undertake changes to adopt GAO's recommendation.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Defense: Department of the Air Force

    Status: Closed - Not Implemented

    Comments: The Department is establishing a full working group to make recommendations to agency officials.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Agriculture: Agricultural Research Service

    Status: Closed - Implemented

    Comments: Agency officials' comments indicate that unless the prior legislation was passed and this change was mandated, they would not undertake changes to adopt GAO's recommendation.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Transportation: Federal Highway Traffic Safety Administration

    Status: Closed - Implemented

    Comments: The Department agrees that royalty-sharing formulas should more adequately reward inventors for their work rather than the minimum percentages provided in FTTA. As a result, the Department has established its royalty-sharing formula to provide 25 percent of the first $50,000, 20 percent of the next $50,000, and 15 percent of any amount over $100,000. In addition, as a result of the report, the Department plans to review the formula applied to small annual royalties in order to encourage researchers to disclose patentable inventions.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of the Interior: Geological Survey

    Status: Closed - Implemented

    Comments: In September 1993, NIH established a Royalties and Awards Committee that would develop recommendations for review and approval by the ICDs' TDCs and science directors in 1994. The recommendations on royalty sharing would then be forwarded to the Technology Transfer Policy Board (TTPB) and subsequently to the Office of Science Policy and Technology Transfer for approval and adoption.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Commerce: National Institute of Standards and Technology

    Status: Closed - Implemented

    Comments: In September 1993, NIH established a Royalties and Awards Committee that would develop recommendations for review and approval by the Institutes, Centers, and Divisions' (ICDs) technical development coordinators (TDCs) and science directors in 1994. The recommendations on royalty sharing would then be forwarded to the Technology Transfer Policy Board (TTPB) and subsequently to the Office of Science Policy and Technology Transfer for approval and adoption.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: DOE's audit liaison, Sterling Ross (586-1909) provided a faxed response dated September 1, 1994. Based on that response, the action taken is not fully responsive.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: National Aeronautics and Space Administration

    Status: Closed - Implemented

    Comments: Agency officials' comments indicate that unless the prior legislation was passed and this change was mandated, they would not undertake changes to adopt GAO's recommendation.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Commerce: National Oceanic and Atmospheric Administration

    Status: Closed - Not Implemented

    Comments: The Department agrees that royalty-sharing formulas may be set to more adequately reward inventors for their work rather than the minimum percentages provided in FTTA. As a result, the Department has established its royalty-sharing formula to provide 25 percent of the first $50,000, 20 percent of the next $50,000, and 15 percent of any amount over $100,000. However, as a result of the GAO report, the Department plans to review the formula applied to small annual royalties in order to encourage researchers to make patentable inventions.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

    Status: Closed - Implemented

    Comments: Agriculture uses an automated payment system and although highly accurate and quick the explanation does not describe any separate and independent verification to ensure checks were received.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Defense: Department of the Air Force

    Status: Closed - Implemented

    Comments: Such procedures for payment were established during FY 1993. The NIH Division of Financial Management (DFM) is responsible for these procedures, which include: (1) maintenance of a database with current addresses and inventors; (2) verification of new inventions with the Office of Technology Transfer's (OTT) Invention Tracking System (ITS) database for inventors' names, patent application numbers, and personal information required for check disbursement; and (3) preparation and distribution of a preliminary report of royalty income and inventor awards to budget directors and TDCs twice each fiscal year. In September 1993, OTT sent royalty reports to DFM for confirmation and verification. OTT planned to: (1) establish new procedures to obtain information on inventions at the time the license is negotiated and enter this information in the ITS database; and (2) review all procedures to determine if further evaluation and refinement is necessary.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Agriculture: Agricultural Research Service

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of the Interior: Geological Survey

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: As a direct result of the recommendation, the Air Force established a royalty payment procedure that provides a cross-check for receipt of payment.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Congress

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of the Interior: Geological Survey

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Commerce: National Institute of Standards and Technology

    Status: Closed - Implemented

    Comments: Such procedures for payment were established during FY 1993. NIH DFM is responsible for these procedures, which include: (1) maintenance of a database with current addresses and inventors; (2) verification of new inventions with the OTT ITS database for inventors' names, patent application numbers, and personal information required for check disbursement; and (3) preparation and distribution of a preliminary report of royalty income and inventor awards to participating Institute budget directors and TDCs twice each fiscal year. In September 1993, OTT sent royalty reports to DFM for confirmation and verification. OTT planned to: (1) establish new procedures to obtain information on inventions at the time the license is negotiated and enter this information in the ITS database; and (2) review all procedures to determine if further evaluation and refinement is necessary as a part of the overall corrective action plans.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should establish procedures that routinely check records of payments to inventors against patent, license, and income records.

    Agency Affected: Department of Health and Human Services: Public Health Service: Centers for Disease Control and Prevention

    Status: Closed - Implemented

    Comments: Agriculture uses an automated payment system and although highly accurate and quick, the explanation does not describe any separate and independent verification to ensure checks were received.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of the Interior: United States Fish and Wildlife Service

    Status: Closed - Not Implemented

    Comments: The agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of the Interior: Bureau of Mines

    Status: Closed - Not Implemented

    Comments: In letters dated February 3, 1993, to the Chairman of the House Committee on Government Operations and the Chairman of the Senate Committee on Governmental Affairs, TVA noted that implementation of a $1,000-threshold formula was being considered.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Health and Human Services: Public Health Service: Centers for Disease Control and Prevention

    Status: Closed - Not Implemented

    Comments: Agency officials' comments indicate that unless the prior legislaiton was passed and this change was mandated, they would not undertake changes to adopt GAO's recommendation.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Energy

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should adopt royalty-sharing formulas that establish an annual threshold of 100 percent of a set amount of invention income (for example, the $1,000 or $2,000 threshold now in use by some agencies) that would more adequately reward inventors for their work.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: In September 1993, NIH established a Royalties and Awards Committee that would develop recommendations for review and approval by the ICDs' TDCs and science directors in 1994. The recommendations on royalty sharing would then be forwarded to TTPB and subsequently to the Office of Science Policy and Technology Transfer for approval and adoption.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: The PHS Laboratory and ICDs are and have been involved in the decisionmaking process. In January 1994, the NIH Director sent a letter to directors explaining the ongoing royalties sharing and utilization review. The letter included a request to ICDs that they require their laboratory chiefs to actively participate in the decisions governing the use of royalty income.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: Response to our final report indicates that they have taken appropriate action.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of the Interior: Geological Survey

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Commerce: National Institute of Standards and Technology

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Health and Human Services: Alcohol, Drug Abuse, and Mental Health Administration

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized educational program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and timeframes for TTPB-approved training were scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

    Status: Closed - Implemented

    Comments: The most recent ARTS report, dated August 9, 1994, shows that the military services have developed training materials, presentations, and an interactive video to further inform scientists concerning the patentability and commercial potential of inventions.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of the Interior: Bureau of Mines

    Status: Closed - Implemented

    Comments: The most recent ARTS report, dated August 9, 1994, shows DOD has implemented appropriate training. Reference Case number 9145.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Health and Human Services: Public Health Service: Centers for Disease Control and Prevention

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: The response describes training to be given in small groups (i.e. seminars) that will serve as a better mechanism for conveying information.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Commerce: National Oceanic and Atmospheric Administration

    Status: Closed - Implemented

    Comments: The most recent ARTS report, dated August 9, 1994, shows DOD has implemented appropriate training. Reference Case number 9145.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: National Aeronautics and Space Administration

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the (royalty-sharing) formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: For several years, NIST has conducted ongoing seminars and programs for training managers and technical staff on management of intellectual property, including general information about what is patentable and how the commercial potential on an invention is evaluated. NTIA also has been active in training its managers and technical staff. Last year, the Department's Patent Counsel spoke to all laboratory staff regarding patent opportunities under FTTA. In addition, NTIA works with the NIST Office of Research Technology Application to seek insights on approaches for evaluating inventions. NOAA is currently developing information on technology management for distribution to all of its laboratories. The Department of Commerce is also working through the Interagency Committee on Federal Technology Transfer to review the diverse agency training programs and consider the development of cooperative training efforts. NIST held training sessions between February 1992 and April 1992.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Health and Human Services: Public Health Service: National Institutes of Health

    Status: Closed - Implemented

    Comments: The DOE laboratories are also actively pursuing intellectural property training programs and actively encourage inventors to report inventions and participate in technology transfer matters. The Pittsburgh Energy Technology Center offers training every 6 months for researchers and uses invention income to support this training. The Technology Transfer General Awareness Pilot Training Course has been piloted three times, on January 11, 1993 in Washington, D.C.; on March 12, 1993 in Chicago, Illinois; and on April 26, 1993, in Oak Ridge, Tennessee. As a result of these pilot sessions the Technology Transfer General Awareness Training Course will be offered through the DOE Training Information System as ST01.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Transportation: United States Coast Guard

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized educational program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and time frames for TTPB-approved training were scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Transportation: Federal Highway Traffic Safety Administration

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized educational program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and timeframes for TTPB-approved training were scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Agriculture: Agricultural Research Service

    Status: Closed - Implemented

    Comments: DOE generally agrees with the recommendation for procedures that establish timely and consistent selection of inventions for patenting. DOE does have procedures for timely and consistent selection of inventions for patenting but believes they could be improved. Implicit in this recommendation is that patenting should be increased, particularly foreign patenting. It should be recognized, however, that there are some limitations to how much of the activity the agency can accomodate. While the government-owned, government-operated laboratories are the topic of this GAO report, DOE engages in a substantially larger amount of patent and licensing activity through its government-owned, contractor-operated laboratories.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Defense: Department of the Air Force

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of the Interior: Bureau of Mines

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized education program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and timeframes for TTPB-approved training are scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Health and Human Services: Public Health Service: Centers for Disease Control and Prevention

    Status: Closed - Implemented

    Comments: The most recent ARTS report, dated August 9, 1994, shows that the military services have developed training materials, presentations, and an interactive video to further inform scientists concerning the patentability and commercial potential of inventions.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Energy

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Commerce: National Oceanic and Atmospheric Administration

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: National Aeronautics and Space Administration

    Status: Closed - Implemented

    Comments: EPA concurs with this recommendation. EPA already has a procedure that provides for timely and consistent selection of inventions for patenting. Under this procedure, each EPA laboratory director is responsible for the selection of inventions for patenting. The Office of Research and Development and the Office of General Counsel support the patenting process by reviewing "Reports of Government Inventions" and assisting in the filing of patent applications on selected inventions in a timely manner with the U.S. Patent and Trademark Office.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Not Implemented

    Comments: The action meet the objective of the recommendation.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Health and Human Services: Public Health Service: National Institutes of Health

    Status: Closed - Implemented

    Comments: The response to the final report indicates that NHTSA has taken appropriate action.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Transportation: United States Coast Guard

    Status: Closed - Implemented

    Comments: The most recent ARTS report, dated August 9, 1994, shows that the military services have developed training materials, presentations, and an interactive video to further inform scientists concerning the patentability and commercial potential of inventions.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Transportation: Federal Aviation Administration

    Status: Closed - Implemented

    Comments: As part of TA implementation of the Federal Technology Transfer Act following a delegation of authority from the Department of Commerce, NIST established review committees for evaluating the patentability and commercial potential of the inventions reported to its office handling technology transfer. They have been functioning for several years. The NTIA laboratory has established an internal peer review procedure and also asks advice from outside experts to help evaluate its inventions for patenting. NOAA, which is in the process of strengthening its technology transfer efforts, is planning to create a committee to review the patentability of its inventions. NOAA has established a process to work with individual laboratory directors in determining which inventions will be patented. TA considers this recommendation closed.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Tennessee Valley Authority

    Status: Closed - Implemented

    Comments: Response to the final report indicates that they have taken appropriate action.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Defense: Department of the Navy

    Status: Closed - Implemented

    Comments: The action meets the objective of the recommendation.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Agriculture: Forest Service

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized educational program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and timeframes for TTPB-approved training were scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: Agencies should establish procedures for the timely and consistent selection of inventions for patenting.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

    Status: Closed - Implemented

    Comments: As part of TA implementation of the Federal Technology Transfer Act following a delegation of authority from the Secretary of Commerce, NIST established review committees for evaluating the patentability and commercial potential of the inventions reported to its office handling technology transfer. They have been functioning for several years. The NTIA laboratory has established an internal peer review procedure and also asks advice from outside experts to help evaluate its inventions for patenting. NOAA, which is in the process of strengthening its technology transfer efforts, is planning to create a committee to review the patentability of its inventions. NOAA has established a process to work with individual laboratory directors in determining which inventions will be patented. TA considers this recommendation closed.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Transportation: Federal Aviation Administration

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Tennessee Valley Authority

    Status: Closed - Implemented

    Comments: The most recent ARTS report, dated August 9, 1994, shows DOD has implemented appropriate training. Reference Case number 9145.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Defense: Department of the Navy

    Status: Closed - Implemented

    Comments: The agency agrees with this recommendation. Over the years, EPA has been concerned about underlying issues addressed in this recommendation and has published an FTTA "Opportunities Bulletin" which provides information on the most promising technical areas for collaboration with industry. In addition, EPA is working with the National Technology Transfer Center to develop a comprehensive FTTA training program for its laboratory personnel. This program will emphasize patents, licenses and cooperative research and development agreements (CRADAs). The Agency initiated this training program for scientists and engineers in October 1993.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Health and Human Services: Public Health Service: National Institutes of Health

    Status: Closed - Implemented

    Comments: While the Department planned to establish a working group to make recommendations to agency officials, it had not done so as of August 1995.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Transportation: United States Coast Guard

    Status: Closed - Implemented

    Comments: There has been no further progress on addressing this recommendation.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Transportation: Federal Aviation Administration

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Tennessee Valley Authority

    Status: Closed - Not Implemented

    Comments: The agency says that its guidelines permit laboratory directors to have full discretion in using their share of invention income.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Defense: Department of the Navy

    Status: Closed - Implemented

    Comments: The agency is in full compliance per ARTS report dated August 9, 1994. Reference Case number 9145.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Agriculture: Forest Service

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

    Status: Closed - Implemented

    Comments: The PHS laboratory and ICDs are and have been involved in the decisionmaking process. In January 1994, the NIH Director sent a letter to directors explaining the ongoing royalties sharing and utilization review. The letter included a request to ICDs that they require their laboratory chiefs to actively participate in the decisions governing the use of royalty income.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Defense: Department of the Air Force

    Status: Closed - Implemented

    Comments: DOE agrees with the recommendation requiring that the laboratory director of the laboratory where the invention originated be active in the royalty sharing process. To date, only one of the DOE government-owned, government-operated laboratories has had licensing and royalty payment activity. In this case, both the Laboratory and the Director for Research and Development made the decisions regarding the use of the invention income. While there are no formal procedures that require the participation of the laboratory director, the relatively small size of the Department's government-owned, government operated laboratories, along with the desirability of patent and licensing activity at the laboratories, ensures continued top-level attention.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Agriculture: Agricultural Research Service

    Status: Closed - Implemented

    Comments: The directors of Commerce laboratories are generally included in decisions governing the use of invention income. However, NIST notes that directors of NIST's separate laboratories, who had been delegated authority to enter into licensing agreements and Cooperative Research and Development Agreements (CRADAs), should not be able to overrule decisions made by the Director of NIST that affect all NIST laboratories. On the basis of action already taken, NOAA considers this recommendation closed.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Transportation: Federal Highway Traffic Safety Administration

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: The agency is in full compliance per ARTS report dated August 9, 1994. Reference Case number 9145.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of the Interior: Geological Survey

    Status: Closed - Implemented

    Comments: The Forest Service has implemented a democratic decisionmaking system with laboratory directors for royalty use.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Commerce: National Institute of Standards and Technology

    Status: Closed - Not Implemented

    Comments: This agency is already in compliance.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Not Implemented

    Comments: The Department is establishing a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: National Aeronautics and Space Administration

    Status: Closed - Implemented

    Comments: According to the February 19, 1993, response to GAO, the directors of Commerce laboratories are generally included in decisions governing use of invention income. However, the National Institute of Standards and Technology (NIST) notes that directors of NIST's separate laboratories, who have been delegated authority to enter into licensing agreements and Cooperative Research and Development Agreements (CRADAs), should not be able to overrule decisions made by the Director of NIST that affect all NIST laboratories. On the basis of action already taken, the Commerce Technology Administration considers this recommendation closed.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Commerce: National Oceanic and Atmospheric Administration

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Agriculture: Forest Service

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

    Status: Closed - Implemented

    Comments: The response describes the training in small groups (i.e., seminars) that will serve as a better mechanism for conveying information.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Defense: Department of the Air Force

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Agriculture: Agricultural Research Service

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Transportation: Federal Highway Traffic Safety Administration

    Status: Closed - Implemented

    Comments: For several years, NIST has conducted ongoing seminars and programs for training managers and technical staff on management of intellectual property, including general information about what is patentable and how the commercial potential on an invention is evaluated. NTIA also has been active in training its managers and technical staff. Last year, the Department's Patent Counsel spoke to all laboratory staff regarding patent opportunities under FTTA. In addition, NTIA works with the NIST Office of Research Technology Application to seek insights on approaches for evaluating inventions. NOAA is currently developing information on technology management for distribution to all of its laboratories. Commerce is also working through the Interagency Committee on Federal Technology Transfer to review the diverse agency training programs and consider the development of cooperative training efforts. NIST held training sessions between February 1992 and April 1992. Training is continuing.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Not Implemented

    Comments: DOT's Office of General Counsel is following through on the recommendations, talking with the operating administrations about the potential for modifying the royalty-sharing formula. At present, it is considering modification, although the decision to revise it is being considered by management.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of the Interior: Geological Survey

    Status: Closed - Not Implemented

    Comments: The Department plans to establish a full working group to make recommendations to agency officials. However, it had not done so as of October 1994.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Commerce: National Institute of Standards and Technology

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized educational program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and timeframes for TTPB-approved training were scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Health and Human Services: Alcohol, Drug Abuse, and Mental Health Administration

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized educational program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and timeframes for TTPB-approved training scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: Agencies should provide more information and training for scientists at their laboratories on the kind of subject matter that is patentable and on the approach that is appropriate for evaluating an invention's commercial demand.

    Agency Affected: Department of Transportation: Federal Highway Traffic Safety Administration

    Status: Closed - Implemented

    Comments: In February 1993, NIH issued a new Employee Invention Report that describes the criteria relevant to an assessment of an invention's commercial potential. In December 1993, NIH developed and tested a prototype computerized education program for patent and other technology transfer activities. A proposal identifying training needs should be submitted to the OTT Director by August 1994. Based on approved recommended actions, proposed dates and timeframes for TTPB-approved training were scheduled to be in place by September 1994. Training courses will then be implemented.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of the Interior: Bureau of Mines

    Status: Closed - Implemented

    Comments: The PHS ICDs are and have been involved in the decisionmaking process. In January 1994, the NIH director sent a letter to directors explaining the ongoing royalties sharing and utilization review. The letter included a request to ICDs that they require their laboratory chiefs to actively participate in the decisions governing the use of royalty income.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Health and Human Services: Public Health Service: Centers for Disease Control and Prevention

    Status: Closed - Implemented

    Comments: The PHS laboratory and ICDs are and have been involved in the decisionmaking process. In January 1994, the NIH Director sent a letter to directors explaining the ongoing royalties sharing and utilization review. The letter included a request to ICDs that they require their laboratory chiefs to actively participate in the decisions governing the use of royalty income.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: While the Department planned to establish a working group to make recommendations to agency officials, it had not done so as of August 1995.

    Recommendation: The heads of departments and agencies operating royalty-sharing programs under the Federal Technology Transfer Act should require that the director of the laboratory where the invention originated be included in decisions governing the use of the laboratory's share of invention income.

    Agency Affected: Department of Health and Human Services: Alcohol, Drug Abuse, and Mental Health Administration

    Status: Closed - Implemented

    Comments: The agency is in full compliance per ARTS report dated August 9, 1994. Reference Case number 9145.

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