1.  Review the Contract for Patents and Royalty Clauses:

    1.1.  Administer Patent and Royalty Requirements Under Non-Procurement Instruments:

        1.1.1.  There are three basic types of non-procurement instruments; grants, cooperative agreements, and other transactions.
        1.1.2.  Administrative Grants Officers (AGOs) and Administrative Agreements Officers (AAOs) shall administer the patent and royalty requirements for non-procurement instruments in accordance with the clauses set forth in 37 CFR 401. 

    1.2.  Upon initial receipt of a contract, the ACO shall review the contract for any patents or royalty clauses.  Applicable patents and royalty clauses are:

• FAR 52.227-9 Refund of Royalties
• FAR 52.227-11 Patent Rights--Ownership by the Contractor
• FAR 52.227-13 Patent Rights--Ownership by the Government
• DFARS 252.227-7038 Patent Rights--Ownership by the Contractor (Large Business)
• DFARS 252.227-7039 Patents--Reporting of subject inventions

    1.3.  MOCAS automatically generates an R9 02 code for contracts when the contract kind is 2 (Research & Development) in the Contract Data Record and/or if the Patents, Royalty, and Technical Data Required codes are either G (Patents only), Y (Technical data plus royalty and patents), R (Royalty only), T (Technical data), or W (Technical data plus patents) in the Provision Data Record.  The R9 02 code prompts MOCAS to generate a report in Reveal (MOCAS ACO Alert, Report UYCDO1).  The report is generated annually from the effective date of the contract until the contract moves to Section 2.  If for some reason the contract contains a patent clause and MOCAS does not automatically input the R9 02 code, the ACO shall input the code manually.

2.  Provide Formal/Informal Patent Instructions to the Contractor:  After identifying the contract patent requirements, the ACO shall contact the contractor to review the requirements.

    2.1.  If the contractor is not familiar with patent rights requirements, the ACO shall provide formal instructions on the reporting and disclosure requirements and other provisions of the various patent clauses through a Post-Award Orientation Conference (PAOC).
    2.2.  If no formal PAOC is held, the ACO shall send a patent rights orientation letter that explains the contractor's responsibilities under the clauses.   The patent rights orientation letter shall:

• inform the contractor/subcontractor that the contract/subcontract contains a Patent Rights Clause (letters to subcontractors should be addressed to/through their prime contractors);
• enclose a summary of the principal obligations imposed upon the contractor/subcontractor under the clause;
• request the name, title, address, and telephone number of the individual responsible for compliance with the clause requirements;
• inform contractors of their responsibility to obtain all reports and submissions from their subcontractors for forwarding to the PCO (Exception:  Affirmative reports and disclosures that the subcontractor wants withheld from the prime contractor may be submitted directly to the PCO).

    2.3.  For additional information on post-award orientation conferences, see the Contract Receipt and Review Instruction. 

3.  Provide Support to the Procuring Contracting Officer (PCO) and Patent Counsel:  Due to the specialized legal nature of the provisions of the patent rights clauses, the PCO may designate a patent counsel in the contract.

    3.1.  The ACO shall support the PCO and designated Patent Counsel in such areas as reviews, surveys, and audits of the contractor's procedures or records and by obtaining required documents or information from the contractor.
    3.2.  The ACO shall invite the PCO and designated Patent Counsel to the PAOC or copy them on the patent rights orientation letter.

4.  Process Patent Submissions:

    4.1.  The patent rights clauses require certain contractor reports and notifications which are forwarded by the ACO to the PCO.
    4.2.  FAR 52.227-11(c)--Patent Rights Ownership by the Contractor requires the contractor to:

        4.2.1.  Disclose in writing each subject invention to the Contracting Officer within 2 months after the inventor discloses it in writing to contractor personnel responsible for patent matters.
        4.2.2.  Elect in writing whether or not to retain ownership of any subject invention by notifying the Contracting Officer within 2 years of disclosure to the agency.
        4.2.3.  File either a provisional or a non-provisional patent application or a Plant Variety Protection Application on an elected subject invention within 1 year after election.

    4.3  FAR 52.227-13(e)(3)--Patent Rights--Ownership by the Government requires the contractor to:

        4.3.1.  Furnish interim reports every 12 months (or a longer period as may be specified by the Contracting Officer) from the date of the contract listing subject inventions during that period, and stating that all subject inventions have been disclosed.
        4.3.2.  Furnish a final report, within 3 months after completion of the contracted work, listing all subject inventions or stating that there were none, and listing all subcontracts at any tier containing a patent rights clause or stating that there were none.

    4.4.  DFARS 252.227-7038(c)--Patent Rights Ownership by the Contractor (Large Business) requires the contractor to:

        4.4.1.  Disclose, in writing, each subject invention to the Contracting Officer within 2 months after the inventor discloses in writing to contractor personnel responsible for patent matters, or within 6 months after the contractor first becomes aware that a subject invention has been made, whichever is first.
        4.4.2.  Elect in writing whether or not to retain ownership of any subject invention by notifying the Contracting Officer at the time of disclosure or within 8 months of disclosure, as to those countries (including the United States) in which the contractor will retain ownership.
        4.4.3.  File either a provisional or a nonprovisional patent application on an elected subject invention within 1 year after election provided that in all cases the application is filed prior to the end of any statutory period wherein valid patent protection can be obtained in the United States after a publication, on sale, or public use;

            4.4.3.1.  File a nonprovisional application within 10 months of the filing of any provisional application; and
            4.4.3.2.  File patent applications in additional countries or international patent offices within either 10 months of the first filed patent application (whether provisional or nonprovisional) or 6 months from the date the Commissioner of Patents grants permission to file foreign patent applications where such filing has been prohibited by a Secrecy Order.

    4.5.  DFARS 252.227-7039(c) Patents--Reporting of subject inventions requires the contractor to:

        4.5.1.  submit upon request, the filing date, serial number and title, a copy of the patent application and patent number, and issue data for any subject invention for which the contractor has retained title.

5.  Withhold Payments:

    5.1.  The ACO may withhold payments until a reserve not exceeding $50,000 or 5 percent of the contract amount, whichever is less, is set aside if the contractor does not comply with the requirements of the patent rights clauses of the contract (FAR 52.227-13 Patent Rights--Ownership by the Government or DFARS 252.227-7038 --Patent Rights Ownership by the Contractor (Large Business).
    5.2.  The ACO will not make final payment under a contract before the contractor delivers all disclosures of subject inventions, an acceptable final report, and all due confirmatory instructions. 
    5.3.  The ACO can withhold payments any time during contract performance if the contractor fails to establish procedures for identifying inventions and adhering to reporting requirements.

6.  Investigate Notices of Infringement:

    6.1.  Upon receipt of notification of any patent infringement claim, the ACO must promptly notify the PCO and DCMA Counsel, who will in turn, notify the appropriate Service Patent Counsel.
    6.2.  The ACO is responsible for conducting investigations of any such claims, if requested by the Service Patent Counsel.

7.  Administer the Reporting or Refund of Royalties:

    7.1.  FAR 52.227-9 Refund of Royalties, establishes procedures to pay the contractor royalties under the contract and recover royalties not paid by the contractor when the royalties were included in the contractor's fixed price.
    7.2.  The ACO must ensure royalty information required by FAR 52.227-9 Refund of Royalties is forwarded to the PCO/Patent Counsel prior to consenting to the placement of subcontracts for work to be performed in the US, its possessions, or Puerto Rico.
    7.3.  The ACO must ensure, prior to approving final payment, that the contractor has submitted its royalty report.

• DAWIA Certifications in accordance with position held
• ACO shall be warranted

• FAR 42.5 Post-Award Orientation
• FAR 52.227-9 Refund of Royalties
• FAR 52.227-11 Patent Rights--Ownership by the Contractor
• FAR 52.227-13 Patent Rights--Ownership by the Government
• DFARS 252.227-7038 Patent Rights--Ownership by the Contractor (Large Business)
• DFARS 252.227-7039 Patents--Reporting of subject inventions
• 37 CFR 401 Patents, Trademarks, and Copyrights

• Process Indicator/s:
  • TBD
• Workload Indicator/s:
  • TBD
• Resource Indicator/s:
  • TBD
• Supplier Indicator/s:
  • TBD

• PLAS Process code:  154

• MOCAS ACO Alert, Report UYCDO1
• DLAM 8000.3 MOCAS Users Manual for Contract Administration
• DD Form 882
• Defense Acquisition Portal
• Flowchart
• Patent Applications and Licenses