Congressional Record: Proceedings and Debates of the 106th Congress, First Session, Volume 145, Part 7 Page: 9,076

CONGRESSIONAL RECORD-SENATE

May 11, 1999

"(3) the applicant makes a commitment to
achieve practical utilization of the invention
within a reasonable time, which time may be
extended by the agency upon the applicant's
request and the applicant's demonstration
that the refusal of such extension would be
unreasonable;
"(4) granting the license will not tend to
substantially lessen competition or create or
maintain a violation of the Federal antitrust
laws; and
"(5) in the case of an invention covered by
a foreign patent application or patent, the
interests of the Federal Government or
United States industry in foreign commerce
will be enhanced.
"(b) MANUFACTURE IN UNITED STATES.-A
Federal agency shall normally grant a li-
cense under section 207(a)(2) to use or sell
any federally owned invention in the United
States only to a licensee who agrees that
any products embodying the invention or
produced through the use of the invention
will be manufactured substantially in the
United States.
"(c) SMALL BUSINESS.-First preference for
the granting of any exclusive or partially ex-
clusive licenses under section 207(a)(2) shall
be given to small business firms having equal
or greater likelihood as other applicants to
bring the invention to practical application
within a reasonable time.
"(d) TERMS AND CONDITIONS.-Any licenses
granted under section 207(a)(2) shall contain
such terms and conditions as the granting
agency considers appropriate. Such terms
and conditions shall include provisions-
"(1) retaining a nontransferable, irrev-
ocable, paid-up license for any Federal agen-
cy to practice the invention or have the in-
vention practiced throughout the world by
or on behalf of the Government of the United
States;
"(2) requiring periodic reporting on utiliza-
tion of the invention, and utilization efforts,
by the licensee, but only to the extent nec-
essary to enable the Federal agency to deter-
mine whether the terms of the license are
being complied with; and
"(3) empowering the Federal agency to ter-
minate the license in whole or in part if the
agency determines that-
"(A) the licensee is not executing its com-
mitment to achieve practical utilization of
the invention, including commitments con-
tained in any plan submitted in support of
its request for a license, and the licensee
cannot otherwise demonstrate to the satis-
faction of the Federal agency that it has
taken, or can be expected to take within a
reasonable time, effective steps to achieve
practical utilization of the invention;
"(B) the licensee is in breach of an agree-
ment described in subsection (b);
"(C) termination is necessary to meet re-
quirements for public use specified by Fed-
eral regulations issued after the date of the
license, and such requirements are not rea-
sonably satisfied by the licensee; or
"(D) the licensee has been found by a court
of competent jurisdiction to have violated
the Federal antitrust laws in connection
with its performance under the license
agreement.
"(e) TREATMENT OF REPORT INFORMATION.-
Any report required under subsection (d)(2)
shall be treated by the Federal agency as
commercial and financial information ob-
tained from a person and is privileged and
confidential and not subject to disclosure
under section 552 of title 5.
"(f) PUBLIC NOTICE.-No exclusive or par-
tially exclusive license may be granted
under section 207(a)(2) unless public notice of

the intention to grant an exclusive or par-
tially exclusive license on a federally owned
invention has been provided in an appro-
priate manner at least 15 days before the li-
cense is granted, and the Federal agency has
considered all comments received before the
end of the comment period in response to
that public notice. This subsection shall not
apply to the licensing of inventions made
under a cooperative research and develop-
ment agreement entered into under section
12 of the Stevenson-Wydler Technology Inno-
vation Act of 1980 (15 U.S.C. 3710a).
"(g) PLAN.-No Federal agency shall grant
any license under a patent or patent applica-
tion on a federally owned invention unless
the person requesting the license has sup-
plied the agency with a plan for development
or marketing of the invention, except that
any such plan shall be treated by the Federal
agency as commercial and financial informa-
tion obtained from a person and privileged
and confidential and not subject to disclo-
sure under section 552 of title 5.".
(b) AMENDMENTS TO CHAPTER 18 OF TITLE
35, UNITED STATES CODE.-Chapter 18 of title
35, United States Code, is amended-
(1) in section 200 by inserting "without un-
duly encumbering future research and dis-
covery" after "free competition and enter-
prise;";
(2) by amending section 202(e) to read as
follows:
"(e) In any case when a Federal employee
is a coinventor of any invention made with a
nonprofit organization, small business firm,
or a non-Federal inventor, the Federal agen-
cy employing such coinventor may, for the
purpose of consolidating rights in the inven-
tion and if it finds that it would expedite the
development of the invention-
"(1) license or assign whatever rights it
may acquire in the subject invention to the
nonprofit organization, small business firm,
or non-Federal inventor in accordance with
sections 200 through 204 (including this sec-
tion); or
"(2) acquire any rights in the subject in-
vention from the nonprofit organization,
small business firm, or non-Federal inventor,
but only to the extent the party from whom
the rights are acquired voluntarily enters
into the transaction and no other trans-
action under this chapter is conditioned on
such acquisition."; and
(3) in section 207(a)-
(A) in paragraph (2), by striking "patent
applications, patents, or other forms of pro-
tection obtained" and inserting "inven-
tions"; and
(B) in paragraph (3), by inserting ", includ-
ing acquiring rights for and administering
royalties to the Federal Government in any
invention, but only to the extent the party
from whom the rights are acquired volun-
tarily enters into the transaction, to facili-
tate the licensing of a federally owned inven-
tion" after "or through contract".
(c) CONFORMING AMENDMENT.-The item re-
lating to section 209 in the table of sections
for chapter 18 of title 35, United States Code,
is amended to read as follows:
"209. Licensing federally patented or owned
inventions.".
By Mr. BREAUX (for himself and
Mr. NICKLES):
S. 1000. A bill to amend the Internal
Revenue Code of 1986 to treat certain
dealer derivative financial instru-
ments, hedging transactions, and sup-
plies as ordinary assets; to the Com-
mittee on Finance.

COMMODITY DERIVATIVE DEALERS AND ORDI-
NARY BUSINESS HEDGING TRANSACTIONS
* Mr. BREAUX. Mr. President, I, along
with my distinguished colleague Sen-
ator DON NICKLES, am introducing leg-
islation today to clarify the tax treat-
ment of commodity derivative dealers
and of ordinary business hedging trans-
actions. This legislation, which was
proposed by the Administration in its
Fiscal Year 2000 budget, is necessary to
eliminate the existing tax uncertain-
ties with respect to dealer derivative
transactions and hedging transactions.
Specifically, Internal Revenue Code
section 1221 would be amended to in-
clude business hedging transaction in
the list of ordinary assets and clarify
that activities that "manage" rather
than only "reduce" risk are hedging
activities. In addition, derivative con-
tracts held by derivative dealers would
similarly be treated as ordinary assets.
Current tax and business practices
treat derivative contracts held by com-
modity derivatives dealers as ordinary
property. Nevertheless, such derivative
dealers are faced with uncertainties re-
garding the proper reporting of gains
and losses from their dealer activities,
unlike dealers in other transactions.
Finally, supplies used in the provision
of services for the production of ordi-
nary property would be added to the
list of ordinary assets in section 1221.
Such supplies are so closely related to
the taxpayer's business that ordinary
character should apply.
The Treasury Department has pro-
mulgated numerous regulations that
affect derivatives contracts and our
bill merely clarifies current law treat-
ment of dealer activities. I urge my
colleagues to support this important
and much needed legislation.
By Mr. LIEBERMAN (for himself,
Mr. MCCAIN, Mr. BYRD, Mr.
BROWNBACK, Mr. CONRAD, Mr.
KOHL, Mr. CLELAND, Ms.
LANDRIEU, Mr. BRYAN, Mr.
REED, and Mrs. MURRAY):
S. 1001. A bill to establish the Na-
tional Youth Violence Commission,
and for other purposes; to the Com-
mittee on Governmental Affairs.
NATIONAL YOUTH VIOLENCE COMMISSION ACT
Mr. LIEBERMAN. Mr. President,
three weeks after the tragic shooting
in Littleton, Colorado, we as a national
community are still struggling to
make sense of this horrific event and
the other school massacres that pre-
ceded it. We are still searching for rea-
sons why some of our children are
slaughtering each other, and why there
is generally so much violence sur-
rounding our young people, not just in
classrooms and schoolyards but on
streetcorners and in homes across the
country.
In this discussion, we have heard
many factors cited as possible causes,
but few definitive conclusions or little
consensus on exactly what or who is re-
sponsible for this alarming trend. In

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