Federal Science and Technology Transfer Act of 1985

Federal Science and Technology Transfer Act of 1985 - Amends the Stevenson-Wydler Technology Innovation Act of 1980 to authorize Federal agencies, subject to specified conditions, to permit the directors of their Government-operated Federal laboratories to enter into cooperative research and development agreements with other Federal agencies, State or local governments, industrial organizations, universities, or other persons. Authorizes Government-operated Federal laboratories, under such agreements and subject to specified conditions, to: (1) grant patent licenses or assignments, or options, in any subject invention made by a Federal employee, or made jointly by a Federal employee and an employee of the collaborating party, and to retain such rights as the laboratory deems appropriate; and (2) waive in advance any right of ownership which the Federal Government may have to any subject invention made by a collaborating party or such party's employee under the agreement.

Requires Federal agencies to establish certain plans to be followed in entering into such agreements.

Prohibits such agreements with: (1) any person who is not located in the United States, does not have a place of business located in the United States, or is subject to the control of a foreign government; or (2) any other entity which is owned or controlled by any such person. Prohibits such agreements if an authority of the Federal Government which is authorized by statute or executive order to conduct foreign intelligence or counterintelligence activities determines that ownership or licensing rights granted by the agreement must be restricted or eliminated in order to protect the security of such activities. Provides for an appeals procedure with respect to such determinations.

Provides that specified provisions of Federal law relating to patent rights in inventions made with Federal assistance shall apply to certain types of such agreements.

Provides that small businesses will be given preference in the making of certain types of such agreements.

Prohibits any person (or his or her assignee) who receives title or exclusive right or exclusive patent license to any subject invention from granting the exclusive right to use or sell, or from making exclusive use of, such invention unless the products embodying it or produced through its use will be manufactured substantially in the United States. Authorizes the Federal agency concerned to waive such prohibition on a case-by-case basis under specified conditions.

Directs each agency to maintain a record of all such agreements.

Establishes the Federal Laboratory Consortium for Technology Transfer in the National Science Foundation. Requires the Director of the Foundation to appoint an individual to manage the Consortium and authorizes such individual to appoint Consortium employees.

Sets forth Consortium duties relating to the commercial potential of new technologies generated by Federal laboratory research.

Requires the Director of the Foundation to report biennially to the President and to the appropriate authorization and appropriation committees of the Congress on Consortium and other specified activities. Requires other Federal agencies to: (1) cooperate in providing information for such reports; and (2) transfer a specified portion of their research and development budgets to the Foundation to carry out Consortium activities.

Sets forth rules and formulas for the distribution of royalties or other income received by Federal agencies from the licensing or assignment of inventions under such agreements under this Act, and from inventions licensed under provisions of Federal law relating to domestic and foreign protection of federally owned inventions, or under any other provision of law. Requires Federal agencies to report annually to the appropriate authorization and appropriation committees of the Congress detailing the amount of such royalties or other income received and expenditures made under such rules and formulas.