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INCENTIVE AWARDS FOR FEDERAL INVENTORS

DAO 202-452: INCENTIVE AWARDS FOR FEDERAL INVENTORS
Number: DAO 202-452
Effective Date: 1977-06-03

SECTION 1. PURPOSE.

The purpose of this order is to set forth the policies and procedures for the granting of incentive awards to Federal inventors.

SECTION 2. GENERAL PROVISIONS.

Pursuant to the provisions of this order, incentive awards shall be granted to Federal inventors in order to: (1) compensate equitably and recognize Federal inventors, and (2) encourage Federal inventors to disclose commercially promising inventions and facilitate the transfer and utilization of related technology for public use.

SECTION 3. PRIMARY RESPONSIBILITY.

Pursuant to its authority under Department Organization Order 30-7A, as amended, the National Technical Information Service (NTIS) shall have the primary operational responsibility for the granting of incentive awards to Federal inventors under this order.

SECTION 4. ELIGIBILITY.

.01 All civil service employees, as defined under 5 U.S.C. 2105, employees of the government of the District of Columbia, and members of the commissioned corps of the National Oceanic and Atmospheric Administration (NOAA) and the United States Public Health Service (PHS) (hereinafter “civil service employees”) shall be eligible to receive awards pursuant to this order after their employing agency or Department has entered into an appropriate cooperative agreement with NTIS. Among other things, such cooperative agreement shall contain provisions that transfer custody of inventions owned by the United States to the Department of Commerce in order to permit NTIS to license those inventions.

.02 Pursuant to Executive Order 11438, 3 CFR 755 (1966-70 Comp.), 10 U.S.C. 1124 (1970), a recommendation may be made to the Department of Defense, or to the Department of Transportation in the case of a member of the Coast Guard when it is not operating as a service in the Navy, that a cash award under this order be made to a member of the armed forces, as defined under 5 U.S.C. 2101(2).

SECTION 5. AUTHORITY.

.01 Awards to civil service employees shall be granted pursuant to 5 U.S.C. 450l-4506, and regulations issued thereunder by the Civil Service Commission at 5 CFR Part 451.

.02 Awards to members of the armed forces may be recommended pursuant to the provisions of Executive Order 11438.

.03 Pursuant to Department Organization Order 30-7A, as amended, the Director, NTIS has been delegated the authority to approve and pay cash awards not exceeding $5,000 to civil service employee-inventors and to recommend to the Department of Defense, or to the Secretary of Transportation in the case of a member of the Coast Guard when it is not operating as a service in the Navy, that a cash award not exceeding $25,000 be granted to a member of the armed forces pursuant to Executive Order 11438.

SECTION 6. RELATIONSHIP TO EXISTING AWARDS PROGRAMS.

An incentive award to an inventor under the provisions of this order will be supplemental to and cumulative with any other incentive award granted to the inventor under Civil Service Commission regulations. Presently, initial awards between $50 to $300 are often made to the inventor by the employing agency at the time of filing the patent application covering an invention or at the time a patent issues on an invention.

SECTION 7. DESCRIPTION OF THE AWARD.

.01 Awards for civil service employees:

a. Upon execution of a royalty-bearing license agreement by NTIS, the inventor, or inventors in the case of a jointly made invention, whose invention is covered by the license agreement, shall be entitled to receive a cash award under the provisions of this order.

b. The amount of the award shall be determined through the interagency coordination process described at section 8.01 of this order. For each year during which the royalty-bearing license agreement is effective, the inventor or inventors shall be entitled to receive a minimum cash award of $300. Where an award in excess of $300 is contemplated, the total annual award to an inventor for a single invention shall not exceed fifteen percent (15%) of the annual gross revenues received by NTIS under the license agreement covering that invention.

c. In the event the cumulative cash awards for a single invention exceed. $5,000 but do not exceed $25,000, the Director, NTIS shall prepare a recommendation from the Secretary of Commerce to the Chairman of the Civil Service Commission for approval of the award. Pursuant to 5 U.S.C. 4504, in those instances where, based upon the exceptional value and benefit of the inventor’s contribution, a cumulative award for a single invention in excess of $25,000 is warranted, the Director, NTIS, shall prepare a recommendation from the Secretary of Commerce to the Chairman of the Civil Service Commission, and to the Director of the Office of Management and Budget, the Presidential award be made. Upon endorsement by both the Chairman of the Civil Service Commission and the Director of the Office of Management and Budget, the President may grant a cumulative award in excess of $25,000, and honorary
recognition may be granted as deemed appropriate.

d. All recommendations for awards prepared for the Secretary by the Director, NTIS in accordance with subparagraph 7.01c., above, shall be reviewed by the Department’s Incentive Awards Board before they are submitted to the Secretary for consideration.

.02 Awards for members of the armed forces:

a. Upon the execution of a royalty-bearing license agreement by NTIS covering an invention made by a member of the armed forces, the Director, NTIS shall, pursuant to Executive Order 11438, recommend to the Department of Defense, or to the Department of Transportation in the case of a member of the Coast Guard when that agency is not operating as a service in the Navy, that a cash award be granted. The amount of the award recommended shall be determined through the interagency coordination process described in paragraph 8.01 below. For each year during which a royalty-bearing license agreement is effective, it shall be suggested that at a minimum an award of $300 be paid. Where an award in excess of $300 is contemplated, the total annual suggested award shall not exceed fifteen percent (15%) of the annual gross revenues received by NTIS under the license agreement covering the invention.

b. Any cash award granted to a member of the armed forces shall be made in accordance with the provisions of Executive Order 11438.

.03 The Director, NTIS, shall establish procedures for the orderly and efficient granting of incentive awards under this order. Such procedures shall include provisions for the preparation and maintenance of accurate records of all awards made under the provisions of this order. Records shall be prepared and maintained with respect to each invention which becomes the subject of an award under this order. These records shall help to ensure that limitations on the dollar amounts of awards are not exceeded, and that appropriate approvals for certain awards are obtained as required.

SECTION 8. GRANTING AWARDS.

.01 Interagency coordination of awards:
a. To ensure that awards criteria are uniformly applied, interagency coordinating meetings will periodically be held at the call of the Director, NTIS, to review the program. The senior patent counsel from each participating agency, or a designee, and the Director, NTIS, or a designee, shall participate in these reviews.

b. The amount of the monetary award for each invention shall be jointly determined,. pursuant to policies established at the interagency coordinating meetings, by the senior patent counsel from the inventor's agency and the Director, NTIS, or their designees, who shall apply the awards criteria described in paragraph 8.02, below.

.02 Criteria for monetary awards:

In determining the amount of the award, factors such as the following shall be considered:

a. the extent to which the invention advances the state of the art;

b. the scope of its application;

c. the importance of the invention in terms of its value and benefits to the Government and the public; and

d. the contribution that the inventor(s) makes to the private sector utilization of the invention by assisting in the transfer of the technology to prospective licensees.

.03 Procedures for granting of awards:

a. Procedures for granting of awards by NTIS shall be specified in the applicable interagency cooperative agreement which shall be consistent with the provisions of 5 CFR 451.309 with regard to awards to civil service employees and with the provisions of Executive Order 11438 with regard to awards to members of the armed forces.

b. The initial award to the inventor shall normally be made at a formal presentation ceremony following the execution by NTIS of the first license agreement on the invention. A plaque or certificate shall accompany the cash payment. The presentation will be made either by the Director, NTIS, or by the Director of the employing agency, or their designees. The ceremony shall normally occur at the inventor’s place of work.

c. Subsequent awards to the inventor, in addition to the $300 minimum annual award, shall be based on additional utilization of the invention, and shall be made annually for as long as a royalty-bearing license agreement covering the inventor's invention is in effect.

d. When an invention is attributable to more than one inventor, the award shall be divided among the joint inventors pursuant to subparagraph 8.02 of this order.

SECTION 9. FUNDING OF AWARD PAYMENTS.

The NTIS patent program is currently funded primarily from appropriated funds. In seeking to increase the transfer of Government technology through the licensing of patents covering Government-owned inventions, NTIS is striving to develop a self-sustaining program in which fees and royalty income will offset program costs. Award payment under this order, as one of the costs of the patent program operation, will only be made from available royalty income derived from the licenses.

Signed by: Director, National Technical Information Service

Approved by: Assistant Secretary for Administration

Office of Primary Interest: National Technical Information Service

Index Changes:

Add:
Federal Inventors, Incentive Awards for 202-452
Incentive Awards for Federal Inventors 202-452
Inventors; Incentive Awards for Federal 202-452

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Page last updated:April 7, 2010