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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: November 15, 2000

FROM: Barry McVay, CPCM

SUBJECT: Department of Energy Acquisition Regulation (DEAR); Patent Regulations Relating to Management and Operating Contracts

SOURCE: Federal Register, November 15, 2000, Vol. 65, No. 221, page 68932

AGENCIES: Department of Energy (DOE)

ACTION: Interim Final Rule

SYNOPSIS: DOE is amending the DEAR Part 927, Patents, Data, and Copyrights, and Part 970, DOE Management and Operating Contracts, to improve the patent coverage relating to management and operating (M&O) contracts.

EDITOR'S NOTE: The DEAR is available on the Internet at http://www.pr.doe/dear.html.

DATES: The interim final rule is effective November 15, 2000. Comments on the interim final rule should be submitted by January 16, 2001.

ADDRESSES: Comments (3 copies) should be addressed to Robert M. Webb, U.S. Department of Energy, Office of Procurement and Assistance Management, 1000 Independence Avenue, SW, Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: Robert M. Webb, 202-586-8264.

SUPPLEMENTAL INFORMATION: DOE last revised its patent regulations covering M&O contracts in 1995 by creating two patent rights clauses: DEAR 970.5204-71, Patent Rights -- Nonprofit Management and Operating Contractors, for nonprofit contractors; and DEAR 970.5204-72, Patent Rights -- Profit-Making Nonprofit Management and Operating Contractors, for profit-making contractors. It has become apparent that the clauses could be designed to deal with the realities of performance under DOE M&O contracts more effectively. Also, the clauses needed to be modified to reflect additional statutory requirements and the special treatment of exceptional circumstances in defense related activities. This interim final rule revises the clauses to accomplish these aims, and rewrites the clauses in "plain language."

This interim final rule replaces those two clauses with three clauses: DEAR 970.5204-101, Patent Rights -- Management and Operating Contracts, Nonprofit Organization or Small Business Firm Contractor, for nonprofit contractors or small business firms with technology transfer authority; DEAR 970.5204-102, Patent Rights -- Management and Operating Contracts, For-Profit Contractor, Non-Technology Transfer, for profit-making contractors where their contracts do not provide for technology transfer responsibilities, or the contract is for the operation of a DOE facility primarily dedicated to naval nuclear propulsion or weapons related programs; and DEAR 970.5204-103, Patent Rights -- Management and Operating Contracts, For-Profit Contractor, Advance Class Waiver, for large profit-making contractors where their contracts provide for technology transfer activities.



In addition, this interim final rule adds the following to DEAR Part 970:

Additionally, the prescriptions for patent-related provisions and clauses are added as DEAR 970.2702, Patent Related Clauses (replacing DEAR 970.2704, Patent Clauses); DEAR 970.2701, General, is rewritten in "plain language"; DEAR 970.2703, Purposes of Patent Rights Clauses, replaces DEAR 970.2703, Technology Transfer; and DEAR 970.2704, Patent Rights Clause Provisions for Management and Operating Contractors, provides additional guidance on the use of the M&O patent rights provisions and clauses.

Finally, a paragraph (c) is added DEAR 927.303, Contract Clauses, to make sure that the facilities license contained in the three M&O patent clauses is used in appropriate contracts not subject to DEAR Part 970 ("any contract that has as a purpose the design, construction, operation, or management integration of a collection of contracts for the same purpose, of a Government-owned research, development, demonstration or production facility...").

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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