252.227-7038 — Patent Rights—Ownership by the Contractor (Large Business).

DFARS 252.227-7038 — Patent Rights—Ownership by the Contractor (Large Business).. This clause is part of the Defense Federal Acquisition Regulation Supplement and applies specifically to Department of Defense contracts.

252.227-7038 Patent Rights—Ownership by the Contractor (Large Business). As prescribed in 227.303(2), use the following clause: Patent Rights—Ownership by the Contractor (Large Business) (JUN 2012) (a) Definitions. As used in this clause— Invention means— (1) Any invention or discovery that is or may be patentable or otherwise protectable under Title 35 of the United States Code; or (2) Any variety of plant that is or may be protectable under the Plant Variety Protection Act (7 U.S.C. 2321, et seq. ). Made — (1) When used in relation to any invention other than a plant variety, means the conception or first actual reduction to practice of the invention; or (2) When used in relation to a plant variety, means that the Contractor has at least tentatively determined that the variety has been reproduced with recognized characteristics. Nonprofit organization means— (1) A university or other institution of higher education; (2) An organization of the type described in the Internal Revenue Code at 26 U.S.C. 501(c)(3) and exempt from taxation under 26 U.S.C. 501(a); or (3) Any nonprofit scientific or educational organization qualified under a State nonprofit organization statute. Practical application means— (1)(i) To manufacture, in the case of a composition or product; (ii) To practice, in the case of a process or method; or (iii) To operate, in the case of a machine or system; and (2) In each case, under such conditions as to establish that— (i) The invention is being utilized; and (ii) The benefits of the invention are, to the extent permitted by law or Government regulations, available to the public on reasonable terms. Subject invention means any invention of the Contractor made in the performance of work under this contract. (b) Contractor's rights —(1) Ownership. The Contractor may elect to retain ownership of each subject invention throughout the world in accordance with the provisions of this clause. (2) License. (i) The Contractor shall retain a nonexclusive roya

• (i) The Contractor shall retain a nonexclusive royalty-free license throughout the world in each subject invention to which the Government obtains title, unless the Contractor fails to disclose the invention within the times specified in paragraph (c) of this clause.
• (1) The Contractor shall— (i) Disclose, in writing, each subject invention to the Contracting Officer within 2 months after the inventor discloses it in writing to Contractor personnel responsible for patent matters, or within 6 months after the Contractor first becomes aware that a subject invention has been made, whichever is earlier; (ii) Include in the disclosure— (A) The inventor(s) and the contract under which the invention was made; (B) Sufficient technical detail to convey a clear understanding of the invention; and (C) Any publication, on sale (i.e., sale or offer for sale), or public use of the invention and whether a manuscript describing the invention has been submitted for publication and, if so, whether it has been accepted for publication; and (iii) After submission of the disclosure, promptly notify the Contracting Officer of the acceptance of any manuscript describing the invention for publication and of any on sale or public use.
• (2) The Contractor shall elect in writing whether or not to retain ownership of any subject invention by notifying the Contracting Officer at the time of disclosure or within 8 months of disclosure, as to those countries (including the United States) in which the Contractor will retain ownership.
• (3) The Contractor shall— (i) File either a provisional or a nonprovisional patent application on an elected subject invention within 1 year after election, provided that in all cases the application is filed prior to the end of any statutory period wherein valid patent protection can be obtained in the United States after a publication, on sale, or public use; (ii) File a nonprovisional application within 10 months of the filing of any provisional application; and (iii) File patent applications in additional countries or international patent offices within either 10 months of the first filed patent application (whether provisional or nonprovisional) or 6 months from the date the Commissioner of Patents grants permission to file foreign patent applications where such filing has been prohibited by a Secrecy Order.
• The Contractor shall assign to the agency, upon written request, title to any subject invention— (i) If the Contractor elects not to retain title to a subject invention; (ii) If the Contractor fails to disclose or elect the subject invention within the times specified in paragraph (c) of this clause and the agency requests title within 60 days after learning of the Contractor's failure to report or elect within the specified times; (iii) In those countries in which the Contractor fails to file patent applications within the times specified in paragraph (c) of this clause, provided that, if the Contractor has filed a patent application in a country after the times specified in paragraph (c) of this clause, but prior to its receipt of the written request of the agency, the Contractor shall continue to retain ownership in that country; and (iv) In any country in which the Contractor decides not to continue the prosecution of any application for, to pay the maintenance fees on, or defend in reexamination or opposition proceeding on, a patent on a subject invention.
• If the Contractor retains ownership of any subject invention, the Government shall have a nonexclusive, nontransferable, irrevocable, paid-up license to practice, or have practiced for or on behalf of the United States, the subject invention throughout the world.
• (1) The Contractor shall execute or have executed and promptly deliver to the agency all instruments necessary to— (i) Establish or confirm the rights the Government has throughout the world in those subject inventions in which the Contractor elects to retain ownership; and (ii) Assign title to the agency when requested under paragraph (d)(1) of this clause and enable the Government to obtain patent protection for that subject invention in any country.
• (2) The Contractor shall— (i) Require, by written agreement, its employees, other than clerical and nontechnical employees, to— (A) Disclose each subject invention promptly in writing to personnel identified as responsible for the administration of patent matters, so that the Contractor can comply with the disclosure provisions in paragraph (c) of this clause; and (B) Provide the disclosure in the Contractor's format, which should require, as a minimum, the information required by paragraph (c)(1) of this clause; (ii) Instruct its employees, through employee agreements or other suitable educational programs, as to the importance of reporting inventions in sufficient time to permit the filing of patent applications prior to U.S.
• (3) The Contractor shall notify the Contracting Officer of any decisions not to file a nonprovisional patent application, continue the prosecution of a patent application, pay maintenance fees, or defend in a reexamination or opposition proceeding on a patent, in any country, not less than 30 days before the expiration of the response or filing period required by the relevant patent office.
• (4) The Contractor shall include, within the specification of any United States nonprovisional patent application and any patent issuing thereon covering a subject invention, the following statement: “This invention was made with Government support under (identify the contract) awarded by (identify the agency).
• The Government has certain rights in this invention.” (5) The Contractor shall— (i) Establish and maintain active and effective procedures to ensure that subject inventions are promptly identified and disclosed to Contractor personnel responsible for patent matters; (ii) Include in these procedures the maintenance of— (A) Laboratory notebooks or equivalent records and other records as are reasonably necessary to document the conception and/or the first actual reduction to practice of subject inventions; and (B) Records that show that the procedures for identifying and disclosing the inventions are followed; and (iii) Upon request, furnish the Contracting Officer a description of these procedures for evaluation and for determination as to their effectiveness.
• (6) The Contractor shall, when licensing a subject invention, arrange to— (i) Avoid royalty charges on acquisitions involving Government funds, including funds derived through the Government's Military Assistance Program or otherwise derived through the Government; (ii) Refund any amounts received as royalty charges on the subject inventions in acquisitions for, or on behalf of, the Government; and (iii) Provide for the refund in any instrument transferring rights in the invention to any party.
• (7) The Contractor shall furnish to the Contracting Officer the following: (i) Interim reports every 12 months (or any longer period as may be specified by the Contracting Officer) from the date of the contract, listing subject inventions during that period and stating that all subject inventions have been disclosed or that there are no subject inventions.
• (8)(i) The Contractor shall promptly notify the Contracting Officer in writing upon the award of any subcontract at any tier containing a patent rights clause by identifying— (A) The subcontractor; (B) The applicable patent rights clause; (C) The work to be performed under the subcontract; and (D) The dates of award and estimated completion.
• (ii) The Contractor shall furnish, upon request, a copy of the subcontract, and no more frequently than annually, a listing of the subcontracts that have been awarded.
• (9) In the event of a refusal by a prospective subcontractor to accept one of the clauses specified in paragraph (l)(1) of this clause, the Contractor— (i) Shall promptly submit a written notice to the Contracting Officer setting forth the subcontractor's reasons for the refusal and other pertinent information that may expedite disposition of the matter; and (ii) Shall not proceed with that subcontract without the written authorization of the Contracting Officer.
• (10) The Contractor shall provide to the Contracting Officer, upon request, the following information for any subject invention for which the Contractor has retained ownership: (i) Filing date.
• (11) The Contractor shall furnish to the Government, upon request, an irrevocable power to inspect and make copies of any patent application file.
• (1) The Contractor shall— (i) Submit upon request periodic reports no more frequently than annually on the utilization of a subject invention or on efforts in obtaining utilization of the subject invention that are being made by the Contractor or its licensees or assignees; (ii) Include in the reports information regarding the status of development, date of first commercial sale or use, gross royalties received by the Contractor, and other information as the agency may reasonably specify; and (iii) Provide additional reports that the agency may request in connection with any march-in proceedings undertaken by the agency in accordance with paragraph (h) of this clause.
• (2) To the extent permitted by law, the agency shall not disclose the information provided under paragraph (f)(1) of this clause to persons outside the Government without the Contractor's permission, if the data or information is considered by the Contractor or its licensee or assignee to be “privileged and confidential” (see 5 U.S.C.