As prescribed at 227.7009-4(c), insert the following clause in patent releases, license agreements, and assignments:

Computation of Royalties (AUG 1984)

Subject to the conditions hereinafter stated, royalties shall accrue to the Contractor under this agreement on all articles or materials embodying, or manufactured by the use of, any or all inventions claimed under any unexpired United States patent licensed herein, upon acceptance thereof by the Department of ______, at the rate of ____ percent of the net selling price of such articles or materials (amount) per (name of item)* whether manufactured by the Government or procured under a fixed price contract, and at the rate of (amount) per (name of item) acquired or manufactured by a Contractor performing under a cost-reimbursement contract. With respect to such articles or materials made by the Department of ______, “net selling price,” as used in this paragraph, means the actual cost of direct labor and materials without allowance for overhead and supervision.

*Use bracketed matter as appropriate.

(End of clause)

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