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New Technology Transfer Act Signed

March 29, 1996

Earlier this month, President Clinton signed legislation designed to ease the transfer of federal technology by providing clarification on intellectual property rights and offering incentives to federal laboratories and their researchers. The National Technology Transfer and Advancement Act of 1995 (H.R. 2196) was sponsored by Rep. Morella (R-Md).

The Act helps define the intellectual property rights for companies participating in Cooperative Research and Development Agreements (CRADAs). According to Congresswoman Morella, current law provides little guidance to either the laboratory or the private sector partner on the rights the company should receive. Consequently, difficult negotiations have often resulted for some laboratories and partners each time a new CRADA is negotiated.

With the new Act, companies are ensured that they will have, at a minimum, an exclusive license in a prenegotiated field of use for the technology. The hope is that this will help speed negotiations. The company would then have the right to use the new invention in exchange for reasonable compensation to the laboratory.

At the same time, the Act provides that the federal government will retain minimum statutory rights to use the technology for its own purposes.

Incentives for federal inventors to develop new inventions are also enhanced. Under current practice, inventors receive 15 percent of the royalty stream from their inventions. With this new Act, inventors will receive the first $2,000 in royalties the laboratory earns each year, plus 15 percent of royalties on top of that.

Federal labs also gain greater flexibility in using the royalty stream that they accrue as a result of the commercialization of the technology.

Representative Walker (R-PA), the chairman of the Science Committee, said,”The act will reduce the time and effort required to develop a CRADA, reduce the uncertainty that can deter companies from working with the government, and thus speed the transfer and commercialization of laboratory technology to the American public.”

tech transfer, legislation