A25 - DEC_Approved.pdf

Determination of Exceptional Circumstances National Institute of Neurological Disorders and Stroke Division of Translational Research

DETERMINATION OF EXCEPTIONAL CIRCUMSTANCES

Under 35 U.S.C. 202(a)(ii) and 37 C.F.R. 401.3(a)(2) and (e), 48 CFR 327.3, and 48 CFR 327.409

NINDS-DTR Division

Manufacturing and Nonclinical Studies Support for Development of Therapeutic Biotechnology Products (Biologics) for Neurological-related Disorders

The National Institute of Neurological Disorders and Stroke (NINDS) is seeking approval to restrict or eliminate the ability of contractors at all tiers to elect title to inventions made by contractor employees for specific classes of inventions in National Institutes of Health (NIH) neurological-related biologics development projects for the NIH Blueprint Neurotherapeutics Network Biologics (BPN-Biologics), the Helping to End Addiction Long-term Pain Therapeutics Development Program (HEAL-PTDP), Ultra-Rare Gene Therapy (URGenT). To that end, the NINDS is seeking approval of this Determination of Exceptional Circumstances (DEC) to the Bayh-Dole Act (35 U.S.C. 200-212). The NINDS is concurrently seeking approval for incorporation of HHSAR 352.227-11 Patent Rights-Exceptional Circumstances (Sept. 2014) and HHSAR 352.227-14 Rights in Data- Exceptional Circumstances (Sept. 2014) Patent Rights clauses as edited to implement this

DEC.

Federal funding recipients of grants, contracts, or cooperative agreements normally have the right to elect to retain title to inventions made by their employees pursuant to the Bayh-Dole Act. Under exceptional circumstances, however, the funding agency may restrict or eliminate the funding recipient's right to elect title to inventions if doing so better promotes or advances the intent of Bayh-Dole. Approval of a DEC by the Agency Head is required to justify the deviation from the typical flow of patent rights under Bayh-Dole to the funding recipient.

I have determined that there are exceptional circumstances that justify the limitation of the rights of all existing and all future contractors and subcontractors at all tiers in: (1) Subject Inventions that require use of any proprietary Material ("Material" or "Materials")1 obtained from a third party (“Contributor”) and used under the contract, and

(2) Subject Inventions that could utilize the Material, but are not limited to, the Material supplied by Contributors.

1 "Material" means any proprietary Material, method, product, composition, compound, biologic, natural product or device, whether patented or unpatented, which is provided to the Contractor under an agreement by a Contributor. Typically, Material is provided to the Contractor under various types of agreements, including but not limited to screening agreements and Material evaluation agreements (MEA). The Material may be provided to the Contractor directly by the Contributor or the Government.

Attachment #25

Division of Translational Research

Overview of the Programs

The NINDS has a need for manufacturing and nonclinical support services to support translational development of therapeutic biotechnology products (i.e., “biologics”) for NIH drug discovery and development programs. To that end, several NIH programs are being launched or expanded to provide support for Contributors developing medical interventions for neurological disorders. Most academic researchers and many small businesses with promising biological therapeutics do not have manufacturing and/or preclinical testing resources, and many companies with those resources are hesitant to invest in biological therapeutics for rare diseases or new targets given concerns about profitability and risk. These programs fill in the gaps by providing those services to promising biological therapeutics identified through the BPN-Biologics program, the HEAL-PTDP program, and the URGenT program.

The NIH Blueprint Neurotherapeutics (BPN) network is a consortium comprised of the NIH Office of the Director and 14 NIH Institutes and Centers (ICs) that support neuroscience research. BPN provides neuroscience researchers with funding and access to a full range of industry-style drug development services and expertise. The program, originally focused on small molecules, was launched for projects requiring medicinal chemistry optimization, pharmacokinetics, drug manufacturing and formulation and IND-enabling toxicological studies support through Phase I clinical testing, and it is now being expanded to include the development of biological therapeutics for neurological diseases (BPN-Biologics).

The HEAL-PTDP program is a multi-IC initiative that has been established by the NIH to support preclinical optimization and development of safe, effective, and non-addictive biologic therapeutics to treat pain. The goal of the program is to accelerate the optimization and development of promising small molecule and biologic hits/leads to Phase I clinical trials and readiness for the Early Phase Pain Investigation Clinical Network (EPPIC-Net) or other Phase II clinical studies.

The URGenT program has been established by the NINDS to support the development and clinical evaluation of therapeutics to address ultra-rare genetically based neurological disorders. The network will provide neuroscience researchers with funding and access to a full range of industry-style biologics development services and expertise and in the future may expand to include other NIH institutes. The program is intended to rapidly advance patient-customized therapeutics through manufacturing and preclinical toxicology testing and evaluation in Phase 1 clinical studies.

These programs are providing services designed to support academic and industry researchers in the manufacture or testing of Materials without incurring the burden of budgetary concerns, financial risk and profitability, or compromise of their intellectual property (IP).

Division of Translational Research

The Biologics Manufacturing and Nonclinical Support Services Contracts using these limiting rights will require contractors to perform the following confidential pre-clinical development and manufacturing activities: (1) Testing in in vitro, in vivo or ex vivo models; (2) Bioassay development; (3) Pharmacokinetic and pharmacodynamic studies;

(4) toxicology studies; and (5) Manufacturing and formulation studies.

Rationale for a DEC

Biologics Manufacturing and Nonclinical Support Services can be provided by a variety of contractor organizations, such as non-profit organizations, academic laboratories, and for-profit contract research or manufacturing organizations. Contractors may show interest in manufacturing derivatives of a Contributor’s Material to improve its efficacy, enhance the technology, or pursue patents and publications strategy based on data generated from manufacturing and/or characterizing the Material in their organization.

However, it is not expected that the Contractor would have an interest in claiming the data and intellectual property generated in their organization while screening the Contributor’s Material.

Contributors will usually own the primary intellectual property surrounding the starting Material and all data generated using their Material. The potential of a Contractor to use or block access to study data generated by a Contributor may have a significant impact on the Contributor’s intellectual property rights and could also hinder the development of promising therapies for neurological-related disorders. Thus, the restriction or elimination of the Contractor’s right to elect title to specific classes of inventions described in this DEC is essential to ensure that Contributor’s Material can be effectively developed into new biologics for the treatment of pain or other neurological-related disorders and to advance the NIH mission and benefit the public health.

Establishing a DEC for Biologics Manufacturing and Nonclinical Support Services will allow the Contributors to retain and protect their intellectual property and encourage broad participation in the programs, which will help achieve the program goals of advancing new therapeutics to preclinical and clinical development stages.

Scope and Implementation of the DEC

The DEC will be narrowly implemented for the noted classes of Subject Inventions made by Biologics Manufacturing and Nonclinical Support Services Contractors at all tiers via HHSAR 352.227-11 Patent Rights-Exceptional Circumstances (Sept. 2014) and HHSAR 352.227-14 Rights in Data-Exceptional Circumstances (Sept. 2014) as edited and attached. The clause addresses three classes of Subject Inventions:

Class 1: Subject Inventions that require use of the Material or a new material derived of the Material or the synthetic routes or use of the Material or its’ derivatives are defined as Class 1 Subject Inventions.

Division of Translational Research

Class 2: Subject Inventions that do not fall into Class 1 above that relate to new methods of manufacturing or synthesis (e.g., development of a new catalyst of general utility in synthesis and manufacturing) are defined as Class 2 Subject Inventions.

Class 3: Subject Inventions that do not fall into Class 1 or Class 2 above. Contractor Class 3 Subject Inventions at all tiers will be subject to the standard FAR 52.227-11 -- Patent Rights -- Ownership by the Contractor (May 2014), which directs ownership of said Subject Inventions to the Contractor pursuant to Bayh-Dole.

Allocation of Subject Invention Rights

Disposition of Class 1 Subject Inventions: Assignment to a Third-party assignee, which generally is the Contributor of the Material, but which may be another entity, including the Government, when deemed appropriate by the Government as represented by NINDS. The Contractor shall assign to the Third-party assignee designated by NINDS the entire right, title, and interest throughout the world to each Class I Subject Invention, or otherwise dispose of or transfer those rights as directed by NINDS, except to the extent that Greater Rights are retained by the Contractor under subparagraph (b)(3) of the clause at HHSAR 352.227-11. Any such assignment or other disposition or transfer of rights will be subject to a nonexclusive, nontransferable, irrevocable, paid-up license to the United States government to practice or have practiced the subject invention for or on behalf of the United States throughout the world. Any assignment shall additionally be subject to the "March-in rights" of 35 U.S.C. 203. If the Contractor is a U.S. nonprofit educational institution, it may retain a royalty free, nonexclusive, nontransferable license to practice the invention for all nonprofit research, including educational purposes and to permit other U.S. nonprofit organizations to do so.

Disposition of Class 2 and 3 Subject Inventions: Class 2 and 3 Subject Inventions will be governed by FAR Clause 52.227-11, Patent Rights-Ownership by the Contractor (December 2007). Provided, however, the Contractor shall grant a nonexclusive, irrevocable world-wide, royalty-free license in Class 2 Subject Inventions to the Contributor for all research or commercial use for any field of use that is limited to the Contributor's Material. The Contributor will have the right to grant sub-licenses to the Contributor's licensee(s) or collaborators to enable further research, development and commercialization of the Material. Class 2 Subject Inventions for which the Contractor does not wish to retain title shall be treated as Class I Subject Inventions.

This DEC applies to contracts for research and development activities of Third-Party Materials provided to the Contractors. The Requests for Proposals (RFPs) resulting in the contracts will include a notification that this DEC and the clause of HHSAR 352.227-11, Patent Rights-Exceptional Circumstances (Sept 2014) will apply to the contract.

Division of Translational Research

Application of HHSAR 352.227-14. Rights in Data-Exceptional Circumstances (Sept 2014)

The timing of data publication will need to be restricted to allow adequate time for patent applications to be filed on Subject Inventions. This is accomplished through the use of HHSAR 352.227-14, Rights in Data-Exceptional Circumstances (Sept 2014).

Specifically, although NIH encourages the publication of articles on research results, HHSAR 352.227-14 restricts the contractor’s right to use, release to others, reproduce, distribute and publish data produced or used by the contractor in the performance of the contract to allow adequate time, but no greater than 6 months, for the filing of patent applications and to protect data that will be submitted as part of a regulatory filing.

NINDS will reserve the right to coordinate the timing of data publication so that appropriate domestic and international patent applications may be filed.

Retention of Pre-existing Rights.

Contributors will retain all preexisting rights to Material in which the Contributor has a proprietary interest.

Summary

This DEC will promote the policy and objectives of the Bayh-Dole Act, 35 U.S.C. 200, et seq., to ensure that Subject Inventions made under the contracts and subcontracts (at all tiers) are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery; to ensure that the Government obtains sufficient rights in federally supported inventions to meet its needs; to protect the public against nonuse or unreasonable use of inventions; and ultimately to benefit the public health.

In order to ensure that small businesses, pharmaceutical companies, academia, and others will collaborate with the NIH in identifying, testing, developing, and commercializing new therapeutics in its pre-clinical and clinical development programs, I have determined that exceptional circumstances exist as described above, and that the Contractor's and subcontractor's rights (at all tiers) in subject inventions should be limited accordingly.

To execute this determination, the attached clauses of HHSAR3 52.227-11, Patent Rights-Exceptional Circumstances (Sept 2014) and HHSAR 327.227-14, Rights in Data- Exceptional Circumstances (Sept 2014) will be included in NINDS contracts for research and development activities of Third-Party Materials listed in Attachment 3. The standard clause at FAR 52.227-11 shall be applicable to Class 2 and 3 subject inventions not covered by this DEC. No alternative to this DEC will better ensure the Contributor's ability to promote the commercialization, and, therefore, public availability of these inventions without unduly encumbering future research and discovery by the contractor.

Division of Translational Research

Summary and Approval

The NIH wishes to facilitate the success of the BPN-Biologics expansion, HEAL-PTDP, and URGenT programs to address the public health need for new therapeutics to address pain and neurological-related disorders. This DEC will promote the policy and objectives of the Bayh-Dole Act to ensure that Subject Inventions made under the contract) and subcontracts (at all tiers) are used in a manner to promote free competition and enterprise without unduly encumbering future discovery and development; to ensure that the Government obtains sufficient rights in federally supported inventions to meet its needs;

to protect the public against nonuse or unreasonable use of inventions; and ultimately to benefit the public health. Accordingly, I approve this Determination of Exceptional Circumstances and the attached deviated clauses for use in the Biologics Manufacturing and Nonclinical Support Services contracts at all tiers.

Date

Attachments:

Attachment No. 1a HHSAR 352.227-11 Patent Rights-Exceptional Circumstances Attachment No. 1b HHSAR 352.227-14 Rights in Data-Exceptional Circumstances

Lawrence A.

Tabak -S

Digitally signed by Lawrence A. Tabak -S Date: 2021.10.14 10:58:33 -04'00'

Attachment 1

352.227-11 Patent Rights—Exceptional Circumstances.

As prescribed in HHSAR 327.303, the Contracting Officer shall insert the following clause:

Patent Rights—Exceptional Circumstances (Sept 2014)

This clause applies to all Contractor and subcontractor (at all tiers) Subject Inventions.

(a) Definitions. As used in this clause—

Agency means the Agency of the U.S. Department of Health and Human Services that is entering into this contract.

Class 1 Subject Invention means a Subject Invention described and defined in the DEC that will be assigned to a third party assignee, or assigned as directed by the Agency.

Class 2 Subject Invention means a Subject Invention described and defined in the DEC.

Class 3 Subject Invention means a Subject Invention that does not fall into Class 1 or Class 2 as defined in this clause.

DEC means the Determination of Exceptional Circumstances signed by [insert approving official] on [insert date] and titled “Preclinical Screening Platform for Pain (PSPP) program.”

Invention means any invention or discovery, which is or may be patentable or otherwise protectable under Title 35 of United States Code, or any novel variety of plant that is or may be protectable under the Plant Variety Protection Act (7 U.S.C. 2321, et seq.)

Made means: When used in relation to any invention other than a plant variety, the conception or first actual reduction to practice of such invention; or when used in relation to a plant variety, that the Contractor has at least tentatively determined that the variety has been reproduced with recognized characteristics.

Material means any proprietary material, method, product, composition, compound, or device, whether patented or unpatented, which is provided to the Contractor under this contract.

Nonprofit organization means a university or other institution of higher education or an organization of the type described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from taxation under section 501(a) of the Internal Revenue Code (26 U.S.C. 501(a)) or any nonprofit scientific or educational organization qualified under a state nonprofit organization statute.

Practical application means to manufacture, in the case of a composition or product; to practice, in the case of a process or method, or to operate, in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and that its benefits are, to the extent permitted by law or Government regulations, available to the public on reasonable terms.

Small business firm means a small business concern as defined at section 2 of Public Law 85-536 (15 U.S.C. 632) and implementing regulations of the Administrator of the Small Business Administration. For the purpose of this clause, the size standards for small business concerns involved in Government procurement and subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, will be used.

Subject Invention means any invention of the Contractor made in the performance of work under this contract.

Third party assignee means any entity or organization that may, as described in the DEC, be assigned Class 1 inventions.

(b) Allocation of principal rights. (1) Retention of pre-existing rights. Third party assignees shall retain all preexisting rights to Material in which the Third party assignee has a proprietary interest.

(2) Allocation of Subject Invention rights. (i) Disposition of Class 1 Subject Inventions. (A) Assignment to the Third party assignee or as directed by the Agency. The Contractor shall assign to the Third party assignee designated by the Agency the entire right, title, and interest throughout the world to each Subject Invention, or otherwise dispose of or transfer those rights as directed by the Agency, except to the extent that rights are retained by the Contractor under paragraph (b)(3) of this clause. Any such assignment or other disposition or transfer of rights will be subject to a nonexclusive, nontransferable, irrevocable, paid-up license to the U.S. Government to practice or have practiced the Subject Invention for or on behalf of the U.S. throughout the world. Any assignment shall additionally be subject to the “March-in rights” of 35 U.S.C. 203. If the Contractor is a U.S. nonprofit organization it may retain a royalty free, nonexclusive, nontransferable license to practice the invention for all nonprofit research including for educational purposes, and to permit other U.S. nonprofit organizations to do so.

(B) [Reserved]

(ii) Disposition of Class 2 and 3 Subject Inventions. Class 2 Subject Inventions shall be governed by FAR clause 52.227-11, Patent Rights-Ownership (December 2007) (incorporated herein by reference). However, the Contractor shall grant a license in the Class 2 Subject Inventions to the provider of the Material or other party designated by the Agency as set forth in Alternate I.

(iii) Class 3 Subject Inventions shall be governed by FAR clause 52.227-11, Patent Rights- Ownership by the Contractor (December 2007) (previously incorporated herein by reference).

(3) Greater Rights Determinations. The Contractor, or an employee-inventor after consultation by the Agency with the Contractor, may request greater rights than are provided in paragraph (b)(1) of this clause in accordance with the procedures of FAR paragraph 27.304-1(c). In addition to the considerations set forth in paragraph 27.304-1(c), the Agency may consider whether granting the requested greater rights will interfere with rights of the Government or any Third party assignee or otherwise impede the ability of the Government or the Third party assignee to, for example, develop and commercialize new compounds, dosage forms, therapies, preventative measures, technologies, or other approaches with potential for the diagnosis, prognosis, prevention, and treatment of human diseases.

A request for a determination of whether the Contractor or the employee-inventor is entitled to retain such greater rights must be submitted to the Agency Contracting Officer at the time of the first disclosure of the invention pursuant to paragraph (c)(1) of this clause, or not later than 8 months thereafter, unless a longer period is authorized in writing by the Contracting Officer for good cause shown in writing by the Contractor. Each determination of greater rights under this contract shall be subject to paragraph (c) of the FAR clause at 52.227-13 (incorporated herein by reference), and to any reservations and conditions deemed to be appropriate by the Agency such as the requirement to assign or exclusively license the rights to Subject Inventions to the Third party assignee.

A determination by the Agency denying a request by the Contractor for greater rights in a Subject Invention may be appealed within 30 days of the date the Contractor is notified of the determination to an Agency official at a level above the individual who made the determination. If greater rights are granted, the Contractor must file a patent application on the invention. Upon request, the Contractor shall provide the filing date, serial number and title, a copy of the patent application (including an English-language version if filed in a language other than English), and patent number and issue date for any Subject Invention in any country for which the Contractor has retained title. Upon request, the Contractor shall furnish the Government an irrevocable power to inspect and make copies of the patent application file.

(c) Invention disclosure by Contractor. The Contractor shall disclose in writing each Subject Invention to the Agency Contracting Officer and to the Director, Division of Extramural Inventions and Technology Resources (DEITR), if directed by the Contracting Officer, as provided in paragraph

(j) of this clause within 2 months after the inventor discloses it in writing to Contractor personnel responsible for patent matters. The disclosure to the Agency Contracting Officer shall be in the form of a written report and shall identify the contract under which the invention was Made and all inventors. It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological, or electrical characteristics of the invention. The disclosure shall also identify any publication, on sale (offer for sale), or public use of the invention and whether a manuscript describing the invention has been submitted for publication, and if so, whether it has been accepted for publication at the time of disclosure.

In addition, after disclosure to the Agency, the Contractor will promptly notify the Contracting Officer and DEITR of the acceptance of any manuscript describing the invention for publication or of any on sale or public use planned by the Contractor. If the Contractor assigns a Subject Invention to the Third party assignee, then the Contractor and its employee inventors shall assist the Third party assignee in securing patent protection. All costs of securing the patent, including the cost of the Contractor's assistance, are at the Third party's expense. Any assistance provided by the Contractor and its employee inventors to the Third party assignee or other costs incurred in securing patent protection shall be solely at the Third party's expense and not billable to the contract.

(d) Contractor action to protect the Third party assignee's and the Government's interest. (1) The Contractor agrees to execute or to have executed and promptly deliver to the Agency all instruments necessary to: Establish or confirm the rights the Government has throughout the world in Subject Inventions pursuant to paragraph (b) of this clause; convey title to a Third party assignee in accordance with paragraph (b) of this clause; and enable the Third party assignee to obtain patent protection throughout the world in that Subject Invention.

(2) The Contractor agrees to require, by written agreement, its employees, other than clerical and nontechnical employees, to disclose promptly in writing to personnel identified as responsible for the administration of patent matters and in a format suggested by the Contractor, each Subject Invention “Made” under contract in order that the Contractor can comply with the disclosure provisions of paragraph (c) of this clause, and to execute all papers necessary to file patent applications on Subject Inventions and to establish the Government's rights or a Third party assignee's rights in the Subject Inventions. This disclosure format should require, as a minimum, the information required by subparagraph (c)(1) of this clause. The Contractor shall instruct such employees, through employee agreements or other suitable educational programs, on the importance of reporting inventions in sufficient time to permit the filing of patent applications prior to U.S. or foreign statutory bars.

(3) If the Contractor is granted greater rights, the Contractor agrees to include, within the specification of any United States non-provisional patent application it files, and any patent issuing thereon, covering a Subject Invention the following statement: “This invention was made with Government support under (identify the Contract) awarded by (identify the specific Agency). The Government has certain rights in the invention.”

(4) The Contractor agrees to provide a final invention statement and certification prior to the closeout of the contract listing all Subject Inventions or stating that there were none.

(e) Subcontracts. (1) The Contractor will include this clause in all subcontracts, regardless of tier, for experimental, developmental, or research work. At all tiers, the clause must be modified to identify the parties as follows: References to the Government are not changed, and the subcontractor has all rights and obligations of the Contractor in the clause. The Contractor will not, as part of the consideration for awarding the contract, obtain rights in the subcontractor's Subject Inventions.

(2) In subcontracts, at any tier, the Agency, the subcontractor, and the Contractor agree that the mutual obligations of the parties created by this clause constitute a contract between the subcontractor and the Agency with respect to the matters covered by the clause; provided, however, that nothing in this paragraph is intended to confer any jurisdiction under the Contract Disputes Act in connection with proceedings under paragraph (c)(1)(ii) of FAR clause 52.227-13.

(f) Reporting on utilization of Subject Inventions in the event greater rights are granted to the Contractor. The Contractor agrees to submit, on request, periodic reports no more frequently than annually on the utilization of a Subject Invention or on efforts at obtaining such utilization that are being made by the Contractor or its licensees or assignees when a request under subparagraph b.3.

has been granted by the Agency. Such reports shall include information regarding the status of development, date of first commercial sale or use, gross royalties received by the Contractor, and such other data and information as the Agency may reasonably specify. The Contractor also agrees to provide additional reports as may be requested by the Agency in connection with any march-in proceeding undertaken by the Agency in accordance with paragraph (h) of this clause. As required by 35 U.S.C. 202(c)(5), the Agency agrees it will not disclose such information to persons outside the Government without permission of the Contractor.

(g) Preference for United States industry in the event greater rights are granted to the Contractor.

Notwithstanding any other provision of this clause, the Contractor agrees that neither it nor any assignee will grant to any person the exclusive right to use or sell any Subject Invention in the United States unless such person agrees that any product embodying the Subject Invention or produced through the use of the Subject Invention will be manufactured substantially in the United States.

However, in individual cases, the requirement for such an agreement may be waived by the Agency upon a showing by the Contractor or its 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 or that under the circumstances domestic manufacture is not commercially feasible.

(h) March-in rights in the event greater rights are granted to the Contractor. The Contractor acknowledges that, with respect to any Subject Invention in which it has acquired ownership through the exercise of the rights specified in paragraph (b)(3) of this clause, the Agency has the right to require licensing pursuant to 35 U.S.C. 203 and 210(c), and in accordance with the procedures in 37 CFR 401.6 and any supplemental regulations of Agency in effect on the date of contract award.

(i) Special provisions for contracts with nonprofit organizations in the event greater rights are granted to the Contractor. If the Contractor is a nonprofit organization, it shall:

(1) Not assign rights to a Subject Invention in the United States without the written approval of the Agency, except where an assignment is made to an organization that has as one of its primary functions the management of inventions, provided that the assignee shall be subject to the same provisions as the Contractor;

(2) Share royalties collected on a Subject Invention with the inventor, including Federal employee co-inventors (but through their Agency if the Agency deems it appropriate) when the Subject Invention is assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;

(3) Use the balance of any royalties or income earned by the Contractor with respect to Subject Inventions, after payment of expenses (including payments to inventors) incidental to the administration of Subject Inventions for the support of scientific research or education;

(4) Make efforts that are reasonable under the circumstances to attract licensees of Subject Inventions that are small business concerns, and give a preference to a small business concern when licensing a Subject Invention if the Contractor determines that the small business concern has a plan or proposal for marketing the invention which, if executed, is equally as likely to bring the invention to practical application as any plans or proposals from applicants that are not small business concerns; provided, that the Contractor is also satisfied that the small business concern has the capability and resources to carry out its plan or proposal. The decision whether to give a preference in any specific case will be at the discretion of the Contractor; and

(5) Allow the Secretary of Commerce to review the Contractor's licensing program and decisions regarding small business applicants, and negotiate changes to its licensing policies, procedures, or practices with the Secretary of Commerce when the Secretary's review discloses that the Contractor could take reasonable steps to more effectively implement the requirements of paragraph (i)(4) of this clause.

(j) Communications. All invention disclosures and requests for greater rights shall be sent to the Agency Contracting Officer, as directed by the Contracting Officer. Additionally, a copy of all disclosures, confirmatory licenses to the Government, face page of the patent applications, waivers and other routine communications under this funding agreement at all tiers must be sent to:

National Institutes of Health Office of Acquisitions, NIDA NINDS Section Contracts Management Branch, Red 6001 Executive Blvd., Room 3172 Bethesda, Maryland 20892

Agency Invention Reporting Web site: https://public.era.nih.gov/iedison.

Alternate I (Sept 2014). As prescribed in 327.303, the license to Class 2 inventions recited in 352.227-11(b)(2)(a) is as follows:

Class 2 Subject Inventions shall be governed by FAR clause 52.227-11, Patent Rights-Ownership (December 2007) (incorporated herein by reference). However, the Contractor shall grant a license in the Class 2 Subject Inventions to the provider of the Material or other party designated by the Agency as set forth in Alternate I.

(End of clause)

Attachment 2

352.227-14 Rights in Data—Exceptional Circumstances.

As prescribed in HHSAR 327.409, insert the following clause with any appropriate alternates:

Rights in Data—Exceptional Circumstances (Sept 2014)

(a) Definitions. As used in this clause—Definitions may be added or modified in paragraph (a) as applicable.

Computer database or database means a collection of recorded information in a form capable of, and for the purpose of, being stored in, processed, and operated on by a computer. The term does not include computer software.

Computer software—(i) Means (A) Computer programs that comprise a series of instructions, rules, routines, or statements, regardless of the media in which recorded, that allow or cause a computer to perform a specific operation or series of operations; and

(B) Recorded information comprising source code listings, design details, algorithms, processes, flow charts, formulas, and related material that would enable the computer program to be produced, created, or compiled.

(ii) Does not include computer databases or computer software documentation.

Computer software documentation means owner's manuals, user's manuals, installation instructions, operating instructions, and other similar items, regardless of storage medium, that explain the capabilities of the computer software or provide instructions for using the software.

Data means recorded information, regardless of form or the media on which it may be recorded. The term includes technical data and computer software. The term does not include information incidental to contract administration, such as financial, administrative, cost or pricing, or management information.

Form, fit, and function data means data relating to items, components, or processes that are sufficient to enable physical and functional interchangeability, and data identifying source, size, configuration, mating and attachment characteristics, functional characteristics, and performance requirements. For computer software it means data identifying source, functional characteristics, and performance requirements but specifically excludes the source code, algorithms, processes, formulas, and flow charts of the software.

Limited rights means the rights of the Government in limited rights data as set forth in the Limited Rights Notice in Alternate II paragraph (g)(3) if included in this clause. “Limited rights data” means data, other than computer software, that embody trade secrets or are commercial or financial and confidential or privileged, to the extent that such data pertain to items, components, or processes developed at private expense, including minor modifications.

Restricted computer software means computer software developed at private expense and that is a trade secret, is commercial or financial and confidential or privileged, or is copyrighted computer software, including minor modifications of the computer software.

Restricted rights, as used in this clause, means the rights of the Government in restricted computer software, as set forth in a Restricted Rights Notice of Alternate III paragraph (g)(4) if included in this clause, or as otherwise may be provided in a collateral agreement incorporated in and made part of this contract, including minor modifications of such computer software.

Technical data means recorded information (regardless of the form or method of the recording) of a scientific or technical nature (including computer databases and computer software documentation).

This term does not include computer software or financial, administrative, cost or pricing, or management data or other information incidental to contract administration. The term includes recorded information of a scientific or technical nature that is included in computer databases (See 41 U.S.C. 403(8)).

Unlimited rights means the rights of the Government to use, disclose, reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, in any manner and for any purpose, and to have or permit others to do so.

(b) Allocation of rights. (1) Except as provided in paragraph (c) of this clause, the Government shall have unlimited rights in—

(i) Data first produced in the performance of this contract;

(ii) Form, fit, and function data delivered under this contract;

(iii) Data delivered under this contract (except for restricted computer software) that constitute manuals or instructional and training material for installation, operation, or routine maintenance and repair of items, components, or processes delivered or furnished for use under this contract; and

(iv) All other data delivered under this contract unless provided otherwise for limited rights data or restricted computer software in accordance with paragraph (g) of this clause.

(2) The Contractor shall have the right to—

(i) Assert copyright in data first produced in the performance of this contract to the extent provided in paragraph (c)(1) of this clause;

(ii) Use, release to others, reproduce, distribute, or publish any data first produced or specifically used by the Contractor in the performance of this contract, unless provided otherwise in paragraph

(d) of this clause;

(iii) Substantiate the use of, add, or correct limited rights, restricted rights, or copyright notices and to take other appropriate action, in accordance with paragraphs (e) and (f) of this clause; and

(iv) Protect from unauthorized disclosure and use those data that are limited rights data or restricted computer software to the extent provided in paragraph (g) of this clause.

(c) Copyright—(1) Data first produced in the performance of this contract. (i) Unless provided otherwise in paragraph (d) of this clause, the Contractor may, without prior approval of the Contracting Officer, assert copyright in scientific and technical articles based on or containing data first produced in the performance of this contract and published in academic, technical or professional journals, symposia proceedings, or similar works. The prior, express written permission of the Contracting Officer is required to assert copyright in all other data first produced in the performance of this contract.

(ii) When authorized to assert copyright to the data, the Contractor shall affix the applicable copyright notices of 17 U.S.C. 401 or 402, and an acknowledgment of Government sponsorship (including contract number).

(iii) For data other than computer software, the Contractor grants to the Government and others acting on its behalf, a paid-up, nonexclusive, irrevocable, worldwide license in such copyrighted data to reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly by or on behalf of the Government. For computer software, the Contractor grants to the Government, and others acting on its behalf, a paid-up, nonexclusive, irrevocable, worldwide license in such copyrighted computer software to reproduce, prepare derivative works, and perform publicly and display publicly (but not to distribute copies to the public) by or on behalf of the Government.

(2) Data not first produced in the performance of this contract. The Contractor shall not, without the prior written permission of the Contracting Officer, incorporate in data delivered under this contract any data not first produced in the performance of this contract unless the Contractor—

(i) Identifies the data; and

(ii) Grants to the Government, or acquires on its behalf, a license of the same scope as set forth in paragraph (c)(1) of this clause or, if such data are restricted computer software, the Government shall acquire a copyright license as set forth in paragraph (g)(4) of this clause (if included in this contract) or as otherwise provided in a collateral agreement incorporated in or made part of this contract.

(3) Removal of copyright notices. The Government will not remove any authorized copyright notices placed on data pursuant to this paragraph (c), and will include such notices on all reproductions of the data.

(d) Release, publication, and use of data. The Contractor shall have the right to use, release to others, reproduce, distribute, or publish any data first produced or specifically used by the Contractor in the performance of this contract, except—

(1) As prohibited by Federal law or regulation (e.g., export control or national security laws or regulations);

(2) As expressly set forth in this contract; or

(3) If the Contractor receives or is given access to data necessary for the performance of this contract that contain restrictive markings, the Contractor shall treat the data in accordance with such markings unless specifically authorized otherwise in writing by the Contracting Officer or in the following paragraphs.

(4) In addition to any other provisions, set forth in this contract, the Contractor shall ensure that information concerning possible inventions made under this contract is not prematurely published thereby adversely affecting the ability to obtain patent protection on such inventions. Accordingly, the Contractor will provide the Contracting Officer a copy of any publication or other public disclosure relating to the work performed under this contract at least 30 days in advance of the disclosure.

Upon the Contracting Officer's request the Contractor agrees to delay the public disclosure of such data or publication of a specified paper for a reasonable time specified by the Contracting Officer, not to exceed 6 months, to allow for the filing of domestic and international patent applications in accordance with Clause 352.227-11, Patent Rights—Exceptional Circumstances (abbreviated month and year of Final Rule publication).

(5) Data on Material(s). The Contractor agrees that in accordance with paragraph (d)(2), proprietary data on Material(s) provided to the Contractor under or through this contract shall be used only for the purpose for which they were provided, including screening, evaluation or optimization and for no other purpose.

(6) Confidentiality. (i) The Contractor shall take all reasonable precautions to maintain Confidential Information as confidential, but no less than the steps Contractor takes to secure its own confidential information.

(ii) Contractor shall maintain Confidential Information as confidential unless specifically authorized otherwise in writing by the Contracting Officer. Confidential Information includes/does not include [Government may define confidential information here.]

(e) Unauthorized marking of data. (1) Notwithstanding any other provisions of this contract concerning inspection or acceptance, if any data delivered under this contract are marked with the notices specified in paragraph (g)(3) or (4) of this clause (if those alternate paragraphs are included in this clause), and use of the notices is not authorized by this clause, or if the data bears any other restrictive or limiting markings not authorized by this contract, the Contracting Officer may cancel or ignore the markings. However, pursuant to 41 U.S.C. 253d, the following procedures shall apply prior to canceling or ignoring the markings.

(i) The Contracting Officer will make written inquiry to the Contractor affording the Contractor 60 days from receipt of the inquiry to provide written justification to substantiate the propriety of the markings;

(ii) If the Contractor fails to respond or fails to provide written justification to substantiate the propriety of the markings within the 60-day period (or a longer time approved in writing by the Contracting Officer for good cause shown), the Government shall have the right to cancel or ignore the markings at any time after said period and the data will no longer be made subject to any disclosure prohibitions.

(iii) If the Contractor provides written justification to substantiate the propriety of the markings within the period set in paragraph (e)(1)(i) of this clause, the Contracting Officer will consider such written justification and determine whether or not the markings are to be cancelled or ignored. If the Contracting Officer determines that the markings are authorized, the Contractor will be so notified in writing. If the Contracting Officer determines, with concurrence of the Head of the Contracting Activity, that the markings are not authorized, the Contracting Officer will furnish the Contractor a written determination, which determination will become the final Agency decision regarding the appropriateness of the markings unless the Contractor files suit in a court of competent jurisdiction within 90 days of receipt of the Contracting Officer's decision. The Government will continue to abide by the markings under this paragraph (e)(1)(iii) until final resolution of the matter either by the Contracting Officer's determination becoming final (in which instance the Government will thereafter have the right to cancel or ignore the markings at any time and the data will no longer be made subject to any disclosure prohibitions), or by final disposition of the matter by court decision if suit is filed.

(2) The time limits in the procedures set forth in paragraph (e)(1) of this clause may be modified in accordance with Agency regulations implementing the Freedom of Information Act (5 U.S.C. 552) if necessary to respond to a request there under.

(3) Except to the extent the Government's action occurs as the result of final disposition of the matter by a court of competent jurisdiction, the Contractor is not precluded by this paragraph (e) from bringing a claim, in accordance with the Disputes clause of this contract, that may arise as the result of the Government removing or ignoring authorized markings on data delivered under this contract.

(f) Omitted or incorrect markings. (1) Data delivered to the Government without any restrictive markings shall be deemed to have been furnished with unlimited rights. The Government is not liable for the disclosure, use, or reproduction of such data.

(2) If the unmarked data has not been disclosed without restriction outside the Government, the Contractor may request, within 6 months (or a longer time approved by the Contracting Officer in writing for good cause shown) after delivery of the data, permission to have authorized notices placed on the data at the Contractor's expense. The Contracting Officer may agree to do so if the Contractor—

(i) Identifies the data to which the omitted notice is to be applied;

(ii) Demonstrates that the omission of the notice was inadvertent;

(iii) Establishes that the proposed notice is authorized; and

(iv) Acknowledges that the Government has no liability for the disclosure, use, or reproduction of any data made prior to the addition of the notice or resulting from the omission of the notice.

(3) If data has been marked with an incorrect notice, the Contracting Officer may—

(i) Permit correction of the notice at the Contractor's expense if the Contractor identifies the data and demonstrates that the correct notice is authorized; or

(ii) Correct any incorrect notices.

(g) Protection of limited rights data and restricted computer software. (1) The Contractor may withhold from delivery qualifying limited rights data or restricted computer software that are not data identified in paragraphs (b)(1)(i) through (iii) of this clause. As a condition to this withholding, the Contractor shall—

(i) Identify the data being withheld; and

(ii) Furnish form, fit, and function data instead.

(2) Limited rights data that are formatted as a computer database for delivery to the Government shall be treated as limited rights data and not restricted computer software.

(3) [Reserved]

(h) Subcontracting. The Contractor shall obtain from its subcontractors all data and rights therein necessary to fulfill the Contractor's obligations to the Government under this…