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Appendix C
Excerpts from the National Competitiveness Technology Transfer Act of 1989 with the 1990 Amendments

Section 3132 Findings and Purpose

(a) FINDINGS—Congress Finds that—

(1) technology advancement is a key component in the growth the United States industrial economy, and a strong industrial base is an essential element of the security of this country;

(2) there is a need to enhance United States competitiveness in both domestic and international markets;

(3) innovation and the rapid application of commercially valuable technology are assuming a more significant role in near-term marketplace success;

(4) the Federal laboratories and other facilities have outstanding capabilities in a variety of advanced technologies and skilled scientists, engineers, and technicians who could contribute substantially to the posture of the United States industry in international competition;

(5) improved opportunities for cooperation research and development agreements between contractor-managers of certain Federal laboratories and the private sector in the United States, consistent with the program missions at those facilities, particularly the national security functions involved in atomic energy defense activities, would contribute to our national well-being; and

(6) more effective cooperation between those laboratories and the private sector in the United States is required to provide speed and certainty in the technology transfer process.

(b) PURPOSES—The purposes of this part are to—



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--> Appendix C Excerpts from the National Competitiveness Technology Transfer Act of 1989 with the 1990 Amendments Section 3132 Findings and Purpose (a) FINDINGS—Congress Finds that— (1) technology advancement is a key component in the growth the United States industrial economy, and a strong industrial base is an essential element of the security of this country; (2) there is a need to enhance United States competitiveness in both domestic and international markets; (3) innovation and the rapid application of commercially valuable technology are assuming a more significant role in near-term marketplace success; (4) the Federal laboratories and other facilities have outstanding capabilities in a variety of advanced technologies and skilled scientists, engineers, and technicians who could contribute substantially to the posture of the United States industry in international competition; (5) improved opportunities for cooperation research and development agreements between contractor-managers of certain Federal laboratories and the private sector in the United States, consistent with the program missions at those facilities, particularly the national security functions involved in atomic energy defense activities, would contribute to our national well-being; and (6) more effective cooperation between those laboratories and the private sector in the United States is required to provide speed and certainty in the technology transfer process. (b) PURPOSES—The purposes of this part are to—

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--> (1) enhance United States national security by promoting technology transfer between Government-owned, contractor-operated laboratories and the private sector in the United States; and (2) enhance collaboration between universities, the private sector, and Government-owned, contractor-operated laboratories in order to foster the development of technologies in areas of significant economic potential. Section 3133 Authority to Enter into Cooperative Research and Development Agreements (a) TECHNOLOGY TRANSFER ACTIVITIES-Section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a) is amended— (1) in subsection (a)— (A) by inserting '', and to the extent provided in an agency-approved joint work statement, the director of any of its Government-owned, contractor-operated laboratories" after "Government-operated Federal laboratories"; (B) by striking "Government-owned" and inserting in lieu thereof "(in the case of a Government-owned, contractor-operated laboratory, subject of subsection (c) of this section) for" in paragraph (2); and (C) by striking "of Federal employees" in paragraph (2); (2) in subsection (b)— (A) by inserting ", and to the extent provided in an agency-approved joint work statement, the director of any of its Government-owned, contractor-operated laboratory" after "Government-operated Federal laboratory"; (B) by striking "a Federal" in paragraph (2) and inserting in lieu thereof "a laboratory"; and (C) by inserting after paragraph (5) the following: "A Government-owned, contractor-operated laboratory that enters into a cooperative research and development agreement under subsection (a)(1) may use or obligate royalties or other income accruing to such laboratory under such agreement with respect to any invention only (i) for payments to inventors; (ii) for the purposes described in section 14(a)(1)(B)(i), (ii), and (iv); and (iii) for scientific research and development consistent with the research and development mission and objectives of the laboratory."; (3) in subsection (c)(3)(A), by striking "employee standards of conduct" and inserting in lieu thereof "standards of conduct for its employees"; (4) in subsection (c)(5)(A), by inserting "presented by the director of a Government-operated laboratory" after "any such agreement"; (5) in subsection (c)(5)(B), by inserting "presented by the director of a Government-operated laboratory" after "an agreement presented"; (6) in subsection (c)(5), by adding at the end of the following new subparagraph:

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--> "(C)(i) Any agency which has contracted with a non-Federal entity to operate a laboratory shall review and approve, request specific modifications to, or disapprove a joint work statement that is submitted by the director of such laboratory within 90 days of after such submission. In any case where an agency has requested specific modifications to a joint work statement, the agency shall approve or disapprove any resubmission of such joint work statement within the 30 days after such resubmission, or 90 days after the original submission, which occurs later. No agreement may be entered into by a Government-owned, contractor-operated laboratory under this section before both approval of the agreement under clause (iv) and approval under this clause of a joint work statement. "(ii) In any case in which an agency which has contracted with a non-Federal entity to operate a laboratory disapproves or requests the modification of a joint work statement submitted under this section, the agency shall promptly transmit a written explanation of such disapproval or modification to the director of the laboratory concerned. "(iii) An agency which has contracted with a non-Federal entity to operate a laboratory or laboratories shall develop and provide to such laboratory or laboratories one or more model cooperative research and development agreements for the purposes of standardizing practices and procedures, resolving common legal issues, and enabling review of cooperative research and development agreements to be carried out in a routine and prompt manner. "(iv) An agency which has contracted with a non-Federal entity to operate a laboratory shall review each agreement under this section. Within 30 days after the presentation, by the director of the laboratory, of such agreement, the agency shall, on the basis of such review, approve or request specific modification to such agreement. Such agreement shall not take effect before approval under this clause. "(v) If an agency fails to complete a review under clause (iv) within the 30-day period specified therein, the agency shall submit to the Congress, within 10 days after the end of that 30-day period, a report in the reasons for such failure. The agency shall, at the end of each successive 30-day period thereafter during which such failure continues, submit to Congress another report on the reasons for the continuing failure. Nothing in this clause relieves the agency if the requirement to complete a review under clause (iv). "(vi) In any case in which an agency which has contracted with a non-Federal entity to operate a laboratory requests the modification of an agreement presented under this section, the agency shall promptly transmit a written explanation of such modification to the director of the laboratory concerned."; (7) in subsection (c), by adding at the end the following new paragraph: "(7)(A) No trade secrets or commercial or financial information that is privileged or confidential, under the meaning of section 552(b)(4) of title 5, United States Code, which is obtained in the conduct of research or as a result of

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--> activities under this Act from a non-Federal party participating in cooperative research and development agreement shall be disclosed. "(B) The director, or in the case of a contractor-operated laboratory, the agency, for a period of up to 5 years after development of information that results from research and development activities conducted under this Act and that would be a trade secret or commercial or financial information that is privileged or confidential if the information had been obtained from a non-Federal party participating in a cooperative research and development agreement, may provide appropriate protections against the dissemination of such information, including exemption from subchapter II of chapter 5, United States Code"; and (8) in subsection (d)— (A) by striking "and" at the end of paragraph (1); (B) by amending paragraph (2) to read as follows: "(2) the term 'laboratory' means— "(A) a facility or group of facilities owned, leased, or otherwise used by a Federal agency, a substantial purpose of which is the performance of research, development, or engineering by employees of the Federal Government; "(B) a group of Government-owned, contractor-operated facilities under a common contract, when a substantial purpose of the contract is the performance of research and development for the Federal Government; and "(C) a Government-owned, contractor-operated facility that is not under a common contract described in subparagraph (B), and the primary purpose of which is the performance of research and development for the Federal Government, but such term does not include any facility covered by Executive Order No. 12344, dated February 1, 1982, pertaining to the Naval nuclear propulsion program; and"; and (C) by adding at the end the following new paragraph: "(3) the term 'joint work statement' means a proposal prepared for a Federal agency by the director of a Government-owned, contractor-operated laboratory describing the purpose and scope of a proposed cooperative research and development agreement, and assigning the rights and responsibilities among the agency, the laboratory, and any other party or parties to the proposed agreement.". (b) PRINCIPLES—Section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.SC. 3710a) is amended by adding at the end the following new subsection: "(g) PRINCIPLES—In implementing this section, each agency which has contracted with a non-Federal entity to operate a laboratory shall be guided by the following principles:

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--> "(1) The implementation shall advance program missions at the laboratory, including any national security mission; "(2) Classified information and unclassified sensitive information protected by law, regulation, or Executive order shall be appropriately safeguarded.". (c) TECHNICAL AMENDMENTS—Section 14 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.SC. 3710a) is amended— (1) in subsection (a)(1) by inserting "by Government-operated Federal laboratories" after "entered into"; and by striking "11'' and inserting in lieu thereof "12"; (2) in subsection (a)(1)(B)(ii), by inserting ",including payments to inventors and developers of sensitive or classified technology, regardless of whether the technology has commercial applications" after "that laboratory"; and (3) in subsection (a)(1)(B)(iv), by striking "Government-operated". (d) CONTRACT PROVISIONS—(1) Note later than 150 days after the date of enactment of this Act, each agency which has contracted with a non-Federal entity to operate a Government-owned laboratory shall propose for inclusion in that laboratory's operating contract, to the extent not already included and subject to paragraph (6), appropriate contract provisions that— (A) establish technology transfer, including cooperative research and development agreements, as a mission for the laboratory under section 11(a)(1) of the Stevenson-Wydler Technology Innovation Act of 1980; (B) describe the respective obligations and responsibilities of the agency and the laboratory with respect to this part and section 12 of the Stevenson-Wydler Technology Innovation Act of 1980; (C) require that, except as provided in paragraph (2), no employee of the laboratory shall have a substantial role (including an advisory role) in the preparation, negotiation, or approval of a cooperative research and development agreement if, to such employee's knowledge— (i) such employee, or the spouse, child, parent, sibling, or partner of such employee, or an organization (other than the laboratory) in which such employee serves as an officer, director, trustee, partner, or employee (I) holds a financial interest in any entity, other than the laboratory, that has a substantial interest in the preparation, negotiation, or approval of the cooperative research and development agreement; or (II) receives a gift or gratuity from any entity, other than the laboratory, that has a substantial interest in the preparation, negotiation, or approval of the cooperative research and development agreement; or (ii) a financial interest in any entity, other than the laboratory, that has a substantial interest in the preparation, negotiation, or approval

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--> of the cooperative research and development agreement, is held by any person or organization with whom such employee is negotiating or has any arrangement concerning prospective employment; (D) require that each employee of the laboratory who negotiates or approves a cooperative research and development agreement shall certify to the agency that the circumstances described in subparagraph (C)(i) and (II) do not apply to such employee; (E) require the laboratory to widely disseminate information on opportunities to participate with the laboratory in technology transfer, including cooperative research and development agreements; and (F) provides for an accounting of all royalty or other income received under cooperative research and development agreements. (2) The requirements described in paragraph (1)(C) and (D) shall not apply in a case where the negotiating or approving employee advises the agency that reviewed the applicable joint work statement under section (c)(5)(C)(i) of the Stevenson-Wydler Technology Innovation Act of 1980 in advance of the matter in which he is to participate and the nature of any financial interest described in paragraph (1)(C), and where the agency employee determines that such financial interest is not so substantial as to be considered likely to affect the integrity of the laboratory employee's service in that matter. (3) Not later than 180 days after the date of enactment of this Act, each agency which has contracted with a non-Federal entity to operate a Government-owned laboratory shall submit a report to Congress which includes a copy of each contract provision amended pursuant to this subsection. (4) No Government-owned, contractor-operated laboratory may enter into a cooperative research and development agreement under section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 unless— (A) that laboratory's operating contract contains the provisions described in paragraph (1)(A) through (F); or (B) such laboratory agrees in separate writing to be bound by the provisions described in paragraph (1)(A) through (F). (5) Any contract for a Government-owned, contractor-operated laboratory entered into after the expiration of 150 days after the date of enactment of this Act shall contain the provisions described in paragraph (1)(A) through (F). (6) Contract provisions referred to in paragraph (1) shall include only such provisions as are necessary to carry out paragraphs (1) and (2) of this subsection.