---
kind: "range"
citation: "35 U.S.C. §§ 202–206"
title: "35"
from: "202"
to: "206"
count: 5
release: "119-102"
url: "https://uscodex.org/usc/35/202..206"
---

# §202. Disposition of rights

- (a) Each [nonprofit organization](/usc/35/201.md?p=i) or [small business firm](/usc/35/201.md?p=h) may, within a reasonable time after disclosure as required by [paragraph (c)(1)](#c-1) of this section, elect to retain title to any [subject invention](/usc/35/201.md?p=e): Provided, however, That a [funding agreement](/usc/35/201.md?p=b) may provide otherwise (i) when the [contractor](/usc/35/201.md?p=c) is not located in the [United States](/usc/35/100.md?p=c) or does not have a place of business located in the [United States](/usc/35/100.md?p=c) or is subject to the control of a foreign government, (ii) in exceptional circumstances when it is determined by the agency that restriction or elimination of the right to retain title to any [subject invention](/usc/35/201.md?p=e) will better promote the policy and objectives of this chapter (iii) when it is determined by a Government authority which is authorized by statute or Executive order to conduct foreign intelligence or counter-intelligence activities that the restriction or elimination of the right to retain title to any [subject invention](/usc/35/201.md?p=e) is necessary to protect the security of such activities or, (iv) when the [funding agreement](/usc/35/201.md?p=b) includes the operation of a Government-owned, [contractor](/usc/35/201.md?p=c)-operated facility of the Department of Energy primarily dedicated to that Department’s naval nuclear propulsion or weapons related programs and all [funding agreement](/usc/35/201.md?p=b) limitations under this subparagraph on the [contractor](/usc/35/201.md?p=c)’s right to elect title to a [subject invention](/usc/35/201.md?p=e) are limited to [inventions](/usc/35/100.md?p=a) occurring under the above two programs of the Department of Energy. The rights of the [nonprofit organization](/usc/35/201.md?p=i) or [small business firm](/usc/35/201.md?p=h) shall be subject to the provisions of [paragraph (c)](#c) of this section and the other provisions of this chapter.
- (b)
  - (1) The rights of the Government under [subsection (a)](#a) shall not be exercised by a [Federal agency](/usc/35/201.md?p=a) unless it first determines that at least one of the conditions identified in [clauses (i) through (iv)](#a-i..a-iv) of subsection (a) exists. Except in the case of subsection (a)(iii), the agency shall file with the Secretary of Commerce, within thirty days after the award of the applicable [funding agreement](/usc/35/201.md?p=b), a copy of such determination. In the case of a determination under subsection (a)(ii), the statement shall include an analysis justifying the determination. In the case of determinations applicable to [funding agreements](/usc/35/201.md?p=b) with [small business firms](/usc/35/201.md?p=h), copies shall also be sent to the Chief Counsel for Advocacy of the Small Business Administration. If the Secretary of Commerce believes that any individual determination or pattern of determinations is contrary to the policies and objectives of this chapter or otherwise not in conformance with this chapter, the Secretary shall so advise the head of the agency concerned and the Administrator of the Office of Federal Procurement Policy, and recommend corrective actions.
  - (2) Whenever the Administrator of the Office of Federal Procurement Policy has determined that one or more [Federal agencies](/usc/35/201.md?p=a) are utilizing the authority of clause (i) or (ii) of subsection (a) of this section in a manner that is contrary to the policies and objectives of this chapter, the Administrator is authorized to issue [regulations](/usc/35/351.md?p=b) describing classes of situations in which agencies may not exercise the authorities of those clauses.
  - (3) If the [contractor](/usc/35/201.md?p=c) believes that a determination is contrary to the policies and objectives of this chapter or constitutes an abuse of discretion by the agency, the determination shall be subject to [section 203(b)](/usc/35/203.md?p=b).
- (c) Each [funding agreement](/usc/35/201.md?p=b) with a [small business firm](/usc/35/201.md?p=h) or [nonprofit organization](/usc/35/201.md?p=i) shall contain appropriate provisions to effectuate the following:
  - (1) That the [contractor](/usc/35/201.md?p=c) disclose each [subject invention](/usc/35/201.md?p=e) to the [Federal agency](/usc/35/201.md?p=a) within a reasonable time after it becomes known to [contractor](/usc/35/201.md?p=c) personnel responsible for the administration of patent matters, and that the Federal Government may receive title to any [subject invention](/usc/35/201.md?p=e) not disclosed to it within such time.
  - (2) That the [contractor](/usc/35/201.md?p=c) make a written election within two years after disclosure to the [Federal agency](/usc/35/201.md?p=a) (or such additional time as may be approved by the [Federal agency](/usc/35/201.md?p=a)) whether the [contractor](/usc/35/201.md?p=c) will retain title to a [subject invention](/usc/35/201.md?p=e): Provided, That in any case where the 1-year period referred to in [section 102(b)](/usc/35/102.md?p=b) would end before the end of that 2-year period, the period for election may be shortened by the [Federal agency](/usc/35/201.md?p=a) to a date that is not more than sixty days before the end of that 1-year period: And provided further, That the Federal Government may receive title to any [subject invention](/usc/35/201.md?p=e) in which the [contractor](/usc/35/201.md?p=c) does not elect to retain rights or fails to elect rights within such times.
  - (3) That a [contractor](/usc/35/201.md?p=c) electing rights in a [subject invention](/usc/35/201.md?p=e) agrees to file a patent application prior to the expiration of the 1-year period referred to in [section 102(b)](/usc/35/102.md?p=b), and shall thereafter file corresponding patent applications in other countries in which it wishes to retain title within reasonable times, and that the Federal Government may receive title to any [subject inventions](/usc/35/201.md?p=e) in the [United States](/usc/35/100.md?p=c) or other countries in which the [contractor](/usc/35/201.md?p=c) has not filed patent applications on the [subject invention](/usc/35/201.md?p=e) within such times.
  - (4) With respect to any [invention](/usc/35/100.md?p=a) in which the [contractor](/usc/35/201.md?p=c) elects rights, the [Federal agency](/usc/35/201.md?p=a) shall have a nonexclusive, nontransferrable, irrevocable, paid-up license to practice or have practiced for or on behalf of the [United States](/usc/35/100.md?p=c) any [subject invention](/usc/35/201.md?p=e) throughout the world: Provided, That the [funding agreement](/usc/35/201.md?p=b) may provide for such additional rights, including the right to assign or have assigned foreign patent rights in the [subject invention](/usc/35/201.md?p=e), as are determined by the agency as necessary for meeting the obligations of the [United States](/usc/35/100.md?p=c) under any treaty, international agreement, arrangement of cooperation, memorandum of understanding, or similar arrangement, including military agreement relating to weapons development and production.
  - (5) The right of the [Federal agency](/usc/35/201.md?p=a) to require periodic reporting on the utilization or efforts at obtaining utilization that are being made by the [contractor](/usc/35/201.md?p=c) or his licensees or assignees: Provided, That any such information as well as any information on utilization or efforts at obtaining utilization obtained as part of a proceeding under [section 203](/usc/35/203.md) of this chapter shall be treated by the [Federal agency](/usc/35/201.md?p=a) as commercial and financial information obtained from a person and privileged and confidential and not subject to disclosure under [section 552 of title 5](/usc/5/552.md).
  - (6) An obligation on the part of the [contractor](/usc/35/201.md?p=c), in the event a [United States](/usc/35/100.md?p=c) patent application is filed by or on its behalf or by any assignee of the [contractor](/usc/35/201.md?p=c), to include within the specification of such application and any patent issuing thereon, a statement specifying that the [invention](/usc/35/100.md?p=a) was made with Government support and that the Government has certain rights in the [invention](/usc/35/100.md?p=a).
  - (7) In the case of a [nonprofit organization](/usc/35/201.md?p=i), (A) a prohibition upon the assignment of rights to a [subject invention](/usc/35/201.md?p=e) in the [United States](/usc/35/100.md?p=c) without the approval of the [Federal agency](/usc/35/201.md?p=a), except where such assignment is made to an organization which has as one of its primary functions the management of [inventions](/usc/35/100.md?p=a) (provided that such assignee shall be subject to the same provisions as the [contractor](/usc/35/201.md?p=c)); (B) a requirement that the [contractor](/usc/35/201.md?p=c) share royalties with the [inventor](/usc/35/100.md?p=f); (C) except with respect to a [funding agreement](/usc/35/201.md?p=b) for the operation of a Government-owned-[contractor](/usc/35/201.md?p=c)-operated facility, a requirement that the balance of any royalties or income earned by the [contractor](/usc/35/201.md?p=c) with respect to [subject inventions](/usc/35/201.md?p=e), after payment of expenses (including payments to [inventors](/usc/35/100.md?p=f)) incidental to the administration of [subject inventions](/usc/35/201.md?p=e), be utilized for the support of scientific research or education; (D) a requirement that, except where it is determined to be infeasible following a reasonable inquiry, a preference in the licensing of [subject inventions](/usc/35/201.md?p=e) shall be given to [small business firms](/usc/35/201.md?p=h); and (E) with respect to a [funding agreement](/usc/35/201.md?p=b) for the operation of a Government-owned-[contractor](/usc/35/201.md?p=c)-operated facility, requirements (i) that after payment of patenting costs, licensing costs, payments to [inventors](/usc/35/100.md?p=f), and other expenses incidental to the administration of [subject inventions](/usc/35/201.md?p=e), 100 percent of the balance of any royalties or income earned and retained by the [contractor](/usc/35/201.md?p=c) during any fiscal year up to an amount equal to 5 percent of the annual budget of the facility, shall be used by the [contractor](/usc/35/201.md?p=c) for scientific research, development, and education consistent with the research and development mission and objectives of the facility, including activities that increase the licensing potential of other [inventions](/usc/35/100.md?p=a) of the facility; provided that if said balance exceeds 5 percent of the annual budget of the facility, that 15 percent of such excess shall be paid to the Treasury of the [United States](/usc/35/100.md?p=c) and the remaining 85 percent shall be used for the same purposes described above in this clause; and (ii) that, to the extent it provides the most effective technology transfer, the licensing of [subject inventions](/usc/35/201.md?p=e) shall be administered by [contractor](/usc/35/201.md?p=c) employees on location at the facility.
  - (8) The requirements of sections [203](/usc/35/203.md) and [204](/usc/35/204.md) of this chapter.
- (d) If a [contractor](/usc/35/201.md?p=c) does not elect to retain title to a [subject invention](/usc/35/201.md?p=e) in cases subject to this section, the [Federal agency](/usc/35/201.md?p=a) may consider and after consultation with the [contractor](/usc/35/201.md?p=c) grant requests for retention of rights by the [inventor](/usc/35/100.md?p=f) subject to the provisions of this Act and [regulations](/usc/35/351.md?p=b) promulgated hereunder.
- (e) In any case when a Federal employee is a [coinventor](/usc/35/100.md?p=g) of any [invention](/usc/35/100.md?p=a) made with a [nonprofit organization](/usc/35/201.md?p=i), a [small business firm](/usc/35/201.md?p=h), or a non-Federal [inventor](/usc/35/100.md?p=f), the [Federal agency](/usc/35/201.md?p=a) employing such [coinventor](/usc/35/100.md?p=g) may, for the purpose of consolidating rights in the [invention](/usc/35/100.md?p=a) and if it finds that it would expedite the development of the [invention](/usc/35/100.md?p=a)—
  - (1) license or assign whatever rights it may acquire in the [subject invention](/usc/35/201.md?p=e) to the [nonprofit organization](/usc/35/201.md?p=i), [small business firm](/usc/35/201.md?p=h), or non-Federal [inventor](/usc/35/100.md?p=f) in accordance with the provisions of this chapter; or
  - (2) acquire any rights in the [subject invention](/usc/35/201.md?p=e) from the [nonprofit organization](/usc/35/201.md?p=i), [small business firm](/usc/35/201.md?p=h), or non-Federal [inventor](/usc/35/100.md?p=f), but only to the extent the party from whom the rights are acquired voluntarily enters into the transaction and no other transaction under this chapter is conditioned on such acquisition.
- (f)
  - (1) No [funding agreement](/usc/35/201.md?p=b) with a [small business firm](/usc/35/201.md?p=h) or [nonprofit organization](/usc/35/201.md?p=i) shall contain a provision allowing a [Federal agency](/usc/35/201.md?p=a) to require the licensing to third parties of [inventions](/usc/35/100.md?p=a) owned by the [contractor](/usc/35/201.md?p=c) that are not [subject inventions](/usc/35/201.md?p=e) unless such provision has been approved by the head of the agency and a written justification has been signed by the head of the agency. Any such provision shall clearly state whether the licensing may be required in connection with the practice of a [subject invention](/usc/35/201.md?p=e), a specifically identified work object, or both. The head of the agency may not delegate the authority to approve provisions or sign justifications required by this paragraph.
  - (2) A [Federal agency](/usc/35/201.md?p=a) shall not require the licensing of third parties under any such provision unless the head of the agency determines that the use of the [invention](/usc/35/100.md?p=a) by others is necessary for the practice of a [subject invention](/usc/35/201.md?p=e) or for the use of a work object of the [funding agreement](/usc/35/201.md?p=b) and that such action is necessary to achieve the [practical application](/usc/35/201.md?p=f) of the [subject invention](/usc/35/201.md?p=e) or work object. Any such determination shall be on the record after an opportunity for an agency hearing. Any action commenced for judicial review of such determination shall be brought within sixty days after notification of such determination.

# §203. March-in rights

- (a) With respect to any [subject invention](/usc/35/201.md?p=e) in which a [small business firm](/usc/35/201.md?p=h) or [nonprofit organization](/usc/35/201.md?p=i) has acquired title under this chapter, the [Federal agency](/usc/35/201.md?p=a) under whose [funding agreement](/usc/35/201.md?p=b) the [subject invention](/usc/35/201.md?p=e) was made shall have the right, in accordance with such procedures as are provided in [regulations](/usc/35/351.md?p=b) promulgated hereunder to require the [contractor](/usc/35/201.md?p=c), an assignee or exclusive licensee of a [subject invention](/usc/35/201.md?p=e) to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the [contractor](/usc/35/201.md?p=c), assignee, or exclusive licensee refuses such request, to grant such a license itself, if the [Federal agency](/usc/35/201.md?p=a) determines that such—
  - (1) action is necessary because the [contractor](/usc/35/201.md?p=c) or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve [practical application](/usc/35/201.md?p=f) of the [subject invention](/usc/35/201.md?p=e) in such field of use;
  - (2) action is necessary to alleviate health or safety needs which are not reasonably satisfied by the [contractor](/usc/35/201.md?p=c), assignee, or their licensees;
  - (3) action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the [contractor](/usc/35/201.md?p=c), assignee, or licensees; or
  - (4) action is necessary because the agreement required by [section 204](/usc/35/204.md) has not been obtained or waived or because a licensee of the exclusive right to use or sell any [subject invention](/usc/35/201.md?p=e) in the [United States](/usc/35/100.md?p=c) is in breach of its agreement obtained pursuant to [section 204](/usc/35/204.md).
- (b) A determination pursuant to this section or [section 202(b)(4)](/usc/35/202.md)[^1] shall not be subject to [chapter 71](/usc/41/chstIII-ch71.md) of title 41. An administrative appeals procedure shall be established by [regulations](/usc/35/351.md?p=b) promulgated in accordance with [section 206](/usc/35/206.md). Additionally, any [contractor](/usc/35/201.md?p=c), [inventor](/usc/35/100.md?p=f), assignee, or exclusive licensee adversely affected by a determination under this section may, at any time within sixty days after the determination is issued, file a petition in the [United States](/usc/35/100.md?p=c) Court of Federal Claims, which shall have jurisdiction to determine the appeal on the record and to affirm, reverse, remand or modify, as appropriate, the determination of the [Federal agency](/usc/35/201.md?p=a). In cases described in paragraphs [(1)](#a-1) and [(3)](#a-3) of subsection (a), the agency’s determination shall be held in abeyance pending the exhaustion of appeals or petitions filed under the preceding sentence.

# §204. Preference for United States industry


Notwithstanding any other provision of this chapter, no [small business firm](/usc/35/201.md?p=h) or [nonprofit organization](/usc/35/201.md?p=i) which receives title to any [subject invention](/usc/35/201.md?p=e) and no assignee of any such [small business firm](/usc/35/201.md?p=h) or [nonprofit organization](/usc/35/201.md?p=i) shall grant to any person the exclusive right to use or sell any [subject invention](/usc/35/201.md?p=e) in the [United States](/usc/35/100.md?p=c) unless such person agrees that any products embodying the [subject invention](/usc/35/201.md?p=e) or produced through the use of the [subject invention](/usc/35/201.md?p=e) will be manufactured substantially in the [United States](/usc/35/100.md?p=c). However, in individual cases, the requirement for such an agreement may be waived by the [Federal agency](/usc/35/201.md?p=a) under whose [funding agreement](/usc/35/201.md?p=b) the [invention](/usc/35/100.md?p=a) was made upon a showing by the [small business firm](/usc/35/201.md?p=h), [nonprofit organization](/usc/35/201.md?p=i), or assignee that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the [United States](/usc/35/100.md?p=c) or that under the circumstances domestic manufacture is not commercially feasible.


# §205. Confidentiality


[Federal agencies](/usc/35/201.md?p=a) are authorized to withhold from disclosure to the public information disclosing any [invention](/usc/35/100.md?p=a) in which the Federal Government owns or may own a right, title, or interest (including a nonexclusive license) for a reasonable time in order for a patent application to be filed. Furthermore, [Federal agencies](/usc/35/201.md?p=a) shall not be required to release copies of any document which is part of an application for patent filed with the [United States](/usc/35/100.md?p=c) Patent and Trademark Office or with any foreign patent office.


# §206. Uniform clauses and regulations


The Secretary of Commerce may issue [regulations](/usc/35/351.md?p=b) which may be made applicable to [Federal agencies](/usc/35/201.md?p=a) implementing the provisions of [sections 202 through 204](/usc/35/202..204.md) of this chapter and shall establish standard [funding agreement](/usc/35/201.md?p=b) provisions required under this chapter. The [regulations](/usc/35/351.md?p=b) and the standard [funding agreement](/usc/35/201.md?p=b) shall be subject to public comment before their issuance.