§ 3710c. — Distribution of royalties received by Federal agencies.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC3710c]
TITLE 15--COMMERCE AND TRADE
CHAPTER 63--TECHNOLOGY INNOVATION
Sec. 3710c. Distribution of royalties received by Federal
agencies
(a) In general
(1) Except as provided in paragraphs (2) and (4), any royalties or
other payments received by a Federal agency from the licensing and
assignment of inventions under agreements entered into by Federal
laboratories under section 3710a of this title, and from the licensing
of inventions of Federal laboratories under section 207 of title 35 or
under any other provision of law, shall be retained by the laboratory
which produced the invention and shall be disposed of as follows:
(A)(i) The head of the agency or laboratory, or such
individual's designee, shall pay each year the first $2,000, and
thereafter at least 15 percent, of the royalties or other payments,
other than payments of patent costs as delineated by a license or
assignment agreement, to the inventor or coinventors, if the
inventor's or coinventor's rights are assigned to the United States.
(ii) An agency or laboratory may provide appropriate incentives,
from royalties, or other payments, to laboratory employees who are
not an inventor of such inventions but who substantially increased
the technical value of such inventions.
(iii) The agency or laboratory shall retain the royalties and
other payments received from an invention until the agency or
laboratory makes payments to employees of a laboratory under clause
(i) or (ii).
(B) The balance of the royalties or other payments shall be
transferred by the agency to its laboratories, with the majority
share of the royalties or other payments from any invention going to
the laboratory where the invention occurred. The royalties or other
payments so transferred to any laboratory may be used or obligated
by that laboratory during the fiscal year in which they are received
or during the 2 succeeding fiscal years--
(i) to reward scientific, engineering, and technical
employees of the laboratory, including developers of sensitive
or classified technology, regardless of whether the technology
has commercial applications;
(ii) to further scientific exchange among the laboratories
of the agency;
(iii) for education and training of employees consistent
with the research and development missions and objectives of the
agency or laboratory, and for other activities that increase the
potential for transfer of the technology of the laboratories of
the agency;
(iv) for payment of expenses incidental to the
administration and licensing of intellectual property by the
agency or laboratory with respect to inventions made at that
laboratory, including the fees or other costs for the services
of other agencies, persons, or organizations for intellectual
property management and licensing services; or
(v) for scientific research and development consistent with
the research and development missions and objectives of the
laboratory.
(C) All royalties or other payments retained by the agency or
laboratory after payments have been made pursuant to subparagraphs
(A) and (B) that is unobligated and unexpended at the end of the
second fiscal year succeeding the fiscal year in which the royalties
and other payments were received shall be paid into the Treasury.
(2) If, after payments to inventors under paragraph (1), the
royalties or other payments received by an agency in any fiscal year
exceed 5 percent of the budget of the agency for that year, 75 percent
of such excess shall be paid to the Treasury of the United States and
the remaining 25 percent may be used or obligated under paragraph
(1)(B). Any funds not so used or obligated shall be paid into the
Treasury of the United States.
(3) Any payment made to an employee under this section shall be in
addition to the regular pay of the employee and to any other awards made
to the employee, and shall not affect the entitlement of the employee to
any regular pay, annuity, or award to which he is otherwise entitled or
for which he is otherwise eligible or limit the amount thereof. Any
payment made to an inventor as such shall continue after the inventor
leaves the laboratory or agency. Payments made under this section shall
not exceed $150,000 per year to any one person, unless the President
approves a larger award (with the excess over $150,000 being treated as
a Presidential award under section 4504 of title 5).
(4) A Federal agency receiving royalties or other payments as a
result of invention management services performed for another Federal
agency or laboratory under section 207 of title 35, may retain such
royalties or payments to the extent required to offset payments to
inventors under clause (i) of paragraph (1)(A), costs and expenses
incurred under clause (iv) of paragraph (1)(B), and the cost of foreign
patenting and maintenance for any invention of the other agency. All
royalties and other payments remaining after offsetting the payments to
inventors, costs, and expenses described in the preceding sentence shall
be transferred to the agency for which the services were performed, for
distribution in accordance with paragraph (1)(B).
(b) Certain assignments
If the invention involved was one assigned to the Federal agency--
(1) by a contractor, grantee, or participant, or an employee of
a contractor, grantee, or participant, in an agreement or other
arrangement with the agency, or
(2) by an employee of the agency who was not working in the
laboratory at the time the invention was made,
the agency unit that was involved in such assignment shall be considered
to be a laboratory for purposes of this section.
(c) Reports
The Comptroller General shall transmit a report to the appropriate
committees of the Senate and House of Representatives on the
effectiveness of Federal technology transfer programs, including
findings, conclusions, and recommendations for improvements in such
programs. The report shall be integrated with, and submitted at the same
time as, the report required by section 202(b)(3) of title 35.
(Pub. L. 96-480, Sec. 14, as added, renumbered Sec. 13, and amended Pub.
L. 99-502, Secs. 7, 9(e)(1), (3), Oct. 20, 1986, 100 Stat. 1792, 1797;
renumbered Sec. 14 and amended Pub. L. 100-418, title V,
Secs. 5122(a)(1), 5162(a), Aug. 23, 1988, 102 Stat. 1438, 1450; Pub. L.
100-519, title III, Sec. 303(a), Oct. 24, 1988, 102 Stat. 2597; Pub. L.
101-189, div. C, title XXXI, Sec. 3133(c), Nov. 29, 1989, 103 Stat.
1677; Pub. L. 104-113, Sec. 5, Mar. 7, 1996, 110 Stat. 777; Pub. L. 106-
404, Secs. 7(7), 10(b), Nov. 1, 2000, 114 Stat. 1746, 1749.)
Amendments
2000--Subsec. (a)(1)(A)(i). Pub. L. 106-404, Sec. 7(7)(A), (B),
inserted ``, other than payments of patent costs as delineated by a
license or assignment agreement,'' after ``or other payments'' and ``,
if the inventor's or coinventor's rights are assigned to the United
States'' before period at end.
Subsec. (a)(1)(B). Pub. L. 106-404, Sec. 7(7)(C), substituted ``2
succeeding fiscal years'' for ``succeeding fiscal year'' in introductory
provisions.
Subsec. (a)(2). Pub. L. 106-404, Sec. 7(7)(D), struck out
``Government-operated laboratories of the'' before ``agency for that
year,''.
Subsec. (b)(2). Pub. L. 106-404, Sec. 7(7)(E), substituted
``invention'' for ``inventon''.
Subsec. (c). Pub. L. 106-404, Sec. 10(b), amended heading and text
of subsec. (c) generally. Prior to amendment, text read as follows:
``(1) In making their annual budget submissions Federal agencies
shall submit, to the appropriate authorization and appropriation
committees of both Houses of the Congress, summaries of the amount of
royalties or other income received and expenditures made (including
inventor awards) under this section.
``(2) The Comptroller General, five years after October 20, 1986,
shall review the effectiveness of the various royalty-sharing programs
established under this section and report to the appropriate committees
of the House of Representatives and the Senate, in a timely manner, his
findings, conclusions, and recommendations for improvements in such
programs.''
1996--Subsec. (a)(1). Pub. L. 104-113, Sec. 5(1), amended par. (1)
generally, restructuring subpar. (A) to require head of agency or his
designee to pay each year first $2,000, and thereafter at least 15
percent of royalties or other income received by agency on account of
any invention to inventor or coinventors if they had assigned their
rights in invention to United States and to authorize agencies to
provide incentives to laboratory employees who substantially increase
technical value of inventions, restructuring subpar. (B) to reorder cls.
(i) to (iv), to add cl. (v), and to strike out closing provisions which
required unobligated or unused funds to be paid into Treasury, and
adding subpar. (C).
Subsec. (a)(2). Pub. L. 104-113, Sec. 5(2), in first sentence,
inserted ``or other payments'' after ``royalties'' and substituted
``under paragraph (1)(B)'' for ``for the purposes described in clauses
(i) through (iv) of paragraph (1)(B) during that fiscal year or the
succeeding fiscal year''.
Subsec. (a)(3). Pub. L. 104-113, Sec. 5(3), substituted ``$150,000''
for ``$100,000'' in two places.
Subsec. (a)(4). Pub. L. 104-113, Sec. 5(4), in first sentence,
substituted ``other payments'' for ``other income'', ``such royalties or
payments'' for ``such royalties or income'', ``offset payments to
inventors'' for ``offset the payment of royalties to inventors'', and
``clause (iv) of paragraph (1)(B)'' for ``clause (i) of paragraph
(1)(B)'' and, in second sentence, substituted ``other payments'' for
``other income'', substituted ``offsetting the payments to inventors''
for ``payment of the royalties'', and struck out ``clauses (i) through
(iv) of'' before ``paragraph (1)(B)''.
Subsec. (b)(1). Pub. L. 104-113, Sec. 5(5), amended par. (1)
generally. Prior to amendment, par. (1) read as follows: ``by a
contractor, grantee, or participant in a cooperative agreement with the
agency, or''.
1989--Subsec. (a)(1). Pub. L. 101-189, Sec. 3133(c)(1), in
introductory provisions, inserted ``by Government-operated Federal
laboratories'' after ``entered into'' and made technical amendment to
reference to section 3710a of this title to correct reference to
corresponding section of original Act, requiring no change in text.
Subsec. (a)(1)(B)(ii). Pub. L. 101-189, Sec. 3133(c)(2), inserted
``, including payments to inventors and developers of sensitive or
classified technology, regardless of whether the technology has
commercial applications'' after ``that laboratory''.
Subsec. (a)(1)(B)(iv). Pub. L. 101-189, Sec. 3133(c)(3), substituted
``technology of the laboratories'' for ``technology of the Government-
operated laboratories''.
1988--Subsec. (a)(1)(A)(i). Pub. L. 100-519, Sec. 303(a)(1),
substituted ``has assigned his or her rights in the invention to the
United States'' for ``was an employee of the agency at the time the
invention was made''.
Subsec. (a)(1)(A)(ii). Pub. L. 100-519, Sec. 303(a)(2), substituted
``under clause (i)'' for ``who were employed by the agency at the time
the invention was made and whose names appear on licensed inventions''.
Subsec. (a)(4). Pub. L. 100-418, Sec. 5162(a), substituted ``may''
for ``shall'' and ``any invention of the other agency'' for ``such
invention performed at the request of the other agency or laboratory''
in first sentence.
1986--Subsec. (a)(1). Pub. L. 99-502, Sec. 9(e)(3), in introductory
par. made technical amendment to reference to section 3710a of this
title to reflect renumbering of corresponding section of original act.
Effective Date of 1988 Amendment
Section 303(b) of Pub. L. 100-519 provided that: ``This section
[amending this section] shall be effective as of October 20, 1986.''
Section Referred to in Other Sections
This section is referred to in sections 3704b, 3710a, 3714 of this
title.
