In addition, we support the concept developed by the Department 
of Health, Education, and Welfare of providing the first option to 
ownership of inventions made in the performance of government research to 
those nonprofit or educational institutions having demonstrated technology 
transfer capabilities. The HEW's Institutional Patent Agreement has 
proved to be an effective means of encouraging commercialization of the 
results of Government-funded research. Therefore, we believe the IPA con- 
cept will assist in recognizing both the incentives of the United States 
patent system and the capabilities of the private sector in commercial- 
izing the results of Government-funded research. We recommend the continued 
full application of this concept to Government-funded activities in the 
area of recombinant DNA research. We see no valid reason for instituting a 
separate set of rules for such activities. Any potential safety factors 
associated with such research can adequately be addressed without alteration 
of the basic arrangement of private ownership of incentive subject matter 
under the limitations outlined in the IPA. 
Your letter raises the concern of whether reliance upon the 
United States patent system may discourage the rapid exchange of research 
information within the scientific community. In our view, the opposite is 
true — that is, elimination of the patent system in this area of research 
would serve to discourage rapid dissemination of information, either through 
private sector reliance upon trade secret protection or a reluctance by 
Government grantees to make full disclosure in reporting research results to 
the Government. Continued reliance upon the incentives of the United States 
patent system, through the mechanism of the Standard Institutional Patent 
Agreement, will encourage prompt reporting and the dissemination of informa- 
tion on research activities in the field of recombinant DNA. Therefore, we 
agree with the conclusions of your patent experts to the effect that there 
will be no undue burden on disclosure due to reliance on patent protection. 
In fact, we feel that the greater the reliance on the patent system the 
greater will be the incentive for prompt dissemination of private and Govern- 
ment-funded research results. 
Your letter lists five options which may be appropriate means of 
allocating invention rights to Government grantees. In our view, the first 
three options are unacceptable in that patent incentives would not be 
utilized to an appropriate extent. We recommend that the Department continue 
to permit qualifying institutions to exercise the first option to ownership 
under the IPA. However, the Department should request that IPA grantees 
license only those institutions which are willing to conduct their DNA 
research activities in a manner consistent with Federal Government guidelines 
governing such research. Thus, we recommend a modification of your options 
4 and 5 under which the grantee institution would license only those concerns 
U07] 
