INVENTIONS - REPORTS, ROYALTY INCOME, AND RELATED MATTERS: IMPORTANTNOTICE FOR INVESTIGATORS AND OFFICIALS RESPONSIBLE FOR PATENT MATTERS NIH GUIDE, Volume 21, Number 38, October 23, 1992 P.T. 34 Keywords: Grants Administration/Policy+ Public Health Service This notice directs the attention of recipients of PHS research grants, contracts, and cooperative agreements to certain terms of these awards that protect the public's interest in inventions made with Federal assistance. (The term recipient will apply to both grantees and contractors.) EMPLOYEE/EMPLOYER RESPONSIBILITIES: Acceptance of grant or contract funds obligates recipients to comply with the "standard patent rights" clauses at 37 CFR 401.14 or FAR 52.227-11. So that recipients can comply with the reporting provisions of Paragraph (c) of these clauses, Paragraph (f) - "Contractor Action to Protect the Government's Interest," among other things, directs recipient institutions to require, by means of a written agreement, their employees, other than clerical and nontechnical employees, to disclose promptly inventions made with Federal assistance to the recipient official responsible for patent matters. Further, through employee agreements or educational programs, recipients are required to instruct such employees on the importance of reporting such inven- tions in sufficient time to permit the filing of patent applications prior to U.S. or foreign statutory bars. Additional guidance on recipient reporting requirements for inventions can be found in the NIH Guide for Grants and Contracts, Vol. 19, No. 23, June 22, 1990, and the PHS Grants Policy Statement, page 8-22 (rev. 9/1/91). Note: Inventions made with NIH (or former ADAMHA) funds should be reported to the Extramural Inventions Office at the address shown below, whereas inventions made with funds from other PHS agencies should be reported to that agency's Grants Management Officer or Contracting Officer. SUBCONTRACTS UNDER GRANTS AND CONTRACTS: Recipients must include, at least by specific reference, the Standard Patent Rights clause of 37 CFR 401.14 or FAR 52.227-11, as appropriate, in all contracts or sub- contracts under grants and contracts for experimental, developmental, or research work, regardless of tier. UTILIZATION REPORTS vis-a-vis FINANCIAL STATUS REPORTS: Questions have arisen regarding interpretation of language concerning grant- related income in Chapter 8 of the PHS Grants Policy Statement, or more particularly in the Department's regulations, 45 CFR 74, Subpart F. There, patent and copyright royalty income is included as a portion of "program income." In turn, Subpart I requires reporting of "program income" on the annual Financial Status Report for each project. The PHS has agreed that for the special case of patent and invention royalties the preferred reporting channel, and the one that meets the requirements of Subpart I, is the annual utilization report of subject inventions authorized by 35 U.S.C. 202(c)(5), 37 CFR 401.14(h), and FAR 52.227-11(h). Such reports by recipients and their licensees or assignees shall contain information regarding the status of development, date of first commercial sale or use, and gross royalties received by the recipient. Recipients may develop their own, simplified format for these reports. This information shall be treated as confidential, privileged information, not subject to disclosure under the Freedom of Information Act without permission of the recipient. Previous issues of the NIH Guide for Grants and Contracts, February 9 and June 22, 1990, specified a biennial reporting cycle. In view of the foregoing discussion, recipients are hereby directed to institute the utilization reporting process on an annual basis. Since these reports are being submitted to the funding agency, there is no requirement for additional, separate reporting to the Department of Commerce as some have done in the past. NOTE: Utilization reports are required ONLY for licensed inventions that have generated royalty or licensing income. COPYRIGHT ROYALTY INCOME: If a Notice of Grant Award specifies that the deductive or matching option must be used for the disposition of copyright royalty income, such income must be reported on the Financial Status Report. Utilization reports are not required for copyrighted material. ACKNOWLEDGEMENT OF FEDERAL SUPPORT: Recipients are required to include within the specification of any U.S. patent application and any patent issuing thereon the following statement, "This invention was made with government support under (identify the grant or contract) awarded by the PHS. The government has certain rights in the invention." ROYALTY-FREE SALES: By law, the Federal Government has a royalty- free license to practice the subject inventions for or on its behalf. Thus, when licensing staff of the recipient institution are drafting commercial licenses they should exercise care and include a provision for this license to the Government. COMPLIANCE: Failure to comply with requirements of the "patent rights clause" can result in loss of the recipient's rights in inventions, (37 CFR 401.14(d), or FAR 52.227-11(d)). INQUIRIES AND RECEIPT POINT FOR NIH UTILIZATION REPORTS: Howard P. Jenerick, Ph.D. Extramural Inventions Office National Institutes of Health Building 31, Room 5B41 Bethesda MD 20892 Telephone: (301) 402-0850 FAX: (301) 496-0166 .
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Office of Extramural Research (OER) |
National Institutes of Health (NIH) 9000 Rockville Pike Bethesda, Maryland 20892 |
Department of Health and Human Services (HHS) |
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