RIGHTS IN TECHNICAL DATA

SEC. 808. RIGHTS IN TECHNICAL DATA (a) In General.—(1) Section 2320(a) of title 10, United States Code, is amended by adding at the end of paragraph (1) the following: “Such regulations also may not impair the right of a contractor or subcontractor to receive from a third party a fee or royalty for the use of technical data pertaining to an item or process developed 101 STAT. 1129 exclusively at private expense by the contractor or subcontractor, except as otherwise specifically provided by law.” (2) Paragraph (2)(E) of such section is amended— (A) by striking out “agreed upon” and inserting in lieu thereof “established”; (B) by striking out the comma after “negotiations)” and inserting in lieu thereof the following: “and shall be based upon negotiations between the United States and the contractor, except in any case in which the Secretary of Defense determines, on the basis of criteria established in the regulations, that negotiations would not be practicable. The establishment of such rights shall be”; and (C) by adding at the end the following new clause: “(iv) Such other factors as the Secretary of Defense may prescribe.” (3) Paragraph (2)(F) of such section is amended to read as follows: “(F) A contractor or subcontractor (or a prospective contractor or subcontractor) may not be required, as a condition of being responsive to a solicitation or as a condition for the award of a contract— “(i) to sell or otherwise relinquish to the United States any rights in technical data except— “(I) rights in technical data described in subparagraph (C); or “(II) under the conditions described in subparagraph (D); or “(ii) to refrain from offering to use, or from using, an item or process to which the contractor is entitled to restrict rights in data under subparagraph (B).” (4) Paragraph (2)(G) of such section is amended— (A) in clause (i)— (i) by striking out “pertaining” and all that follows through “private expense” and inserting in lieu thereof “not otherwise provided under subparagraph (C) or (D),”; and (ii) by striking out “or” at the end of such clause; (B) in clause (ii)— (i) by striking out “such regulations” and inserting in lieu thereof “this section”; and (ii) by striking out the period at the end and inserting in lieu thereof “; or”; (C) by adding at the end of such paragraph the following new clause: “(iii) permit a contractor or subcontractor to license directly to a third party the use of technical data which the contractor is otherwise allowed to restrict, if necessary to develop alternative sources of supply and manufacture.” (5) Paragraph (3) of such section is amended— (A) by striking out “and ‘private expense’” and inserting in lieu thereof “, ‘exclusively with Federal funds’, and ‘exclusively at private expense’”; and (B) by adding at the end the following: “In defining such terms, the Secretary shall specify the manner in which indirect costs shall be treated and shall specify that amounts spent for independent research and development and bid and proposal costs shall not be considered to be Federal funds for the purposes of definitions under this paragraph.” 101 STAT. 1130 (b) Conduct of Negotiations.—Section 2320(c) of such title is amended— (1) by striking out “from” and inserting in lieu thereof “from—”; (2) by designating the text beginning with “prescribing standards” as paragraph (1) and indenting such text two ems; (3) by striking out the period at the end of such paragraph and inserting in lieu thereof “; or”; and (4) by adding at the end the following new paragraph: “(2) prescribing reasonable and flexible guidelines, including negotiation objectives, for the conduct of negotiations regarding the respective rights in technical data of the United States and the contractor.” (c) Effective Date.—The amendments made by this section shall take effect on the earlier of— (1) the last day of the 120-day period beginning on the date of the enactment of this Act; or (2) the date on which regulations are prescribed and made effective to implement such amendments.