PATENT RIGHTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP57-00384R001100060022-2
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 3
• Document Creation Date: December 9, 2016
• Document Release Date: March 14, 2001
• Sequence Number: 22
• Publication Date: July 2, 1952
• Content Type: MF

Approved"'or Release 2001/08/27 : CIA-RDP57-0$4R001100060022-2
RESTRICTED
OGC HAS REVIEWED.
MEMORANDUM FOR: Acting Deputy Director (Administration)
SUBJECT: Patent Rights
1. The Chief of Procurement and Supply has asked for policy
guidance in his memorandum of 30 June on the question of negotiating
patent rights with contractors doing research work for the Government.
The problem arises in one of the first ^ contracts of this natures
and decision on this point will probably set a pattern for the whole
=program. The following comments are submitted for guidance on
an over-all Government practice and thought.
2. It appears to be the unanimous thought of the Attorney
General and other Government officials who have studied the matter
that patents arising out of work done for the Goverment, and. for
profit out of Government funds, should belong to the Government with
shop rights going back to the contractor. There are many exceptions
and, in straight procurement, rights to so-called foreground patents,
particularly when the contractor has an existing patent structure,
are normally left to the contractor with royalty free license going
back to the Government. Also the philosophy set forth above has not,
been followed in practice and, during the war particularly, the Armed
Services appear not to have made an issue of the patent problem but
have let the contractors take title in almost all cases.
3. Our thoughts are as follows. On one extreme we have the case
of the contractor who is asked to do pure research on a matter of,
interest to the Government which he would not otherwise do, and who
has all his costs plus a fee paid by the Government. He takes no risks
as all facilities and personnel are either provided or paid for by the
Government. We think it would be only sound business practice to
insist that the title to arty patents resulting from this work stay with
the Government and that shop rights as appropriate should be given to
the contractor. On the other extreme we have a simple item of procure-
ment with developmental features from a contractor already engaged in
procuring the type of material involved who is fully equipped with his
own capital structure and plant and who may be either on a cost-plus-
fixed-fee basis or a negotiated',price contract in which he is risking
his profit on. his ability to produce economically. Particularly if he
has an existing patent structure in the field we see no objection to
granting to him the right to foreground patents. In between are all
sorts of variations. We suggest that the Contracting Officer be
2 July 1952
Approved For Re T l 7 : CIA-RDP57-00384RO01100060022-2
 Approveor Release FtAZ'['EIW-RDP57-MM84R001100060022-2
instructed as follows on Agency policy.
a. In all cases he should attempt to obtain title to
any prospective patents in the Government, but he should
feel free to relinquish such rights to the contractor in
those procurement items where the Government philosophy
clearly permits.
b. In all research contracts, however, he should try
to obtain title to patents in the Government.
c. If this cannot be obtained and there appear to be
logical arguments that certain patents should go to the con-
tractor, I believe it would be sound to put in the contract
a clause to the effect that as patent questions arose they
would be referred to thevAgency Patents Board which would be
authorized to review and make final determination on whether
it was fair and equitaole for the patent title to 'be in-the
Government or with the contractor. Where such determination
can be made %n advance, the Contracting officer should feel
free to exercise his discretion and negotiate a contract
provision spelling out the specific rights of each party.
d. In those cases where the Contracting Officer, in
the light of over-all Government philosophy, believes that
such a Patents Board clause should be inserted or patents
should go to the Government, and the contractor with whom
he is negotiating insists that all patent rights go to him,
the Contracting Officer should seek out another contractor
qualified to do the work and only if such other suitable con-
tractor cannot be found should he make an exception to the
above stated concept of Government-wide policy on patent
rights. This emphasizes the fact that the Contracting Officer
must be free to conduct procurement of all types in accordance
with standard Government policies and procedures as they may
be qualified by our peculiar security problems and authorities
granted us. This means that in all but the most exceptional
cases, the Requisitioning Branch should not determine who the
contractor will be. They may, of course, recommend suitable
contractors and point out special factors in connection with
their desires, but unless most unusual considerations are
presented to override the normal procedures, the Contracting
Officer should make final determination of the party with
whom the Government is going to contract.
OGC/LBH:kr
LAWRENCE R. HOUSTON
General Counsel
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