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B-204687 1 (1981-10-16)

handle is hein.gao/gaobabjax0001 and id is 1 raw text is: 

                 COMPTROLLER GENERAL OF~ THE UNITED STATES
                          WASHINGTON D.C. 20548


5-2046a7                                    October 16, 1981



1he Lonorable Albert Core, jr*.
Ch~airm~an, SuItcoituittee on Investigation
   end Oversight
Com, -±Iittee on S3cience and Technology
Eouse of Representatives

Dear M'r. Chairftan:

     You have reauested GAO to undertake a leqal analysis of a
contract signed in '-.e 1931 bettween Pec-achusetts  Tnrdhsil
   a:ci nd- oechst Chemical Co -oeanv of t-lest 'Germany (FUo --dst) an?5
ti~e i--act of U!e Act azj-rove6 Decemoer 12, 1950, Public La:w c
Si6-517 , *-4 4tat . 301lS ( Act.) u hicl ainlfed the pa ten t az  re -
,1:ark laws, upon the contract. Since  10S receivez rore tnar~ ',130
m;illion, nor year in research funCoin-- from~ tihe lationa1 Institutes
otf ;iealth (~~,a possibility exists that Poccihst will :7!Ain
title, in violation. of the Act, to invontions that nave L 'cen
par tially func with ?ederal Collars.

     Section 6 of the Act addied sections 200 thrcuo-h 2:X.)-- to title
35, Unitei- States Code.  0Veferercus hercafter to sections zre to
tkitle 25, as a&er j-ded by the Act, unless otherwize cta)
3azic.3lly, tt~cse zections give norrcfit canztions r      s-I1
busiiner- firms a firsct right. of rciuzal to title in inventions
tIkoy Alave r-zadc und~er wfn.n  a-,rceioents withi Feder;A a- cncie'
(s cct io n , -2 IV(a)  2U 2( c(Z   ~iv e t Ite F'e d eraI a qCArc i es a r.o r,-
exclusive license to - rzctice zmn irve~.tirn to which the nono-rofit
orjanizations or sztall bu=siness firms elect to retain title,, (zac-
tion 202(c)(5)); restrict rnonorofit ora. iza tiors' assigm-,ir-t Of
rightz zni  granting of. licens~es in their inventions (scctior 2102(c)
(7))l oive to tihe Facderal agJencies 'rmarch-in ri-ihts*- to force
develijment or application of inventions not utilized (secticon
203);' Zr,1 i-andatfe2 a pref erence for United States industry in the
mtauf.acture of the inventions in certain circu.mrstances (section


     These requircl:ents are n.'ot self -executing;I they m~uat he
eff.ectuated with appropriate provisions ir. any funeing egrcerent
with, a sm-all busincss xfirs or nonprofit, orianization. section
202(c). --hile weoe     not reccived the areesert between
and -!G a nonprofit orgianization an defin.eJ in the Act, we
asurne thet the annual $,30 r'i3lion IT3 nrovins to -MI! is 6one
un, t-r' 'fundmrg arcernents as tllot ter.- is derflned in section
  2~ bthat iz-, t!rcuth -.rant5s, cr-ntracts:, or co-operative
agreenients for tpcrforrnance of reseerch.

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