Patent protection is important in bringing technology arising from government-sponsored research and nonprofit organizations to fruition. This is an area of vital interest to the Department of Health, Education, and Welfare since it is the largest single source of funding for such research in the United States, and a substantial portion of its research budget is devoted to this category. The most obvious problem affecting ultimate use of innovations resulting from this research is that educational and nonprofit organizations do not engage in the direct development and manufacture of commercial items. In the transfer of innovative results of sponsored research to industrial developers, the question of intellectual property rights is raised. A licensable property right is probably a primary factor in the successful transfer of a university innovation to industry and the marketplace, and failure to protect such rights may fatally affect a transfer of a major innovation, especially in the health field. A list of examples of university inventions that have reached the marketplace illustrates the magnitude of this issue. (Author/MSE)