Defense Federal Acquisition Regulation Supplement; Patents, Data, and Copyrights (DFARS Case 2010-D001)
Federal RegisterSep 27, 2010
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 212, 227, 246, and 252
RIN 0750-AG62
Defense Federal Acquisition Regulation Supplement; Patents, Data, and Copyrights (DFARS Case 2010-D001)
AGENCY:
Defense Acquisition Regulations System, Department of Defense (DoD).
ACTION:
Proposed rule with request for comments.
SUMMARY:
DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update text on patents, data, and copyrights. The proposed rule removes text and clauses that are obsolete or unnecessary; relocates and integrates the coverage for computer software and computer software documentation with the coverage for technical data to eliminate redundant coverage for these subjects while retaining the necessary distinctions; eliminates or combines the clauses associated with technical data and computer software, consistent with the revised and streamlined regulatory coverage; relocates, reorganizes, and clarifies the coverage for rights in works; and relocates to the DFARS companion resource, Procedures, Guidance, and Information (PGI), text that is not regulatory in nature and does not impact the public.
DATES:
Comments on the proposed rule should be submitted to the address shown below on or before November 26, 2010, to be considered in the formulation of the final rule.
ADDRESSES:
You may submit comments, identified by DFARS Case 2010-D001, using any of the following methods:
○
Federal eRulemaking Portal:
http://www.regulations.gov.
Follow the instructions for submitting comments.
○
E-mail:
dfars@osd.mil.
Include DFARS Case 2010-D001 in the subject line of the message.
○
Fax:
703-602-0350.
○
Mail:
Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD (AT&L) DPAP (DARS), Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.
Comments received generally will be posted without change to
http://www.regulations.gov,
including any personal information provided.
To confirm receipt of your comment(s), please check
http://www.regulations.gov
approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT:
Ms. Amy Williams, 703-602-0328.
SUPPLEMENTARY INFORMATION:
A. Background
This proposed rule is intended to simplify and clarify DFARS part 227, Patents, Data, and Copyrights, and move to PGI text that does not impact the public. These proposed DFARS changes are discussed in detail, followed by a list of specific issues or topics on which public comment is sought.
1. Subpart 212.2, Special Requirements for the Acquisition of Commercial Items.
Subpart 212.2 is revised to update cross-references to the reorganized subpart 227.71 for technical data and computer software. In addition, a new section 212.270 is added to provide appropriate cross-reference to the DFARS policies and procedures for rights in works at subpart 227.72.
2. Subpart 212.5, Applicability of Certain Laws to the Acquisition of Commercial Items.
Section 212.504 is revised to eliminate the statutory sections 10 U.S.C. 2320 and 2321 from the list of statutes that are inapplicable to subcontracts for commercial items. The Federal Acquisition Streamlining Act (FASA) required the FAR to identify statutes that do not apply to contracts or subcontracts for commercial items (see FAR 12.503 and 12.504, and DFARS 212.503 and 212.504). The current DFARS implementation of this authority makes 10 U.S.C. 2320 and 2321 applicable to prime contracts for commercial items, but not to subcontracts (see 212.504(a)(iii) and (iv)), which results in the DFARS clauses used in prime contracts not being flowed down to subcontracts, pursuant to current 227.7102-3.
However, this approach fails to recognize that intellectual property rights create a direct relationship between the Government and subcontractors. Intellectual property rights are one area in which there is a direct legal relationship created between the Government and subcontractors, at any tier. The Government's license rights are granted directly from the subcontractor, as the owner of the deliverable intellectual property; the Government and subcontractor are allowed to transact business directly with one another; and the higher-tier contractors are prohibited from using their position to acquire rights in subcontractor technology (i.e., other than by mutual agreement in an arms length negotiation). This concept is recognized explicitly in the statutes governing acquisition of intellectual property:
• Inventions and Patents. The Bayh-Dole Act (35 U.S.C. 200-212) explicitly states that its requirements apply to subcontracts. The regulatory implementation specifically addresses this issue at FAR 27.304-4, and in the clauses at FAR 52.227-11(k), 52.227-12, and 52.227-13(i).
• Technical Data. 10 U.S.C. 2320 and 2321 explicitly apply to subcontracts, provide that the subcontractor may transact business directly with one another, and explicitly address rights and procedures applicable for commercial items (
see, e.g.,
2320(a) & (b)(1), and 2321(f)). These procedures are discussed and implemented at current DFARS 227.7103-13 and -15, and in the current clauses at DFARS 252.227-7013(k), and 252.227-7037(b), (k), and (l).
These proposed revisions, which now apply these statutory requirements to subcontracts for commercial items, also require corresponding changes to the flowdown of the proposed revised clauses at DFARS 252.227-7013, -7015, and -7037.
3. Subpart 227.3, Patent Rights under Government Contracts, and associated clause 252.227-7039, Patents—Reporting of Subject Inventions.
The proposed rule deletes the requirement for DFARS clause 252.227-7034, Patents—Subcontractor. This clause provided for flowdown of the 52.227-12 clause to large business subcontractors. This clause is unnecessary because the original defect in the 1984 clause was fixed in the late 1980s, and that fix was further improved in the FAR part 27 rewrite (FAR Case 1999-402). Under that case, FAR clause 52.227-12 was deleted. The FAR clause was replaced by DFARS clause 252.227-7038, Patent Rights—Ownership by the Contractor (Large Business) (DFARS Case 2001-D015, 72 FR 69159).
4. Subpart 227.4, Rights in Data and Copyrights.
There are no substantive changes in subpart 227.4.
5. Subpart 227.6, Foreign Intellectual Property Exchanges and Licenses.
The language of this subpart has been edited to use plain language when possible. This revision proposes to relocate to PGI—
• Assistance with patent rights and royalty payments in the U.S. European Command; and
• Information on the laws and regulations governing export control of intellectual property.
6. Subpart 227.70, Infringement Claims, Licenses, and Assignments.
• Requirements for filing an infringement claim.
Section 227.7004 (now 227.7002) establishes requirements for a private party to file a valid patent or copyright infringement claim or secrecy order claim against the United States. This subject matter is not necessarily limited to FAR/DFARS-based contracts. However, the DAR Council was unable to identify any other appropriate regulation in which to include this subject matter, and therefore proposes to retain it in the DFARS. This subject matter directly affects the legal rights and remedies of private parties and therefore, must be kept in a regulation.
The proposed rewrite differentiates between the requirements for filing a claim for patent infringement and for filing a claim for copyright infringement. The current DFARS only references copyright infringement claims generically. More specific guidance is required so that the department or agency affected can more appropriately respond to a claim for copyright infringement. Moreover, these sections were revised such that the section concerning indirect notification of a claim submitted to a contractor rather than the Government was revised to state that such notice is defective.
• Guidance for processing and settling claims.
The remaining subject matter in subpart 225.70 provides guidance for investigating and settling any intellectual property infringement claims using a specialized form of acquisition instrument, more commonly referred to as settlement agreements, licenses, or releases. The following information has been moved to PGI:
• Addresses for filing an administrative claim.
• Examples of disposition of trademark infringement claims.
• Sample denial of an administrative claim.
The section on notification and disclosure to claimants (now 227.7004) was completely rewritten to positively state that it is the Government's policy to settle meritorious claims, that the agency making such a determination should coordinate with other agencies on their potential liability, and that if a claim is to be denied, the responsible agency should notify the claimant and provide a basis for the denial.
The DFARS clauses 252.227-7000 through 252.227-7012, currently prescribed in DFARS subpart 227.70, have been eliminated. These clauses were all provided just as examples, which could be modified or omitted. Section 227.7006 now provides a sample settlement agreement for patent infringement. This settlement agreement may be tailored as appropriate for copyright infringement releases, settlement agreements, license agreements, or assignment. Cognizant legal counsel must be consulted in such circumstances.
7. Subpart 227.71, Rights in Technical Data and Computer Software.
The current version of DFARS part 227 was issued in 1995, as the result of a joint Government-industry committee that was formed by section 807 of the National Defense Authorization Act for FY 1991. The section 807 committee revised nearly the entire part 227 and clauses, and established separate coverage for the treatment of technical data at subpart 227.71, and for computer software and computer software documentation at subpart 227.72. In addition, within each of these subparts, the materials were organized to provide separate sections for commercial technologies (227.7102 and 227.7202) and for noncommercial technologies (227.7103 and 227.7203).
As a result of this structure, the current DFARS coverage for computer software at subpart 227.72 is primarily a duplication of the text covering technical data at 227.71. Similarly, the current clause for noncommercial computer software at 252.227-7014 is nearly a duplicate of the clause governing noncommercial technical data at 252.227-7013. With this structure, it can be more difficult to distinguish the actual differences between the treatment of technical data vice computer software because so much of the coverage is identical.
One of the objectives in this proposed rule is to identify and eliminate the redundancy between current subparts 227.71 and 227.72, and associated clauses. After consolidating the technical data and computer software coverage at subpart 227.71, the entire subpart was reorganized and streamlined to improve clarity, eliminate unnecessary or obsolete coverage, and relocate appropriate materials to the PGI. In general, materials were grouped into sections with related purposes or policies, and to the extent possible, discussed sequentially in order to more closely parallel the chronological sequence in which these issues are presented in a typical acquisition (
e.g.,
starting with acquisition planning, specifying delivery requirements and asserting restrictions as early as possible, accepting and validating markings on deliverables, and the use, safeguarding, and handling of those materials).
This subpart is now divided into the following sections:
a. 227.7100 Scope of subpart.
The subpart has been expanded to include computer software and no longer includes rights in works.
b. 227.7101 Definitions.
The definitions in this section and the associated clauses at 252.227-7013, 252.227-7014, and 252.227-7015 are revised to incorporate definitions applicable to computer software (
e.g.,
“restricted rights”), and are further revised as to be consistent with statutory definitions. For example, the definitions of “computer software” and “computer software documentation” were revised to reclassify some types of recorded information as “computer software documentation” rather than “computer software.” The items “design details, algorithms, processes, flow charts, formulas, and related material that describe the design, organization, or structure” of computer software had been added to the current definition of “computer software” in the 1995 rewrite, but these types of recorded information are more legitimately characterized as “technical data that pertains to an item” (in this case, the item being computer software). However, another type of recorded information that was retained from the 1995-era redefinition of “computer software” is “source code listings”—the human-readable versions of computer programs for which there is no analog in the world of technical data. Thus, “source code” is more appropriately characterized as “computer software.”
c. 227.7102 Policy.
The policy section expands in most cases the statutory requirements for technical data at 10 U.S.C. 2320 and 2321 to cover computer software as well. It combines the policy for both commercial and noncommercial items or processes.
d. 227.7103 Acquisition of technical data and computer software.
Associated clauses:
• 252.227-7026, Deferred Delivery of Technical Data or Computer Software; and
• 252.227-7027, Deferred Ordering of Technical Data or Computer Software.
Proposed subsection 227.7103-1 addresses acquisition planning and provides a pointer to additional guidance in PGI.
Proposed subsections 227.7103-2, Preparation of solicitation, and 227.7103-3, Identification and assessment of Government minimum needs, are primarily the consolidation of
coverage from the following current DFARS sections: 227.7103-2 for noncommercial technical data; and 227.7203-1 for noncommercial computer software. Because these materials focus on the Government's determination of its delivery requirements, and the evaluation of offered deliverables, they are equally applicable to commercial technical data and computer software, subject to the commercial-specific policies at proposed revised 227.7102. Procedures for Government personnel to identify minimum needs have been moved to PGI.
Proposed subsection 227.7103-4 is the consolidation of the coverage for deferred delivery and deferred ordering at delivery at current DFARS 227.7103-8 for noncommercial technical data, and 227.7203-8 for noncommercial computer software. The associated clauses at 252.227-7026 and 252.227-7027 are revised for clarity, with no substantive changes.
e. 227.7104 License rights in technical data and computer software.
Associated clauses:
• 252.227-7013, Rights in Technical Data and Computer Software—Noncommercial.
• 252.227-7014, Rights in Technical Data and Computer Software—Small Business Innovation Research (SBIR) Program. (moved from 252.227-7018)
• 252.227-7015, Rights in Technical Data and Computer Software—Commercial.
This section 227.7104 consolidates all of the existing DFARS coverage of the allocation of rights between the parties (i.e., the Government, contractors, subcontractors, and third parties) for the various categories of technical data and computer software.
(i) Acquisition of rights in technical data and computer software—noncommercial.
Proposed subsection 227.7104-1, General, is based on the consolidation of current 227.7103-4 for noncommercial technical data, and 227.7203-4 for noncommercial computer software. These materials are adapted and clarified as follows:
• Paragraph (a) addresses Grant of license to the Government. Much of this information is moved to PGI.
• Paragraph (b) clarifies the doctrine of segregability, which is used to determine the license rights (or license rights scheme) that is most appropriate for each segregable element of a technical data computer software. This concept is further reinforced later at 227.7104-8, in prescribing multiple rights clauses for contracts that involve multiple types of technical data and computer software (
e.g.,
both commercial and noncommercial).
• Paragraph (c), Activities covered, clarifies the scope of the license that is granted to the Government. At paragraph (c)(1), the term “access” is added to the well-established list of activities that are covered by the standard license grant for noncommercial technical data and computer software, in recognition of the emerging practice of providing the Government with remote (
e.g.,
Internet-based) access to technical data or computer software that is maintained by the contractor, as an alternative to traditional delivery methods (
e.g.,
delivery on static electronic media such as CD-ROM or DVD). Paragraph (c)(2) recognizes and clarifies that commercial licenses involve a wide variety of licensed activities, which may not cover all of the activities covered by the grant of license for noncommercial technical data or computer software.
• Paragraph (d) clarifies the types of intellectual property covered by the license grant.
Proposed 227.7104-2, Rights in technical data and computer software of third parties (including subcontractors), is based on the consolidation of current 227.7103-9 and 227.7103-15 for noncommercial technical data; and 227.7203-9 and 227.7203-15 for noncommercial computer software.
Proposed 227.7104-3, Rights in noncommercial technical data and noncommercial computer software, is a consolidation of current 227.7103-5 for noncommercial technical data, and 227.7203-5 for noncommercial computer software.
The corresponding clause at 252.227-7013 is a consolidation of the current 252.227-7013, which covers only noncommercial technical data, and 252.227-7014, which covers noncommercial computer software and computer software documentation. The new 252.227-7013 clause is a complete replacement for the current 252.227-7013 clause and 252.227-7014, with several key improvements:
In addition to the revised definitions discussed in section A.7.b. of this notice, the proposed 252.227-7013 clause clarifies limitations on the Government's right to release or disclose technical data or computer software in which it has limited rights, restricted rights, or Government-purpose rights. In all cases, such release or disclosure is permitted only under certain conditions (
e.g.,
the recipient of the technical data or computer software is subject to a prohibition on further disclosure of the materials). In the current 252.227-7013 and 252.227-7014 clauses, these limitations are set forth primarily in the definitions of limited rights and restricted rights (with one additional limitation specified within the license grant at paragraph (b) of the clause), but for Government-purpose rights, these restrictions are set forth entirely within the license grant (see current 252.227-7013(b)(2)(iii) and 252.227-7014(b)(2)(iii)). This discrepancy is remedied by listing all such restrictions on the Government's rights within the definition of the license rights; this reformatting also streamlines the grant of license rights at paragraph (b) of the proposed clause.
A nearly identical paragraph regarding limitations on negotiated special licenses was relocated from the current DFARS clause language granting limited rights (see current 252.227-7013(b)(3)(iii)), and restricted rights (see current 252.227-7014(b)(3)(ii)), and integrated in a streamlined format within the grant of negotiated license rights (see proposed 252.227-7013(b)(5)).
At proposed paragraph (f) of the clause, the substance of the requirements governing post-award identification and assertion of restrictions (paragraph (e) of the current 252.227-7013 and 252.227-7014 clauses) was relocated to a new stand-alone clause 252.227-7018, which serves as the post-award complement to the pre-award identification and assertion clause 252.227-7017.
At paragraph (g)(2), the proposed clause establishes a new unlimited rights marking that is optional whenever unlimited rights are applicable, and is required when the unlimited rights apply and the contractor also uses the copyright legend permitted by 17 U.S.C. 401 or 402 (the copyright notice). This new unlimited rights legend will help resolve any ambiguities regarding the Government's rights in materials that are marked with a copyright notice “only.” The copyright notice, standing alone, does not qualify as a restrictive marking on noncommercial technical data or computer software, but could serve as restrictive marking on commercial technical data or computer software (
e.g.,
where it is usually accompanied by additional language such as “All rights reserved” and thus may indicate the “standard” commercial license rights or other license more restrictive than unrestricted rights). This new unrestricted rights marking,
required
only for noncommercial technical data or computer software that is both subject to unrestricted rights and which is also marked with a copyright notice, would be distinguishable from other commercial technical data or
computer software with confusingly similar copyright notices.
The clause 252.227-7032, Rights in Technical Data and Computer Software (Foreign), previously prescribed in 227.7103 for optional use in lieu of 252.227-7013 in contracts with foreign contractors, has been eliminated. It is an unnecessary clause that was not frequently used. Furthermore, it predates 10 U.S.C. 2320 and is inconsistent with that statute.
(ii) License rights under the Small Business Innovation Research (SBIR) Program.
Proposed section 227.7104-4 is the revised and updated version of the current 227.7104 and 227.7204. The associated clause at 252.227-7014, Rights in Noncommercial Technical Data and Computer Software—Small Business Innovation Research (SBIR) Program, is based on the current 252.227-7018 clause and is revised to include several key statutory and policy updates. The SBIR Program Reauthorization Act of 2000, Public Law 106-554, amended section 9 of the Act (codified at 15 U.S.C. 638(j)(3)(A)) to require that the Small Business Administration(SBA) modify the SBIR policy directives to provide that SBIR data rights apply to Phase III SBIR awards, as well as Phase I and II awards. The SBA issued its policy directive on September 24, 2002, and is currently in the process of revising and updating that policy directive, including the treatment of intellectual property rights, which will also be published for public comment under a separate rulemaking action. Thus, the Department of Defense is working with the SBA to harmonize the DFARS sections on SBIR data rights and the SBIR Policy Directive. SBA has advised that it intends to clarify and revise the SBIR Policy Directive regarding these issues soon.
• Definitions. A definition of “SBIR data” was added to the proposed clause. This new definition is based on the definition of “SBIR Technical Data” in section 3(bb) of the SBIR Policy Directive, i.e., all data generated during the performance of an SBIR award. The definition of “SBIR data rights” was revised and simplified to provide the Government with limited rights in SBIR technical data, and restricted rights in SBIR computer software, as the most straightforward mechanism to achieve the objective of allowing the SBIR contractor to assert proprietary data restrictions during the SBIR data protection period. The term “computer software” was added to the definition because SBIR data rights also apply to both technical data and computer software generated under an SBIR award.
• SBIR data rights protection period. Normally, SBIR data rights end upon the date five years after acceptance of the last deliverable. However, any SBIR data that are appropriately referenced and protected in a subsequent SBIR award during the five-year period of this contract remain protected through the protection period of that subsequent SBIR award. This serves to implement the requirement of the Policy Directive that SBIR data rights may be extended throughout multiple future awards if the SBIR data is appropriately referenced and protected in subsequent SBIR awards. In addition, with this new procedure, it may be impossible for the contractor, under any particular award, to know the expiration date of the SBIR data generated under that award. For this reason the proposed clause eliminates any reference to a date-certain expiration of the SBIR data rights period. The SBIR clause continues to provide the Government with unlimited rights upon expiration of the SBIR data protection period. However, the SBA has advised that although its current SBIR Policy Directive provides that after the protection period expires the Government may disclose SBIR data, and may use and authorize others to use SBIR data on behalf of the Government, this does not authorize the Government or third parties to use the data for commercial purposes without the consent of the awardee. SBA has advised that it intends to clarify and revise the SBIR Policy Directive regarding these issues soon. Public comments regarding the merits of the DFARS approach (i.e., unlimited rights after the expiration of the protection period) or the SBA's interpretation of its current policy directive are specifically requested.
• Identification and assertion of SBIR data rights restrictions. To facilitate the identification and assertion of restrictions on all SBIR data being delivered to the Government, including the extension of the SBIR data protection period through subsequent SBIR awards, the revised clause 252.227-7017 and new clause 252.227-7018, have been expanded in scope to cover all deliverable SBIR data.
• Prohibition against requiring negotiated licenses as a condition of award. Paragraph (b)(6)(i) of the proposed 252.227-7014 clause implements the requirements of section (b)(4) of the Policy Directive by prohibiting the contracting officer from negotiating for special license rights as an element of any SBIR Phase I, Phase II, or Phase III award. However, after award, the parties may voluntarily negotiate special license rights, or even the assignment of rights, by mutual agreement.
(iii) License rights for commercial technical data and commercial computer software.
Proposed 227.7104-5 is the consolidation of current 227.7102-2 for commercial technical data, and current 227.7202-3 and -4 for commercial computer software. The associated clause 252.227-7015 is based on the current 252.227-7015 (which covers only commercial technical data), adapted to include the policies governing rights in commercial computer software from current 227.7202-2 and -3, and to include several other key revisions:
• The inclusion of clause language allocating rights in commercial computer software and computer software documentation is a noteworthy change. The current 227.7202 provides no clause for commercial computer software, instead specifying that the Government receives the rights specified in the standard commercial license agreement that is “customarily provided to the public unless such licenses are inconsistent with federal procurement law or do not otherwise meet the agencies needs.”
• The proposed rule preserves this policy at 252.227-7015(b)(1), and strengthens and clarifies it by expressly incorporating this requirement into the contract clause.
• In addition, the proposed language resolves a long-standing issue regarding potential inconsistency between the commercial license and Federal procurement law. The proposed 252.227-7015(b)(1) clarifies that the inconsistent language is considered stricken from the license, and the remainder of the license remains in effect—effectively incorporating a “severability” provision equivalent to those contained in most commercial license agreements.
• The clause also encourages the parties to promptly enter into negotiations to resolve any issues raised by striking the inconsistent provisions. Of course, the proposed 252.227-7015(b)(4) also preserves the parties' ability to negotiate specialized license provisions by mutual agreement.
• The proposed clause is revised to remove a specialized definition of “commercial item” that excluded commercial computer software from this statutorily defined term. The statutory definition of commercial item contains no such exclusion, leaving no authority for this regulatory limitation.
Commercial computer software that otherwise meets the definition of commercial item must be treated as a commercial item; which clarifies that commercial computer software documentation is merely a specialized subtype of commercial technical data, which remains subject to statutory mandates of 10 U.S.C. 2320.
• The proposed clause establishes a more consistent policy regarding DoD receiving the same license rights that are customarily provided to the public as long as the license rights are consistent with procurement law. This was already the clear statement of policy as applied to commercial computer software at 227.7202, and is generally consistent with the overall themes and policies governing acquisition of commercial items at FAR part 12. However, the regulatory and clause coverage for technical data pertaining to commercial items contained inconsistent guidance: most of the coverage appears to implement the general policy governing commercial acquisitions (
e.g.,
only the customary commercial deliverables are required except when DoD has special needs), but then rather than granting DoD the standard commercial license rights, the clause specifies a DoD-unique license that provides only the minimum rights in technical data that are required by the statute, 10 U.S.C. 2320. There is no clear rationale for requiring DoD to accept lesser rights than an ordinary consumer would receive in a standard, arms-length, commercial transaction for the same technology. The Government should take the standard commercial terms and conditions except when Government-unique requirements (including Federal procurement law) require specialized treatment. The standard terms and conditions should be tailored only as necessary to meet the Government's needs.
• DoD's minimum license rights were corrected to conform to the statutory minimum rights. More specifically, in addition to the license rights specified in the current clause, 10 U.S.C. 2320 also requires that the DoD have the right to disclose certain technical data to foreign governments for evaluation or information, and that both this type of release, and a release for emergency repair or overhaul of the commercial item, are permitted only when the recipient of the data is subject to a prohibition on further release of the data, and the contractor (i.e., owner of the data) is notified of the release. These statutory requirements are added to the minimum rights required for commercial technical data.
• The proposed clause language now clarifies the requirement that commercial technical data and computer software to be delivered with less than unlimited rights must be marked with an appropriate restrictive legend (proposed 252.227-7015(d)). This requirement is contained expressly in the current 252.227-7015(d) in the form of a release of liability for any Government use or disclosure of technical data that is not restrictively marked. This revision clarifies the rule for commercial technical data, and expressly establishes such a requirement for commercial computer software. Although the current DFARS is silent regarding any mandatory restrictive legends or notices for commercial computer software, best commercial practices always require restrictive markings or notices—and this is a keystone requirement in both copyright and trade secret law. The proposed clause allows any restrictive legend or notice that accurately characterizes the restrictions on the Government's use and is consistent with best commercial practices.
(iv) Prescriptions for primary rights allocation clauses.
The proposed 227.7104-8 combines and clarifies all of the current DFARS language prescribing the primary rights-allocation clauses. In addition, 227.7104-8(d) reinforces the application of the doctrine of segregability to the use of clauses when multiple types of technical data and/or computer software are involved in a single contract.
f. 227.7105, Contractor assertion of restrictions on technical data and computer software—early identification and marking requirements.
Associated provision and clauses at—
• 252.227-7016, Rights in Bid or Proposal Information;
• 252.227-7017, Pre-Award Identification and Assertion of License Restrictions—Technical Data and Computer Software; and
• 252.227-7018, Post-Award Identification and Assertion of License Restrictions—Technical Data and Computer Software.
Proposed section 227.7105 consolidates coverage from current DFARS 227.7103-3 and 227.7103-10 for noncommercial technical data, and 227.7202-3 and 227.7202-10 for noncommercial computer software. The associated clauses 252.227-7017 (pre-award) and the new clause at 252.227-7018 (post-award) consolidate the current DFARS clause requirements of 252.227-7017, pre-award assertions for technical data and computer software; 252.227-7013(e), post-award assertions for technical data; 252.227-7014(e), post-award assertions for computer software; and 252.227-7028, identification of technical data and computer software previously delivered to the Government.
The proposed clauses create a comprehensive and consistent scheme to enable the contractor to identify and assert restrictions on technical data and computer software. This improved two-clause combination overcomes the shortcomings in the current DFARS by ensuring that these procedures govern all technical data and computer software under the contract (i.e., now including all deliverable SBIR data, commercial technical data, and commercial computer software), and clarifying the instructions for identifying these restrictions—which resulted in widespread confusion and noncompliance with the listing requirement.
Another change to the original 252.227-7017 clause is the removal of the mandatory chart format for reporting the Government's restrictions on use, release, or disclosure of data. This requirement was restrictive and needlessly burdensome for the contractor. Instead, the contractor may now present the required information to the contracting officer in any understandable format, so long as the required information is presented and understandable. Thus, the proposed revisions to the clause and provision aid the contractor by lessening the burden in preparing these documents. Contractors, under this proposed regime, will no longer have to create an entirely different identification system just for Government customers. Rather, the contractor will be able to submit its materials to the Government in the same manner that it does for its commercial customers.
The original 252.227-7017 clause requirements regarding negotiated, commercial, or non-standard licenses place a large burden upon the contractor to (1) identify the requirements of these licenses and (2) describe the terms of these licenses to the satisfaction of the contracting officer. Therefore, in an effort to alleviate a portion of this burden, the contractor is now required to submit copies of the licenses, etc., with its assertion of restrictions.
A further change benefiting both the contractor and the Government is the integration of the requirements of the current 252.227-7028 clause with the requirements of the 252.227-7017 clause, which avoids the unnecessary duplication of information when the contract will involve the delivery of technical data or computer software with restrictions (required to be identified under current 252.227-7017, and 252.227-7013(e) or 252.227-
7014(e)) that have also been previously delivered to the Government (identified again under the 252.227-7028 clause). However, now that the consolidated 252.227-7017 and 252.227-7018 clauses apply also to commercial technical data and computer software, these commercial technical data and computer software are exempted from the requirement to identify previous deliveries to the Government when such technical data or computer software was and is offered with the standard commercial license rights, eliminating the need for 252.227-7028, Technical Data or Computer Software Previously Delivered to the Government.
Additionally, pre-and post-award restriction identifications have been separated into two distinct clauses. In order to streamline this process, the 252.227-7018 clause tracks the language of the 252.227-7017 clause very closely. Thus, both clauses are easy to understand and apply, as they are quite similar in nature.
g. 227.7106, Conformity, acceptance, warranty, and validation of asserted restrictions on technical data and computer software.
And associated clauses at—
• 252.227-7030, Technical Data and Computer Software—Withholding of Payment; and
• 252.227-7037, Validation of Restrictive Markings in Technical Data and Computer Software.
Proposed subsection 227.7106 is the consolidation of coverage from the following current DFARS sections: 227.7103-11, -12, -13, and -14 for noncommercial technical data; and 227.7203-11, -12, -13, and -14 for noncommercial computer software. The associated clause 252.227-7037, Validation of Restrictive Markings on Technical Data and Computer Software, combines the current clauses at 252.227-7037 (applicable to all technical data), and 252.227-7019 (noncommercial computer software).
The two current DFARS clauses: DFARS 252.227-7037 Validation of Restrictive Markings on Technical Data (which governs both commercial and noncommercial technical data and is based on 10 U.S.C. 2321) and DFARS 252.227-7019, Validation of Asserted Restrictions-Computer Software (which governs noncommercial computer software and is not based directly on the technical data statute) have been combined into proposed DFARS 252.227-7037 Validation of Restrictive Markings on Technical Data and Computer Software, hereinafter referred to as the “proposed clause”. In addition, coverage for the validation of asserted restrictions on commercial computer software has been added to the proposed clause.
i. Definitions.
The definition of “Contractor” from the current 252.227-7019 computer software clause was retained in the proposed clause. This definition was not present in the current 252.227-7037 technical data clause.
ii. Challenge for commercial computer software.
The proposed clause has added a challenge procedure for “commercial computer software.” The current 252-227-7037 technical data clause provided for challenge of technical data relating to a commercial item, component, or process. This “commercial technical data” challenge procedure was extended to cover commercial computer software in the proposed clause, thereby harmonizing the challenge procedures for both commercial computer software and commercial technical data.
iii. Commercial presumption.
The presumption in contracts for commercial items, components, or processes that the asserted use and release restrictions are justified on the basis that the commercial items, components, or processes were developed at private expense remains in the proposed clause. Notwithstanding this presumption, the proposed clause allows the Government to challenge the asserted use and release restrictions on commercial technical data and commercial computer software. However, the Government can only use information the Government provides as a basis for challenging these asserted use and release restrictions. In addition, the Government may request information from the contractor on these asserted use and release restrictions, but the contractor is not required to provide such information. See (d)(1) of the proposed clause. Moreover, as provided in section (e)(2) of the proposed clause, the contractor's failure to provide a timely response or to provide sufficient information to such a request will not constitute reasonable grounds for questioning the validity of the asserted restrictions.
In addition, the record keeping requirements in paragraph (c) of the proposed clause are not required for “contracts for commercial items, components, or processes (including “commercial computer software.”
iv. Criteria for Challenge.
The two criteria for a challenge provided in the current 252.227-7037 clause (which governs technical data only) have been extended in the proposed clause to cover computer software. In the current 252.227-7019 clause only the “reasonable grounds” criteria was provided. In the proposed clause the contracting officer may challenge the marking on both technical data and computer software if reasonable grounds exist to question the validity of the marking, and continued adherence to the marking would make impracticable subsequent competitive acquisition of the computer software, item, component, or process.
Note 10 U.S.C. 2321 (d)(1)(A) and (B) require both grounds for technical data. Accordingly, in order to harmonize the criteria for technical data and computer software, the two criteria were extended to cover computer software.
v. Urgent and compelling circumstances.
The proposed clause allows an agency head, at any time after a contracting officer's final decision, to declare that urgent and compelling circumstances exist. This allows the agency to use or release the data “as necessary to address the urgent and compelling circumstances.” However, the recipient of this data will be required to sign a non-disclosure agreement at DFARS 227.7103-7 or be performing work under a contract containing the clause at DFARS 252.227-7025, Government-Furnished Information Marked with Restrictive Legends. The urgent and compelling circumstances procedure which currently exists in the current 252.227-7019 clause but not in the current 252.227-7037 clause has been extended to cover technical data in the combined clause, thereby harmonizing the procedures for both technical data and computer software.
The proposed clause allows the agency to use or release the data “as necessary to address the urgent and compelling circumstances”. This language replaces language in the current 252.227-7019 clause providing specific rights for specific rights category data. The new language provides more flexibility for the agency and is less confusing than the current language.
vi. Written response considered a claim within the meaning of the Contract Disputes Act.
The proposed clause provides, that for both technical data and computer software, a contractor's (includes subcontractors and suppliers at any tier) written response to a contracting officer's challenge “shall be considered a claim within the meaning of the Contract Disputes Act of 1978 (41 U.S.C. 601,
et seq.
), and shall be certified—regardless of dollar amount.” This provision is contained in the current 252.227-7037 clause as mandated by 10 U.S.C. 2321(h). Note that the statute
does not prohibit application of this requirement for computer software. Sections (f)(3) through(6) of the current 252.227-7019 clause provide an analogous requirement which was subject to the rigors of a formal rulemaking process. Accordingly, in order to harmonize the requirements for both technical data and computer software in the proposed clause, the language of the current 252.227-7037 clause was extended to cover computer software in the proposed clause.
vii. Flowdown.
The proposed clause provides for flowdown of this clause for both technical data and computer software, commercial as well as noncommercial, to subcontractors, at any tier, or suppliers. This flowdown is mandated by 10 U.S.C. 2321. Note as part of this case that the prohibition against 10 U.S.C. 2321 applying to subcontracts for commercial items will be eliminated.
viii. Privity of contract.
This proposed clause tracks the privity of contract language contained in the new proposed DFARS 252.227-7013 Rights in Technical Data and Computer Software—noncommercial items. Note privity of contract with subcontractors, at any tier, and suppliers is mandated by 10 U.S.C. 2321 for technical data. Further, both the current 252.227-7019 and the current 252.227-7037 clause contain a privity of contract provision for subcontractors, at any tier, and suppliers that were subject to the rigors of a formal rulemaking process.
ix. The related regulatory material.
Current 227.7103-12 and 227.7103-13 have been revised and relocated at 227.7106-4 and -5, respectively. Revisions were made to streamline existing language and to eliminate material that was duplicative of material in the proposed clause at DFARS 252.227-7037, Validation of Restrictive Markings on Technical Data and Computer Software.
h. 227.7107, Safeguarding, use, and handling of technical data and computer software.
Associated clause at 252.227-7025, Government-Furnished Information Marked with Restrictive Legends.
Proposed 227.7107 is the consolidation of coverage from the following current DFARS sections: 227.7103-7, and -16, and 227.7202-16 regarding the safeguarding and release of restricted information outside the Government; and 227.7108 and 227.7208 regarding contractor data repositories.
Perhaps most importantly, this new coverage harmonizes and clarifies the operation of the nondisclosure agreement provided at current 227.7103-7 (see proposed 227.7107-2), and its clause equivalent at 252.227-7025. In both cases, the scope of the nondisclosure agreement/clause was expanded to cover commercial technical data or computer software marked with a restrictive legend. This expansion helps clarify the Government's obligation to protect such restricted and valuable commercial information by applying a consistent protection and release scheme to all forms of technical data and computer software, regardless of whether the material is commercial or noncommercial. In view of the wide variety of potential restrictive legends, and associated license restrictions, for commercial technical data and computer software, these new requirements are modeled after the procedures used to handle negotiated license agreements for noncommercial technical data and computer software: The recipient is expressly limited to those uses authorized by the applicable license, which the Government is required to identify in an attachment prior to release of the information.
8. Subpart 227.72, Rights in Works.
The treatment of special works, existing works, and architect-engineer services was moved out of current 227.71 to entirely replace the material of subpart 227.72. This was done because special works, existing works, and architect-engineer services, are not technical data, which is exclusively covered by 10 U.S.C. 2320 and subpart 227.71, or computer software, also covered by subpart 227.71. To avoid confusion, technical data, computer software documentation, and computer software, are excluded from the coverage of special works and existing works. No exclusion was deemed necessary for architect-engineer services because plans for buildings and other structures, and the structures themselves, are not normally considered to be technical data, i.e., recorded information of a scientific or technical nature. The material was reorganized. Instead of differentiating between special works and existing works, the proposed regulations are differentiated based on whether the contract is for the acquisition of—
• Works and the assignments of rights in works (section 227.7202 and associated clause at 252.227-7020, Rights in Works—Ownership;, or
• Works and license rights in works (section 227.7203 and associated clause at 227.7021, Rights in Works—License.
These clauses replace the current clauses 252.227-7020 and 252.227-7021.
There is also a new section on safeguarding, use, and handling of works, which parallels the section 227.7107 on safeguarding, use, and handling of technical data and computer software. The associated new clause is 252.227-70YY, Government-Furnished Works Marked with Restrictive Legends.
The existing section 227.7107 on Contracts for architect-engineer services has been expanded to cover rights in architectural designs, shop drawings, or similar information related to architect-engineer services and construction. The associated clauses are—
252.227-7022, Government Rights (Unlimited);
252.227-7024, Notice and Approval of Restricted Designs;
252.227-7033, Rights in Shop Drawings.
Of particular note is the inclusion of architectural works in the list of examples of works in the clauses at 252.227-7020 and 252.227-7021. The acquisition of a unique architectural design of a building, a monument, or construction of similar nature, which for artistic, aesthetic or other special reasons the Government does not want duplicated, is actually a special work which should be included within the coverage of special works and not under the general coverage of contract for architect-engineer services (now at 227.7205).
The clause at 252.227-7023, Drawings and other Data to Become the Property of the Government has been deleted, as the requirement is now covered in the proposed revised Rights in Works—Ownership clause at 252.227-7020.
9. Request for Public Comment on Additional Issues.
In addition to comments on any of the subject matter covered by these proposed revisions, DoD seeks comments on the following additional issues related to this subject matter:
• A new clause containing all definitions relevant to DFARS Part 227 (or subpart 227.71 and/or 227.72).
Paragraph (a) of the primary rights-allocation clauses (252.227-7013, -7014, and -7015) largely duplicate each other, and many of the other clauses repeat these definitions. Combining all definitions into a single clause would significantly shorten these clauses collectively by avoiding duplication. However, the drawback is that one requires the definitions clause in order to interpret the rights-clauses, and many people will not even realize that so many of the terms used in the rights-clause are actually defined, and thus would not be motivated to seek out the additional clause.
• A single prescriptive section covering all clauses in subpart 227.71.
In the proposed rule, the clause prescriptions are distributed throughout the sections. It may be preferred to combine all of the relevant clause prescriptions into a single, all-encompassing prescriptive section (
e.g.,
a new 227.7108).
•
Renumbering the clauses.
The proposed clauses have retained their current numbering, except for 252.227-7018 (now 252.227-7014) (and in cases where clauses have been merged, the new combined clause uses the number applicable to the current clause that applies to technical data). However, the clauses could be renumbered to coincide with the general order in which the clauses are discussed and prescribed in the regulation, without necessitating any significant changes for the most well-known and critical clauses. For example:
Current/proposed 252.227-
Prescribed at:
Renumbered
7013
227.7104-8(a)
7013
7018/7014
227.7104-8(b)
7014
7015
227.7104-8(c)
7015
7016
227.7105-3(a)
7016
7017
227.7105-3(b)
7017
(new)
227.7105-3(c)
7018
7030
227.7106-5(a)
7023
7037
227.7106-5(b)
7024
7025
227.7107-4
7025
7020
227.7202-3
7030
7021
227.7203-3
7031
7022
227.7205-2(a)
7032
7033
227.7205-2(b)
7033
7024
227.7205-2(c)
7034
7038
227.303(2)
7038
7039
227.303(1)
7039
Would the benefits of a more logical sequence outweigh the administrative difficulty of the number changes?
•
Addition of a “Scope” section to the primary rights-allocation clauses.
Would this assist with the application of the doctrine of segregability? When more than one rights-allocation clause is used in the contract, issues may arise as to which clause applies to which deliverable-technical data or computer software.
This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. This is not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,
et seq.,
because the rule updates and clarifies DFARS text, but makes no significant change to DoD policy regarding patents, data, and copyrights. However, DoD has performed an initial regulatory flexibility analysis, which is summarized as follows:
The objective of the rule is to clarify and update the coverage on patents, data, and copyrights in DFARS part 227.
Statutes pertaining to administrative claims of infringement in DoD include the following: The Foreign Assistance Act of 1961, 22 U.S.C. 2356 (formerly the Mutual Security Acts of 1951 and 1954); the Invention Secrecy Act, 35 U.S.C. 181-188; 10 U.S.C. 2386; 28 U.S.C. 1498; and 35 U.S.C. 286.
Subpart 227.71 implements the following laws and Executive order:
(1) 10 U.S.C. 2302(4).
(2) 10 U.S.C. 2305(d)(4).
(3) 10 U.S.C. 2320.
(4) 10 U.S.C. 2321.
(5) 10 U.S.C. 7317.
(6) 17 U.S.C. 1301, et seq.
(7) Executive Order 12591 (paragraph 1(b)(7)).
The SBIR Program Reauthorization Act of 2000 (Pub. L. 106-554) amended section 9 of the Act (codified at 15 U.S.C. 638(j)(3)(A)) to require that the Small Business Administration (SBA) modify the SBIR policy directives to provide that SBIR data rights apply to phase III SBIR awards, as well as phase I and II awards. The SBA issued its policy directive on September 24, 2002, and is currently in the process of revising and updating that policy directive, including the treatment of intellectual property rights, which will also be published for public comment under a separate rulemaking action. Thus, DoD is working with SBA to harmonize the DFARS sections on SBIR data rights and the SBIR policy directive. SBA has advised that it intends to clarify and revise the SBIR policy directive regarding these issues soon.
This rule applies to small businesses awarded contracts—
• That anticipate the delivery of technical data or computer software;
• When technical data or computer software will be generated during performance of contracts under the SBIR program;
• When the Government has a specific need to control the distribution of works first produced, created, or generated in the performance of a contract; or
• For architect-engineer services and for construction involving architect-engineer services.
DoD does not have an overall estimate of the number of small entities receiving awards in these categories, but there are approximately 3,000 awards per year in the SBIR program in recent years.
The clause at 252.227-7038, Patent Rights—Ownership by the Contractor (Large Business) is only used if the contractor is other than a small business or nonprofit organization.
It is not known how many of the respondents are small business concerns. Certainly the respondents to the requirements of DFARS 252.227-7018, Rights in Noncommercial Technical Data and Computer Software—Small Business Innovation Research (SBIR) Program are small businesses, but the burdens for that clause have not been separately calculated from the burdens for the other clauses addressing technical data rights.
The rule does not duplicate, overlap, or conflict with any other Federal rules.
There are no known alternatives that would reduce the burden on small business and still meet the objectives of the rule.
DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2010-D001.
C. Paperwork Reduction Act
The Paperwork Reduction Act does apply. The information collection requirements associated with part 227 that require the approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.,
have been extended under OMB Control Number 0704-0369 (55,000 respondents, approximately 1.5 million burden hours). This proposed rule does not change DoD's estimates of the associated information collection requirement. The proposed rule deletes 17 clauses that did not have information collection requirements. Two clauses that had information collection requirements have been incorporated into other clauses (252.225-7014 into 252.225-7013, 252.227-7019 into 252.227-7037), without affecting the associated information collection requirements. The SBIR clause at 252.227-7018 has been renumbered as 252.227-7014.
List of Subjects at 48 CFR Parts 212, 227, 246, and 252.
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.
Therefore, DoD proposes to amend 48 CFR parts 212, 227, 246, and 252 as follows:
1. The authority citation for 48 CFR parts 212, 227, 246, and 252 continues to read as follows:
Authority:
41 U.S.C. 421 and 48 CFR chapter 1.
PART 212—ACQUISITION OF COMMERCIAL ITEMS
2. Section 212.211 is revised to read as follows:
212.211
Technical data.
The DoD policies and procedures for acquiring technical data related to commercial items are at subpart 227.71.
3. Section 212.212 is revised to read as follows:
212.212
Computer software.
The DoD policies and procedures for acquiring commercial computer software are at subpart 227.71.
4. Section 212.271 is added to subpart 212.2 to read as follows:
212.271
Works.
The DoD policies and procedures for acquiring rights in works, including architectural designs, shop drawings, or other information resulting from or related to architect-engineer services and construction, are at subpart 227.72.
Section
212.504 [Amended]
5. Section 212.504 is amended by removing and reserving paragraphs (a)(iii) and (a)(iv).
6. Revise part 227 to read as follows:
PART 227—PATENTS, DATA, AND COPYRIGHTS
Subpart 227.3—Patent Rights Under Government Contracts
227.303
Contract clauses.
227.304
Procedures.
227.304-1
General.
Subpart 227.4—Rights in Data and Copyrights
227.400
Scope of subpart.
Subpart 227.6—Foreign License and Technical Assistance Agreements
227.670
Foreign intellectual property agreements and licenses.
§ 227.670-1
General.
§ 227.670-2
Policy.
§ 227.670-3
Procedures.
§ 227.670-4
Export control of intellectual property.
Subpart 227.70—Infringement Claims, Licenses, and Assignments
§ 227.7000
Scope.
§ 227.7001
Statutes pertaining to administrative claims of infringement.
§ 227.7002
Requirements for filing an administrative claim for patent or copyright infringement or a secrecy order claim.
§ 227.7003
Investigation and administrative disposition of claims.
§ 227.7004
Notification and disclosure to claimants.
§ 227.7005
Settlement of indemnified claims.
§ 227.7006
Settlement agreements.
Subpart 227.71—Rights in Technical Data and Computer Software
§ 227.7100
Scope of subpart.
§ 227.7101
Definitions.
§ 227.7102
Policy.
§ 227.7103
Acquisition of technical data and computer software.
§ 227.7103-1
Acquisition planning.
§ 227.7103-2
Preparation of solicitation.
§ 227.7103-3
Identification and assessment of Government minimum needs.
§ 227.7103-4
Deferred delivery and deferred ordering of technical data or computer software.
§ 227.7103-5
Contract clauses.
§ 227.7104
License rights in technical data and computer software.
§ 227.7104-1
General.
§ 227.7104-2
Rights in technical data and computer software of third parties (including subcontractors).
§ 227.7104-3
Rights in noncommercial technical data and noncommercial computer software.
§ 227.7104-4
Rights in technical data and computer software—Small Business Innovation Research (SBIR) Program.
§ 227.7104-5
Rights in commercial technical data and computer software.
§ 227.7104-6
Rights in derivative technical data and computer software.
§ 227.7104-7
Retention of rights by offerors, contractors, or third parties.
§ 227.7104-8
Contract clauses.
§ 227.7105
Contractor assertion of restrictions on technical data and computer software—early identification and marking requirements.
§ 227.7105-1
Early identification.
§ 227.7105-2
Marking requirements.
§ 227.7105-3
Solicitation provision and contract clauses.
§ 227.7106
Conformity, acceptance, warranty, and validation of asserted restrictions on technical data and computer software.
§ 227.7106-1
Conformity and acceptance.
§ 227.7106-2
Warranty
§ 227.7106-3
Unjustified and nonconforming markings.
§ 227.7106-4
Government right to review, verify, challenge and validate asserted restrictions.
§ 227.7106-5
Contract clauses.
§ 227.7107
Safeguarding, use, and handling of technical data and computer software.
§ 227.7107-1
Government procedures for protecting technical data and computer software.
§ 227.7107-2
Use and non-disclosure agreement.
2§ 27.7107-3
Contractor technical data or computer software repositories.
§ 227.7107-4
Contract clause.
Subpart 227.72—Rights in Works
§ 227.7200
Scope of subpart.
§ 227.7201
Definitions.
§ 227.7202
Contracts for the acquisition of works and the assignment of rights in works.
§ 227.7202-1
Policy.
§ 227.7202-2
Procedures.
§ 227.7202-3
Contract clause.
§ 227.7203
Contracts for the acquisition of works and license rights in works.
§ 227.7203-1
Policy.
§ 227.7203-2
Procedures.
§ 227.7203-3
Contract clause.
§ 227.7204
Safeguarding, use, and handling of works.
§ 227.7204-1
Procedures.
§ 227.7204-2
Contract clause.
§ 227.7205
Rights in architectural designs, shop drawings, or similar information related to architect-engineer services and construction.
§ 227.7205-1
Scope.
§ 227.7205-2
Contract clauses.
Subpart 227.3—Patent Rights Under Government Contracts
227.303
Contract clauses.
(1) Use the clause at 252.227-7039, Patents—Reporting of Subject Inventions, in solicitations and contracts containing the clause at FAR 52.227-11, Patent Rights—Ownership by the Contractor.
(2)(i) Use the clause at 252.227-7038, Patent Rights—Ownership by the Contractor (Large Business), instead of the clause at FAR 52.227-11, in
solicitations and contracts for experimental, developmental, or research work if—
(A) The contractor is other than a small business concern or nonprofit organization; and
(B) No alternative patent rights clause is used in accordance with FAR 27.303(c) or (e).
(ii) Use the clause with its Alternate I if—
(A) The acquisition of patent rights for the benefit of a foreign government is required under a treaty or executive agreement;
(B) The agency head determines at the time of award that it would be in the national interest to acquire the right to sublicense foreign governments or international organizations pursuant to any existing or future treaty or agreement; or
(C) Other rights are necessary to effect a treaty or agreement, in which case Alternate I may be appropriately modified.
(iii) Use the clause with its Alternate II in long-term contracts if necessary to effect treaty or agreements to be entered into.
§ 227.304
Procedures.
§ 227.304-1
General.
Interim and final invention reports and notification of all subcontracts for experimental, developmental, or research work (FAR 27.304-1(e)(2)(ii)) may be submitted on DD Form 882, Report of Inventions and Subcontracts. For additional guidance and information on invention reporting, see PGI 227.304-1.
Subpart 227.4—Rights in Data and Copyrights
§ 227.400
Scope of subpart.
DoD activities shall follow the requirements in subparts 227.71 and 227.72 instead of FAR subpart 27.4.
Subpart 227.6—Foreign License and Technical Assistance Agreements
§ 227.670
Foreign intellectual property agreements and licenses.
§ 227.670-1
General.
In furtherance of the national defense, the Government may develop foreign additional sources of defense services or products that may be accomplished through the use of intellectual property rights or technical assistance agreements. Under such agreements, a domestic concern (“domestic source”), agrees to furnish to a foreign concern or government (“foreign source”), intellectual property rights and other foreign technical assistance needed to enable the foreign source to produce particular supplies or perform particular services.
§ 227.670-2
Policy.
(a) It is DoD policy not to pay for rights for intellectual property to which the Government holds a royalty-free license or otherwise has title to use or disclose.
(b) This policy shall be applied by agencies in negotiating consideration for foreign license technical assistance agreements or supply contracts with foreign sources.
(c) The consideration for foreign intellectual property agreements may be in the form of a lump sum payment, payments for each item manufactured by the foreign source, an agreement to exchange intellectual property rights on improvements made to the article or service, capital stock transactions, or any combination of these. The domestic source's bases for computing such consideration may include actual costs; charges for the use of the intellectual property rights and the domestic source's “price” for setting up a foreign source. The compensation to be paid for in such agreements is referred to as a royalty or license fee.
§ 227.670-3
Procedures.
(a)
Negotiation of intellectual property agreements.
When negotiating or reviewing the terms of an intellectual property exchange or license agreement between the Government and a domestic source, between the Government and a foreign source, or between a domestic source and a foreign source—
(i)
Intellectual property agreements between the Government and a domestic source.
(A) Intellectual property agreements between the Government and a domestic source (a domestic contractor) shall—
(
1
) Specify the intellectual property rights to be supplied to the foreign source (a foreign concern or government);
(
2
) Provide, in connection with any separate agreement between the domestic source and the foreign source, a statement referring to the contract between the Government and the domestic source; and
(
3
) Conform to the requirements of export control laws and regulations. See PGI 227.670-4.
(B) In negotiating the price paid to the domestic source, the actual cost of the intellectual property rights, the extent of the Government's contribution to the development of the supplies and services, and the Government's intellectual property rights shall be considered.
(ii)
Intellectual property agreements between the Government and a foreign source.
In negotiating contract prices with a foreign source, the agency concerned shall obtain from the foreign source a detailed statement (see FAR 27.204-1(a)(2)) of royalties, license fees, and other compensation paid to a domestic source (or any of its subcontractors) for intellectual property rights and other technical assistance provided to the foreign source, including identifications and descriptions. Examples of charges for intellectual property that are not acceptable include any charge or royalty to which the Government already has title or license or has paid for in an agreement with a domestic source.
(iii)
Reviewing intellectual property agreements between a domestic source and a foreign source.
(A) In reviewing foreign licenses or technical assistance agreements between domestic and foreign sources, the agency concerned shall indicate whether the intellectual property exchange or agreement meets the requirements of 22 CFR sections 124.07-124.10 (of the International Traffic in Arms Regulations).
(B) When the Government anticipates that it will purchase foreign supplies or services involved in the agreement from the foreign source, the following guidance applies:
(
1
) The agency concerned shall evaluate the amount of the reduction in charges necessary to account for the Government's intellectual property rights, and shall determine whether it is fair and reasonable in the circumstances, before indicating its approval.
(
2
) If the agreement does not specify any reduction in charges, however, or otherwise fails to give recognition to the Government's intellectual property rights, the agency concerned shall evaluate the agreement and condition its approval upon amendment of the agreement to reflect a reduction, in accordance with 22 CFR 124.10.
(C) When the Government does not anticipate that it will purchase the foreign supplies or services involved in the agreement from the foreign source, the following guidance applies:
(
1
) If the agreement provides for charges to the foreign source for data or patent rights, it may suffice to fulfill the requirements of 22 CFR 124.10 insofar as the Department of Defense is concerned if—
(
i
) The domestic source and the Government negotiate the appropriate reduction in the domestic source's
charges to the foreign source considering any rights the Government may have in the intellectual property.
(
ii
) The foreign source shall pass any reduction in purchase price on to the Government.
(
2
) Even though no charge is to be made to the foreign source for intellectual property rights, the agency concerned shall—
(
i
) Evaluate the acceptability of the provision before indicating its approval; or
(
ii
) Explicitly condition its approval on the right to evaluate the acceptability of the provision at a later time.
(D) Any agreement between the domestic and foreign sources shall reflect the arrangements contemplated by any technical assistance agreement between the Government and the domestic source.
(E) Every agreement shall provide that any license rights transferred under the agreement are subject to existing rights of the Government.
(F) In connection with every agreement referred to in paragraph (b) of this section, a request shall be made to the domestic source—
(
1
) To identify the intellectual property rights to be provided to the foreign source by the domestic source or any of its subcontractors, and
(
2
) To identify any intellectual property rights of which the domestic source may be aware.
(G) The agency concerned shall notify the domestic source that the approval of any agreement is not an approval of the charges, and is not an approval of any business arrangements in the agreement. However, the agency may approve any charges or business arrangements if it is in the Government's best interests. In any event, a disclaimer should be made to charges or business terms not affecting any purchase made by or for the Government.
(b) For assistance with patent rights and royalty payments in the United States European Command, see PGI 227.670-3(b).
§ 227.670-4
Export control of intellectual property.
The laws and regulations governing the export of intellectual property are numerous. These laws and regulations are referenced at PGI 227.670-4.
Subpart 227.70—Infringement Claims, Licenses, and Assignments
§ 227.7000
Scope.
(a) This subpart prescribes—
(1) The policy regarding patent and copyright infringement and secrecy order claims; and
(2) Provides instructions on how the public must submit these claims.
(b) This subpart 227.70 does not apply to licenses or assignments acquired by the Department of Defense. Moreover, this subpart does not apply to other forms of intellectual property infringement other than patent, copyright, and secrecy order claims.
§ 227.7001
Statutes pertaining to administrative claims of infringement.
Statutes pertaining to administrative claims of infringement in the Department of Defense include the following: The Foreign Assistance Act of 1961, 22 U.S.C. 2356 (formerly the Mutual Security Acts of 1951 and 1954); the Invention Secrecy Act, 35 U.S.C. 181-188; 10 U.S.C. 2386; 28 U.S.C. 1498; and 35 U.S.C. 286.
§ 227.7002
Requirements for filing an administrative claim for patent or copyright infringement or a secrecy order claim.
(a) A patent or copyright infringement claim or a secrecy order claim, asserted against the United States under any of the applicable statutes cited in 227.7001, must be in writing and actually communicated to and received by an agency, organization, office, or field establishment within the Department of Defense. Claims shall include the following:
(1) An allegation of infringement;
(2) The requested remedy;
(3) An identification of the patent(s), or copyrighted work(s) alleged to be infringed;
(4) An identification of the alleged infringing use, including a statement of the acts allegedly committed by the Government, and the time period during which the alleged acts occurred; or
(5) As an alternative to paragraph (a)(4) of this section, a declaration that the claimant has made a bona fide attempt to determine the alleged infringing use, but was unable to do so, giving reasons, and stating a reasonable basis for its belief that its patent(s) or copyrighted work(s) allegedly are being infringed;
(6) Any additional information that will expedite the resolution of the claim; and
(7) A declaration that the claimant is the owner or exclusive licensee of the patent(s) or copyrighted work(s) alleged to be infringed, or otherwise has standing to sue.
(b) If the correspondence alleging infringement does not meet the requirements set forth in this paragraph, the sender shall be advised in writing—
(1) That the claim for infringement has not been satisfactorily presented, and
(2) What is necessary to establish a claim.
(c) In addition to the information listed in paragraph (a) of this section, the following material and information is generally necessary in the course of processing an infringement claim. Claimants are encouraged to furnish this information at the time of filing a claim to permit the most expeditious processing and settlement of the claim.
(1) For patent infringement claims—
(i) A copy of the allegedly infringed patent(s) and a designation of all claims alleged to be infringed.
(ii) Identification of all alleged infringements known to the claimant that involve the patented item or process, including the identity of the vendor or contractor and the Government procuring activity.
(iii) A detailed identification of the alleged infringement, particularly where the infringement relates to a component or subcomponent of the item procured. This should include an element-by-element comparison of a representative claim(s) with the allegedly infringing product or process. Further, this identification should include documentation and drawings in suitable detail to enable verification of the infringement.
(iv) Names and addresses of all past and present licenses under the patent(s), and copies of all license agreements and releases involving the patent(s).
(v) A brief description of all litigation in which the patent(s) has been or is now involved, and the present status thereof.
(vi) A list of all persons to whom notices of infringement have been sent, including all agencies of the Government, and a statement of the ultimate disposition of each.
(vii) A description of Government employment or military service of the inventor(s).
(viii) A list of all Government contracts or agreements under which the inventor, patent owner, or their agents have performed work relating to the patents.
(ix) A copy of the U.S. Patent and Trademark Office (PTO) file wrapper of each patent if available to claimant.
(x) A list of any corresponding foreign patent applications.
(xi) Pertinent prior art known to claimant, not contained in the PTO file wrapper, such as prior art cited in corresponding foreign patent prosecutions.
(2) For copyright infringement claims—
(i) A copy of the copyrighted work(s) alleged to be infringed.
(ii) A detailed identification of the allegedly infringing work, including a copy, if available.
(iii) Names and addresses of all past and present licensees and assignees under the copyrighted work, and copies of all licenses and assignments involving the copyrighted work(s).
(iv) A brief description of all litigation in which the copyrighted work(s) has been or is now involved, and the present status.
(v) A list of all persons and organizations to whom notices of infringement have been sent, including all agencies of the Government, and a statement of the ultimate disposition of each.
(vi) A description of Government employment or military service of the author.
(vii) A list of all Government contracts under which the work was produced.
(viii) Copies of registration records for the copyrighted works. (Registration of the work with the U.S. copyright office is not required to file an administrative claim).
(d)
Secrecy order claims.
In addition to the information listed in paragraph (a) of this section, the following material or information is generally necessary in the course of processing a secrecy order claim.
(1) An identification of the damages sought from imposition of the secrecy order and/or use of the invention by the Government while the secrecy order was pending.
(2) A copy of the secrecy order, the notice of allowability and any PTO licenses for foreign filing or modifications of the secrecy order.
(3) An identification of the sponsor of the secrecy order.
(4) An identification of the serial number and filing date of the patent application under secrecy order and any corresponding foreign patent application.
(5) Documentation for any claim for damages.
(6) An indication of when and where the Government allegedly used the invention.
(e) Claimants must submit their claims to the appropriate agency at the addresses at PGI 227.7002(e). Any agency receiving an allegation of infringement which meets the requirements of paragraph (a) of this section shall—
(1) Acknowledge the receipt of the allegation; and
(2) Supply the other agencies that may have an interest with a copy of the allegation and the acknowledgement.
(f) A communication making a proffer of a license in which no infringement is alleged shall not be considered as a claim for infringement.
227.7003
Investigation and administrative disposition of claims.
(a) Whenever a claim of infringement of an intellectual property right is asserted against the Department of Defense, or its contractors acting with the authorization and consent of the Government, all necessary steps shall be taken to investigate, and to settle administratively, deny, or otherwise dispose of such claim prior to suit against the United States.
(b)
Agency procedures.
An investigation and administrative determination (denial or settlement) of each claim shall be made in accordance with instructions and procedures established by each agency, subject to the following:
(1) The agency responsible for purchasing the alleged infringing item or process shall have sole responsibility for the disposition of the infringement claim when the funds of that agency alone will be charged. However, when funds of another agency are to be charged, in whole or in part, the agreement of such agency shall be obtained, and each agency concerned shall execute any settlement agreement.
(2) When two or more agencies are responsible for purchasing the alleged infringing item or process, and the funds of both agencies are to be charged in the settlement, the agency with the predominant financial interest in the claim shall be responsible for the disposition of the claim, or as jointly agreed upon by the agencies concerned. The agency responsible for negotiation shall, throughout the negotiation, coordinate with the other agencies concerned and keep them advised of the status of the negotiation. Each agency concerned shall execute any settlement agreement.
(c)
Disposition of trademark infringement claims.
See PGI 227.7003(c) for examples of various ways a trademark infringement claim might be disposed of.
227.7004
Notification and disclosure to claimants.
(a) Before settling any claim—
(1) Contact any other agencies that might have an interest in the settlement of the claim; and
(2) Send the claimant a letter stating the limits of the Government's liability, for patent or copyright infringement, and indicate that any settlement agreement will take the general form found at PGI 227.7006(b).
(b) If a claim is denied, the department or agency responsible for the determination of the claim shall—
(1) Notify the claimant or authorized representative in writing;
(2) Provide a basis for denying the claim; and
(3) Draft the notification to avoid any admissions against the Government's interest. Additionally, the notification should not waive any evidentiary privileges that the Government may have, and it should state that the denial is a final agency action. An example letter of denial of an administrative claim may be found at PGI 227.7004(b)(3).
227.7005
Settlement of indemnified claims.
Settlement of claims involving payment for past infringement should not be made without the consent of, and equitable contribution by, each indemnifying contractor involved, unless such settlement is determined to be in the best interests of the Government.
227.7006
Settlement agreements.
Settlement of claims for intellectual property infringement can take many forms. Sometimes, the appropriate manner in which to settle a claim or litigation is through use of a settlement agreement.
(a)
Required FAR clauses for settlement agreements.
The following FAR clauses shall be included in any settlement agreement:
(1) FAR 52.203-5, Covenant Against Contingent Fees.
(2) FAR 52.203-3, Gratuities.
(3) FAR 52.232-23, Assignment of Claims.
(4) FAR 52.233-1, Disputes.
(b)
Sample settlement agreement for patent infringement.
This patent infringement settlement agreement may be tailored as appropriate for copyright infringement releases, settlement agreements, license agreements, or assignments.
PATENT LICENSE AND RELEASE CONTRACT
THIS CONTRACT is effective as of the __ day of [month, year,] between the UNITED STATES OF AMERICA (hereinafter called the Government), and ______ (hereinafter called the Contractor), (a corporation organized and existing under the laws of the State of ______), (a partnership consisting of ______), (an individual trading as ______), of the City of ______, in the State of ______.
WHEREAS, the Contractor warrants that it has the right to grant the within license and release, and the Government desires to procure the same, and
WHEREAS, this contract is authorized by law, including 10 U.S.C. 2386.
NOW THEREFORE, in consideration of the grant, release and agreements hereinafter recited, the parties have agreed as follows:
FIRST OPTION FOR ARTICLES 1 AND 2
ARTICLE l. License Grant.*
(a) The Contractor hereby grants to the Government an irrevocable, nonexclusive, nontransferable, and paid-up license, under the following intellectual property rights, to practice by or for the Government, throughout the world, any and all of the inventions hereunder, in the manufacture and use of any article or material, in the use of any method or process, and in the disposition of any article or material in accordance with law:
U.S. Patent No. ___ Date ___
Application Serial No. ___ Filing Date ___
(b) No rights are granted or implied by the agreement under any other patents other than as provided above or by operation of law.
(c) Nothing contained herein shall limit any rights which the Government may have obtained by virtue of prior contracts or by operation of law or otherwise.
ARTICLE 2. License Term.*
ALTERNATE I
The license hereby granted shall remain in full force and effect for the full term of the intellectual property referred to in the “License Grant” clause of this contract and any and all intellectual property hereafter issued.
ALTERNATE II
The license hereby granted shall terminate on the __ day of ___, __ provided, however, that termination is without prejudice to the completion of any Government contract entered into prior to termination or to the subsequent use or disposition of any articles or materials manufactured by or for the Government under this license.
SECOND OPTION FOR ARTICLES 1 AND 2
ARTICLE 1. License Grant—Running Royalty.*
(a) The Contractor hereby grants to the Government, as represented by the Secretary of ___, an irrevocable, nonexclusive, nontransferable license, under the following intellectual property rights, to practice by or for [agency], throughout the world, any and all of the inventions hereunder in the manufacture and use of any article or material, in the use of any method or process, and in the disposition of any article or material in accordance with law:
U.S. Patent No. ___ Date _____
Application Serial No. ___ Filing Date ___
(b) No rights are granted or implied by the agreement under any other patents other than as provided above or by operation of law.
(c) Nothing contained herein shall limit any rights which the Government may have obtained by virtue of prior contracts or by operation of law or otherwise.
(d) Computation of Royalties.
Subject to the following conditions, 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 [agency], 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 [agency], “net selling price,” as used in this paragraph, means the actual cost of direct labor and materials without allowance for overhead and supervision.
(e) Reporting and Payment of Royalties.
(1) The (procuring office) shall, on or before the sixtieth (60th) day following the end of each yearly * period ending ___deliver to the Contractor a written report furnishing necessary information relative to royalties which have accrued under this contract during stated period.
(2) Royalties which have accrued under this contract during the yearly* period ending ___ shall be paid to the Contractor (if appropriations therefore are available or become available) within sixty (60) days following the receipt of a voucher from the Contractor submitted in accordance with the report referred to above; provided, that the Government shall not be obligated to pay, in respect of any such yearly period, on account of the combined royalties accruing under this contract directly and under any separate licenses granted pursuant to the “License to Other Government Agencies” clause (if any) of this contract, an amount greater than __ dollars ($__). If such combined royalties exceed the said maximum yearly obligation, each agency shall pay a pro-rata share as determined by the proportion its accrued royalties bear to the combined total of accrued royalties.
(f) License to Other Government Agencies.
The Contractor hereby agrees to grant a separate license under the intellectual property rights referred to in the “License Grant” clause of this contract, on the same terms and conditions as appear in this license contract, to any other agency of the Government at any time on receipt of a written request for such a license; provided, however, that each agency make payments directly to the Contractor for royalties which accrue under the separate licenses. The Contractor shall promptly notify the Licensee upon receipt of any request for a license.
ARTICLE 2. License Term—Running Royalty.*
The license hereby granted shall remain in full force and effect for the full term of each of the intellectual property referred to in the “License Grant” clause of this contract and any and all intellectual property hereafter issued unless terminated sooner, as elsewhere herein provided.
ARTICLE 3. Release of Past Infringement.
The Contractor hereby releases each and every claim and demand which it now has or may hereafter have against the Government for the manufacture or use by or for the Government prior to the effective date of this contract, of any inventions covered by (i) any patents and patent applications identified in this contract, and (ii) any other patents or patent applications owned or hereafter acquired by it, insofar as and only to the extent that such other patents or patent applications cover the manufacture, use, or disposition of (description of subject matter).
ARTICLE 4. Non-Estoppel.
The Government reserves the right at any time to contest the enforceability, validity, scope of, or the title to any intellectual property herein licensed without waiving or forfeiting any right under this contract.
ARTICLE 5. FAR Clauses.
Insert the following FAR clauses:
(a) Covenant Against Contingent Fees, FAR 52.203-5.
(b) Gratuities, FAR 52.203-3.
(c) Assignment of Claims, FAR 52.232-23.
(d) Disputes, FAR 52.233-1.
ARTICLE 6. Termination.
Notwithstanding any other provision of this contract, the Government shall
have the right to terminate the license, in whole or in part, by giving the Contractor at least thirty (30) days written notice of the termination date; provided, however, that the obligation of the Government to pay royalties which have accrued prior to the effective date of termination shall not be affected.
ARTICLE 7. Payment.
The Contractor shall be paid the sum of ___ Dollars ($__) in full compensation for the rights herein granted and agreed to be granted.
ARTICLE 8. Readjustment of Payments.
(a) The Government shall be entitled to the benefit of more favorable terms with respect to all royalties accruing under a contract when any license, under substantially the same intellectual property and authorizing substantially the same acts which are authorized under this contract, has been or shall hereafter be granted within the United States. The Contractor shall promptly notify the Secretary in writing of the granting of such more favorable terms.
(b) In the event any licensed intellectual property is held invalid by decision of a court of competent jurisdiction, the requirement to pay royalties under this contract shall be interpreted in conformity with the court's decision as to the scope of validity of such intellectual property; provided, however, that in the event such decision is modified or reversed on appeal, the requirement to pay royalties under this contract shall be interpreted in conformity with the final decision rendered on such appeal.
ARTICLE 9. Successors and Assignees.
This Agreement shall be binding upon the Contractor, its successors (when the Contractor is an individual, change “successors” to “heirs”; if a partnership, modify appropriately) and assignees, but nothing contained in this Article shall authorize an assignment of any claim against the Government other than as permitted by law.
IN WITNESS WHEREOF, the parties hereto have executed this contract.
THE UNITED STATES OF AMERICA
By
Date
(Signature and Title of Contractor Representative)
By
Date
(Signature and Title of Government Representative
Contract Number __
* If only a release is procured, delete those articles marked with an *.
(c) Assignment. If an assignment is procured, the following provides sample language that may be used to assign patent rights to the Government.
The Contractor hereby conveys to the Government, as represented by the Secretary of ____, the entire right, title, and interest in and to the following patents (and applications for patent), in and to the inventions thereof, and in and to all claims and demands whatsoever for infringement thereof heretofore accrued, the same to be held and enjoyed by the Government through its duly appointed representatives to the full end of the term of said patents (and to the full end of the terms of all patents which may be granted upon said applications for patent, or upon any division, continuation-in-part or continuation thereof):
U.S. Patent No. ___ Date ___
Name of Inventor
U.S. Application Serial No. ___
Filing Date ___
Name of Inventor
Subpart 227.71—Rights in Technical Data and Computer Software
227.7100
Scope of subpart.
This subpart—
(a) Prescribes policies and procedures for—
(1) The acquisition of technical data and computer software; and
(2) The rights to use, modify, reproduce, release, perform, display, or disclose technical data and computer software.
(b) It implements requirements of the following laws and Executive order:
(1) 10 U.S.C. 2302(4).
(2) 10 U.S.C. 2305(d)(4).
(3) 10 U.S.C. 2320.
(4) 10 U.S.C. 2321.
(5) 10 U.S.C. 7317.
(6) 17 U.S.C. 1301, et seq.
(7) Executive Order 12591 (paragraph 1(b)(7)).
(c) Does not apply to rights in works (see subpart 227.72).
227.7101
Definitions.
As used in this subpart—
(a) Unless otherwise specifically indicated, the terms
offeror
and
contractor
include an offeror's or contractor's subcontractors or suppliers, or potential subcontractors or suppliers, at any tier.
(b) Other terms are defined in the clauses at—
(1) 252.227-7013, Rights in Technical Data and Computer Software—Noncommercial;
(2) 252.227-7014, Rights in Technical Data and Computer Software—Small Business Innovation Research (SBIR) Program; and
(3) 252.227-7015, Rights in Technical Data and Computer Software—Commercial.
227.7102
Policy.
(a) It is DoD policy to acquire only the technical data and computer software, and the rights in that data and software, that are necessary to satisfy agency needs. Significant elements of the materials discussed in this section are based on 10 U.S.C. 2320 and 2321. Although these statutes apply only to technical data, they are expanded by policy in most cases to cover computer software as well.
(b) To encourage offerors and contractors to offer or use commercial products to satisfy military requirements, offerors and contractors shall not be required to—
(1) Furnish technical information related to commercial items that is not customarily provided to the public except technical data or computer software that—
(i) Are form, fit, or function data (applies only to technical data);
(ii) Are required for repair or maintenance of commercial items or processes, or for the proper installation, operating, or handling of a commercial item, either as a stand-alone unit or as a part of a military system, when such information is not customarily provided to commercial users or the data provided to commercial users is not sufficient for military purposes; or
(iii) Describe the modification of a commercial item made at Government expense to meet the requirements of a Government solicitation; or
(2) Relinquish to, or otherwise provide, the Government rights to use, modify, reproduce, release, perform, display, or disclose commercial technical data or commercial computer software except for a transfer of rights mutually agreed upon.
(c) Commercial technical data and commercial computer software shall be acquired—
(1) Under the licenses customarily provided to the public unless such licenses are inconsistent with Federal procurement law or do not otherwise satisfy user needs; and
(2) Competitively, to the maximum extent practicable, using firm-fixed-price contracts or firm-fixed-priced orders under available pricing schedules.
(d) Solicitations and contracts shall—
(1) Specify the technical data and computer software to be delivered under
a contract and the delivery schedules for that data and software (10 U.S.C. 2320(b)(2)).
(2) Whenever practicable, identify—
(i) The type and quantity of the technical data and computer software (including requirements for multiple users at one site, or multiple site licenses)
(ii) The format and media in which the data or software will be delivered; and
(iii) The place of delivery for each deliverable item of technical data;
(3) Establish or reference procedures for determining the acceptability of technical data and computer software (10 U.S.C. 2320(b)(3));
(4) Establish separate contract line items, to the extent practicable, for the technical data and computer software to be delivered under a contract (10 U.S.C. 2320(b)(4)) (this requirement may be satisfied by listing each deliverable item on an attachment to the contract);
(5) Require offerors and contractors to price separately each deliverable data or software item (10 U.S.C. 2320(b)(4));
(6) Require offerors to identify and assert, to the maximum extent practicable, restrictions on deliverable technical data and computer software as early as possible in the acquisition, and in all cases require the identification and assertion prior to delivery (10 U.S.C. 2320(b)(5)).
(e) Offerors shall not be required, either as a condition of being responsive to a solicitation or as a condition for award, to sell or otherwise relinquish to the Government any rights in technical data or computer software related to items, or processes developed at private expense, except for the types of data or software for which the Government receives unlimited rights regardless of the source of funding (10 U.S.C. 2320(a)(2)(F)).
(f) Offerors and contractors shall not be prohibited or discouraged from furnishing or offering to furnish items, processes, or computer software developed at private expense solely because the Government's rights to access, use, modify, reproduce, release, perform, display, or disclose technical data pertaining to those items may be restricted. (10 U.S.C. 2320(a)(2)(F)).
(g) Solicitations for major systems development contracts shall not require offerors to submit proposals that would permit the Government to acquire competitively items identical to items developed at private expense unless a determination is made at a level above the contracting officer that—
(1) The offeror will not be able to satisfy program schedule or delivery requirements; or
(2) The offeror's proposal to meet mobilization requirements does not satisfy mobilization needs. (10 U.S.C. 2305)
(h) For acquisitions involving major weapon systems or subsystems of major weapon systems, the acquisition plan shall address acquisition strategies that provide for technical data and computer software, and the associated license rights, in accordance with 207.106(S-70).
(i) The Government's rights in a vessel design, and in any useful article embodying a vessel design, must be consistent with the Government's rights in technical data pertaining to the design (10 U.S.C. 7317; 17 U.S.C. 1301(a)(3)).
(j) Solicitations and contracts establish a limited form of privity between the Government and subcontractors or suppliers regarding technical data and computer software, and rights in that data or software. Subcontractors and suppliers at any tier—
(1) Shall not be required to relinquish rights in technical data or computer software to the prime contractor or a higher-tier subcontractor; and
(2) May transact directly with the Government in matters relating to technical data and computer software. (10 U.S.C. 2320 and 2321)
(k) DoD shall protect technical data and computer software from unauthorized access, use, reproduction, modification, release, performance, display, and disclosure. For additional information on the protection of technical data and computer software from unauthorized activities, see PGI 227.7102(i).
227.7103
Acquisition of technical data and computer software.
227.7103-1
Acquisition planning.
Requirements for technical data and computer software, and rights in that data and software, shall be fully addressed in acquisition planning, including through compliance with 207.106(S-70) for acquisitions of major weapons systems or subsystems thereof. Restrictions on the Government's rights to access, use, modify, reproduce, perform, display, release, or disclose technical data or computer software may have a significant impact on other elements of the acquisition plan, such as the ability to release data or software in connection with the competitive re-procurement of additional quantities of the item or process, or the competitive selection of life cycle support, maintenance, or for future upgrades or technical refresh of the technologies. For additional information on incorporating technical data and computer software considerations into acquisition planning,
see
PGI 227.7103-1.
227.7103-2
Preparation of solicitation.
Contracting officers shall work closely with data managers, software managers, and requirements personnel to ensure that requirements included in solicitations and contracts for technical data and computer software are consistent with the policies at 227.7102.
227.7103-3
Identification and assessment of Government minimum needs.
(a) Data managers, software managers, and other requirements personnel are responsible for identifying the Government's minimum needs for technical data and computer software, and for rights in that data or software. Follow the procedures at PGI 227.7103-3(a) to identify and assess the Government's minimum needs.
(b) When reviewing offers received in response to a solicitation or other request for technical data or computer software, data managers must balance the original assessment of the Government's data and software needs with the associated prices contained in the offer. Information provided by offerors in response to the solicitation provision may be used in the source selection process to evaluate the impact on evaluation factors that may be created by restrictions on the Government's ability to use or disclose technical data, consistent with the policies of this subpart.
227.7103-4
Deferred delivery and deferred ordering of technical data or computer software.
(a)
Deferred delivery.
The contracting officer shall—
(1) Specify in the contract which technical data or computer software is subject to deferred delivery; and
(2) Notify the contractor sufficiently in advance of the desired delivery date in order to permit timely delivery of the technical data or computer software.
(b)
Deferred ordering.
When computer software or technical data are to be procured through deferred ordering, the contracting officer shall—
(1) Negotiate the delivery dates with the contractor; and
(2) Compensate the contractor only for—
(i) Converting the data into the prescribed form;
(ii) Reproduction costs; and
(iii) Delivery costs.
227.7103-5
Contract clauses.
(a) Use the clause at 252.227-7026, Deferred Delivery of Technical Data or Computer Software, when it is in the Government's interests to defer the delivery of technical data or computer software.
(b) Use the clause at 252.227-7027, Deferred Ordering of Technical Data or Computer Software, when a firm requirement for a particular data item(s) has not been established prior to contract award but there is a potential need for the data.
227.7104
License rights in technical data and computer software.
227.7104-1
General.
(a)
Grant of license.
The Government obtains rights in technical data and computer software under an irrevocable license granted or obtained for the Government by the contractor. The contractor (or licensor) retains all rights in the data not granted to the Government.
(b)
Doctrine of segregability.
Determinations of the rights in technical data and computer software may be made at the lowest practicable segregable portion of the data or software.
See
PGI 227.7104-1(b) for examples of making this determination on the segregable portion.
(c)
Activities covered.
(1)
Noncommercial licenses.
The license granted for noncommercial technical data and noncommercial computer software under the clauses covers the following activities:
(i) Access;
(ii) Use;
(iii) Reproduction;
(iv) Modification;
(v) Release;
(vi) Performance;
(vii) Display; and
(viii) Disclosure.
(2)
Commercial licenses.
Due to the wide variety of terms and conditions used in commercial license agreements, some of the licenses customarily offered to the public might not expressly address all of the individual activities listed in paragraph (c)(1) of this subsection. Contracting officers must ensure that the license rights covering commercial technical data or commercial computer software satisfy the Governments minimum needs—including the need to engage in any or all of the activities listed in paragraph (c)(1) of this subsection.
(d)
Scope of the license.
(1) Except as specified in paragraph (c)(2) of this subsection, the Government's license rights cover all forms of intellectual property interest that, absent the license, would restrict the ability of the Government to engage in any of the activities listed in paragraph (c) of this subsection. The most common examples are copyright and trade secret.
(2) The license does not cover—
(i) Rights in inventions (
see
FAR subpart 27.3 and DFARS subpart 227.3); and
(ii) Rights in trademarks, service marks, collective marks, certification marks, or any other mark.
(e)
Additional information.
For additional information on the nature of the Government's license,
see
PGI 227.7104-1(e).
227.7104-2
Rights in technical data and computer software of third parties (including subcontractors).
(a)
Third parties.
(1) Under the standard data rights clauses (
e.g.,
252.227-7013, -7014, -7015), a contractor must grant or obtain for the Government the same license rights in a third party's technical data and computer software delivered under the contract that the contractor must grant the Government under the clauses.
(2) When non-standard license rights in technical data or computer software are negotiated, also negotiate the extent of a third party's intellectual property license commensurate with those non-standard license rights negotiations. An intellectual property license with a third party must provide the Government with at least the minimum rights required by the applicable rights-allocation clause.
(3) Only grant approval to use a third party's intellectual property (excluding patents) in which the Government will not receive a license when the Government's requirements cannot be satisfied without the third party material or when the use of the third party material will result in cost savings to the Government which outweigh the lack of a license.
(b)
Subcontractors.
(1) Subcontractors or suppliers at any tier cannot be required to relinquish any rights in technical data to a contractor, a higher tier subcontractor, or to the Government, as a condition for award of any contract, subcontract, purchase order, or similar instrument except for the rights obtained by the Government under the standard rights clause contained in the contractor's contract with the Government.
(2) The Government may transact directly with a subcontractor on matters relating to the validation of its asserted restrictions on the Government's rights to use or disclose technical data. The clause at 252.227-7037 obtains a contractor's agreement that the direct transaction of validation or challenge matters with subcontractors at any tier does not establish or imply privity of contract for matters not covered by the clause. When a subcontractor or supplier exercises its right to transact validation matters directly with the Government, contracting officers shall deal directly with such persons, as provided at 227.7106-5.
227.7104-3
Rights in noncommercial technical data and noncommercial computer software.
(a) The Government's license rights in noncommercial technical data and noncommercial computer software are governed by the clause at 252.227-7013, Rights in Technical Data and Computer Software—Noncommercial.
(b) For noncommercial technical data and noncommercial computer software, the scope of the license is generally determined by the source of funds used to develop the item, process, or software.
(1)
Technical data pertaining to items or processes.
Contractors or licensors may, with some exceptions (see paragraphs (b)(1)(iii) through (xi) of the clause at 252.227-7013), restrict the Government's rights to use, modify, release, reproduce, perform, display, or disclose technical data pertaining to items or processes developed exclusively at private expense (limited rights). They may not restrict the Government's rights to technical data pertaining to items or processes developed exclusively at Government expense (unlimited rights) without the Government's approval. When an item or process is developed with mixed funding, the Government may use, modify, release, reproduce, perform, display, or disclose the data pertaining to such items or processes within the Government without restriction, but may release or disclose the data outside the Government only for government purposes (government purpose rights).
(2)
Technical data that do not pertain to items or processes.
Technical data may be created during the performance of a contract for a conceptual design or similar effort that does not require the development, manufacture, construction, or production of items or processes. The Government generally obtains unlimited rights in such data when the data were created exclusively with Government funds, government purpose rights when the data were created with mixed funding, and limited rights when the data were created exclusively at private expense.
(c) In unusual situations, the standard rights may not satisfy the Government's
needs or the Government may be willing to accept lesser rights in data in return for other consideration. In those cases, a special license may be negotiated. However, the licensor is not obligated to provide the Government greater rights and the contracting officer is not required to accept lesser rights than the rights provided in the standard grant of license. The situations under which a particular grant of license applies are enumerated in paragraphs (c)(1) through (c)(4) of this subsection.
(1)
Unlimited rights.
The Government obtains unlimited rights in technical data or computer software when the technical data or computer software, or the items or processes to which the technical data pertain, are developed exclusively with Government funds, or that qualify under certain criteria for which the source of development funding is irrelevant. See paragraph (b)(1) of the clause at 252.227-7013.
(2)
Government purpose rights.
(i) The Government obtains Government purpose rights in noncommercial technical data and noncommercial computer software when the technical data or computer software, or the items or processes to which the technical data pertain, are developed with mixed funding—except when the Government is entitled to unlimited rights regardless of the source of development funding, as provided in paragraph (c)(1) of this subsection.
(ii) The period during which Government purpose rights are effective is negotiable. The clause at 252.227-7013 provides a nominal five-year period, but either party may request a different period. Changes to the Government purpose rights period may be made by mutual agreement at any time prior to delivery of the technical data or computer software without consideration from either party. Longer periods should be negotiated when a five-year period does not provide sufficient time to apply the data for commercial purposes or when necessary to recognize subcontractors' interests in the data.
(iii) During the Government purpose rights period, the Government may not use, or authorize other persons to use, technical data marked with Government purpose rights legends for commercial purposes. The Government shall not release or disclose data in which it has Government purpose rights to any person, or authorize others to do so, unless—
(A) Prior to release or disclosure, the intended recipient is subject to the use and non-disclosure agreement at 227.7107-2; or
(B) The intended recipient is a Government contractor receiving access to the data for performance of a Government contract that contains the clause at 252.227-7025, Government-Furnished Information Marked with Restrictive Legends.
(iv)
See
227.7107-1 for Government procedures for protecting data and computer software.
(v) Upon expiration of the Government purpose rights period, the Government has unlimited rights in the data including the right to authorize others to use the data for commercial purposes.
(3)
Limited rights.
(i) The Government obtains limited rights in noncommercial technical data, when the technical data, or the items or processes to which the technical data pertain, is developed exclusively at private expense—except when the Government is entitled to unlimited rights as provided in paragraphs (b)(1)(iii) through (xi) of the clause at 252.227-7013.
(ii) Data in which the Government has limited rights may not be used, released, or disclosed outside the Government without the permission of the contractor asserting the restriction except for a use, release, or disclosure that is—
(A) Necessary for emergency repair and overhaul; or
(B) To a foreign government, other than detailed manufacturing or process data, when use, release, or disclosure is in the interest of the United States and is required for evaluational or informational purposes.
(iii) The person asserting limited rights must be notified of the Government's intent to release, disclose, or authorize others to use such data prior to release or disclosure of the data except notification of an intended release, disclosure, or use for emergency repair or overhaul, which shall be made as soon as practicable.
(iv) When the person asserting limited rights permits the Government to release, disclose, or have others use the data subject to restrictions on further use, release, or disclosure, or for a release under paragraph (c)(3)(ii)(A) or (B) of this subsection, the intended recipient must complete the use and non-disclosure agreement at 227.7107-2 prior to release or disclosure of the limited rights data.
(4)
Restricted rights.
The Government obtains restricted rights in noncommercial computer software required to be delivered or otherwise provided to the Government under a contract that was developed exclusively at private expense.
(5)
Negotiated license rights.
(i)
General.
(A) The standard license rights granted to the Government under paragraphs (c)(1) through (4) of this subsection (including the period during which the Government shall have Government purpose rights) may be modified only by mutual written agreement.
(B) Negotiate specific licenses when the parties agree to modify the standard license rights granted to the Government or when the Government wants to obtain rights in data in which it does not have rights. If either party desires to negotiate specialized license rights in technical data or computer software, the other party agrees to promptly enter into good faith negotiations to determine whether there are acceptable terms for transferring such rights.
(C) In no event may the negotiated license provide the Government lesser rights than limited rights in technical data, or restricted rights in computer software.
(D) The negotiated license rights must stipulate what rights the Government has to release or disclose the technical data or computer software to other persons or to authorize others to use the technical data or computer software.
(E) Identify all negotiated rights in a license agreement made part of the contract.
(ii)
Technical data.
(A) When negotiating to obtain, relinquish, or increase the Government's rights in technical data, consider the acquisition strategy for the item or process, including logistics support and other factors which may have relevance for a particular procurement.
(B) Generally, if technical data was acquired with Government purpose or limited rights, the contracting officer should negotiate for additional rights only if there is a need to disclose the data outside the Government or if the additional rights are required for competitive reprocurement and the anticipated savings expected to be obtained through competition are estimated to exceed the acquisition cost of the additional rights. Prior to negotiating for additional rights in limited rights data, consider alternatives such as—
(
1
) Using performance specifications and form, fit, and function data to acquire or develop functionally equivalent items or processes;
(
2
) Obtaining a contractor's contractual commitment to qualify additional sources and maintain adequate competition among the sources; or
(
3
) Reverse engineering, or providing items from Government inventories to contractors who request the items to
facilitate the development of equivalent items through reverse engineering.
(6)
Pre-existing license rights.
When the Government has previously obtained license rights in the technical data or computer software, the Government retains those same rights, unless—
(i) The parties have agreed otherwise; or
(ii) Any restrictions on the Government's rights have expired.
227.7104-4
Rights in technical data and computer software—Small Business Innovation Research (SBIR) Program.
(a) Pursuant to 15 U.S.C. 638(j)(1)(B)(v), (2)(A), (3)(A), and the Small Business Innovation Research Program Policy Directive, small business concerns in the performance of SBIR Phase I, II, and III awards may create technical data and computer software categorized as “SBIR data.” SBIR Phase III includes activities that derive from, extend, or logically conclude efforts performed under prior SBIR awards, but are funded by sources other than the SBIR program. SBIR contractors retain proprietary rights to SBIR data for a limited protection period (5 years after acceptance of the last deliverable), but grant specific license rights to the Government (SBIR data rights). This protection period is extended for any SBIR data that is appropriately referenced and protected in any subsequent SBIR award made prior to the expiration of the protection period. SBIR data rights attach to all SBIR data even if the data would otherwise qualify for unlimited rights or government purpose rights based on development exclusively or partially with Government funds (
see
10 U.S.C. 2320). For additional information on the SBIR program,
see
PGI 227.7104-4.
(b) The contracting officer shall not negotiate for special license rights as an element of any SBIR Phase I, Phase II, or Phase III award. However, after award, the parties may negotiate special license rights by mutual agreement.
227.7104-5
Rights in commercial technical data and commercial computer software.
(a) The clause at 252.227-7015, Rights in Technical Data and Computer Software—Commercial, provides the Government specific license rights in commercial technical data and commercial computer software. The Government takes the same license rights as are customarily offered to the public, to the extent that the commercial license is consistent with Federal procurement law and meets DoD minimum needs (
see
252.227-7015(b)(1)).
(1) Notwithstanding any terms or conditions to the contrary in the commercial license agreement, the Government shall have—
(i) Unlimited rights in certain types of technical data listed at 252.227-7015(b)(2); and
(ii) At least certain minimum rights (similar to limited rights in noncommercial technical data) in all technical data listed at 252.227-7015(b)(3).
(2) If the commercial license customarily offered to the public is inconsistent with Federal procurement law or does not otherwise meet DoD needs, the contracting officer will negotiate with the contractor as provided for at 252.227-7015(b)(1) and (b)(4).
(b) If additional rights are needed, the contracting officer must negotiate with the contractor to obtain such rights. The specific additional rights granted to the Government shall be enumerated in a license agreement made part of the contract.
(c)
See
PGI 227.7104-5(c) for guidance regarding determining whether a license is consistent with Federal procurement law and meets the agency's needs, including open source software as a special type of commercial computer software, (
see
PGI 227.7104-5(c)).
227.7104-6
Rights in derivative technical data and computer software.
The clauses at 252.227-7013 and 252.227-7014 protect the Government's rights in technical data and computer software, or portions thereof, that the contractor subsequently uses to prepare derivative data or software or subsequently embeds or includes in other data or software. The Government retains the rights it obtained under the development contract in the unmodified portions of the derivative data or software.
227.7104-7
Retention of rights by offerors, contractors, or third parties.
The offeror, contractor, or other third party owner or licensor retains all intellectual property rights (including ownership) in technical data and computer software except those rights granted to the Government.
227.7104-8
Contract clauses.
(a)(1) Use the clause at 252.227-7013, Rights in Technical Data and Computer Software-Noncommercial, in solicitations and contracts when the successful offeror(s) will be required to deliver noncommercial technical data or noncommercial computer software to the Government, except when contracting under the Small Business Innovation Research Program (
see
paragraph (b) of this subsection).
(2) Also use the clause at 252.227-7013 in all solicitations and contracts when the contractor will be required to deliver commercial technical data or commercial computer software (in addition to the clause at 252.227-7015), if the Government will pay any portion of the costs of development or modification of a commercial item, commercial technical data, or commercial computer software.
(3) Use the clause at 252.227-7013 with its Alternate I in research contracts when the contracting officer determines, in consultation with counsel, that public dissemination by the contractor would be—
(i) In the interest of the Government; and
(ii) Facilitated by the Government relinquishing its right to publish the work for sale, or to have others publish the work for sale on behalf of the Government.
(4) Use the clause at 252.227-7013 with its Alternate II in contracts for the development or delivery of a vessel design or any useful article embodying a vessel design.
(b)(1) Use the clause at 252.227-7014, Rights in Technical Data and Computer Software—Small Business Innovation Research (SBIR) Program, when SBIR data will be generated during performance of Phase I, II, or III awards or activities under the SBIR program (227.7104-4).
(2) Use the clause at 252.227-7014 with its Alternate I in research contracts when the contracting officer determines that public dissemination of SBIR data by the contractor would be—
(i) In the interest of the Government; and
(ii) Facilitated by the Government relinquishing its right to publish the work for sale, or to have others publish the work for sale on behalf of the Government.
(c)(1) Use the clause at 252.227-7015, Technical Data and Computer Software—Commercial, in all solicitations and contracts when the contractor will be required to deliver commercial technical data or commercial computer software.
(2) Use the clause at 252.227-7015 with its Alternate I in contracts for the development or delivery of a vessel design or any useful article embodying a vessel design.
(d)
Doctrine of segregability and applicability to subcontractors.
To the maximum extent practicable, when the prescriptions at paragraphs (a) through (c) of this subsection require the use of more than one clause, the contract will specify which deliverables are governed by each clause. In addition, the clauses
prescribed at paragraphs (a) through (c) of this subsection require the contractor to use the appropriate clause(s) in subcontracts, and to notify the Government if a clause is used that is not already included in the prime contract. For additional guidance on using the doctrine of segregability to manage the application of multiple rights-determinative clauses under a single contract,
see
PGI 227.7104-8(d).
227.7105
Contractor assertion of restrictions on technical data and computer software—early identification and marking requirements.
227.7105-1
Early identification.
(a) The solicitation provision at 252.227-7017, Pre-Award Identification and Assertion of License Restrictions—Technical Data and Computer Software, requires offerors to identify to the contracting officer, prior to contract award, all technical data and computer software that the offeror asserts should be provided to the Government with restrictions on use, modification, reproduction, release, or disclosure. The notification and identification must be submitted as an attachment to the offer.
(1) The contracting officer shall specify that pre-award identification is intended to require the identification of situations in which an offeror or contractor anticipates using a commercial or nondevelopmental technology (or any technology for which restrictions are likely to be asserted), but the specific subcontractor, supplier, or the specific asserted restrictions, have not yet been identified. For example, to ensure that the latest and best technology is used for a particular application, the offeror may propose delaying the selection of the particular technology or source for that technology, until shortly before the technology is required to be integrated into the systems or deliverables—often referred to as “just in time” technology insertion. In this case, the offeror's pre-award list shall identify the technical data or computer software that it anticipates delivering with restrictions, and provide as much information as possible about the nature of the anticipated restrictions, the basis for the asserted restrictions, and the potential source(s) of the technology (
e.g.,
commercial technologies, or noncommercial technologies developed exclusively or partially at private expense).
(2) The pre-identification list of assertions must be consistent with the offeror's proposal regarding the use of commercial or nondevelopmental technologies and the need to develop new technologies, as reflected in the remainder of the technical and cost portions of the proposal. Even such a rudimentary identification will place the contracting officer on notice that rights may be restricted in the technical data or computer software, thereby permitting the Government to more accurately evaluate the offer.
(3) After contract award, the contractor is required to provide the more specific information (
e.g.,
the asserted restrictions, basis for assertion, and entity asserting restrictions) as soon as the information is available, pursuant to 252.227-7018, Post-Award Identification and Assertion of License Restrictions—Technical Data and Computer Software.
(b) If an offeror fails to submit the attachment or fails to complete the attachment in accordance with the requirements of the solicitation provision, such failure shall constitute a minor informality. The contracting officer shall provide an offeror an opportunity to remedy a minor informality in accordance with the procedures at FAR 14.405 or 15.307. An offeror's failure to correct the informality within the time prescribed by the contracting officer shall render the offer ineligible for award.
(c) The procedures for correcting minor informalities shall not be used to obtain information regarding asserted restrictions or an offeror's suggested asserted rights category. Questions regarding the justification for an asserted restriction or asserted rights category must be pursued in accordance with the procedures at 227.7106-3.
(d) The restrictions asserted by a successful offeror shall be attached to its contract unless, in accordance with the procedures at 227.7103-13, the parties have agreed that an asserted restriction is not justified.
(e) Subsequent to contract award, the clause at 252.227-7018, Post-Award Identification and Assertion of License Restrictions—Technical Data and Computer Software, permits the contractor to make additional assertions under certain conditions, in accordance with the procedures and in the format prescribed by that clause.
(f) Neither the pre- or post-award assertions made by the contractor, or the fact that certain assertions are identified in the attachment to the contract, determine the respective rights of the parties. As provided at 227.7106-4, the Government has the right to review, verify, challenge, and validate restrictive markings.
(g) Information provided by offerors in response to the solicitation provision may be used in the source selection process to evaluate the impact on evaluation factors that may be created by restrictions on the Government's ability to use or disclose technical data, consistent with the policies of this subpart.
227.7105-2
Marking requirements.
(a)
Contractor marking requirements.
The clause at 252.227-7013, Rights in Technical Data and Computer Software—Noncommercial—
(1) Requires a contractor that desires to restrict the Government's rights in technical data or computer software to place restrictive markings on the data or software, provides instructions for the placement of the restrictive markings, and authorizes the use of certain restrictive markings; and
(2) Requires a contractor to deliver, furnish, or otherwise provide to the Government any technical data or computer software in which the Government has previously obtained rights with the Government's pre-existing rights in that data or software unless the parties have agreed otherwise or restrictions on the Government's rights to use, modify, reproduce, release, perform, display, or disclose the data have expired. When restrictions are still applicable, the contractor is permitted to mark the data or software with the appropriate restrictive legend for which the data or software qualifies.
(b)
Unmarked technical data or computer software.
(1) Technical data or computer software delivered or otherwise provided under a contract without restrictive markings shall be presumed to have been delivered with unlimited rights and may be released or disclosed without restriction. To the extent practicable, if a contractor has requested permission (see paragraph (b)(2) of this subsection) to correct an inadvertent omission of markings, do not release or disclose the technical data or computer software pending evaluation of the request.
(2) A contractor may request permission to have appropriate legends placed on unmarked technical data or computer software at its expense. The request must be received by the contracting officer within six months following the furnishing or delivery of such data or software, or any extension of that time approved by the contracting officer. The person making the request must—
(i) Identify the technical data or computer software that should have been marked;
(ii) Demonstrate that the omission of the marking was inadvertent and that the proposed marking is justified and conforms with the requirements for the
marking of technical data and computer software contained in the relevant clause(s); and
(iii) Acknowledge, in writing, that the Government has no liability with respect to any disclosure, reproduction, or use of the technical data or computer software made prior to the addition of the marking or resulting from the omission of the marking.
(3) Contracting officers should grant permission to mark only if the technical data or computer software were not distributed outside the Government or were distributed outside the Government with restrictions on further use or disclosure.
227.7105-3
Solicitation provision and contract clauses.
(a) Use the clause 252.227-7016, Rights in Bid or Proposal Information, in all solicitations and contracts that anticipate the delivery of technical data or computer software.
(b) Use the provision 252.227-7017, Pre-Award Identification and Assertion of License Restrictions—Technical Data and Computer Software, in all solicitations that anticipate the delivery of technical data or computer software.
(c) Use the clause 252.227-7018, Post-Award Identification and Assertion of License Restrictions—Technical Data and Computer Software, in all solicitations and contracts that anticipate the delivery of technical data or computer software.
227.7106
Conformity, acceptance, warranty, and validation of asserted restrictions on technical data and computer software.
227.7106-1
Conformity and acceptance.
(a) Solicitations and contracts requiring the delivery of technical data or computer software shall specify the requirements the data or software must satisfy to be acceptable. Contracting officers, or their authorized representatives, are responsible for determining whether technical data and computer software tendered for acceptance conform to the contractual requirements.
(b) The clause at 252.227-7030, Technical Data and Computer Software—Withholding of Payment, provides for withholding up to 10 percent of the contract price pending correction or replacement of the nonconforming technical data or negotiation of an equitable reduction in contract price. The amount subject to withholding may be expressed as a fixed dollar amount or as a percentage of the contract price. In either case, the amount shall be determined giving consideration to the relative value and importance of the data. For examples on the amount subject to withholding,
see
PGI 227.7106-1(b).
(c) Do not accept technical data or computer software that do not conform to the contractual requirements in all respects. Except for nonconforming restrictive markings (
see
paragraph (d) of this subsection), correction or replacement of nonconforming data or software, or an equitable reduction in contract price when correction or replacement of the nonconforming data or software is not practicable or is not in the Government's interests, shall be accomplished in accordance with—
(1) The provisions of a contract clause providing for inspection and acceptance of deliverables and remedies for nonconforming deliverables; or
(2) The procedures at FAR 46.407(c) through (g), if the contract does not contain an inspection clause providing remedies for nonconforming deliverables.
(d) Follow the procedures at 227.7106-3 if nonconforming markings are the sole reason technical data or computer software fails to conform to contractual requirements. The clause at 252.227-7030, as prescribed at 227.7106-5, may be used to withhold an amount from payment, consistent with the terms of the clause, pending correction of the nonconforming markings.
227.7106-2
Warranty.
(a)
Noncommercial
technical data.
The intended use of the technical data and the cost, if any, to obtain the warranty should be considered before deciding to obtain a data warranty (see FAR 46.703). The fact that a particular item or process is or is not warranted shall not be a consideration in determining whether or not to obtain a warranty for the technical data that pertain to the item or process.
(1) A data warranty should be considered if the Government intends to repair or maintain an item and defective repair or maintenance data would impair the Government's effective use of the item or result in increased costs to the Government.
(2) As prescribed in 246.710, use the clause at 252.246-7001, Warranty of Data, and its alternates, or a substantially similar clause when the Government needs a specific warranty of technical data.
(b)
Noncommercial c
omputer software.
(1)
Weapon systems.
Computer software that is a component of a weapon system or major subsystem shall be addressed as part of the weapon system warranty. Follow the procedures at 246.710.
(2)
Non-weapon systems.
Approval of the chief of the contracting office must be obtained to use a computer software warranty other than a weapon system warranty. Consider the factors at FAR 46.703 in deciding whether to obtain a computer software warranty. When approval for a warranty has been obtained, the clause at 252.246-7001, Warranty of Data, and its alternates, may be appropriately modified for use with computer software or a procurement-specific clause may be developed.
(c)
Commercial technical data and commercial computer software.
Follow FAR part 12 and DFARS part 212 regarding warranties for commercial technical data and commercial computer software.
227.7106-3
Unjustified and nonconforming markings.
(a)
Unjustified markings.
(1) An unjustified marking is an authorized marking that does not accurately depict restrictions applicable to the Government's use, modification, reproduction, release, performance, display, or disclosure of the marked technical data or computer software. For an example,
see
PGI 227-7106-3(b).
(2) The correction of unjustified markings on technical data or computer software is governed by 252.227-7013(i)(1). However, at any time during performance of a contract and notwithstanding existence of a challenge, the contracting officer and the party that has asserted a restrictive marking may agree that the restrictive marking is not justified.
(b)
Nonconforming markings.
(1) A nonconforming marking is a marking that does not comply with the form or content that is authorized by the clause governing the technical data or computer software.
(i) For noncommercial technical data and noncommercial computer software, authorized markings are identified in the clause at 252.227-7013, Rights in Technical Data and Computer Software—Noncommercial. All other noncommercial markings which differ from those identified in 252.227-7013, whether in form or substance, are nonconforming markings.
(ii) For commercial technical data and commercial computer software, the clause at 252.227-7015, Rights in Technical Data and Computer Software—Commercial does not specify the form or content of restrictive legends. However, any restrictive marking that does not accurately describe the Government's license rights shall be considered an unjustified
marking under paragraph (b) of this subsection.
(2) The correction of nonconforming markings on technical data or computer software is governed by 252.227-7013(i)(2). To the extent practicable, the contracting officer should return technical data or computer software bearing nonconforming markings to the person who has placed the nonconforming markings on such technical data or computer software to provide that person an opportunity to correct or strike the nonconforming marking at that person's expense.
227.7106-4
Government right to review, verify, challenge, and validate asserted restrictions.
(a)
General.
All challenges must be made in accordance with the provisions of 252.227-7037, Validation of Restrictive Markings on Technical Data and Computer Software.
(1) The Government has the right to challenge asserted restrictions on technical data (
see
10 U.S.C. 2321) and computer software when—
(i) There are reasonable grounds to question the validity of the assertion; and
(ii) Continued adherence to the assertion would make it impractical to later procure competitively the item to which the technical data or computer software pertain.
(2) However, there is a mandatory presumption that commercial items are developed at private expense. (
See
10 U.S.C. 2320(b)(1), and 2321(f)). Therefore, do not challenge a contractor's assertion that a commercial item or process was developed at private expense unless the Government can demonstrate that it contributed to development of the item, component, or process.
(b)
Pre-award considerations.
(1) The challenge procedures may significantly delay awards under competitive procurements. Therefore, avoid challenging asserted restrictions prior to a competitive contract award unless resolution of the assertion is essential for successful completion of the procurement.
(2)
Transacting challenge matters directly with subcontractors, at any tier, or suppliers.
The clause at 252.227-7037 includes the contractor's agreement that the Government may transact matters under the clause directly with a subcontractor, at any tier, or supplier without creating or implying privity of contract for matters not covered under the clause. Contracting officers should permit a subcontractor or supplier to transact challenge and validation matters directly with the Government when—
(i) A subcontractor's or supplier's business interests in its technical data would be compromised if the data were disclosed to a higher-tier contractor;
(ii) There is reason to believe that the contractor will not respond in a timely manner to a challenge and an untimely response would jeopardize a subcontractor's or supplier's right to assert restrictions; or
(iii) Requested to do so by a subcontractor or supplier.
227.7106-5
Contract clauses.
Use the following clauses in solicitations and contracts that anticipate the delivery of technical data or computer software:
(a) 252.227-7030, Technical Data and Computer Software—Withholding of Payment; and
(b) 252.227-7037, Validation of Restrictive Markings on Technical Data and Computer Software.
227.7107
Safeguarding, use, and handling of technical data and computer software.
227.7107-1
Government procedures for protecting technical data and computer software.
(a) DoD personnel, including acquisition personnel, are required to protect technical data and computer software from unauthorized or inappropriate access, use, modification, reproduction, release, performance, display, and disclosure. This protection includes—
(1) Restrictions that are based on an offeror's, contractor's, or licensor's intellectual property rights; and
(2) Restrictions based on other laws, policies, or regulations (
e.g.,
export-controlled information or technology, information subject to withholding under the FOIA, privacy information).
(b) Contracting activities shall establish procedures to assure that technical data or computer software marked with restrictive legends are released or disclosed, including a release or disclosure through a Government solicitation, only to authorized persons subject to appropriate use and non-disclosure restrictions. Solicitations or public announcements must provide notice of the use and non-disclosure requirements.
(c)(1) Class use and non-disclosure agreements (
e.g.,
agreements covering all solicitations received by a company within a reasonable period) are authorized for Government purpose rights technical data or computer software, and may be obtained at any time prior to release or disclosure of the technical data or computer software.
(2) Documents transmitting Government purpose rights technical data or computer software to persons under class agreements shall identify the technical data or computer software subject to Government purpose rights and the class agreement under which the technical data or computer software are provided.
227.7107-2
Use and non-disclosure agreement.
(a) Except as provided in paragraph (c) of this subsection, technical data or computer software delivered to the Government with restrictions on access, use, modification, reproduction, release, performance, display, or disclosure may not be provided to third parties unless the intended recipient completes and signs the use and non-disclosure agreement (Agreement) at paragraph (d) of this subsection prior to release or disclosure of the data or software.
(b) An attachment to the Agreement will identify—
(1) The technical data and computer software that the Government intends to furnish to the recipient with restrictions on access, use, modification, reproduction, release, performance, display, or disclosure; and
(2) The specific conditions under which the recipient is authorized to access, use, modify, reproduce, release, perform, display, or disclose the following:
(i) Technical data subject to limited rights;
(ii) Computer software subject to restricted rights;
(iii) SBIR data subject to SBIR data rights; and
(iv) Technical data or computer software subject to—
(A) Negotiated license rights; or
(B) Other license restrictions, including commercial license rights.
(c) The requirement for the Agreement does not apply to Government contractors which require access to a third party's technical data or computer software for the performance of a Government contract that contains the clause at 252.227-7025, Government-Furnished Information Marked with Restrictive Legends.
(d) The prescribed use and non-disclosure agreement is as follows:
BILLING CODE 5001-08-P
EP27SE10.000
EP27SE10.001
EP27SE10.002
EP27SE10.003
EP27SE10.004
EP27SE10.005
EP27SE10.006
EP27SE10.007
EP27SE10.008
EP27SE10.009
BILLING CODE 5001-08-C
227.7107-3
Contractor technical data or computer software repositories.
(a) Contractor technical data or computer software repositories may be established when permitted by agency procedures. The contractual instrument establishing each repository must require, as a minimum, the repository management contractor to—
(1) Establish and maintain adequate procedures for protecting technical data and computer software delivered to or stored at the repository from unauthorized release or disclosure;
(2) Establish and maintain adequate procedures for controlling the release or disclosure of technical data and computer software from the repository to third parties consistent with the Government's rights in such data;
(3) When required by the contracting officer, deliver technical data or computer software to the Government on paper or in other specified media;
(4) Be responsible for maintaining the currency of technical data and computer software delivered directly by Government contractors or subcontractors to the repository;
(5) Obtain use and non-disclosure agreements (
see
227.7107-2) from all persons to whom government purpose rights technical data or computer software is released or disclosed; and
(6) Indemnify the Government from any liability to technical data and computer software owners or licensors resulting from, or as a consequence of, a release or disclosure of data or software made by the repository contractor or its officers, employees, agents, or representatives.
(b) If the contractor is or will be the repository manager, the contractor's technical data and computer software management and distribution responsibilities must be identified in the contract or the contract must reference the agreement between the Government and the contractor that establishes those responsibilities.
(c) If the contractor is not and will not be the repository manager, do not require a contractor or subcontractor to deliver technical data marked with limited rights legends, or computer software marked with restricted rights legends, to a repository managed by another contractor unless the contractor or subcontractor who has asserted the limited rights or restricted rights agrees to release the data or software to the repository or has authorized, in writing, the Government to do so.
(d) Repository procedures may provide for the acceptance, delivery, and subsequent distribution of technical data or computer software in storage media other than paper, including direct electronic exchange of data between two computers. The procedures must provide for the identification of any portions of the data provided with restrictive legends, when appropriate. The acceptance criteria must be consistent with the authorized delivery format.
227.7107-4
Contract clause.
(a) Use the clause at 252.227-7025, Government-Furnished Information Marked with Restrictive Legends, in solicitations and contracts when it is anticipated that the Government will provide the contractor, for performance of its contract, technical data or computer software marked with another party's restrictive legend(s).
(b) When technical data marked with Government purpose rights legends will be released or disclosed to a Government contractor performing a contract that does not include the clause at 252.227-7025, the contract may be modified, prior to release or disclosure, to include that clause in lieu of requiring the contractor to complete a use and non-disclosure agreement.
Subpart 227.72—Rights in Works
227.7200
Scope of subpart.
This subpart—
(a) Prescribes policies and procedures for the acquisition of, and Government rights in—
(1) Copyrightable works;
(2) Other works; and
(3) Architectural designs, shop drawings, or similar information resulting from or related to construction or architect-engineer services; and
(b) Does not apply to technical data (including computer software documentation) or computer software (see subpart 227.71). For additional information concerning the acquisition of works versus the acquisition of technical data and computer software,
see
PGI 227.7200(b).
227.7201
Definitions.
As used in this subpart—
(a) Unless otherwise specifically indicated, the terms
offeror
and
contractor
include an offeror's or contractor's subcontractors or suppliers, or potential subcontractors or potential suppliers, at any tier.
(b) Other terms are defined in the clause at—
(1) 252.227-7020, Rights in Works-Ownership; and
(2) 252.227-7021, Rights in WorksLicense.
227.7202
Contracts for the acquisition of works and the assignment of rights in works.
227.7202-1
Policy.
The Government shall require assignment of the entire right, title, and interest, including the intellectual property rights (other than patent rights), in works first created, developed, generated, originated, prepared, or produced in the performance of a contract where it has a need to control—
(a) The use, modification, reproduction, release, distribution, performance, or display, of the works; and
(b) The preparation of derivative works from the works.
227.7202-2
Procedures.
(a) Solicitations and contracts shall specify—
(1) The works to be first produced, created, or generated;
(2) The intellectual property rights to be assigned; and
(3) The delivery schedule for both the works and the assignment instruments.
(b) Use the procedures at subpart 227.71 if the Government has a need to control technical data (including computer software documentation), computer software, and architectural works that comprise technical data or computer software.
227.7202-3
Contract clause.
(a)(1) Use the clause at 252.227-7020, Rights in Works—Ownership, in solicitations and contracts—
(i) For architect-engineer services, or for construction involving architect-engineer services, when the Government requires the exclusive control of the data pertaining to design for a unique architectural design of a building, a monument, or construction of similar nature, which for artistic, aesthetic, or other special reasons the Government does not want duplicated; and
(ii) When the successful offeror(s) will be required to assign to the Government the entire right, title, and interest, including the intellectual property rights, to the entirety of works first created, developed, generated, originated, prepared, or produced in the performance of the contract.
(2) The following are examples of copyright assignments.
The assignment instruments should be tailored to the particular work and the rights being assigned.
Copyright Assignment
Title of Work:
Contract No.:
Assignor's Name:
Assignor's Address:
For good and valuable consideration, receipt of which is hereby acknowledged, [name of assignor] (“Assignor”), hereby irrevocably transfers and assigns to [name of assignee] (“Assignee”), located at [insert address], its successors and assigns, in perpetuity, all right (whether now known or hereinafter created), title, and interest, throughout the world, including any copyrights and renewal or extensions thereto, in [title and short description of work, created under Contract No.: __, including, if available, copyright registration number].
IN WITNESS THEREOF, Assignor has duly executed this Agreement.
By:
[Authorized signature]
Typed Name:
Title:
[Assignor's title]
Date:
AUTHOR COPYRIGHT ASSIGNMENT AGREEMENT
BETWEEN THE (name of agency)
AND
This Copyright Assignment Agreement, (hereinafter called “AGREEMENT”) is made and entered into by and between the United States of America as represented by the Secretary of the (name of agency) (hereinafter called “GOVERNMENT”) and (AUTHOR's name), at____ (AUTHOR's Address) (hereinafter called “AUTHOR”) and governs a Work(s) already prepared or to be prepared by the AUTHOR with the intention that the contribution has been or shall be included in a United States Government produced textbook, website, spreadsheet calculator, or other teaching or reference material, titled:
1. The AUTHOR hereby sells, grants, conveys, assigns and transfers to the GOVERNMENT, its entire right, title and interest in and to the Work(s), including, without limitation, copyrights, renewals and/or extensions thereof for all territories of the world, and all derivative works resulting from the Work(s) covered by this Agreement in consideration for payment of the Work(s) made under Contract No.____ and subject to the retained rights set forth in Paragraph 2. Such assigned rights include, but are not limited to, the rights throughout the world to:
(a) Edit, print, publish, republish, and distribute the Work(s) and to prepare, edit, print, publish, republish and distribute derivative works based thereon, in any language and in all media of expression now known or later developed; and
(b) To license and permit others to do so.
2. The AUTHOR retains the rights to:
(a) Reproduce or authorize others to reproduce the Work(s), material extracted verbatim from the Work(s), or create derivative works, for the AUTHOR's business purposes, but shall not use these rights for purposes that directly compete with the GOVERNMENT's use of the Work(s).
(b) Make limited distribution of all or portions of the Work(s) if the AUTHOR informs the GOVERNMENT in advance of the nature and extent of such limited distribution.
(c) First refusal for the creation of any derivative works resulting from the generation of this Work(s).
3. GOVERNMENT agrees:
(a) To abide by accepted academic standards in the use of the Work(s), specifically the Work(s) will be published with the name of the Author(s) attached to the Work(s).
(b) No part of the Work(s) will be used in a subsequent or derivative work without both a citation of the source and, if a large amount of material is used, without the name of the Author(s) attached.
(c) If a portion of the Work(s) is to be modified, updated, changed, or otherwise used in another Work(s), the AUTHOR will be given an opportunity to update the material and will be compensated for this update effort at a fair and reasonable rate. For such updates, the GOVERNMENT agrees to exert reasonable efforts to contact the recipient. If the AUTHOR declines or is unable to update the Work(s) within a reasonable period of time, the GOVERNMENT is authorized to engage an alternate author to update the Work(s). When the Work(s) is being updated by an alternate author, the chapter, section, or material in question will include the original author's name with an appropriate inscription, such as “based on,” or “updated from.”
4. The AUTHOR represents and warrants that the Work(s):
(a) Is original or has in part been obtained from copyrighted works for which the AUTHOR has obtained written permission from the copyright owner, has not been previously published and is not in the public domain.
(b) Is owned by the AUTHOR who has the right to convey all rights herein conveyed to the GOVERNMENT.
(c) Contains no libelous material or material which may infringe upon or violate the copyright, trademark, trade secret or other right of another.
(d) And that all statements asserted as facts in the Work(s) are either true or based upon generally accepted professional research practices and principles.
5. This Agreement shall commence on the Effective Date and shall continue for the duration of the existing copyright term of the Work(s), and the duration of any renewals or extensions thereof. The Effective Date shall be the latest of the dates after which both parties have signed this Agreement.
6. If any part of this Agreement is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of any other part or provision of this Agreement, which other part or provision shall remain in full force and effect.
7. This Agreement shall be governed by and construed in accordance with the laws of the United States, as applicable to contracts made and to be performed within the United States, and all disputes had by one party against the other shall be brought in a court of competent jurisdiction in the United States under Federal Acquisition Regulation (FAR) clause 52.233-1, Disputes, which is hereby incorporated into this agreement (found in full at
http://www.farsite.hill.af.mil
).
8. The waiver of any provision of this Agreement by either party, or the failure of either party to require performance of any provision of this Agreement shall not be construed as a waiver of its rights to insist on performance of that same provision, or any other provision, at some other time. Any effective waiver, modification or amendment must be in writing and signed by both parties.
9. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof, and expressly supersedes any prior written or oral understandings or agreements between them with respect to the subject matter hereof.
SIGNED:
Author:
Date:
Printed Name
Street Address
City, State, Zip Code
Phone Number
GOVERNMENT (Contracting Officer):
Date:
Printed Name
(b)(1) When the clause at 252.227-7020, Rights in Works-Ownership, is used in accordanc
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