thereto, is hereinafter referred to as "the contract"; and

Whereas, the contract provides that the performance of work thereunder may at the convenience or option of the Government be terminated by the Government in whole, or from time to time in part, whenever any such termination is determined to be for the best interest of the Government, and that the Contractor and Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid to the Contractor by reason of such termination; and

Whereas, by the Notice of Termination dated. 19, the Government advised the Contractor of the termination of the contract for the convenience or at the option of the Government; and

Whereas, the Contractor is willing to waive unconditionally any claim against the Government by reason of such termination;

Now, therefore, the parties hereto agree as follows:

ARTICLE 1. The Contractor hereby unconditionally waives any claim against the Government by reason of the termination of the contract and, except as set forth below, releases it from any and all obligations arising under the contract or by reason of its termination, and the Government agrees that all obligations arising under the contract or by reason of its termination, shall be deemed to be concluded; except as follows:

(List reserved or excepted rights and liabilities; see 32 CFR 8.209-2 and Articles 6 of the agreement set forth in 32 8.806-1.)

CFR

9.203

9.204

Contract clauses.

Contract clauses; special.

Limitation on Government's right of

publication for sale to the general public.

Production of motion pictures.

Contracts for acquisition of existing works.

Contracts to be performed outside the United States.

Data Withholding of payment.
General.

Clauses.

Sec.

9.000

Scope of part.

Subpart A-Patents

Authorization and consent.

Authorization and consent in con

tracts for supplies.

9.102-2 Authorization and consent in con

tracts for research or development.

9.302

9.103

Patent indemnification of Government by contractor.

9.303

9.103-1 Patent indemnification in formally

advertised contracts-commercial status predetermined.

9.304

9.103-3 Patent indemnification in negoti

ated contracts.

Sec.

9.304-1 International Traffic in Arms Regulations.

9.304-2 Review of agreements.

AUTHORITY: The provisions of this Part 9 issued under sec. 201, 55 Stat. 839, as amended, sec. 2202, 70A Stat. 120; 50 U.S.C. App. 611, 10 U.S.C. 2202. Interpret or apply secs. 2301-2314, 70A Stat. 127-133; 10 U.S.C. 2301-2314, E.O. 9001, 6 F.R. 6787, as amended by E.O. 9296, 8 F.R. 1429, 3 CFR, 1943 Cum. Supp.

§ 9.000 Scope of part.

This part sets forth policies, instructions and contract clauses pertaining to patents and copyrights in connection with the procurement of supplies and services.

[25 F.R. 14242, Dec. 31, 19601

This subpart prescribes contract clauses and instructions which define and implement the policy of the Department of Defense with respect to

(a) Inventions made in the course of experimental, developmental, or research work performed under Government contracts;

(b) Patent infringement liability resulting from work performed by or for the Government;

(c) Royalties payable in connection with the performance of Government contracts;

(d) Security requirements covering patent applications containing classified subject matter filed by contractors. [29 F.R. 14833, Oct. 31, 1964] § 9.101 [Reserved]

§ 9.102 Authorization and consent.

(a) Under 28 U.S.C. 1498, any suit for infringement of a United States patent based on the manufacture or use by or for the United States of an invention described in and covered by a patent of the United States by a contractor or by a subcontractor (including lower-tier subcontractors) can be maintained only against the Government in the Court of Claims, and not against the contractor or subcontractor, in those cases where the Government has authorized or consented to the manufacture or use of the patented invention. Accordingly,

to insure that work by a contractor or subcontractor under a Government contract may not be enjoined by reason of patent infringement, authorization and

consent shall be given as herein provided. The liability of the Government for damages in any such suit against it⠀⠀ may, however, ultimately be borne by the contractor or subcontractor in accordance with the terms of any patent indemnity clause also included in the contract, and an authorization and consent clause does not detract from any patent indemnification commitment by the contractor or subcontractor. Therefore, both a patent indemnity clause and an authorization and consent clause may be included in the same contract.

(b) Any provision whereby the Government expressly agrees to indemnify the contractor against liability for patent infringement shall not be included in a contract.

(c) An authorization and consent clause shall not be used in contracts where both complete performance and delivery are to be outside the United States, its possessions, or Puerto Rico. [29 F.R. 14833, Oct. 31, 1964]

§ 9.102-1 Authorization and consent in contracts for supplies.

The contract clause set forth below may be included in all contracts for supplies (including construction work), except:

(a) When prohibited by § 9.102(c); or

(b) In contracts for experimental, developmental, or research work in which the clause of § 9.102-2 is required.

AUTHORIZATION AND CONSENT (MAR. 1964)

The Government hereby gives its authorization and consent (without prejudice to any rights of indemnification) for all use and manufacture, in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lower-tier subcontract), of any invention described in and covered by a patent of the United States (i) embodied in the structure or composition of any article the delivery of which is accepted by the Government under this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the Contractor or the using subcontractor with (a) specifications or written provisions now or hereafter forming a part of this contract, or (b) specific written instructions given by the Contracting Officer directing the manner of performance. The entire liability to the Government for infringement of a patent of the United States shall be determined solely by the provisions of the indemnity clauses, if any, included in this contract or any subcontract hereunder (including any lower-tier subcontract), and the Government assumes liability for all other

Greater latitude in the use of patented inventions may be necessary in a contract for experimental, developmental, or research work than in a contract for supplies. Unless prohibited by § 9.102 (c), the clause set forth below shall be included in all contracts calling exclusively for experimental, developmental, or research work, and may be included in contracts calling for both supplies and experimental, developmental, or research work where the latter work is a primary purpose of the contract. In all other contracts for both supplies and experimental, developmental, or research work, the Authorization and Consent clause of § 9.102-1 shall be used. If the clause set forth below is included in a contract, the clause in § 9.102-1 shall not be included. AUTHORIZATION AND CONSENT (JAN. 1961)

The Government hereby gives its authorization and consent for all use and manufacture of any invention described in and covered by a patent of the United States in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lowertier subcontract).

[26 F.R. 2613, Mar. 28, 1961, as amended at 29 F.R. 14833, Oct. 31, 1964]

§ 9.103 Patent indemnification of Government by contractor.

In order that the Government may be reimbursed for liability for patent infringement arising out of or resulting from the performance of construction contracts or contracts for supplies which normally are or have been sold or offered for sale to the public in the commercial open market or which are the same as such supplies with a relatively minor modification thereof a clause providing for indemnification of the Government is to be included in such contracts in accordance with the instructions set forth below. A patent indemnity clause shall not be used in contracts:

(a) Where the Authorization and Consent clause of § 9.102-2 applicable to research and development contracts is authorized, except that in contracts calling also for supplies of the kind described

above, a patent indemnity clause may be used with respect to such supplies;

(b) Where the contract is for supplies which clearly are not or have not been sold or offered for sale to the public in the commercial open market. However, even in the foregoing instance, a patent indemnity clause may be included where (1) in the case of contracts to be awarded by formal advertising it is desired to obtain an indemnity as to specific components or spare parts so sold or offered for sale, in which case the clause shall be modified pursuant to § 9.103-1(b); or (2) in the case of contracts to be awarded either by formal advertising (see § 2.407-8 of this chapter) or negotiation, a patent owner contends that the prospective procurement would infringe his patent and the low bidder or offeror is willing to indemnify the Government as to such patent either (i) without increase in price on the basis that the patent is invalid or not infringed, or (ii) for other good reasons;

(c) Where both performance and delivery are to be outside the United States, its possessions, or Puerto Rico, unless the contract indicates that the supplies are ultimately to be shipped into the United States, its possessions, or Puerto Rico, in which case the instructions of § 9.1031 or § 9.103-3 are applicable; or

(d) Where the contract is for an amount of $5,000 or less, except that, as a matter of administrative convenience, the clause need not be deleted where it is a part of a standard form being used for contracts of $5,000 or less, since it is selfdeleting as to such contracts.

[29 F.R. 14834, Oct. 31, 1964] § 9.103-1

Patent indemnification in formally advertised contracts- -commercial status predetermined.

(a) Except as prohibited by § 9.103 the clause set forth below is appropriate in formally advertised construction contracts and shall be included in formally advertised contracts for supplies when it has been determined in advance of issuing the invitation for bids that the supplies (or such supplies apart from relatively minor modifications to be made thereto) normally are or have been sold or offered for sale by any supplier to the public in the commercial open market.

PATENT INDEMNITY (SEPTEMBER 1964)

If the amount of this contract is in excess of $5,000, the Contractor shall indemnify the

Government and its officers, agents, and employees against liability, including costs, for infringement of any United States letters patent (except letters patent issued upon an application which is now or may hereafter be kept secret or otherwise withheld from issue by order of the Government) arising out of the manufacture or delivery of supplies or out of construction, alteration, modification, or repair of real property (hereinafter referred to as "construction work") under this contract, or out of the use or disposal by or for the account of the Government of such supplies or construction work. The foregoing indemnity shall not apply unless the Contractor shall have been informed as soon as practicable by the Government of the suit or action alleging such Infringement, and shall have been given such opportunity as is afforded by applicable laws, rules, or regulations to participate in the defense thereof; and further, such indemnity shall not apply to: (i) An infringement resulting from compliance with specific written instructions of the Contracting Officer directing a change in the supplies to be delivered or in the materials or equipment to be used, or directing a manner of performance of the contract not normally used by the Contractor; (ii) an infringement resulting from addition to, or change in, such supplies or components furnished or construction work performed which addition or change was made subsequent to delivery or performance by the Contractor; or (iii) a claimed infringement which is settled without the consent of the Contractor, unless required by final decree of a court of competent jurisdiction.

(b) Where a supply contract calls in part for specific components or spare parts which normally are or have been sold or offered for sale by any supplier to the public in the commercial open market, or such items with relatively minor modifications, the Patent Indemnity clause of paragraph (a) of this section shall be modified by adding to the end of the clause either of the following sentences:

The foregoing shall not apply to the following:

(Specifically identify the items to be excluded from the Patent Indemnity clause) (Sept. 1964)

or

The foregoing shall apply only to the following:

(Specifically identify the items to which the Patent Indemnity clause applies) (Sept. 1964)

[29 F.R. 14834, Oct. 31, 1964, as amended at 30 F.R. 1743, Feb. 9, 1965]

§ 9.103-3 Patent indemnification in ne gotiated contracts.

A patent indemnity clause is not required to be included in negotiated contracts, but may be included, first, in negotiated construction contracts, second, as authorized in § 9.103(b) (2), and third, in negotiated contracts for supplies where such supplies normally are or have been sold or offered for sale by the contractor to the public in the commercial open market, or are such supplies with relatively minor modifications made thereto. Ordinarily, the contracting officer, in consultation with the contractor, should be able to determine whether the supplies being purchased normally are on sale or have been sold or offered for sale by the contractor to the public in the commercial open market.

(a) Subject to the foregoing and to the prohibitions in § 9.103, the clause set forth in § 9.103-1(a) is approved for use in negotiated contracts for construction work or supplies.

(b) Where a supply contract calls in part for specific components or spare parts which normally are or have been sold or offered for sale by the contractor to the public in the commercial open market, or such items with relatively minor modifications, the patent indemnity clause of § 9.103-1(a) shall be modified by adding to the end of the clause either of the following sentences:

The foregoing shall not apply to the following:

(Specifically identify the items to be excluded from the Patent Indemnity clause) (SEPT. 1964)

or

The foregoing shall apply only to the following:

(Specifically identify the items to which the Patent Indemnity clause applies) (SEPT. 1964)

[29 F.R. 14834, Oct. 31, 1964]

§ 9.103-4 Waiver of indemnity by the

Government.

In the event that it is desired to exempt one or more specified United States patents from the patent indemnity clause of § 9.103-1, authority shall first be obtained from the Secretary concerned or his authorized representative, and the following clause shall be includ

ed in the contract, in addition to the patent indemnity clause:

WAIVER OF INDEMNITY (JAN. 1955)

Any provision of this contract to the contrary notwithstanding, the Government hereby authorizes and consents to the use and manufacture, solely in the performance of this contract, of any invention covered by the United States patents identified and listed below, and waives indemnification by the Contractor with respect to such patents: (Identify the patents by number or by other means if more appropriate)

[25 F.R. 14243, Dec. 31, 1960, as amended at 29 F.R. 14834, Oct. 31, 1964]

§ 9.104

Notice and assistance.

The Government should be notified by the contractor of all claims of infringement in connection with the performance of a Government contract which come to the contractor's attention. The contractor should also assist the Government, to the extent of evidence and information in the possession of the contractor, in connection with any suit against the Government, or any claims against the Government made before suit has been instituted, on account of any alleged patent or copyright infringement arising out of or resulting from the performance of the contract. Accordingly, the clause set forth below shall be included in all contracts in excess of $10,000 for supplies, construction, or experimental, developmental, or research work: Provided, That the clause set forth below shall not be included in contracts:

(a) Where both performance and delivery are to be outside the United States, its possessions, or Puerto Rico, unless the contract indicates that the supplies are ultimately to be shipped into the United States, its possessions, or Puerto Rico; or

(b) Of $10,000 or less, except that as a matter of administrative convenience, the clause need not be deleted when it is a part of a standard form being used for such contracts, since it is self-deleting: NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT JANUARY 1965)

The provisions of this clause shall be applicable only if the amount of this contract exceeds $10,000.

(a) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each notice or claim of patent or copyright infringement based on

the performance of this contract of which the Contractor has knowledge.

(b) In the event of any claim or suit against the Government on account of any alleged patent or copyright infringement arising out of the performance of this contract or out of the use of any supplies furnished or work or services performed hereunder, the Contractor shall furnish to the Government, when requested by the Contracting Officer, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of the Government except where the Contractor has agreed to indemnify the Government.

(c) This clause shall be included in all subcontracts.

For proper action to be taken by the contracting officer with respect to reports of notices or claims of patent infringement received by him under the provisions of this section, see § 9.105. [30 F.R. 6003, Apr. 29, 1965]

§ 9.105 Processing of infringement claims.

The Military Departments shall process claims for alleged unauthorized use of inventions in accordance with instructions of each respective Military Department.

[25 F.R. 14244, Dec. 31, 1960]

§ 9.106 Classified contracts.

Unauthorized disclosure of classified subject matter, whether in patent applications or resulting from the issuance of a patent, may be a violation of 18 U.S. Code 791 et seq. (Espionage and Censorship) and related statutes and may be contrary to the interests of national security. Accordingly, except as otherwise provided in § 9.106-1, the following clause shall be included in every classified contract and in every unclassified contract which covers or is likely to cover classified subject matter:

FILING OF PATENT APPLICATIONS (JAN. 1955)

(a) Before filing or causing to be filed a patent application disclosing any subject matter of this contract, which subject matter is classified "Secret" or higher, the Contractor shall, citing the thirty (30) day provision below, transmit the proposed application to the Contracting Officer for determination whether, for reasons of national security, such application should be placed under an order of secrecy or sealed in accordance with the provisions of 35 U. S. Code 181-188 or the issuance of a patent should