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Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
Intellectual property in_federal_contracts
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Intellectual property in_federal_contracts

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Cutting edge technology is a driving force behind America’s sustained economic growth; domestic technology and knowledge-based markets are growing at unprecedented rates; new markets are opening to …

Cutting edge technology is a driving force behind America’s sustained economic growth; domestic technology and knowledge-based markets are growing at unprecedented rates; new markets are opening to American goods under the influence of free-trade treaties; and companies that specialize in high technology are increasingly global in scope and reach. United States Government has played and continues to play very significant role in the development of these, being the biggest consumer of the cutting edge technology. In today’s marketplace, the private sector is also significant contributor. Some of the good examples are Internet and Wireless technology, which has fueled the growth digital age.

The United States Constitution gives the rights to the government to protect the technology and innovations which are the key to maintaining competitive edge over other nations. One of the “Bills Of Rights” is the protection of copyrights and patents, or what we now call “Intellectual Property Rights (IPRs)”.

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  • 1. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Intellectual Property in Federal Contracts Pravin Asar PRAVIN ASAR pravinasar.com Page 1
  • 2. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Abstract Cutting edge technology is a driving force behind America’s sustained economic growth; domestic technology and knowledge-based markets are growing at unprecedented rates; new markets are opening to American goods under the influence of free-trade treaties; and companies that specialize in high technology are increasingly global in scope and reach. United States Government has played and continues to play very significant role in the development of these, being the biggest consumer of the cutting edge technology. In today’s marketplace, the private sector is also significant contributor. Some of the good examples are Internet and Wireless technology, which has fueled the growth digital age. The United States Constitution gives the rights to the government to protect the technology and innovations which are the key to maintaining competitive edge over other nations. One of the ―Bills Of Rights‖ is the protection of copyrights and patents, or what we now call ―Intellectual Property Rights (IPRs)‖. Long before digital age began, our Founding Fathers understood that these rights were an important part of the overall need to protect the right to obtain and hold property necessary for the new nation to grow and prosper economically. Here is exact text as stated in U.S. Constitution Article I, Section 8, Clause 8 (Heritage.org, 2013), are ―The Congress shall have power to promote the progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive PRAVIN ASAR pravinasar.com Page 2
  • 3. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS right to their respective writings and discoveries....‖ Governments Stand on Intellectual Property The IPtypicallyinvolvedingovernmentcontractsincludespatent,copyrightand/ortrade secretrights. McEwen et al (2009) have discussed the most common types of IP and specifics of IP protection.With the exception of certain technologies developed by the NASA, DoE, DOD, the governmentpolicyencouragesmaximum practicalcommercial use ofIPdevelopedunder governmentcontracts for the benefit of mankind.Consequently,theGovernmentismore willingthanacommercial purchasertoallowa contractortoretainrightsinIPdevelopedundercontract. TheGovernmentislesswillingtoagreetolimitdistributionanduseofthisIP. Contractorsmaysecure IPrightsforthemselvesrespectingdevelopmentswithinthescope ofthe contract,buttypicallysubjecttocertainrightsreservedtothe Government. But the ownership of contractor developed IP on certain DOD contracts, is an especially sticky problem. Rightly so, Feldman (2012) states ―The issues pertain to the rights of the government, the contractor, and third parties; they are most likely the most difficult and complex subject‖. While seeking to maximize its use of commercial technologies to maintain, upgrade and replace its legacy systems for National Aeronautics and Space Administration (NASA), Department of Energy (DoE), Department of Defense (DOD), Department of Homeland Security (DHS) and others, government imposes specific restrictions to its supplier and contractors on the use of these for the purposes other than government PRAVIN ASAR pravinasar.com Page 3
  • 4. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS specific purposes. The implementation of the commercial technology and the joint development of specific technologies is governed by government contacting rules. The policybehindthese rulesandregulationsoftenruncountertoprivate sectortendenciesandpractices. Thisisespeciallytrue withrespecttothe treatmentofintellectual property(IP). Rules of the Road: Government Contracting and IP Rights Framework As we all know, FederalprocurementisgovernedbymanycomplexGovernmentrulesandregulations as implemented by Federal Acquisition Regulations (FAR), Defense Federal Acquisition Regulation Supplement (DFARS) and other agency specific regulations and clauses. This can be terms as a contracting framework; a collections of regulations, rules that apply to specific agencies, laws and executive memorandum. This contracting framework also provides the guidance fordefiningIPrightsundergovernmentcontractsandhowtopreserve same,aswellasotherconsiderationsthatshouldbeborne inmind. FederalAcquisitionRegulation TheFederalAcquisitionRegulations(FAR)Systemisthecodificationandpublicationofun iformpoliciesandproceduresforacquisitionbyallexecutive agencies. The FAR is applicable to all Governmentcontracts. FAR 1.101 ―Statement of guiding principles for the Federal Acquisition System‖ explains the objective and scope of FAR. FAR Part 27 ―Patents, Data, and Copyrights‖ and FAR Part 35 ―Research and PRAVIN ASAR pravinasar.com Page 4
  • 5. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Development Contracting‖ specify the government policies and p rocedures related to IP. To obligate the contractor into assigning to the United States any copyrighted works created during the performance of the contract, the government will insert an appropriate FAR clause.FAR located at 48 C.F.R. Chapter 1 codifies the policy of the United States regarding ownership of IP developed during the performance of a government contract and applies to almost all procurements. Part 1-51 of the FAR provide government policies and contracting procedures and include an explanation of the rules and clauses which apply to specific situations.Part 52 of the FAR contains the actual contractual clauses, the boilerplate used in private contracts, which are to be used in government contracts. Government Contract Andrews Litigation Report (2009) states the FAR clauses often implement statutory or policy directive of Congress or the president and the language contained therein cannot be changed by contracting officers. With respect to some FAR clauses, their insertion into the government contract is discretionary on the part of the contracting office and the contractor can attempt to negotiate these clauses. DefenseFederalAcquisitionRegulationSupplement TheDefenseFederalAcquisitionRegulationSupplement(DFARS)supplementsFARpur chasesandcontractsbyDepartmentofDefensecontractingactivitiesmadeinsupportofforeign militarysalesorNorthAtlanticTreatyOrganizationcooperativeprojects as stated under PRAVIN ASAR pravinasar.com Page 5
  • 6. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS DFAR 201.104. Feldman (2012) states the Department of Defense (DOD) is not governed by the FAR on patent rights, but adheres to separate DFARS instructions and solicitation/contract terms. DFARS Part 227 Patents, Data, and Copyright, establishes the clauses and provisions for IP in DOD contracts. SmallBusinessInnovationResearch(“SBIR”)program The Title 15 U.S.C. 638 – Research and Development, established the SmallBusinessInnovationResearch(SBIR)programin1982aspartoftheSmall BusinessInnovationDevelopmentAct.ManyFederal agencies,includingthe DepartmentofDefense,arerequiredtooutsource someresearchanddevelopmentendeavorsforsmallbusinessestostimulateandcommercialize technologicalinnovationthroughsmallbusinesses. According to Boston University (2010), The Bayh-Dole act of 1980, together with amendmentsin 1984 and augmentation in 1986, has helped to unlock allthe inventions and discoveries that had been made inlaboratories throughout the United States with thehelp of taxpayers’ money.Typically SBIRprogram typicallyhasthree phases: 1. Trade Studies and Exploration (determiningthe scientific andtechnical meritandfeasibilityofconcepts) 2. Furtherdevelopment of the conceptsthatmeetparticularGovernmentprogramneeds 3. The implementation of refined concepts for a. Commercial applicationsofSBIR-fundedresearchwithnon-Federalfunding b. Productsorservicesintendedforusebythe FederalGovernmentwithnon- PRAVIN ASAR pravinasar.com Page 6
  • 7. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS SBIRFederalfunding TheFAR part 35, governsthe aspects of IP developed under SBIRprograms. Feldman (2012) states, the government’s current position with regard to R&D contracts are basically the license policy. Applicable Laws Among the laws of general applicability, of special note for purposes of IP licenses are the Competition in Contracting Act (CICA), the Contract Dispute Act (CDA), the Tucker Act, and the Bayh-Dole Act. CICA is relevant because it requires the Government to seek full and open competition for all contracts to obtain the maximum number of bidders, and in doing so, the Government often seeks to obtain and release to the potential bidders as much detailed information as possible about the relevant systems or technologies—information that may be considered proprietary by the vendors of those technologies. The CDA and Tucker Act provide relief when there is a breach of a contract. Boston University (2010) sites, The Bayh-Dole Act generally provides a framework for allocating rights in patentable ―subject inventions‖ created under a Government contract. Lastly, there are agency-specific laws that can affect IP rights but that do not apply outside of a specific agency. PRAVIN ASAR pravinasar.com Page 7
  • 8. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Government Policy FAR Sub 27 provides guidance on the rights in patents, data and copyrights developed under Government contracts. Governmentpolicyfavorsgrantingcontractorsthe title todevelopments,whetherfederallyfundedinwhole orinpart,inexchange forroyaltyfreeuse byoronbehalfofthe Government. Thispolicy isintendedto: (1)promote theutilizationandcommercializationofinventionsarisingfromfederallysupportedresearchanddevelopment;and(2)encouragemaximumparticipationofindustryinfeder allysupportedresearchanddevelopmentefforts as stated under FAR 1.102. The primary objective of this policyto ensurethatthe GovernmentobtainssufficientrightsinfederallysupportedinventionstomeetGovernmentneedsandprotectthepublicagainstnonuseorunreasona bleuseof these inventions. Presidential memorandum Feldman (2012) cites, the government policy may also supplemented by presidential memorandum promoting the commercialization of certain patentable results of federally funded research by granting to all contractors regardless of size, the title to patents made in whole or in part with federal funds in exchange for royalty-free use by or on behalf of the government- is reflected in the FAR and the various FAR ―Patent Rights‖ clauses. For example, Bayh-Dole Act of 1980, which granted small businesses, universities, and other non-profit scientific or educational organizations the right to retain title to PRAVIN ASAR pravinasar.com Page 8
  • 9. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS inventions derived under federally funded R&D contracts and grants, was supplemented by a memorandum, issued by President Reagan in February 1983, directing the heads of all departments and agencies to extend the benefits of the Bayh-Dole Act law to all R&D contractors, including large businesses and for-profit organizations. What are Patentable Inventions As discussed earlier, Government is not interested in protecting all of the inventions. The contracting framework mandates which inventions should be protected. This also provides a guidance and procedures to Government agencies and contractor on Patentable Inventions and IP Rights. Contractor Ownership and Requirements Although on most the federal contracts, Governmentpolicymayfavorcontractors, the contractor still mustactand should notexpectthe Governmenttochurnoutready-made IPrightsforthem. WhileGovernmentcontractstypicallyspecifyacontractor’srightsrespectingelectinginventi onownership(negotiable),generallythe contractormustdisclosetothe Governmenteachsubjectinventionwithinthe earlierof: (1)twomonthsafterthe inventordisclosesittocontractorpersonnel responsibleforpatentmatters; or(2)sixmonthsafterthe contractorbecomesaware thatasubjectinventionhasbeenmade. Then,thecontractormustnotifytheGovernmentofintentiontoretaintitlewithintwoyears. Ifthecontractorintendstoretaintitle,the contractormusttimelyfilea patentapplicationdescribingandclaimingthe invention. PRAVIN ASAR pravinasar.com Page 9
  • 10. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Ifnot,theGovernmentmayshortenthetitle election periodtogivethe Governmentsufficienttime toprepareandfile a patentapplication. Ifthecontractorfailstomake timelydisclosureortofile apatentapplication, theGovernmentmayfile for the IP rights. Importantexceptionstothese electionrulesare made fordevelopmentsrelatedtonationalsecurityorspecific foreignpolicies. Forexample,the USGovernmentmaynotpermitcontractorIPrightsownershipwherethe contractorisnotlocatedintheUnitedStatesorissubjecttothe control ofa foreigngovernment. Whenthe Governmentacquirestitle,the contractornormallyisgranteda revocable,nonexclusive,royalty-free license tothatinventionthroughoutthe world.The licenseistransferable onlywithpriorapproval,exceptwhentransferredtothesuccessorofthatpartofthecontractor’ sbusinesstowhichtheinventionpertains. GovernmentOwnershipandRights Where the contractorretainstitle toa patentcoveringaninventiondevelopedundera governmentcontract,the Governmentretainsatleasta nonexclusive,nontransferable,irrevocable,paid-uplicense topractice,orhave practicedfororonbehalfofthe UnitedStates,anysubjectinventionthroughoutthe world. The Governmentmaycontractforadditional rights,forexample,tosublicense a foreigngovernmentorinternationalorganizationpursuanttoexistingtreatiesoragreements. PRAVIN ASAR pravinasar.com Page 10
  • 11. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Infurtherance ofthe Government’spolicytomaximizepractical commercialuse ofIPdevelopedundercontract,theGovernment typicallyreservesthe righttorequestthatacontractorgranta licensetoa responsible applicantforcontractoriginatedIP. Toensurethatalicense isgrantedshoulda contractorrefuse sucha request?The Governmentalsotypicallyreserves―march-in‖ rightstograntthe license to government.Shouldacontractoruntimelyorfail toshowcause whylicensingshouldnotoccur? The Governmentmayexercisethese march-inrights:(1)ifanagencydeterminesthatthe contractorhasnottakeneffective stepstoachievepractical applicationofthesubjectinvention;(2)toalleviatehealthorsafetyneeds; (3)tomeetrequirementsforpublicusenotreasonablysatisfiedbythe contractor;or(4)because the contractororassignee hasnotexecutedorenforcedanagreementtomanufacture theproductsembodyingthe subject inventionsubstantiallyintheUnitedStates. Inkeepingwiththese ―marchin‖rights,theGovernmenttypicallyrequiresthatContractorsreportperiodicallytothe Governmentonthecontractors(anddesignee’s)utilizationoreffortsinutilizingtheinvention. ThirdPartyRights FAR 27.2 provides a detailed guidance on use of third party inventions and third party rights, Aswithanycommercial undertaking,evenifaninventionisoriginal,novel andnonobviouswithrespecttoknowntechnology,theinventionneverthelessmayfallwithinthe scope PRAVIN ASAR pravinasar.com Page 11
  • 12. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS ofabroaderpatent. Inthe privatesector,obtainingappropriate licensingoravoidingproprietarytechnologyisa prerequisitetoanycommercial undertaking. Butinthegovernmentsector,theGovernmentmaynotbeenjoinedfrom practicingapatentedinvention,norwill the Governmentrefuse toawarda contractonthebasisthatanintendedcontractormayinfringeapatentinundertakingacontract. Further,toensurethataGovernmentcontractorisnotenjoinedonthe basisofpatent infringement,the Governmentshall giveauthorizationandconsenttotheuse ofaninvention. Whiledeniedinjunctive relief,thirdpartiesmaypursue otherremedies. Ifthe Governmentauthorizedmanufacture oruse ofa patentedinvention,the patentee maybringsuitforinfringementonlyagainstthe Governmentandnotagainstthe contractor, as stated by U.S.C 1498. However, FAR 27.203 covers the Governmentliabilityfordamagesinanysuchsuitmaybe passedontothecontractor,dependingontheknowledge oftheGovernmentoftheexistence ofa conflictingpatentandthe consentofthe Governmenttoitsuse. Underthe DFARSscheme,Patenteesalsomaypursueadministrativeinfringementclaims under DAFRS 227.70 PublicOwnership The Title 35 USC § 102 – ―Conditions for patentability; novelty and loss of right to patent‖, discusses the conditions for patentability; novelty and loss of right to patent. Development of aninventionunderagovernmentcontractdoesnotavoidorsuspenddomesticlawsorinternati PRAVIN ASAR pravinasar.com Page 12
  • 13. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS onaltreatiesrespectingpatentability. Forinstance,publication,sale orpublicuse ofaninvention,regardlessofwhetherdevelopedundercontract,will initiatetheoneyearstatutoryperiodwithinwhichpatentprotectionmustbe soughtifever.Itispossiblethat,evenifthe contractorandGovernmentadheresstrictlytothe contractrules,the public neverthelessmaywindupentitledtothe subjectmatterdevelopedunderitbyoperationofUSLaw. Developments Regarded as Trade Secrets The FAR 27.4 andDFARS 227.70define ―data‖ asincludingtradesecrets; Trade secrets and Know-how (including negative know-how) differ from other forms of intellectual property in many subtle ways that affect incentives to invest in information development. These differences relate not only to the types of information protected, but also to the requirements one must meet to protect each type of information. The trade secret owner is rewarded for keeping information that may be neither new nor original away from the public for as long as possible. Thus, information that could not be copyrighted or patented is still protected for as long as the owner can keep the information secret. The various divergences from and intersections between trade secret law and other intellectual property laws result in ―differential incentives,‖ leading to differences in the amount and types of investments companies make in developing information. Copyrights The Title 17 U.S.C. 105 ―Subject matter of copyright: United States Government works‖ mentions, PRAVIN ASAR pravinasar.com Page 13
  • 14. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS nocopyrightsmayariseinanyworkoftheUnitedStatesGovernment,thatis,workscreatedbyG overnmentemployeesaspartoftheirofficial duties. However,theGovernmentmayowncopyrightsthatareassigned.The Governmenttypicallyreservestherighttoreceive certaincopyrightsin worksmadeunderorusedinfurtheranceofacontract. ContractorOwnershipandRights FAR 27.404(f) states, Contractorsordinarilymayclaimcopyrights,withoutpriorapproval,inarticlesbasedonorcont ainingdatafirstproducedundercontractandpublishedinacademic,technicalorprofessionaljou rnals,symposia,proceedingsandsimilarworks. Otherwise,theGovernmentwillpermitcontractorclaimstomaterialscontainingthisdatawhen copyrightprotectionwillenhancetheappropriatetransferordisseminationofthedataortheco mmercializationofrelatedproductsorprocesses. GovernmentRights Governmentrightstocontractors’copyrightedmaterialscorrespondtoGovernmentrightsintech nicaldataandcomputersoftware. These are discussed in detail in the following section. ThirdPartyRightsandDeliverables FAR 27.104(h), FAR 27.404(f) and DFARS 252.227-7013(d) provide the guidelines about the Third party rights and deliverables. Contractorsmaynotincorporate incontractdeliverablescopyrightedmaterial thatisnotfirstproducedunderthe contractwithoutpriorapproval orhavingobtainedfororgrantedtotheGovernmentthe PRAVIN ASAR pravinasar.com Page 14
  • 15. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS requisitecopyrightlicenserights. Rights in Technical Data and Computer Software Asmentioned earlier, the Governmenttypicallyrequirescontractorstoprovide the Governmentwithcertainrightstouse technical dataandcomputersoftwarecreatedordeliveredinconnectionwiththe contract. TheserightstendtocorrespondwiththeextentofGovernmentfundingusedtodevelopthe technical data orcomputersoftware. Atthe outsetofthiswork,contractorsmustact,andcautiously comply the requirements,withinthe applicable Governmentregulationsgoverningrights related to computer software, data (including knowledgebase). The ―Technical data‖ underboththe FAR 27 andDFARS 227, includesdata ofa scientific ortechnical nature. While bothschemesexcludecomputersoftwarefrom―technicaldata,‖theDFARSadditionallyincludesc omputerdatabasesandcomputersoftwaredocumentation. WhileGovernmentrightsintechnicaldataandcomputersoftwarearecomparableundertheFAR andDFARS, someimportantdifferencesexist,asshowninTable 1andexplainedbelow. Commercial Non-Commercial CIVIL Co- Made under Privately Made by (FAR) existwithcommer contract contractor ciallicense Unlimited Limitedrightstodata PRAVIN ASAR pravinasar.com Page 15
  • 16. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Restrictiverightstosof tware MILITARY Sameasabove sameasabove (DFAR) plusform/fit,etc. plusgovernmentpurp oserights Table 1 Government Rights in Computer Software PRAVIN ASAR pravinasar.com Page 16
  • 17. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS CommercialSoftwareand Technical Data BoththeFARandDFARSprovidethatGovernmentrightsincommercialcomputersoftwareor commercialcomputersoftwaredocumentation and dataextendnomore thanthe rightsaffordedinlicensestothe general public.Underthe DFARS,theGovernmentalsoretainsrightsincommercialtechnicaldata and knowledgebase that is describes the modifications made to meet government requirements and is requiredfor sustainment and/ormaintenance ofthese items. Non-CommercialDataandSoftwareunderFARContracts Underthe FAR 52.227.14(d),acontractorordinarilymayuse,releasetoothers,reproduce,distribute,orpublish technical dataandcomputersoftwarefirstproducedorusedunderthe contract,exceptwhere the data are subjecttoFederal exportcontrol ornational securityregulations.TheGovernmentretains―unlimitedrights,‖―limitedrights‖totechnicalda ta,or―restrictiverights‖tocomputersoftwaredependingonoriginandnatureoftheIPinvolved. 1. ―Unlimited Rights‖ pertain to: a. Data firstproducedintheperformance ofthe contract; b. Form,fit,andfunctiondatadeliveredunderthe contract; c. Datadeliveredunderthecontract,exceptrestrictedcomputersoftware,thatconstit utemanualsorinstructionalandtrainingmaterial forinstallation,operation,orroutine PRAVIN ASAR pravinasar.com Page 17
  • 18. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS maintenanceandrepairofitems,components,orprocessesdeliveredorfurnishedfo ruseunderthiscontract;and d. All otherdata deliveredunderthecontractunlessprovidedotherwise forlimitedrightsdataorrestrictedcomputersoftware.―Unlimitedrights‖indataors oftwaremeansthattheGovernmentmayuse,disclose,reproduce,preparederivativ eworks,distribute copies tothepublic,andperformpubliclyanddisplaypubliclythedataorsoftware,inanym annerandforanypurpose,andtohaveorpermitotherstodoso,evenforcommercial purposes. 2. ―LimitedRights‖and―RestrictiveRights‖ a. ―Limitedrightsdata‖pertainstotechnicaldatapertainingtoitems,components,orp rocessesdevelopedatprivateexpenseandwhichembodytrade secretsorarecommercial orfinancial andconfidentialorprivileged. b. ―Restrictedcomputersoftware‖pertainsto:(1)computersoftwaredevelopedatpri vateexpenseandthatisatradesecret; (2)commercialorfinancialandconfidentialorproprietary;or(3)publishedcopyrig htedcomputersoftware. c. LimitedrightsdatamaybereproducedorusedbytheGovernment,butmaynotbeuse dformanufactureordisclosedwithouttheGovernment. Similarly,restrictedcomputersoftwaremaynotbeused,reproduced,ordisclosedb ytheGovernmentwithoutexpresspermission,orusedforbackup,archivalandothe PRAVIN ASAR pravinasar.com Page 18
  • 19. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS rlimitedpurposes. The ―Limitedrights‖and―restrictiverights‖limittheGovernment’srighttouse,release toothers,reproduce,distribute,orpublishtechnical data andcomputersoftware. Withoutstrictadherence totherules,theyarerightsthatacontractoreasilymaylose. Toavoidconverting―limitedrights‖and―restrictiverights‖into―unlimitedrights,‖ contractorsinitiallymustwithholdlimitedrightsdataandrestrictedcomputersoftwarefrom delivery,identifythe databeingwithheld,andfurnishform,fit,andfunctiondata therefor.However,ifthe contractrequiresdeliveryoflimitedrightsdata orrestrictedcomputersoftwareisrequired,theGovernmentmayexerciseonlylimitedrightst ouse the data andrestrictedrightstousethe computerprograms. Non-commercial DataandSoftwareunderDFARSContracts DFARScontractsgenerallyprovideforthesame rightsrespectingnoncommercialdataandsoftwareasinFARcontracts,asdescribedearlier. Additionally,theGovernmentgenerallyretains―governmentpurposerights‖intechnicaldataandco mputersoftwaredevelopedwithmixedfunding. The ―Governmentpurposerights‖includerightsto use,modify,reproduce,release,perform,display,ordisclosetechnicaldataorcomputersoftwarewit hintheGovernmentwithoutrestriction;and release ordisclose thetechnicaldata orcomputersoftwareoutside theGovernmentandauthorizeitsuse PRAVIN ASAR pravinasar.com Page 19
  • 20. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS for―UnitedStatesgovernmentpurposes.‖ The ―Governmentpurpose rights‖statutorilyexpireafterfiveyears,afterwhichtheGovernmentenjoys―unlimitedrights‖. Thus,onlyduringthe―governmentpurposerights‖periodaretechnicaldata andcomputersoftwaresafeguardedfromcommercialexploitation. Accordingly,contractorsshoulddemandlonger―governmentpurposerights‖periodstoallowforop timalcommercializationorotherconcernsregardingprematuredisclosureoftechnicaldata. SBIR data TheGovernmentobtainsonlylimitedrightsindatafirstproducedunderanSBIRcontractforf ouryearsafteracceptance ofalldeliverables. Mostsignificantly,duringthe time thatthe contractorhasexclusive use ofthe data andthe Governmentcannotdisclose thedata forprocurementpurposes. However,unlike underthe FARorDFARS,SBIRcontractorshavelesstimetocommercializedevelopmentsmadeunderco ntract. Preserving Contractors Rights FARandDFARS As discussed earlier, Governmentregulationsmayentitlecontractorstocertainrights,contractorsmustact,andcautio usly,withintheFARandDFARSschemes. Inparticular,preservingrightsintechnical data andcomputersoftware involvedina Governmentcontractrequireseither: (1)withholdingandidentifyingtechnicaldataandcomputersoftware,or(2)appropriatelyandco nsistentlyidentifyingtechnical dataandcomputersoftware. PRAVIN ASAR pravinasar.com Page 20
  • 21. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Contractorsalsomustgivethebasisforassertinganyrestrictedrights. Additionally,contractorsmustmarkeverycopyofthedata,software,anddocumentationfurnish edtothe Governmentwithlessthan unlimitedrights,typicallywithlegendsprescribedintheregulations. For instance, contractor must request government to protect release of the trade secrets and specifics of his technology provided during solicitation process to its competitors. InadequatemarkingmayleadtoforfeitingrightfulrestrictionsanddedicatingvaluableIP.Thisisb ecause,whilecontractorscanrequestthattheGovernmenttoapplyretroactivelyanyrestrictive markingsthatwere initiallyinadvertentlyomitted,the Governmentisnotliable fordata use ordisclosure priortocorrectivemarkingapplication. SBIR As mentioned earlier, the government’s current position with regard to SBIR R&D contracts is basically the license policy. SBIRcontractorsmustpreservetheirrightsinthe same fashionasFARandDFARScontractorsnotedabove. However,anSBIRcontractormustbeespeciallywarywhenaprogramshouldadvanceintoaPha se III,asdescribedearlier. InfurtheranceofGovernmentpolicymentioned, ratherthanoperatingunderathirdphaseofanongoingSBIRprogram,the Governmentmayregardthe SBIRprogram tobe concluded. After expiration of stipulated hold period, Government mayreleasetechnicaldataandcomputerprogramstoothercontractors. PRAVIN ASAR pravinasar.com Page 21
  • 22. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Conclusion Governmentcontracting traditionallyhasbeenalucrative andreliable businessforthose resourceful,determined,patientorluckyenoughtolandone. Governmentcontractscanbegoodforbusinessintheshortterm,especiallyindifficulteconomictimes. However,longtermprosperityderivedfromdevelopmentsfromaGovernmentcontractrequiresspecialvigilance. UnderstandingandtakingappropriateactiontoprotectIPrightsincontractdevelopmentsisessential . Although interactions with the Government have many similar features with interactions between private parties, there are important distinctions that need to be understood. In a contractual setting, it is important to recognize that the Government requires the contractor to take certain actions to protect the investment of the Government, on behalf of the taxpayer. While certain of these provisions are relatively intuitive and exist in normal commercial contracting, others represent traps for the unwary and require additional due diligence in order to ensure a successful license negotiation. Moreover, contractors need to realize that these other provisions reflect a number of social and public policies, and will be enforced in a manner substantially affecting intellectual property ownership if there is a dispute. However,evenbeforetheinkisdry,governmentcontractorsmusttakecarethatthefruitsforalloftheir effortsdonotwindupinsomeoneelse’syard. PRAVIN ASAR pravinasar.com Page 22
  • 23. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS Outside of the contractual setting, the Government enjoys certain privileges due to its nature as a sovereign. These privileges include being able to choose both the forum in which liability is resolved, and what remedies are available (if any). At the same time, the Government generally has set up mechanisms for redress for both perceived contractual breaches and intellectual property infringement. Thus, when faced with a license with the Government or an infringement by the Government, it is incumbent on the private party to recognize that the Government generally has provided one or more mechanisms for resolution. The trick is determining which one. PRAVIN ASAR pravinasar.com Page 23
  • 24. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS References Boston University, ―The Bayh-Dole Act Turns 30‖, online, http://www.bu.edu/otd/files/2011/02/The_Bayh-Dole_Act_Turns_30.pdf, last retrieved on June 1, 2013 Defense Federal Acquisition Regulation Supplement (DFARS), ―Table of Contents‖, online, http://www.acq.osd.mil/dpap/dars/dfars/html/r20110916/tochtml.htm , last retrieved on June 1, 2013 DARS 201.104, ―Applicability‖, online, http://www.acq.osd.mil/dpap/dars/dfars/html/r20110916/tochtml.htm, last retrieved on June 1, 2013 DFARS 227 ―Patents, Data and Copyrights‖, online, http://www.acq.osd.mil/dpap/dars/dfars/html/r20110916/tochtml.htm, Last retrieved on June 1, 2013 DFARS SUBPART 227.72 ―Rights in Computer Software and Computer Software Documentation‖, online, http://www.acq.osd.mil/dpap/dars/dfars/html/r20110916/227_72.htm, last retrieved on June 1, 2013 DFARS 252 ―Solicitation Provisions and Contract Clauses‖, online, http://www.acq.osd.mil/dpap/dars/dfars/html/r20110916/tochtml.htm, Last retrieved on June 1, 2013 Federal Acquisition Regulation (FAR), online, https://acquisition.gov/far/index.html, last retrieved on June 1, 2013 PRAVIN ASAR pravinasar.com Page 24
  • 25. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS FAR Part 1.101 ―Statement of guiding principles for the Federal Acquisition System‖, online, https://acquisition.gov/far/current/html/Subpart%201_1.html#wp1130776, last retrieved on June 15, 2013 FAR Part 2 – ―Definitions of Words and Terms‖, online, https://acquisition.gov/far/current/html/FARTOCP02.html#wp284164, Last retrieved on June 1, 2013 FAR Part 12—Acquisition of Commercial Items, online, https://acquisition.gov/far/current/html/FARTOCP12.html#wp1033864, Last retrieved on June 1, 2013 FAR Part 27 ―Patents, Data, and Copyrights‖, online, https://acquisition.gov/far/current/html/FARTOCP27.html#wp224991, Last retrieved on June 1, 2013 FAR Part 52 – ―Solicitation Provisions and Contract Clauses‖, online, https://acquisition.gov/far/current/html/FARTOCP52.html#wp372482, Last retrieved on June 1, 2013 Feldman Steven W; ―Government Contract Guidebook‖, 4 th Edition, West Publishing, Thomson Reuter Business, 2012 Heritage.org; ―Patent and Copyright Clause‖, online, http://www.heritage.org/constitution/#!/articles/1/essays/46/patent-andcopyright-clause; Last retrieved on July 1, 2013 Government Contract Andrews Litigation Report Volume 23, issue 6 July 27, 2009; PRAVIN ASAR pravinasar.com Page 25
  • 26. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS ―Intellectual Property Rights in Government Contracting‖, online, http://www.bakerlaw.com/files/Uploads/Documents/News/Articles/INTELLE CTUAL%20PROPERTY/Andrews_Litigation_Reporter_Bergmann_Aina_72009.pdf, Last retrieved on July 1, 2013 McEwen James G, Bloch David S, Gray Richard M, ―Intellectual Property in Government Contracts‖, 1st Edition, Oxford Press, 2009 PRAVIN ASAR pravinasar.com Page 26
  • 27. INTELLECTUAL PROPERTY IN FEDERAL CONTRACTS NASA – ―Intellectual Property and Data Rights‖, online, http://www.nasa.gov/offices/ogc/ip/1210_prt.htm, last retrieved on June 1, 2013 Title 15 U.S.C. § 638, ―Research and development‖, online, http://www.law.cornell.edu/uscode/text/15/638, last retrieved on June 12, 2013 Title 28 USC § 1498, ―Patent and copyright cases, http://www.law.cornell.edu/uscode/text/28/1498, last retrieved on June 1, 2013 Title 35 USC § 102, ―Conditions for patentability; novelty and loss of right to patent‖,online, http://www.law.cornell.edu/uscode/text/35/102, last retrieved on June 15, 2013 Title 17 USC § 105 ―Subject matter of copyright: United States Government works‖, http://www.law.cornell.edu/uscode/text/17/105, last retrieved on June 15, 2013 PRAVIN ASAR pravinasar.com Page 27

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