Government funded research is approaching 60 percent of the total research conducted in this country and is still growing as a percentage of the total. The government patent policy during the 1960s and 1970s is briefly outlined and shown as permitting the agencies to use their discretion to determine whether or not the normal incentives of the patent system should be applied. This cannot help but to undermine the integrity of our patent system if essentially all decisions result in Government ownership without further effort toward commercialization. Two alternate patent policies have been proposed and are discussed. The proposal favored at this time would establish a uniform Federal policy providing contractor retention of ownership of inventions resulting from Federally-sponsored research if they have sufficient interest to seek patent protection and declare an intent to commercialize the invention, subject to strong "march-in" rights in the Government. (JMF)