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VI

ANNEX



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Page 279 VI ANNEX

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Page 281 Annex A: Authorizing Legislation for the Advanced Technology Program US Code as of: 01/23/00 Omnibus Trade and Competitiveness Act, 1988 Legislation Authorizing the AdvancedTechnology Program § 278n. Advanced Technology Program (a) Establishment; purpose; focus; guidance There is established in the Institute an Advanced Technology Program (hereafter in this chapter referred to as the “Program”) for the purpose of assisting United States businesses in creating and applying the generic technology and research results necessary to - (1) commercialize significant new scientific discoveries and technologies rapidly; and (2) refine manufacturing technologies. The Secretary, acting through the Director, shall assure that the Program focuses on improving the competitive position of the United States and its businesses, gives preference to discoveries and to technologies that have great economic potential, and avoids providing undue advantage to specific companies. In operating the Program, the Secretary and Director shall, as appropriate, be guided by the findings and recommendations of the Biennial National Critical Technology Reports prepared pursuant to section 6683 of title 42. (b) Authority of Secretary; research and development; contracts and cooperative agreements; Federal laboratories; other activities with joint ventures Under the Program established in subsection (a) of this section, and consistent with the mission and policies of the Institute, the Secretary, acting through the Director, and subject to subsections (c) and (d) of this section, may - (1) aid industry-led United States joint research and development ventures (hereafter in this section referred to as “joint ventures”) (which may also include universities and independent research organizations), including those involving collaborative technology demonstration projects which develop and test prototype equipment and processes, through -

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Page 282 (A) provision of organizational and technical advice; and (B) participation in such joint ventures by means of grants, cooperative agreements, or contracts, if the Secretary, acting through the Director, determines participation to be appropriate, which may include (i) partial start-up funding, (ii) provision of a minority share of the cost of such joint ventures for up to 5 years, and (iii) making available equipment, facilities, and personnel, provided that emphasis is placed on areas where the Institute has scientific or technological expertise, on solving generic problems of specific industries, and on making those industries more competitive in world markets; (2) provide grants to and enter into contracts and cooperative agreements with United States businesses (especially small businesses), provided that emphasis is placed on applying the Institute's research, research techniques, and expertise to those organizations' research programs; (3) involve the Federal laboratories in the Program, where appropriate, using among other authorities the cooperative research and development agreements provided for under section 3710a of this title; and (4) carry out, in a manner consistent with the provisions of this section, such other cooperative research activities with joint ventures as may be authorized by law or assigned to the Program by the Secretary. (c) Authority of Secretary; selection criteria; monitoring use of technologies; overseas transfer; annual report to Congress; financial reporting and auditing; routine consideration of Committee advice; dissemination of research results The Secretary, acting through the Director, is authorized to take all actions necessary and appropriate to establish and operate the Program, including - (1) publishing in the Federal Register draft criteria and, no later than six months after August 23, 1988, following a public comment period, final criteria, for the selection of recipients of assistance under subsection (b)(1) and (2) of this section; (2) monitoring how technologies developed in its research program are used, and reporting annually to the Congress on the extent of any overseas transfer of these technologies; (3) establishing procedures regarding financial reporting and auditing to ensure that contracts and awards are used for the purposes specified in this section, are in accordance with sound accounting practices, and are not funding existing or planned research programs that would be conducted in the same time period in the absence of financial assistance under the Program;

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Page 283 (4) assuring that the advice of the Committee established under section 278 of this title is considered routinely in carrying out the responsibilities of the Institute; and (5) providing for appropriate dissemination of Program research results. (d) Contracts or awards; criteria; restrictions When entering into contracts or making awards under subsection (b) of this section, the following shall apply: (1) No contract or award may be made until the research project in question has been subject to a merit review, and has, in the opinion of the reviewers appointed by the Director and the Secretary, acting through the Director, been shown to have scientific and technical merit. (2) In the case of joint ventures, the Program shall not make an award unless the award will facilitate the formation of a joint venture or the initiation of a new research and development project by an existing joint venture. (3) No Federal contract or cooperative agreement under subsection (b)(2) of this section shall exceed $2,000,000 over 3 years, or be for more than 3 years unless a full and complete explanation of such proposed award, including reasons for exceeding these limits, is submitted in writing by the Secretary to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives. The proposed contract or cooperative agreement may be executed only after 30 calendar days on which both Houses of Congress are in session have elapsed since such submission. Federal funds made available under subsection (b)(2) of this section shall be used only for direct costs and not for indirect costs, profits, or management fees of the contractor. (4) In determining whether to make an award to a particular joint venture, the Program shall consider whether the members of the joint venture have made provisions for the appropriate participation of small United States businesses in such joint venture. (5) Section 552 of title 5 shall not apply to the following information obtained by the Federal Government on a confidential basis in connection with the activities of any business or any joint venture receiving funding under the Program - (A) information on the business operation of any member of the business or joint venture; and (B) trade secrets possessed by any business or any member of the joint venture. (6) Intellectual property owned and developed by any business or joint

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Page 284venture receiving funding or by any member of such a joint venture may not be disclosed by any officer or employee of the Federal Government except in accordance with a written agreement between the owner or developer and the Program. (7) If a business or joint venture fails before the completion of the period for which a contract or award has been made, after all allowable costs have been paid and appropriate audits conducted, the unspent balance of the Federal funds shall be returned by the recipient to the Program. (8) Upon dissolution of any joint venture or at the time otherwise agreed upon, the Federal Government shall be entitled to a share of the residual assets of the joint venture proportional to the Federal share of the costs of the joint venture as determined by independent audit. (9) A company shall be eligible to receive financial assistance under this section only if - (A) the Secretary finds that the company's participation in the Program would be in the economic interest of the United States, as evidenced by investments in the United States in research, development, and manufacturing (including, for example, the manufacture of major components or subassemblies in the United States); significant contributions to employment in the United States; and agreement with respect to any technology arising from assistance provided under this section to promote the manufacture within the United States of products resulting from that technology (taking into account the goals of promoting the competitiveness of United States industry), and to procure parts and materials from competitive suppliers; and (B) either - (i) the company is a United States-owned company; or (ii) the Secretary finds that the company is incorporated in the United States and has a parent company which is incorporated in a country which affords to United States-owned companies opportunities, comparable to those afforded to any other company, to participate in any joint venture similar to those authorized under this chapter; affords to United States-owned companies local investment opportunities comparable to those afforded to any other company; and affords adequate and effective protection for the intellectual property rights of United States-owned companies. (10) Grants, contracts, and cooperative assignments under this section shall be designed to support projects which are high risk and which have the potential for eventual substantial widespread commercial application. In order to receive a grant, contract, or cooperative agree

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Page 285ment under this section, a research and development entity shall demonstrate to the Secretary the requisite ability in research and technology development and management in the project area in which the grant, contract, or cooperative agreement is being sought. (11) (A) Title to any intellectual property arising from assistance provided under this section shall vest in a company or companies incorporated in the United States. The United States may reserve a nonexclusive, nontransferable, irrevocable paid-up license, to have practiced for or on behalf of the United States, in connection with any such intellectual property, but shall not, in the exercise of such license, publicly disclose proprietary information related to the license. Title to any such intellectual property shall not be transferred or passed, except to a company incorporated in the United States, until the expiration of the first patent obtained in connection with such intellectual property. (B) For purposes of this paragraph, the term “intellectual property” means an invention patentable under title 35 or any patent on such an invention. (C) Nothing in this paragraph shall be construed to prohibit the licensing to any company of intellectual property rights arising from assistance provided under this section. (e) Suspension for failure to satisfy eligibility criteria The Secretary may, within 30 days after notice to Congress, suspend a company or joint venture from continued assistance under this section if the Secretary determines that the company, the country of incorporation of the company or a parent company, or the joint venture has failed to satisfy any of the criteria set forth in subsection (d)(9) of this section, and that it is in the national interest of the United States to do so. (f) Coordination with other Federal technology programs When reviewing private sector requests for awards under the Program, and when monitoring the progress of assisted research projects, the Secretary and the Director shall, as appropriate, coordinate with the Secretary of Defense and other senior Federal officials to ensure cooperation and coordination in Federal technology programs and to avoid unnecessary duplication of effort. The Secretary and the Director are authorized to work with the Director of the Office of Science and Technology Policy, the Secretary of Defense, and other appropriate Federal officials to form interagency working groups or special project offices to coordinate Federal technology activities. (g) Meetings with industry sources In order to analyze the need for the value of joint ventures and other research projects in specific technical fields, to evaluate any proposal made

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Page 286by a joint venture or company requesting the Secretary's assistance, or to monitor the progress of any joint venture or any company research project which receives Federal funds under the Program, the Secretary, the Under Secretary of Commerce for Technology, and the Director may, notwithstanding any other provision of law, meet with such industry sources as they consider useful and appropriate. (h) Standards development Up to 10 percent of the funds appropriated for carrying out this section may be used for standards development and technical activities by the Institute in support of the purposes of this section. (i) Acceptance of funds from other Federal departments and agencies In addition to such sums as may be authorized and appropriated to the Secretary and Director to operate the Program, the Secretary and Director also may accept funds from other Federal departments and agencies for the purpose of providing Federal funds to support awards under the Program. Any Program award which is supported with funds which originally came from other Federal departments and agencies shall be selected and carried out according to the provisions of this section. (j) Definitions As used in this section - (1) the term “joint venture” means any group of activities, including attempting to make, making, or performing a contract, by two or more persons for the purpose of - (A) theoretical analysis, experimentation, or systematic study of phenomena or observable facts; (B) the development or testing of basic engineering techniques; (C) the extension of investigative finding or theory of a scientific or technical nature into practical application for experimental and demonstration purposes, including the experimental production and testing of models, prototypes, equipment, materials, and processes; (D) the collection, exchange, and analysis of research information; (E) the production of any product, process, or service; or (F) any combination of the purposes specified in subparagraphs (A), (B), (C), (D), and (E), and may include the establishment and operation of facilities for the conducting of research, the conducting of such venture on a protected and proprietary basis, and the prosecuting of applications for patents and the granting of licenses for the results of such venture; and (2) the term “United States-owned company” means a company that has majority ownership or control by individuals who are citizens of the United States.