Technology TransferReporting Requirements for Federally Sponsored Inventions Need Revision Gao ID: RCED-99-242 August 12, 1999
Under the Patent and Trademark Laws Amendments of 1980, small businesses, nonprofit organizations, and certain contractors operating government-owned laboratories may retain title to and profit from the inventions they create under federally funded research projects. Executive Order 12591 extends these same privileges to large businesses. GAO was asked to study the government's rights to inventions under the 1980 act and Executive Order 12591. GAO found that federal agencies and their contractors and grantees are not complying with provisions on the disclosure, reporting, retention, and licensing of federally sponsored inventions under the regulations implementing the Patent and Trademark Laws Amendments of 1980 and Executive 12591. In addition, the government is not always aware of federally sponsored inventions to which it has royalty-free rights.
GAO noted that: (1) federal agencies and their contractors and grantees are not complying with provisions on the disclosure, reporting, retention, and licensing of federally sponsored inventions under the regulations implementing the Bayh-Dole Act and Executive Order 12591; (2) in GAO's review of more than 2,000 patents issued in calendar year 1997 as well as an Inspector General's draft report on 12 large grantees of the National Institutes of Health, GAO found that the databases for recording the government's royalty-free licenses are inaccurate, incomplete, and inconsistent and that some inventions are not being recorded at all; (3) as a result, the government is not always aware of federally sponsored inventions to which it has royalty-free rights; (4) few statistics were available on how federal agencies exercise their rights to federally sponsored inventions; (5) agency officials said the primary benefits of the royalty-free licenses are that the government can use the underlying research without concern about possible challenges that such use was unauthorized; and (6) the licenses normally would not be a means by which the government could lower its procurement costs by avoiding the payment of royalties, as royalties are not a factor in most federal procurements.Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.Director: Team: Phone: