Part

601

The regulations in this part are issued under the authority contained in Executive Order 9865 dated June 14, 1947. Under the Executive order, the Secretary of Commerce is required, where the best interests of the United States so indicate, to file patent applications in foreign Countries covering inventions resulting from Government conducted or financed research embodied in United States patents owned by the Government of the United States. The Secretary of Commerce having obtained such foreign patent rights for the United States Government may issue licenses thereunder to nationals of the United States who make application therefor.

§ 601.2

Application for licenses.

An application for a license should be addressed to the Secretary of Commerce, Washington 25, D. C., Attention: Director, Business and Defense Services Administration. It should set forth the name and address of the individual, partnership, or corporation desiring the license, a brief description of the business activities in which engaged, and such other pertinent information as may be desired. The Government of the United States is interested in the maximum use being made of patented processes and devices which it owns, and, accordingly, the Secretary of Commerce will consider the likely ability of the applicant to use the patented process or device before determining that a license should or should not issue.

[13 F. R. 313, Jan. 22, 1948, as amended at 18 F. R. 8111, Dec. 10, 1953] § 601.3

Type of license.

Under existing law, the United States can issue only licenses which are revocable at will. Licenses will also be nonexclusive and royalty-free except where the Secretary of Commerce shall determine and proclaim it to be inconsistent with the public interest to issue licenses on such a basis.

§ 601.4

Conditions in licenses.

The licenses to be issued will be granted on the following express conditions: (a) The Government of the United States will not guarantee the validity of the patent covered by the license, nor will it undertake to defend any suits brought against the licensees or to indemnify for infringement of the patent; (b) the Government of the United States will reserve the right at any time to grant additional licenses; and (c) the Government will reserve the right to revoke the license at any time. It will also be provided in the license that it be nontransferable.

602.2 Application for duty-free entry of foreign instruments.

602.3 Review of the application by the Commissioner of Customs.

602.4 Public notice of application and opportunity to present views. 602.5 Review and findings of the Department of Commerce.

Appendix A-Sample Form BDSAF-768. AUTHORITY: The provisions of this Part 602 issued under 80 Stat. 897 (1966); 19 U.S.C. nts. prec. 1202; Department of Commerce Order No. 152, as revised July 11, 1968.

SOURCE: The provisions of this Part 602 appear at 34 F.R. 15787, Oct. 14, 1969, unless otherwise noted.

as added by said section 6(c)). The Act provides, inter alia that any nonprofit institution (whether public or private) established for educational or scientific purposes may obtain duty-free treatment of certain instruments and apparatus entered for its use, if the Secretary of Commerce determines that no instrument or apparatus of equivalent scientific value to such article, for the purposes for which the instrument or apparatus is intended to be used, is being manufactured in the United States. A public or private nonprofit institution established for educational or scientific purposes desiring to obtain free entry of an instrument or apparatus under item 851.60, Tariff Schedules of the United States, shall file an application for such entry in accordance with the requirements of 19 CFR 10.115 and § 602.2. (All references in this part to items, headnotes, schedules or parts, unless otherwise indicated, are references to items, headnotes, schedules or parts of the Tariff Schedules of the United States.) If the application is made in accordance with applicable regulations, notice and opportunity to present views will be provided in accordance with § 602.4, subject to § 602.5 (e). Thereafter the application shall be reviewed, and a decision made thereon and published in the FEDERAL REGISTER, in accordance with § 602.5. An appeal from any such decision may be taken, in accordance with headnote 6(e) to part 4 of Schedule 8, Tariff Schedules of the United States, only to the U.S. Court of Customs and Patent Appeals and only on a question or questions of law, within 20 days after publication of the decision in the FEDERAL REGISTER. If at any time while its application is under consideration by the Secretary of Commerce or by the Court of Customs and Patent Appeals on an appeal from a finding by him, an institution cancels an order for the instrument or apparatus to which the application relates or ceases to have a firm intention to order such instrument or apparatus, the institution shall promptly notify the Administrator or such court, as the case may be.

(b) Definitions. (1) "Instruments and apparatus" shall embrace only instruments and apparatus classifiable under the tariff items specified in headnote 6(a) of part 4 of Schedule 8. A combination of a basic instrument or apparatus and additional components shall be treated as a single instrument or apparatus here

under provided that, under normal commercial practice, such combination is considered to be a single instrument or apparatus and provided further that the applicant has ordered or, upon favorable action on its application, firmly intends to order the combination as a unit.

(2) "Accessory” shall have the meaning which it has under normal commercial usage. An accessory for which dutyfree entry is sought under item 851.60 shall be the subject of a separate application when it is not an accompanying accessory.

(3) "Foreign instrument" shall mean an instrument, apparatus or accessory for which duty-free entry is sought under item 851.60. However, "foreign instrument" does not include repair components, which enter under item 851.65.

(4) "Accompanying accessory" shall mean an accessory for a foreign instrument that accompanies it in the same shipment and that is necessary for accomplishment of the purposes for which the foreign instrument is intended to be used. Only one application shall be required for a foreign instrument and its accompanying accessories.

(5) Unless context indicates otherwise, "article" shall mean a foreign instrument and its accompanying accessories.

(6) "Domestic instrument" shall mean an instrument, apparatus or accessory which is produced in the United States.

(7) "Pertinent specification" of an instrument, apparatus or accessory shall mean those structural, operational, performance, and other characteristics specified for the instrument, apparatus, or accessory that are necessary for the accomplishment of the purposes described by the applicant in response to Question 7 of form BDSAF-768, "Request for Duty-Free Entry of Scientific Instruments or Apparatus," excluding from consideration those purposes excluded by headnotes 1 or 6(a) to Part 4, Schedule 8, Tariff Schedules of the United States (TSUS). The term does not extend to such characteristics as size, durability, complexity, or ease of operation, ease of maintenance and versatility, unless the applicant can demonstrate that they are necessary for accomplishing the purposes for which the article is intended to be used. The term does not include cost differences between the domestic and foreign instrument, apparatus or accessory.

(8) "Guaranteed specifications" shall

mean those pertinent specifications for the foreign article and comparable domestic instruments, whereby the respective manufacturers define as an explicit part of the contractual agreement with the purchaser, for each related capability, the minimum performance level that the user may routinely expect to achieve as well as the conditions under which the specified minimum level was established by the manufacturer.

(9) "Administrator" shall mean the Administrator, Business and Defense Services Administration of the Department of Commerce, or such official as may be designated to act in his behalf in this matter.

(c) Applications and comments. Applications (19 CFR 10.115 and § 602.2) and comments (§ 602.4) shall be written, typed or printed, in the English language and legible. Copies of relevant documents, such as manufacturers' specifications, advertisements for bids, correspondence relating to availability of instruments or apparatus or the like, should be made a part of an application or comments, and be fully identified. Each copy should be permanent and legible, and shall be attached as part of the response to the question to which it relates. A document in a foreign language shall be accompanied by an accurate translation.

(d) Exclusion from duty-free entry under Headnote 6(a). Certain articles will be excluded from duty-free entry as prescribed in 19 CFR 10.114 (c).

(e) Scientific equivalency. The determination of scientific equivalency shall be based on a comparison of the pertinent specifications of the foreign instrument with similar pertinent specifications of the most closely comparable domestic instrument. The guaranteed specifications for the foreign article will be considered in the comparison, including any amendments to the guaranteed specifications which have been inserted in the record. Similarly, the guaranteed specifications for the most closely comparable domestic instrument will be considered including any amendments to the guaranteed specifications which have been inserted in the record. In the comparison, the Administrator may consider any reasonable combination of domestic instruments and accessories as being comparable to a foreign instrument that combines two or more functions in an integrated unit, if the combination of domestic instruments and accessories is

capable of accomplishing the purposes for which the foreign instrument is intended to be used. If the Administrator finds that at least one domestic instrument or reasonable combination of domestic instruments does possess all the pertinent specifications of the foreign article, he shall find that there is being manufactured in the United States an instrument of equivalent scientific value to the foreign instrument for such purposes as described in the response to Question 7 of form BDSAF-768. Otherwise, he shall find to the contrary.

(f) Domestic manufacturer. An instrument, apparatus, or accessory shall be considered as being manufactured in the United States if they are customarily produced for stock in anticipation of a sale, produced according to manufacturer's specifications only after receipt of order, or custom-made. Produced for stock, produced on order, and custommade shall have the following meanings:

(1) Produced for stock. An instrument, apparatus, or accessory shall be considered to be produced for stock if it was manufactured in the United States, is on sale and available from a stock in the United States.

(2) Produced on order. An instrument, apparatus, or accessory shall be considered to be produced on order if a domestic manufacturer lists it in a current catalog and is able and willing to produce the instrument, apparatus or accessory within the United States and have it available without unreasonable delay to the applicant. In determining whether a U.S. manufacturer is able and willing to produce such instrument, apparatus, or accessory and have it so available, the Administrator shall take into account the normal commercial practices applicable to the production and delivery of instruments, apparatus, or accessories of the same general category.

(3) Custom-made. An instrument, apparatus or accessory shall be considered to be custom-made if it is an instrument, apparatus, or accessory made to purchaser's specifications. In determining whether a domestic manufacturer is able to produce a custom-made instrument, apparatus, or accessory as defined herein, the Administrator shall take into account the production experiences of the domestic manufacturer with respect to the types and complexity of products, the extent of the technological gap between

the instrument, apparatus or accessory to which the application relates and the manufacturer's customary products, and the availability of the professional and technical skills, as well as manufacturing experience, essential to bridging the gap and the time required by the domestic manufacturer to produce an instrument, apparatus or accessory to purchaser's specifications.

(g) Excessive delivery time. Duty-free entry of the article shall be considered justified without regard to whether there is being manufactured in the United States an instrument, apparatus or accessory of equivalent scientific value for the purposes described in response to Question 7, if the delay in obtaining such domestic instrument, apparatus or accessory (as indicated by the difference between the delivery times quoted respectively by domestic manufacturer and foreign manufacturer) will seriously impair the accomplishment of the purposes. In determining whether the difference in delivery times is excessive, the Administrator shall take into account the relevancy of the applicant's program to other research programs with respect to timing, the applicant's need to have such instrument, apparatus or accessory available at the scheduled time for the course(s) in which the article is intended to be used, and other relevant circumstances.

(h) Entry and liquidation. Entry and liquidation procedures are prescribed in 19 CFR 10.114(d).

§ 602.2

Application for duty-free entry

of foreign instruments.

(a) Additional requirements applicable to applications. Business and Defense Services Administration Form 768 (BDSAF-768), "Request for duty-free entry of scientific instruments and apparatus," a sample of which is set forth as Appendix A hereto and is hereby made a part hereof, shall be used in the preparation of an application. Seven copies of the form shall be completed in accordance with paragraph (b) of this section. Questions 1, 2, 3, 4, 6, and 10 of the form shall be answered by an authorized fiscal officer of the applicant institution; Questions 5, 7, 8, and 9 shall be answered by the person in the applicant institution under whose direction and control the foreign instrument will be used and who is thoroughly familiar with the specific program requiring an instrument, apparatus or accessory having the

pertinent specifications of the foreign instrument. Two of such forms shall be executed in original by the aforementioned persons; five shall be conformed copies. The seven completed copies of the form, with the attachments required to complete the form fully should be filed with the Commissioner of Customs, Attention: Tariff Classification Rulings, Washington, D.C. 20226.

(b) BDSAF-768. The applicant should answer all applicable questions appearing on BDSAF-768. The instructions set forth below are to be followed in completing the form. Unless otherwise indicated from context, terms used in the form have the meanings defined in § 602.1(b).

(1) Question 5 (Description of article). A single application (in the required number of copies) may be submitted for any quantity of the same type or model of the foreign instrument, apparatus or accessory, provided that all of that quantity are intended to be used for all of the purposes described in the response to Question 7. If the purchase order includes different types or models of the same category of instrument, apparatus or accessory, a separate application shall be submitted for each type or model although all may be intended for the same purposes. The specifications of the foreign manufacturer or facsimile thereof shall be included in the response to Question 5. These specifications shall be in a form that permits comparison with customary specifications for comparable domestic instruments, apparatus, or accessories. If the technical nature of the foreign instrument, apparatus, or accessory is such that the specifications for a performance capability may vary according to variations in test procedures, sample material, sample size, and other parameters, the specifications for the article shall identify the relevant parameters. In the case of produced-on-order or custom-made instruments, apparatus or accessories, the response to Question 5 shall include a statement from the foreign manufacturer attesting to the degree of compliance with purchaser's specifications.

(2) Question 6 (Serial number (s)). If the serial numbers of the foreign instrument and accompanying accessories are not known when the application is submitted, they shall be supplied in writing to the Administrator promptly when they become known to the applicant.

(3) Question 7 (Intended purposes).

The response to this question shall describe the intended purposes of the article in sufficient detail to permit identifying each specification of the article that is alleged to be pertinent with the particular purpose(s) and the related objective(s) for the accomplishment of which the specification is claimed to be necessary. If the article is intended to be used in both research and educational programs, the purposes and relevant objectives of each program shall be described separately. Programs that may be undertaken in some unspecified future period shall not be considered in the comparison.

(4) Question 8 (Justification for dutyfree entry) —(i) No instrument, apparatus, or accessory of the same general category is being manufactured in the United States. The term "same general category" shall mean the category in which an instrument, apparatus or accessory is customarily classified in trade directories and product-source lists (electron microscope, mass spectrometers, light microscopes, X-ray spectrometers, and the like). If any instrument, apparatus or accessory of the same general category is being manufactured in the United States, without regard to the degree of comparability with the article, the applicant shall justify the nonequivalency of such instrument, apparatus or accessory in accordance with subdivision (ii) of this subparagraph.

(ii) No instrument, apparatus, or accessory being manufactured in the United States is of equivalent scientific value to the article for such purposes as described in respsone to Question 7. The comparison of the alleged pertinent specifications of the article shall be made with similar specifications of the most closely comparable instrument being manufactured in the United States. The term "most closely comparable instrument" shall mean the domestic instrument(s) or apparatus and accessories that most closely fulfill the applicant's technical requirement described in response to Question 7, without regard to differences in cost, design or structural characteristics. In making the comparison only the article and accompanying accessories described in response to Question 5 and the purposes described in response to Question 7 shall be considered. The planned purchase of additional accessories or the planned conversion of the article at some unspecified future time, for programs that may be