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Patents and Licensing

Both the Department of Interior and the USGS encourage innovative activity by their employees and promote the commercialization of employee inventions through patents (http://www.usgs.gov/tech-transfer/patent.html) and licensing of intellectual property. Intellectual property is intangible property, the rights to which can be bought and sold, leased or rented, or otherwise transferred between parties in much the same way that real property or other personal property can be transferred.

A USGS researcher who has invented something new should make every effort to protect his or her invention through patenting. Patents can be used to demonstrate success in your field of research, may lead to increased funding for your research, and may produce royalty income, which can also serve to fund future research. The inventor directly benefits, provided the patent or patent application can be licensed, by receiving the first $2,000 of royalty income each year, plus a minimum of 15 percent of the additional royalties collected by the Government up to a maximum of $150,000 per year. Under current USGS policy inventors receive 33.3 percent. In addition, regardless of whether their inventions are licensed, inventors are awarded $500 (before taxes) when a patent application describing their invention is filed. If the invention is patented, they receive an additional $800 (before taxes).

Reporting and Patenting Inventions

Policy and procedures for reporting inventions and seeking patents are covered in the DOI Manual Chapter 453.1 and the USGS Manual Chapter 453.1. (http://www.usgs.gov/usgs-manual/t408.html) The Technology Transfer Handbook also outlines the procedures.

Inventors should report their inventions to their Discipline using form DI-1215, “Report of Invention.” The Discipline reviews the report, determines if a patent is worth pursuing, and if so, forwards the report, with a memorandum recommending patenting, to the Administrative Policy and Services, Office of Policy and Analysis, which manages the patent application process. The Office of Policy and Analysis evaluates the invention for patentability and commerciality. If the invention seems patentable and has commercial potential, a formal patentability search will be done. If the result is positive, preparation of a patent application is authorized. The patenting process generally takes between 1 and 3 years from the creation of the report to patent issuance.

Protecting Patent Rights

The key to protecting an inventor's valuable patent rights is to avoid the unprotected disclosure of the invention at least until a patent application has been filed. Disclosure can occur either through practical use (for example, a demonstration of a working prototype at a scientific meeting or to a private company or companies for any purpose) or publication (either written, visual or oral, to one or more persons not employed by the Federal Government, disclosing the important elements of the invention, and providing an adequate level of detail to enable one “skilled in the art” to both understand and be able to duplicate the invention). Inventors should enter into a non-disclosure agreement before making any substantive disclosures. Patenting and publishing patentable information should be done simultaneously; otherwise patent rights may be lost. If USGS is interested in pursuing foreign patent rights, then the patent application must be prepared and filed in the U.S. before publication. If patent rights within the U.S. only are desired, the patent application has to be prepared and filed within one year of first disclosure outside the Federal Government to a person “skilled in the art” to meet the statutory deadline. The patent process should start sufficiently early to beat this one-year deadline. Failure to file a patent application before the one-year deadline will result in the loss of the ability to patent that invention. If this one-year deadline is at hand and insufficient time remains to prepare and file a formal (non-provisional) application, it may still be possible to preserve patent rights by filing a “provisional” patent application (provided the one-year statutory limit is met) and, later, filing a formal (non-provisional) application.

Non-Disclosure Agreement

When patenting is being considered and information needs to be provided to an individual outside the Government, those who are asked to either evaluate the technology or read the manuscript must first execute a nondisclosure agreement (NDA) or else the statutory one-year period is triggered. In other words, the execution of a nondisclosure agreement must precede making an "enabling" disclosure, which provides information that allows a person skilled in the appropriate art to duplicate the invention. Disclosures of a general, non-enabling, nature do not trigger the start of the one-year clock and do not require execution of an NDA.

Not to Patent, by Choice or Necessity

If the invention has a low commercial potential or the time necessary to obtain a patent exceeds the anticipated period of “useful life” in the field of the invention, obtaining a patent makes little sense. Likewise, pursuit of a patent for an invention a year or more after unprotected disclosure would be rejected since the Patent and Trademark Office would refuse to consider the invention for patenting.

Licenses

The Federal government can grant non-exclusive, exclusive, and partially exclusive licenses to companies interested in marketing, manufacturing, or using federally developed technology protected by a patent. These licenses are agreements between the government and the technology users that permit the licensees to make, have made, use, offer for sale, or sell a particular product or process.

Copyrights and Royalties

USGS and other Federal agency employees are ineligible for U.S. copyrights on their Government work products (see 17 USC 105). Therefore, when one or more USGS employees author a work in their USGS capacities, that work is unprotected by the U.S. copyright laws.

If a publisher desires to publish the work of one or more USGS employees (a Government work), an agreement should be written expressing the intent of the parties. That agreement should be reviewed by the AEI Office of Policy and Analysis. Such agreements should not provide for the receipt of “royalties” by USGS because USGS has no authority to keep payments characterized as royalties – they must be forwarded to the U.S. Treasury as miscellaneous receipts.

The only way any private publication-related funds may be retained is if the agreement with the publisher provides for the USGS “recoupment of expenses.” In that case, if payments made to USGS are so characterized, they may be kept (but not “royalties”).

Please direct all questions on patenting and licensing to:

Sharon Borland
Chief, Office of Policy and Analysis
Administration and Enterprise Information
703-648-6725
sborland@usgs.gov
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