I think I underdstand what has happened. What the company has done is taken
standard practice of substituting their name for the government's in passing
through clauses. Everyone does this and, for many clauses, it is appropriate.
What the company has also done is inappropriately substitute itself for the
government in certain places. For instance, if you were to pass through the FAR
clause entitled Inspection by the Comptroller General, you would not sustitute
your name for the government because of the nature of that clause and the fact
you have no legal right to put yourself in the place of the Comptroller General,
nor does you have the legal authority mentioned in that clause that is reserved
for the Comptroller General.

With regard to patent rights, a simple substitution of names takes away the
royalty-free (etc) license reserved for the government and gives it to the
company. The company has no legal right whatsoever to do that or to insert
itself into that clause in any way, shape or manner. This is not because of FAR
provisions, but because the law reserves rights specifically for the government.

What you need to do is talk to the company and inform them that they have gone
beyond the scope of the regulation and law. The patent relationship is between
the government and the subcontractor in terms of rights. The prime contractor
has no rights it can reserve for itself unless an invention is jointly held
between the prime contractor and subcontractor (based solely on the fact that
their truly are joint inventors).  You can negotiate license rights to the
company, but if you give the company the same rights as reserved for the
government, you may very well be severely diminishing your ability to negotiate
licenses with another company, and certainly so if you wish to make any oither
licenses royalty-bearing.

In terms of the Rights in Data clause, you might be willing to negotiate a
royalty-free, non-exclusive license to the company, particularly with regard to
the data/information included in reports made to the company. You need to be
careful about the company asserting its rights to background or pre-existing
data/information as that may have been develioped with other sponsored funds,
and you want to be sure any license terms you negotiate do not violate the terms
of other pre-existing  agremeents with others.

Steve

"Rosemary K. Alexander" wrote:

> Dear FAR / DEAR guru's,
>
> I would appreciate your help and further ask that if you know of some other
> listserv where my question is most likely to find a definitive answer,
> please forward this posting to that listserv.  (In fact, please also share
> with me other listservs to which I should be subscribed.)
>
> I  have a subcontract I am negotiating with an independent nonprofit
> organization (non-university), "WXYZ", who has a R and D subsidiary. WXYZ
> received a DOE contract and wishes to subcontract to our university a
> portion of the work.  Portions of our work are potentially patentable. Not
> surprisingly, the subcontract contains a thick general provisions section of
> the flow-through clauses.  Company WXYZ has incorporated and amended these
> clauses by substituting "WXYZ" for, or adding "and WXYZ" to, the words
> "government", "contracting officer", "patent counsel" and "DOE" (depending
> upon the specific clause).  Specifically of concern to CWRU are the
> incorporated clauses dealing with patent rights and rights in data (DEAR
> 952.227-11, FAR 52.227-14, FAR 52.227-17, FAR 52.227-23 and FAR 52.227-23).
>
> CWRU has no problem giving the government its rights as dictated by
> Bayh-Dole, but we have a problem giving up rights not apparantly specified
> by Bayh-Dole.  In addition, it seems that substituting "WXYZ" for
> "government" takes away rights from the government as well.
>
> I have two questions:
>
> 1.  Where in FAR and / or DEAR are the rights to make these substitutions
> given to these companies?
>
> 2.  How have other universities dealt with these clauses?
>
> Thanks so much for your help.
>
> Rosemary
> ****************************************
> Rosemary K. Alexander
> Assistant Director, Office of Research Administration
> Case Western Reserve University
> 10900 Euclid Avenue
> Cleveland, Ohio 44106-7015
>
> xxxxxx@po.cwru.edu
> Phone: 216-368-2008
> Fax:     216-368-4679
>
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--
Stephen Erickson, Director
Office of Research Administration
Boston College
McGuinn Hall 600
Chestnut Hill, MA 02467
On-Campus FAX  2-0747
Fax to my computer:  413-895-8328

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