81 FR 41468 - Technology Innovation-Personnel Exchanges

DEPARTMENT OF COMMERCE
National Institute of Standards and Technology

Federal Register Volume 81, Issue 123 (June 27, 2016)

Page Range		41468-41472
FR Document		2016-14723
NIST is seeking comments on proposed regulations intended to foster the exchange of scientific and technical personnel among academia, industry, including particularly small businesses, and Federal laboratories. Such exchanges are an effective means for accelerating the transfer of Federal laboratory technology to benefit the United States economy. An objective of this rulemaking is to clarify the appropriate use of Cooperative Research and Development Agreement authority by a Federal laboratory for personnel exchanges where the Federal laboratory has an existing relationship with the potential partner through another legal mechanism, as well as in the context of joint research projects or the development of existing laboratory technology, and through use of the General Services Administration's Presidential Innovation Fellows program for Federal laboratory Entrepreneur-in-Residence programs. Another objective of this rulemaking is to remove outdated regulations addressing the licensing of inventions owned by the Department of Commerce. When the comment period is concluded, NIST will analyze the comments received, incorporate comments as appropriate, and publish a final regulation.
Federal Register, Volume 81 Issue 123 (Monday, June 27, 2016)
[Federal Register Volume 81, Number 123 (Monday, June 27, 2016)]
[Proposed Rules]
[Pages 41468-41472]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-14723]


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DEPARTMENT OF COMMERCE

National Institutes of Standards and Technology

15 CFR Part 17

[Docket No.: 160311228-6228-01]
RIN 0693-AB62


Technology Innovation--Personnel Exchanges

AGENCY: National Institute of Standards and Technology (NIST), United 
States Department of Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: NIST is seeking comments on proposed regulations intended to 
foster the exchange of scientific and technical personnel among 
academia, industry, including particularly small businesses, and 
Federal laboratories. Such exchanges are an effective means for 
accelerating the transfer of Federal laboratory technology to benefit 
the United States economy. An objective of this rulemaking is to 
clarify the appropriate use of Cooperative Research and Development 
Agreement authority by a Federal laboratory for personnel exchanges 
where the Federal laboratory has an existing relationship with the 
potential partner through another legal mechanism, as well as in the 
context of joint research projects or the development of existing 
laboratory technology, and through use of the General Services 
Administration's Presidential Innovation Fellows program for Federal 
laboratory Entrepreneur-in-Residence programs. Another objective of 
this rulemaking is to remove outdated regulations addressing the 
licensing of inventions owned by the Department of Commerce. When the 
comment period is concluded, NIST will analyze the comments received, 
incorporate comments as appropriate, and publish a final regulation.

DATES: Comments must be received no later than July 27, 2016.

ADDRESSES: Submit your comments, identified by docket identification 
(ID) number: 160311228-6228-01, through the Federal e-Rulemaking 
Portal: http://www.regulations.gov (search using the docket number). 
Follow the online instructions for submitting comments. Identify the 
document by docket ID number and other identifying information (subject 
heading, Federal Register date and page number).

FOR FURTHER INFORMATION CONTACT: Courtney Silverthorn, via email: 
[email protected], or by telephone: 301-975-4189.

SUPPLEMENTARY INFORMATION: 

I. General Information

Does this action apply to me?

    This proposed rule may be of interest to you if you are an 
educational institution, a company (including a small business firm), 
or a nonprofit institution, that collaborates or would like to 
collaborate with Federal Government employees on technology research 
and development of mutual interest.

II. Background

    The Stevenson-Wydler Technology Innovation Act of 1980, Public Law 
96-480, as amended (codified at title 15 of the United States Code 
(U.S.C.), Section 3701 et seq.) (the Stevenson-Wydler Act), sets forth 
a national policy to promote cooperation among academia, Federal 
laboratories, labor, and industry in order to facilitate the transfer 
of innovative federal technologies to United States and world markets. 
In furtherance of that policy, the Administration's Lab to Market 
initiative seeks to ``significantly accelerate and improve technology 
transfer by streamlining administrative processes, facilitating 
partnerships with industry, evaluating impact, and opening federal 
research and development (R&D) assets as a platform for innovation and 
economic growth.'' (Lab to Market: Cross Agency Priority Goal Quarterly 
Progress Update, Fiscal Year 2015 Quarter 4). One proven method to 
ensure that federal innovations are made available to industry and the 
public is to encourage frequent interactions among Federal 
laboratories, academic institutions, and industry, including small 
businesses.

A. Notice of Proposed Rulemaking

    Pursuant to authority delegated to it by the Secretary of Commerce, 
NIST is providing notice to the public of proposed rulemaking to remove 
outdated provisions in part 17 of title 15 of the Code of Federal 
Regulations (CFR) regarding the licensing of inventions owned by the 
Department, and to revise part 17 to address the use of personnel 
exchange authorities and programs as authorized under 15 U.S.C. 3712, 
which authorizes the establishment of a program to foster the exchange 
of scientific and technical personnel among academia, industry, and 
Federal laboratories.
    Under the Stevenson-Wydler Act, several mechanisms have been 
developed which are being used by various Federal agencies for 
exchanging personnel with the public and private sectors. The proposed 
rules will facilitate agencies' use of existing mechanisms, as well as 
provide for more integrated programs intended to expand the exchange of 
personnel as authorized under section 3712, in order to accelerate the 
transfer of innovative technologies from Federal laboratories for the 
benefit of the United States and its economy. Some current authorities 
relevant to personnel exchange between Federal laboratories and non-
federal partners are described below.

B. Current Personnel Exchange Mechanisms

    1. Cooperative Research and Development Agreement--The Cooperative 
Research and Development Agreement (CRADA) is one of the principal 
mechanisms used by Federal laboratories to engage in collaborative 
efforts with non-federal partners to achieve the goals of technology 
transfer. It affords discretion to Government Owned Government Operated 
(GOGO) and Government Owned Contractor Operated (GOCO) laboratories to 
enter into collaborative agreements with many types of organizations. 
CRADAs allow one or more Federal laboratories and one or more non-
federal parties (i.e., state or local government units; industrial 
organizations; public and private foundations; universities and other 
non-profit organizations; and other individuals who are licensees of 
Government-owned inventions) to collaborate to conduct specified 
research and development-related activities that are consistent with 
the laboratory's mission. Technical assistance can also be provided to 
small businesses. The legal authority for this personnel exchange 
mechanism via mutual collaboration on research and development projects 
is 15 U.S.C. 3710a. DOE has recently used the CRADA authority to enable 
a pilot program for public-private entrepreneurial partnerships between 
Federal laboratories and the private sector for the placement of 
personnel. The DOE's Lawrence Berkeley National Laboratory provides a 
virtual home for entrepreneurial clean-energy researchers through 
``Cyclotron Road,'' a new public-private partnership to advance energy 
technologies until they can succeed beyond the laboratory. This new, 
competitive opportunity provides

[[Page 41469]]

clean energy researchers with business mentorship and access to 
resources and potential business partners to advance innovation.
    2. Entrepreneur Leave Program (ELP)--Some Department of Energy 
(DOE) GOCO laboratories have a personnel pathway that permits a limited 
number of contractor employees to take entrepreneurial leave, also 
known as Entrepreneurial Separation to Transfer Technology, for a 
designated period of time. Some laboratories offer the employee 
assurance of appropriate resources upon return to restart a research 
program, while others offer continued benefits while the employee is on 
leave. These programs are designed to facilitate commercialization of 
technologies developed in a DOE laboratory. Because these laboratories 
are GOCO facilities, the programs are subject to the policies and 
procedures of the contractor organization.
    3. Entrepreneur-in-Residence (EIR)--EIRs are entrepreneurs from 
outside of Government who want to use their skills to benefit the 
public good. They are typically mid- to senior-level professionals and 
may be academics, technology entrepreneurs, software designers, 
policymakers, business experts, or non-profit leaders who have 
demonstrated a significant record of innovative achievement in their 
field. Funding models differ from agency to agency, and some 
flexibility in authorities can be applied in creating these programs. 
Generally, these programs run through state or non-profit organizations 
that recommend or otherwise place the personnel within the technology 
transfer office. NIST operates its EIR program under the Partnership 
Intermediary Agreement (PIA) authority, 15 U.S.C. 3715. The program is 
conducted through a PIA with the Maryland Technology Development 
Corporation, which selects and funds each EIR. The National Institutes 
of Health (NIH) program is currently conducted through a contracting 
mechanism to place EIRs at several of NIH institutes and centers. Both 
programs rely on the expertise of existing State-based programs with a 
shared vision of commercializing federal technologies and providing 
expert support to potentially interested parties working at these 
Federal laboratories. Similarly, the Department of Homeland Security 
(DHS) operates a Loaned Executive Program that is open to all 
interested executive-level talent; DHS makes unpaid temporary 
appointments under 5 U.S.C. 3109 to place private sector consultants at 
various DHS laboratories.
    4. Strategic Partnership Projects (SPP)--This DOE authorization 
enables a DOE GOCO laboratory to advise United States companies or 
other agencies and institutions on problems as to which the laboratory 
has special expertise or equipment. Work is performed under a formal 
agreement on a full cost recovery basis if the assistance requires more 
than an incidental amount of time. Authorization: 48 CFR 970.5217-1--
Work for Others Program. In addition, the Oak Ridge Institute for 
Science and Education (ORISE), a DOE institution operated under 
contract on behalf of DOE, implements a range of education, training, 
and workforce development programs on behalf of DOE and a number of 
other Federal sponsors. Programs provide opportunities for participants 
at a broad range of locations including Federal research laboratories 
(including GOCO), agency headquarters offices, or universities. For 
example, an SPP agreement between the United States Department of 
Agriculture (USDA) and ORISE authorizes ORISE to provide qualified 
candidates for research positions and to manage the appointment 
process. ORISE-identified candidates may be selected from a variety of 
sources and placed into a variety of research-related positions. 
Appointed candidates placed by ORISE have ``program participant'' 
status and are not Federal employees.
    5. Use of Facilities--Outside entities such as universities, 
technology incubators, private companies, and individual inventors may 
be able to use scientific equipment, specialized rooms, testing 
centers, or other unique experimental property or facilities of the 
Federal laboratories, such as DOE's designated scientific user 
facilities located across the DOE laboratories. Such facility use is 
often at the discretion of the Federal laboratory. While this provides 
the opportunity for outside entities to place personnel at Government 
facilities, it does not typically provide a mechanism for those 
personnel to collaborate with Government personnel (Federal employees). 
DOE's scientific user facilities are open access, through a proposal 
solicitation process, and do enable collaboration with scientists and 
engineers that are employees of the laboratory contractor.
    6. Visiting Scientist Programs--These are arrangements allowing 
industry personnel to work for limited periods of time, usually 6-12 
months, in a GOCO laboratory. Depending on the program, costs can be 
borne by the GOCO laboratory or by the organization sending the 
personnel, and intellectual property arrangements can be addressed in 
exchange agreements. Because these laboratories are GOCO facilities, 
they are subject to the policies and procedures of the contractor 
organization. DOE's national laboratories operated as GOCOs and NIH 
(e.g., Frederick National Laboratory for Cancer Research) currently 
offer visiting scientist opportunities.
    7. Educational Partnership Agreements (EPAs)--These agreements are 
entered into between the Department of Defense (Defense) and 
educational institutions, including colleges, universities, and local 
education agencies, to encourage and enhance the study of scientific 
disciplines. Under an EPA, a Defense laboratory director may make 
laboratory personnel available to teach science courses or to assist in 
the development of science courses and materials for the institution; 
provide for sabbatical opportunities for faculty and internship 
opportunities for students of the institution; involve faculty and 
students of the institution in Defense laboratory projects, cooperate 
with the institution in developing a program under which students may 
be given academic credit for work on Defense laboratory projects; 
provide academic and career advice to students of the institution; loan 
Defense laboratory equipment to the institution for any purpose and 
duration in support of such agreement; and transfer commonly used 
surplus computer or other scientific equipment to the institution. EPAs 
are authorized by 10 U.S.C. 2194.
    8. Co-Locations--The USDA has a number of laboratories that are co-
located on University campuses, which fosters a high level of 
scientific exchange between the USDA scientists and their university 
collaborators.

C. Proposed Regulation Implementing 15 U.S.C. 3712 Personnel Exchanges

    The regulation proposed by NIST to implement 15 U.S.C. 3712, in 
consultation jointly with the Department of Energy and the National 
Science Foundation, is intended to accomplish two main objectives. The 
first objective is to clarify the appropriate use of CRADA authority 
under 15 U.S.C. 3710a for personnel exchanges where a Federal 
laboratory has an existing relationship with the potential partner 
through another legal mechanism, such as a grant or cooperative 
agreement. The second objective is to increase the use of existing 
authorities to implement personnel exchange programs at Federal 
Laboratories: (1) By utilizing the existing CRADA authority to transfer

[[Page 41470]]

personnel to and from a Federal laboratory for joint research projects 
or the development of existing laboratory technology; and (2) by 
utilizing the General Services Administration (GSA)'s Presidential 
Innovation Fellows program to offer Federal laboratories additional 
options for implementing Entrepreneur-in-Residence programs.
    Under the proposed rule, all existing provisions in part 17 of 
title 15 of the Code of Federal Regulations (CFR), ``Licensing of 
Government-Owned Inventions in the Custody of the Department of 
Commerce,'' which are outdated, would be deleted. Outdated subpart A 
implemented for the Department of Commerce licensing rules found at 41 
CFR part 101-4, which were themselves removed at 50 FR 28402, July 12, 
1985. Outdated subpart B was reserved. Outdated subpart C set forth 
appeal procedures addressed to the outdated licensing rules of subpart 
A. All subparts are obsolete, and the rules governing the licensing of 
government-owned inventions are today found in 37 CFR part 404. The 
heading of part 17 would be revised to read ``Personnel Exchanges 
Between Federal Laboratories and Non-Federal Entities,'' and five new 
sections would be added.
    Section 17.1, Scope, sets forth the scope of revised part 17, which 
is to implement 15 U.S.C. 3712 and to clarify the appropriate use of 
personnel exchanges in relation to Federal laboratory CRADAs under the 
authority of 15 U.S.C. 3710a(a)(1), including CRADAs involving as 
parties recipients of Federal funding under grants and contracts, which 
could include National Network for Manufacturing Innovation awardees.
    Section 17.2, Definitions, provides definitions for certain terms 
used in this part.
    Section 17.3, Exchange of Federal Laboratory Personnel with 
Recipients of Federal Funding, provides in paragraph (a) that the 
existence of a funding agreement (as defined in 35 U.S.C. 201(b)) 
between a Federal laboratory and a contractor shall not preclude a 
CRADA with that contractor, where the Federal laboratory director makes 
a determination that the technical subject matter of the funding 
agreement is sufficiently distinct from that of the CRADA. Paragraph 
(a) also provides that a contractor which is a collaborating party 
shall in no event reimburse a Federal agency under a CRADA using funds 
awarded to the contractor by that agency.
    Paragraph (b) of section 17.3 provides that a Federal laboratory 
may exchange personnel with a contractor under a CRADA where the 
determination required under paragraph (a) cannot be made, provided 
that the CRADA includes at least one collaborating party in addition to 
the Federal laboratory and that contractor. In that circumstance, the 
Federal laboratory shall not provide services, property, or other 
resources to that contractor under the CRADA, and if any individual 
terms of that contractor's funding agreement conflict with the terms of 
the multi-party CRADA, then the funding agreement terms will control as 
applied to that contractor and the Federal laboratory only.
    Paragraph (c) of section 17.3 sets forth a number of factors which 
may be taken into account in making the ``sufficiently distinct'' 
determination required under paragraph (a), including whether the 
conduct of specified research or development efforts under the CRADA 
would require the contractor to perform tasks identical to those 
required under the funding agreement; whether existing intellectual 
property to be provided by the Federal laboratory or the contractor 
under the CRADA is the same as that provided under, or referenced in, 
the funding agreement; whether the contractor's employees performing 
the specified research or development efforts under the CRADA are the 
same employees performing the tasks required under the funding 
agreement; and whether services, property or other resources 
contemplated by the Federal Laboratory to be provided to the contractor 
for the specified research or development efforts under the CRADA would 
materially benefit the contractor in the performance of tasks required 
under the funding agreement.
    Section 17.4, Personnel Exchanges from a Federal Agency, provides 
in paragraph (a)(1) that a Federal laboratory may exchange its 
personnel with a collaborating party under a CRADA where no invention 
currently exists. Under paragraph (a)(2), a Federal laboratory may 
exchange personnel with a non-Federal collaborating party for the 
purposes of developing or commercializing an invention in which the 
Federal government has an ownership interest, including an invention 
made by an employee or former employee while in the employment or 
service of the Federal government, and such personnel exchanged may 
include such employee or former employee who is an inventor. Paragraph 
(a)(2) also provides that funding may be provided by the non-federal 
collaborating party to the Federal laboratory for the participation of 
the Federal employee in developing or commercializing an invention, 
including costs for salary and other expenses, such as benefits and 
travel. Consistent with guidance in the Office of Legal Counsel's 
Memorandum for Gary Davis, Acting Director, Office of Government 
Ethics, September 7, 2000, ``Application of 18 U.S.C. 209 to Employee-
Inventors Who Receive Outside Royalty Payments,'' paragraph (a)(2) also 
sets forth that royalties from inventions received through a license 
agreement negotiated with the Federal laboratory and paid by the 
laboratory to an inventor who is a Federal employee are considered 
Federal compensation. Paragraph (a)(3) provides that where an employee 
leaves Federal service in order to receive salary or other compensation 
from a non-Federal organization, a Federal laboratory may use 
reinstatement authority in accordance with 5 CFR 315.401, or other 
applicable authorities, to rehire the former Federal employee at the 
conclusion of the exchange.
    In exchanging personnel with a collaborating party under a CRADA, 
as in any other exercise of the CRADA authority, a Federal Agency 
should take into account the provisions of 15 U.S.C. 3710a(c)(3) 
regarding standards of conduct for its employees for resolving 
potential conflicts of interest.
    Section 17.5, Personnel Exchanges to a Federal Agency, provides 
that a Federal Agency may provide funds for non-federal personnel 
exchanged in order to bring into a Federal laboratory outside personnel 
with expertise in scientific commercialization through the Presidential 
Innovation Fellows program, and that an Agency will engage with the 
General Services Administration (GSA) to transfer funding for exchanged 
personnel and to select and place Entrepreneurs-In-Residence at the 
laboratory for the purposes of evaluating the laboratory's 
technologies, and providing technical consulting to facilitate readying 
a technology for commercialization by an outside entity.

III. Request for Comments

    NIST requests comments on this proposed rule to encourage the 
exchange of personnel among Federal laboratories, State, local, and 
tribal governments, academia and industry, including small businesses. 
NIST is requesting ideas and comments about ways in which an integrated 
program might be developed. We have included some questions that you 
might consider as you develop your comments.
    1. Personnel exchanges commonly occur in the course of CRADAs 
involving Federal laboratories and collaborating parties. Are there 
ways to further promote personnel exchanges

[[Page 41471]]

involving CRADAs? Are there ways to use the CRADA authority to develop 
a more integrated personnel exchange program? Are there other 
mechanisms that you find effective and/or easier to use that should be 
included in this regulation?
    2. Do the proposed regulations facilitate the exchange of personnel 
between Federal laboratories and academia and industry? Are there 
additional mechanisms that should be incorporated in this regulation?
    When submitting comments, remember to:
    i. Identify the document by docket ID number and other identifying 
information (subject heading, Federal Register date and page number).
    ii. Please organize your comments by referencing the specific 
question you are responding to or the relevant section number in the 
proposed regulatory text.
    iii. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    iv. Describe any assumptions and provide any technical information 
and/or data that you used.
    v. Provide specific examples to illustrate your concerns and 
suggest alternatives.
    vi. Explain your views as clearly as possible.
    vii. Comments that contain profanity, vulgarity, threats, or other 
inappropriate language will not be considered.
    viii. Make sure to submit your comments by the comment period 
deadline identified.

IV. References

1. Federal Laboratory Consortium for Technology Transfer. (n.d.) 
Technology Transfer Mechanisms. Retrieved from http://www.federallabs.org/education/t2-mechanisms/.
2. Federal Laboratory Consortium for Technology Transfer. (2011). 
Technology Transfer Desk Reference. Retrieved from: http://globals.federallabs.org/pdf/T2_Desk_Reference.pdf.
3. Kalil, T. and Wong, J. (2015). Lab to Market: Cross Agency 
Priority Goal Quarterly Progress Update, Fiscal Year 2015 Quarter 4. 
Retrieved from: https://www.performance.gov/node/3395/view?view=public#progress-update.
4. Howieson, S.V. et al (2013). Federal Personnel Exchange 
Mechanisms. Retrieved from https://www.ida.org/~/media/Corporate/
Files/Publications/STPIPubs/D-4906.ashx.

V. Statutory and Executive Order Reviews

Executive Order 12866

    This rulemaking is a significant regulatory action under Sections 
3(f)(3) and 3(f)(4) of Executive Order 12866, as it raises novel policy 
issues. This rulemaking, however, is not an ``economically 
significant'' regulatory action under Section 3(f)(1) of the Executive 
Order, as it does not have an effect on the economy of $100 million or 
more in any one year, and it does not have a material adverse effect on 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities.

Executive Order 13132

    This proposed rule does not contain policies with Federalism 
implications as defined in Executive Order 13132.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires the preparation and 
availability for public comment of ``an initial regulatory flexibility 
analysis'' which will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA) that this rule, if adopted, would not have a 
significant economic impact on a substantial number of small entities. 
The factual basis for this determination is as follows:
    A description of this proposed rule, why it is being considered, 
and the objectives of this proposed rule are contained in the preamble 
and in the SUMMARY section of the preamble. The statutory basis for 
this proposed rule is provided by 15 U.S.C. 3712. This proposed rule, 
if implemented, is not expected to directly affect any small entities. 
Federal agencies that would be directly affected by this rulemaking are 
not small governmental jurisdictions, small organizations, or small 
businesses, as defined by the RFA. 5 U.S.C. 601. Any requirements 
imposed by the proposed rule would be obligatory only upon Federal 
agencies. NIST does not expect the issuance of the proposed rule to 
result in any direct impacts to small entities pursuant to the RFA. 
Small entities could potentially benefit from exchanging personnel with 
Federal agencies.
    The information provided above supports a determination that this 
rule would not have a significant economic impact on a substantial 
number of small entities. Because this rulemaking, if adopted, would 
directly affect Federal agencies and not small entities, NIST concludes 
the action would not result in a significant economic impact on a 
substantial number of small entities. Therefore, an initial regulatory 
flexibility analysis is not required and none has been prepared.

Paperwork Reduction Act

    This proposed rule contains no new collection of information 
subject to the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

National Environmental Policy Act

    This proposed rule will not significantly affect the quality of the 
human environment. Therefore, an environmental assessment or 
Environmental Impact Statement is not required to be prepared under the 
National Environmental Policy Act of 1969.

List of Subjects in 15 CFR Part 17

    Federal employees, Inventions and patents, Laboratories, Research 
and development, Science and technology, Technology transfer.

    For the reasons stated in the preamble, the National Institute of 
Standards and Technology proposes to revise 15 CFR part 17 as follows:

PART 17--PERSONNEL EXCHANGES BETWEEN FEDERAL LABORATORIES AND NON-
FEDERAL ENTITIES

Sec.
17.1 Scope.
17.2 Definitions.
17.3 Exchange of Federal laboratory personnel with recipients of 
Federal funding.
17.4 Personnel exchanges from a Federal agency.
17.5 Personnel exchanges to a Federal agency.

    Authority:  15 U.S.C. 3712.


Sec.  17.1  Scope.

    (a) The Stevenson-Wydler Technology Innovation Act of 1980, Public 
Law 96-480, as amended (codified at title 15 of the United States Code 
(U.S.C.), section 3701 et seq.)(the Stevenson-Wydler Act), sets forth a 
national policy to renew, expand, and strengthen cooperation among 
academia, Federal laboratories, labor, and industry, in forms including 
personnel exchanges (15 U.S.C. 3701(3)). One proven method to ensure 
that federal innovations are passed to industry and the public is to 
encourage frequent interactions among Federal laboratories, academic 
institutions, and industry, including both large and small businesses. 
In accordance with applicable ethics

[[Page 41472]]

regulations and Agency policies, exchanges of personnel between Federal 
laboratories and outside collaborators should be encouraged (15 U.S.C. 
3702(5)). Models that include federal funding, as well as those that 
are executed without federal funding, are encouraged.
    (b) This part implements 15 U.S.C. 3712 and provides clarification 
regarding the appropriate use of personnel exchanges in relation to 
Federal laboratory Cooperative Research and Development Agreements 
(CRADAs) under the authority of 15 U.S.C. 3710a.
    (c) This part is applicable to exchanges of personnel between 
Federal laboratories and parties to a CRADA under 15 U.S.C. 
3710a(a)(1).


Sec.  17.2  Definitions.

    (a) The term funding agreement shall have the meaning according to 
it under 35 U.S.C. 201(b).
    (b) The term contractor shall have the meaning according to it 
under 35 U.S.C. 201(c).
    (c) The term Federal laboratory shall have the meaning according to 
it under 15 U.S.C. 3703(4).


Sec.  17.3  Exchange of Federal laboratory personnel with recipients of 
Federal funding.

    (a) In accordance with 15 U.S.C. 3710a(b)(3)(A) and 3710a(d)(1), a 
Federal laboratory may provide personnel, services, property, and other 
resources to a collaborating party, with or without reimbursement (but 
not funds to non-Federal parties) for the conduct of specified research 
or development efforts under a CRADA which are consistent with the 
missions of the Federal laboratory. The existence of a funding 
agreement between a Federal laboratory and a contractor shall not 
preclude the Federal laboratory from using its authority under 15 
U.S.C. 3710a to enter into a CRADA with the contractor as a 
collaborating party for the conduct of specified research or 
development efforts, where the director of the Federal laboratory 
determines that the technical subject matter of the funding agreement 
is sufficiently distinct from that of the CRADA. In no event shall a 
contractor which is a collaborating party reimburse a Federal agency 
under a CRADA using funds awarded to the contractor by that agency.
    (b)(1) A Federal laboratory may enter into a CRADA with a 
contractor as a collaborating party for the purpose of exchange of 
personnel for the conduct of specified research or development efforts 
where the determination required under paragraph (a) of this section 
could not be made, provided that:
    (i) The CRADA includes at least one collaborating party in addition 
to the Federal laboratory and that contractor; and
    (ii) The Federal laboratory shall not provide services, property or 
other resources to that contractor under the CRADA.
    (2) Where a Federal laboratory enters into a CRADA with a 
contractor under this paragraph (b), the terms of that contractor's 
funding agreement shall normally supersede the terms of the CRADA, to 
the extent that any individual terms conflict, as applied to that 
contractor and the Federal laboratory only.
    (c) In making the determination required under paragraph (a) of 
this section, the director of a Federal laboratory may consider factors 
including the following:
    (1) Whether the conduct of specified research or development 
efforts under the CRADA would require the contractor to perform tasks 
identical to those required under the funding agreement;
    (2) Whether existing intellectual property to be provided by the 
Federal laboratory or the contractor under the CRADA is the same as 
that provided under, or referenced in, the funding agreement;
    (3) Whether the contractor's employees performing the specified 
research or development efforts under the CRADA are the same employees 
performing the tasks required under the funding agreement; and
    (4) Whether services, property or other resources contemplated by 
the Federal laboratory to be provided to the contractor for the 
specified research or development efforts under the CRADA would 
materially benefit the contractor in the performance of tasks required 
under the funding agreement.


Sec.  17.4  Personnel exchanges from a Federal laboratory.

    (a) For personnel exchanges in which a Federal laboratory maintains 
funding for Federal personnel provided to a collaborating party--
    (1) in accordance with 15 U.S.C. 3710a(b)(3)(A), a Federal 
laboratory may exchange personnel with a collaborating party for the 
purposes of specified scientific or technical research towards a mutual 
goal consistent with the mission of the Agency, where no invention 
currently exists, or
    (2) in accordance with 15 U.S.C. 3710a(b)(3)(C), a Federal 
laboratory may exchange personnel with a non-Federal collaborating 
party for the purposes of developing or commercializing an invention in 
which the Federal government has an ownership interest, including an 
invention made by an employee or former employee while in the 
employment or service of the Federal government, and such personnel 
exchanged may include such employee or former employee who is an 
inventor.
    (i) Funding may be provided by the non-federal collaborating party 
to the Federal laboratory for the participation of the Federal employee 
in developing or commercializing an invention, including costs for 
salary and other expenses, such as benefits and travel.
    (ii) Royalties from inventions received through a license agreement 
negotiated with the Federal laboratory and paid by the Federal 
laboratory to an inventor who is a Federal employee are considered 
Federal compensation.
    (3) Where an employee leaves Federal service in order to receive 
salary or other compensation from a non-Federal organization, a Federal 
laboratory may use reinstatement authority in accordance with 5 CFR 
315.401, or other applicable authorities, to rehire the former Federal 
employee at the conclusion of the exchange.


Sec.  17.5  Personnel exchanges to a Federal agency.

    For exchanges in which a Federal Agency provides funds for the non-
federal personnel--
    (a) Outside personnel with expertise in scientific 
commercialization may be brought in to a Federal laboratory through the 
Presidential Innovation Fellows program (see 5 CFR 213.3102(r)) for 
Entrepreneur-In-Residence programs or similar, related programs.
    (b) An Agency will engage with the General Services Administration 
(GSA) to transfer funding for exchanged personnel, and will work with 
GSA to select and place Entrepreneurs-In-Residence at the laboratory 
for the purposes of evaluating the laboratory's technologies, and 
providing technical consulting to facilitate readying a technology for 
commercialization by an outside entity.

Kent Rochford,
Associate Director for Laboratory Programs.
[FR Doc. 2016-14723 Filed 6-24-16; 8:45 am]
 BILLING CODE 3510-13-P
Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Proposed Rules 41469

clean energy researchers with business 4. Strategic Partnership Projects property arrangements can be addressed
mentorship and access to resources and (SPP)—This DOE authorization enables in exchange agreements. Because these
potential business partners to advance a DOE GOCO laboratory to advise laboratories are GOCO facilities, they
innovation. United States companies or other are subject to the policies and
2. Entrepreneur Leave Program agencies and institutions on problems as procedures of the contractor
(ELP)—Some Department of Energy to which the laboratory has special organization. DOE’s national
(DOE) GOCO laboratories have a expertise or equipment. Work is laboratories operated as GOCOs and
personnel pathway that permits a performed under a formal agreement on NIH (e.g., Frederick National Laboratory
limited number of contractor employees a full cost recovery basis if the for Cancer Research) currently offer
to take entrepreneurial leave, also assistance requires more than an visiting scientist opportunities.
known as Entrepreneurial Separation to incidental amount of time. 7. Educational Partnership
Transfer Technology, for a designated Authorization: 48 CFR 970.5217–1— Agreements (EPAs)—These agreements
period of time. Some laboratories offer Work for Others Program. In addition, are entered into between the
the employee assurance of appropriate the Oak Ridge Institute for Science and Department of Defense (Defense) and
resources upon return to restart a Education (ORISE), a DOE institution educational institutions, including
research program, while others offer operated under contract on behalf of colleges, universities, and local
continued benefits while the employee DOE, implements a range of education, education agencies, to encourage and
is on leave. These programs are training, and workforce development enhance the study of scientific
designed to facilitate commercialization programs on behalf of DOE and a disciplines. Under an EPA, a Defense
of technologies developed in a DOE number of other Federal sponsors. laboratory director may make laboratory
laboratory. Because these laboratories Programs provide opportunities for personnel available to teach science
are GOCO facilities, the programs are participants at a broad range of locations courses or to assist in the development
subject to the policies and procedures of including Federal research laboratories of science courses and materials for the
the contractor organization. (including GOCO), agency headquarters institution; provide for sabbatical
offices, or universities. For example, an opportunities for faculty and internship
3. Entrepreneur-in-Residence (EIR)—
SPP agreement between the United opportunities for students of the
EIRs are entrepreneurs from outside of
States Department of Agriculture institution; involve faculty and students
Government who want to use their skills
(USDA) and ORISE authorizes ORISE to of the institution in Defense laboratory
to benefit the public good. They are projects, cooperate with the institution
provide qualified candidates for
typically mid- to senior-level in developing a program under which
research positions and to manage the
professionals and may be academics, students may be given academic credit
appointment process. ORISE-identified
technology entrepreneurs, software for work on Defense laboratory projects;
candidates may be selected from a
designers, policymakers, business provide academic and career advice to
variety of sources and placed into a
experts, or non-profit leaders who have students of the institution; loan Defense
variety of research-related positions.
demonstrated a significant record of laboratory equipment to the institution
Appointed candidates placed by ORISE
innovative achievement in their field. have ‘‘program participant’’ status and for any purpose and duration in support
Funding models differ from agency to are not Federal employees. of such agreement; and transfer
agency, and some flexibility in 5. Use of Facilities—Outside entities commonly used surplus computer or
authorities can be applied in creating such as universities, technology other scientific equipment to the
these programs. Generally, these incubators, private companies, and institution. EPAs are authorized by 10
programs run through state or non-profit individual inventors may be able to use U.S.C. 2194.
organizations that recommend or scientific equipment, specialized rooms, 8. Co-Locations—The USDA has a
otherwise place the personnel within testing centers, or other unique number of laboratories that are co-
the technology transfer office. NIST experimental property or facilities of the located on University campuses, which
operates its EIR program under the Federal laboratories, such as DOE’s fosters a high level of scientific
Partnership Intermediary Agreement designated scientific user facilities exchange between the USDA scientists
(PIA) authority, 15 U.S.C. 3715. The located across the DOE laboratories. and their university collaborators.
program is conducted through a PIA Such facility use is often at the
with the Maryland Technology C. Proposed Regulation Implementing
discretion of the Federal laboratory. 15 U.S.C. 3712 Personnel Exchanges
Development Corporation, which selects While this provides the opportunity for
and funds each EIR. The National outside entities to place personnel at The regulation proposed by NIST to
Institutes of Health (NIH) program is Government facilities, it does not implement 15 U.S.C. 3712, in
currently conducted through a typically provide a mechanism for those consultation jointly with the
contracting mechanism to place EIRs at personnel to collaborate with Department of Energy and the National
several of NIH institutes and centers. Government personnel (Federal Science Foundation, is intended to
Both programs rely on the expertise of employees). DOE’s scientific user accomplish two main objectives. The
existing State-based programs with a facilities are open access, through a first objective is to clarify the
shared vision of commercializing proposal solicitation process, and do appropriate use of CRADA authority
federal technologies and providing enable collaboration with scientists and under 15 U.S.C. 3710a for personnel
expert support to potentially interested engineers that are employees of the exchanges where a Federal laboratory
parties working at these Federal laboratory contractor. has an existing relationship with the
mstockstill on DSK3G9T082PROD with PROPOSALS

laboratories. Similarly, the Department 6. Visiting Scientist Programs—These potential partner through another legal
of Homeland Security (DHS) operates a are arrangements allowing industry mechanism, such as a grant or
Loaned Executive Program that is open personnel to work for limited periods of cooperative agreement. The second
to all interested executive-level talent; time, usually 6–12 months, in a GOCO objective is to increase the use of
DHS makes unpaid temporary laboratory. Depending on the program, existing authorities to implement
appointments under 5 U.S.C. 3109 to costs can be borne by the GOCO personnel exchange programs at Federal
place private sector consultants at laboratory or by the organization Laboratories: (1) By utilizing the
various DHS laboratories. sending the personnel, and intellectual existing CRADA authority to transfer

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41470 Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Proposed Rules

personnel to and from a Federal required under paragraph (a) cannot be expenses, such as benefits and travel.
laboratory for joint research projects or made, provided that the CRADA Consistent with guidance in the Office
the development of existing laboratory includes at least one collaborating party of Legal Counsel’s Memorandum for
technology; and (2) by utilizing the in addition to the Federal laboratory and Gary Davis, Acting Director, Office of
General Services Administration that contractor. In that circumstance, the Government Ethics, September 7, 2000,
(GSA)’s Presidential Innovation Fellows Federal laboratory shall not provide ‘‘Application of 18 U.S.C. 209 to
program to offer Federal laboratories services, property, or other resources to Employee-Inventors Who Receive
additional options for implementing that contractor under the CRADA, and Outside Royalty Payments,’’ paragraph
Entrepreneur-in-Residence programs. if any individual terms of that (a)(2) also sets forth that royalties from
Under the proposed rule, all existing contractor’s funding agreement conflict inventions received through a license
provisions in part 17 of title 15 of the with the terms of the multi-party agreement negotiated with the Federal
Code of Federal Regulations (CFR), CRADA, then the funding agreement laboratory and paid by the laboratory to
‘‘Licensing of Government-Owned terms will control as applied to that an inventor who is a Federal employee
Inventions in the Custody of the contractor and the Federal laboratory are considered Federal compensation.
Department of Commerce,’’ which are only. Paragraph (a)(3) provides that where an
outdated, would be deleted. Outdated Paragraph (c) of section 17.3 sets forth employee leaves Federal service in
subpart A implemented for the a number of factors which may be taken order to receive salary or other
Department of Commerce licensing into account in making the ‘‘sufficiently compensation from a non-Federal
rules found at 41 CFR part 101–4, which distinct’’ determination required under organization, a Federal laboratory may
were themselves removed at 50 FR paragraph (a), including whether the use reinstatement authority in
28402, July 12, 1985. Outdated subpart conduct of specified research or accordance with 5 CFR 315.401, or other
B was reserved. Outdated subpart C set development efforts under the CRADA applicable authorities, to rehire the
forth appeal procedures addressed to would require the contractor to perform former Federal employee at the
the outdated licensing rules of subpart tasks identical to those required under conclusion of the exchange.
A. All subparts are obsolete, and the the funding agreement; whether existing In exchanging personnel with a
rules governing the licensing of intellectual property to be provided by collaborating party under a CRADA, as
government-owned inventions are today the Federal laboratory or the contractor in any other exercise of the CRADA
found in 37 CFR part 404. The heading under the CRADA is the same as that authority, a Federal Agency should take
of part 17 would be revised to read provided under, or referenced in, the into account the provisions of 15 U.S.C.
‘‘Personnel Exchanges Between Federal funding agreement; whether the 3710a(c)(3) regarding standards of
Laboratories and Non-Federal Entities,’’ contractor’s employees performing the conduct for its employees for resolving
and five new sections would be added. specified research or development potential conflicts of interest.
Section 17.1, Scope, sets forth the efforts under the CRADA are the same Section 17.5, Personnel Exchanges to
scope of revised part 17, which is to employees performing the tasks a Federal Agency, provides that a
implement 15 U.S.C. 3712 and to clarify required under the funding agreement; Federal Agency may provide funds for
the appropriate use of personnel and whether services, property or other non-federal personnel exchanged in
exchanges in relation to Federal resources contemplated by the Federal order to bring into a Federal laboratory
laboratory CRADAs under the authority Laboratory to be provided to the outside personnel with expertise in
of 15 U.S.C. 3710a(a)(1), including contractor for the specified research or scientific commercialization through the
CRADAs involving as parties recipients development efforts under the CRADA Presidential Innovation Fellows
of Federal funding under grants and would materially benefit the contractor program, and that an Agency will
contracts, which could include National in the performance of tasks required engage with the General Services
Network for Manufacturing Innovation under the funding agreement. Administration (GSA) to transfer
awardees. Section 17.4, Personnel Exchanges funding for exchanged personnel and to
Section 17.2, Definitions, provides from a Federal Agency, provides in select and place Entrepreneurs-In-
definitions for certain terms used in this paragraph (a)(1) that a Federal Residence at the laboratory for the
part. laboratory may exchange its personnel purposes of evaluating the laboratory’s
Section 17.3, Exchange of Federal with a collaborating party under a technologies, and providing technical
Laboratory Personnel with Recipients of CRADA where no invention currently consulting to facilitate readying a
Federal Funding, provides in paragraph exists. Under paragraph (a)(2), a Federal technology for commercialization by an
(a) that the existence of a funding laboratory may exchange personnel with outside entity.
agreement (as defined in 35 U.S.C. a non-Federal collaborating party for the
201(b)) between a Federal laboratory purposes of developing or III. Request for Comments
and a contractor shall not preclude a commercializing an invention in which NIST requests comments on this
CRADA with that contractor, where the the Federal government has an proposed rule to encourage the
Federal laboratory director makes a ownership interest, including an exchange of personnel among Federal
determination that the technical subject invention made by an employee or laboratories, State, local, and tribal
matter of the funding agreement is former employee while in the governments, academia and industry,
sufficiently distinct from that of the employment or service of the Federal including small businesses. NIST is
CRADA. Paragraph (a) also provides that government, and such personnel requesting ideas and comments about
a contractor which is a collaborating exchanged may include such employee ways in which an integrated program
mstockstill on DSK3G9T082PROD with PROPOSALS

party shall in no event reimburse a or former employee who is an inventor. might be developed. We have included
Federal agency under a CRADA using Paragraph (a)(2) also provides that some questions that you might consider
funds awarded to the contractor by that funding may be provided by the non- as you develop your comments.
agency. federal collaborating party to the 1. Personnel exchanges commonly
Paragraph (b) of section 17.3 provides Federal laboratory for the participation occur in the course of CRADAs
that a Federal laboratory may exchange of the Federal employee in developing involving Federal laboratories and
personnel with a contractor under a or commercializing an invention, collaborating parties. Are there ways to
CRADA where the determination including costs for salary and other further promote personnel exchanges

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41472 Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Proposed Rules

regulations and Agency policies, under paragraph (a) of this section could developing or commercializing an
exchanges of personnel between Federal not be made, provided that: invention in which the Federal
laboratories and outside collaborators (i) The CRADA includes at least one government has an ownership interest,
should be encouraged (15 U.S.C. collaborating party in addition to the including an invention made by an
3702(5)). Models that include federal Federal laboratory and that contractor; employee or former employee while in
funding, as well as those that are and the employment or service of the
executed without federal funding, are (ii) The Federal laboratory shall not Federal government, and such
encouraged. provide services, property or other personnel exchanged may include such
(b) This part implements 15 U.S.C. resources to that contractor under the employee or former employee who is an
3712 and provides clarification CRADA.
inventor.
regarding the appropriate use of (2) Where a Federal laboratory enters
personnel exchanges in relation to into a CRADA with a contractor under (i) Funding may be provided by the
Federal laboratory Cooperative Research this paragraph (b), the terms of that non-federal collaborating party to the
and Development Agreements contractor’s funding agreement shall Federal laboratory for the participation
(CRADAs) under the authority of 15 normally supersede the terms of the of the Federal employee in developing
U.S.C. 3710a. CRADA, to the extent that any or commercializing an invention,
(c) This part is applicable to individual terms conflict, as applied to including costs for salary and other
exchanges of personnel between Federal that contractor and the Federal expenses, such as benefits and travel.
laboratories and parties to a CRADA laboratory only. (ii) Royalties from inventions received
under 15 U.S.C. 3710a(a)(1). (c) In making the determination
through a license agreement negotiated
required under paragraph (a) of this
§ 17.2 Definitions. with the Federal laboratory and paid by
section, the director of a Federal
(a) The term funding agreement shall laboratory may consider factors the Federal laboratory to an inventor
have the meaning according to it under including the following: who is a Federal employee are
35 U.S.C. 201(b). (1) Whether the conduct of specified considered Federal compensation.
(b) The term contractor shall have the research or development efforts under (3) Where an employee leaves Federal
meaning according to it under 35 U.S.C. the CRADA would require the service in order to receive salary or
201(c). contractor to perform tasks identical to other compensation from a non-Federal
(c) The term Federal laboratory shall those required under the funding organization, a Federal laboratory may
have the meaning according to it under agreement; use reinstatement authority in
15 U.S.C. 3703(4). (2) Whether existing intellectual accordance with 5 CFR 315.401, or other
property to be provided by the Federal applicable authorities, to rehire the
§ 17.3 Exchange of Federal laboratory
laboratory or the contractor under the former Federal employee at the
personnel with recipients of Federal
funding. CRADA is the same as that provided conclusion of the exchange.
under, or referenced in, the funding
(a) In accordance with 15 U.S.C.
agreement; § 17.5 Personnel exchanges to a Federal
3710a(b)(3)(A) and 3710a(d)(1), a (3) Whether the contractor’s agency.
Federal laboratory may provide employees performing the specified
personnel, services, property, and other research or development efforts under For exchanges in which a Federal
resources to a collaborating party, with the CRADA are the same employees Agency provides funds for the non-
or without reimbursement (but not performing the tasks required under the federal personnel—
funds to non-Federal parties) for the funding agreement; and (a) Outside personnel with expertise
conduct of specified research or (4) Whether services, property or in scientific commercialization may be
development efforts under a CRADA other resources contemplated by the brought in to a Federal laboratory
which are consistent with the missions Federal laboratory to be provided to the through the Presidential Innovation
of the Federal laboratory. The existence contractor for the specified research or
of a funding agreement between a Fellows program (see 5 CFR 213.3102(r))
development efforts under the CRADA for Entrepreneur-In-Residence programs
Federal laboratory and a contractor shall would materially benefit the contractor
not preclude the Federal laboratory from or similar, related programs.
in the performance of tasks required
using its authority under 15 U.S.C. under the funding agreement. (b) An Agency will engage with the
3710a to enter into a CRADA with the General Services Administration (GSA)
contractor as a collaborating party for § 17.4 Personnel exchanges from a to transfer funding for exchanged
the conduct of specified research or Federal laboratory. personnel, and will work with GSA to
development efforts, where the director (a) For personnel exchanges in which select and place Entrepreneurs-In-
of the Federal laboratory determines a Federal laboratory maintains funding Residence at the laboratory for the
that the technical subject matter of the for Federal personnel provided to a purposes of evaluating the laboratory’s
funding agreement is sufficiently collaborating party— technologies, and providing technical
distinct from that of the CRADA. In no (1) in accordance with 15 U.S.C. consulting to facilitate readying a
event shall a contractor which is a 3710a(b)(3)(A), a Federal laboratory may technology for commercialization by an
collaborating party reimburse a Federal exchange personnel with a collaborating outside entity.
agency under a CRADA using funds party for the purposes of specified
mstockstill on DSK3G9T082PROD with PROPOSALS

awarded to the contractor by that scientific or technical research towards Kent Rochford,
agency. a mutual goal consistent with the Associate Director for Laboratory Programs.
(b)(1) A Federal laboratory may enter mission of the Agency, where no [FR Doc. 2016–14723 Filed 6–24–16; 8:45 am]
into a CRADA with a contractor as a invention currently exists, or BILLING CODE 3510–13–P
collaborating party for the purpose of (2) in accordance with 15 U.S.C.
exchange of personnel for the conduct 3710a(b)(3)(C), a Federal laboratory may
of specified research or development exchange personnel with a non-Federal
efforts where the determination required collaborating party for the purposes of

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Document Created: 2016-06-25 02:06:53
Document Modified: 2016-06-25 02:06:53
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Notice of proposed rulemaking.
Dates		Comments must be received no later than July 27, 2016.
Contact		Courtney Silverthorn, via email: [email protected], or by telephone: 301-975-4189.
FR Citation		81 FR 41468
RIN Number		0693-AB62
CFR Associated		Federal Employees; Inventions and Patents; Laboratories; Research and Development; Science and Technology and Technology Transfer
81 FR 41468 - Technology Innovation-Personnel Exchanges

DEPARTMENT OF COMMERCENational Institute of Standards and Technology

Federal Register Volume 81, Issue 123 (June 27, 2016)

DEPARTMENT OF COMMERCE
National Institute of Standards and Technology
