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In reference to this question which -- what is the legal status of patents filed by and granted to the U.S Federal Government?

My understanding is that any work done by the Federal government is in the public domain, and can be used by anybody without any licensing -- and hence this would include patents.

Is that a correct understanding?

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No, they are owned by the U.S. and controlled by the specific agency where the inventing happened. However, there is a policy of licensing. It is covered in 35 USC 209. The logic behind this is that the U.S. would like the public to benefit from the invention and if anybody can do it, it may very well be that no one actually does it. Without some exclusivity it may be that no one will be able to justify the investment to enter the market.

§209. Licensing federally owned inventions (a) Authority.—A Federal agency may grant an exclusive or partially exclusive license on a federally owned invention under section 207(a)(2) only if— (1) granting the license is a reasonable and necessary incentive to— (A) call forth the investment capital and expenditures needed to bring the invention to practical application; or (B) otherwise promote the invention's utilization by the public;

(2) the Federal agency finds that the public will be served by the granting of the license, as indicated by the applicant's intentions, plans, and ability to bring the invention to practical application or otherwise promote the invention's utilization by the public, and that the proposed scope of exclusivity is not greater than reasonably necessary to provide the incentive for bringing the invention to practical application, as proposed by the applicant, or otherwise to promote the invention's utilization by the public; (3) the applicant makes a commitment to achieve practical application 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.

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