Contractor Reporting Obligations under US Government Contracts:
A Trap for the Unwary
Nonprofit organizations and small businesses that enter into contracts with US federal government executive agencies such as the National Institutes of Health (gNIHh), the Centers for Disease Control and Prevention (the gCDCh), the National Aeronautics and Space Administration (NASA), the Federal Energy Regulatory Commission (FERC), the National Oceanic and Atmospheric Administration (NOAA), the National Institute of Standards and Technology (NIST), the US Agricultural Department (the gUSDAh), the Federal Aviation Administration (the gFAAh), and the US Department of Defense, (including the Air Force, Army, Marine Corps, and Navy) should realize that under the holding of a recent US case, failure to comply fully with contractual provisions may mean that contractors completely forfeit to the US federal government ownership of inventions made under the contracts.
In November 2004, the US Court of Appeals for the Federal Circuit (the gCAFCh) held in the Campbell Plastics case[P] that because a contractor with the US Army Chemical Research, Development, and Engineering Center (the gArmyh) failed to comply with contractual provisions requiring it to disclose inventions under a single form within two months after the inventor disclosed the invention to contractor personnel in charge of patent matters, the contractor had forfeited its right to the invention, and the US federal government could take title to it.
on the Contract and
gcthe Contractor will disclose each subject invention to the Federal agency within 2 months after the inventor discloses it in writing to Contractor personnel responsible for patent matters. The disclosure to the agency shall be in the form of a written report and shall identify the contract under which the invention was made and the inventor(s). It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological or electrical characteristics of the invention.[R]
(1) If the Contractor fails to disclose or elect title to the subject invention within the times specified in paragraph (c) of this clausec.[S]
The contract also required
3. History of
Although Mr. Campbell submitted a monthly progress report on June 6, 1994 that contained the phrase gEyelens Retaining System, Branson satisfied with Sonic Weld Concept – best under design restrictions,h and continued to report work on the sonic welding process in monthly progress reports in late 1994, Campbellfs final DD Form 882, submitted on September 15, 1994, did not list any inventions.
In August 1997,
Campbell argued that even though its disclosure to the
Army was not in the form of a DD Form 882, it had in fact disclosed all
technical aspects of the invention, as shown by a report prepared by the Army
and published in June 1997 that disclosed research conducted by the Army, and
made reference to sonic welded components in the mask. The Army admitted that
this report made an enabling disclosure of the invention.
5. The Armed Services Board of Contract Appeals Finding
The Armed Services Board of Contract Appeals held that
despite the fact that the Armyfs own June 1997 report provided an enabling
disclosure of the invention, and even though the Army did learn about the
invention when it reviewed the patent application for US national security
determination procedures, because Campbell had failed to perform its
contractual obligations to inform the Army of the invention,
6. The CAFC Decision
The CAFC upheld the Armed Services Board of Contract
Appeals finding, holding that
The CAFC found that the policy of requiring a single,
easily identifiable form on which to disclose inventions effectively protects the
federal governmentfs interest in retaining its rights to contractor inventions
is sound. Therefore, the contractual language gneeds to be strictly enforced.h As
a result, the CAFC held that
[Q] Federal Acquisition Regulation 52.227-11 is available here: http://www.acqnet.gov/far/current/pdf/FAR.book.pdf .
[R] F.A.R. 52.227-11(c) (1).
[S] F.A.R 52.227-11(d) (1).
[T] On January 30, 1998, the US Patent and
Trademark Office had allowed the Army to review the application under 35 USC
Sec. 181, a US Patent
[U] 35 U.S.C. Secs. 200-212.
[V] 35 U.S.C. Sec. 202 (c) (4).
[W] 35 U.S.C. Sec. 202 (c) (3).