Protect That IP! Or the Art of Doing Business with the Government if You Sell Products in the Commercial Market May 19, 2015

1. Protect That IP!
Or the Art of Doing Business with the Government if You Sell Products in the
Commercial Market
May 19, 2015
Antigone Peyton, Esq.
Cloudigy Law PLLC

2. Federal procurement law favors
acquisition of commercial items…
But is the government appropriately acquiring
commercial computer software (CCS),
documentation (CCSD), and other commercial items?
DFARS 227.7200 (2013)

3. Why Do It?
Overcome business stagnation
Reallocate risk
Expand revenue
New R&D funding sources
Monetize assets, including IP

4. IP On The Table
Patents
Trademarks
Copyrights
Trade secrets
Other proprietary information

5. The Thinking Phase
Identify:
Goals
Deliverables
Inconsistencies &
contradictions in rules and
guidelines
Negotiation partners
Who will provide the
commercial item?

6. The Thinking Phase
Target valuable gov’t markets
Build list of key terms
Understand risk considerations
High transaction costs
associated w/assessing
appropriate license
Getting gov’t buy in on license
terms

7. The Concerns
No statute governing acquisition of CCS, unlike “technical data”
Allocation of IP rights is by policy & regulation (DFARS
227.7202-3(a)), which extend “technical data” allocation
Both FAR and DFARS require contract contain info re: gov’t
rights in CCS (FAR 12.212(a) & DFARS 227.7202-1(a))
Terms should be similar to commercial license terms unless
inconsistent w/federal procurement law (DFARS) or federal law
and otherwise satisfy the gov’t needs (FAR)

8. The Constraints
Offerors and contractors not required to relinquish or provide gov’t “rights to use, modify,
reproduce, release, perform, display or disclose [CCS] or [CCSD] except for a transfer of
rights mutually agreed upon” (DFARS 227.7102-1(b)(2) & FAR 12.212(a)(2))
What about miscellaneous provisions in commercial contracts-jurisdiction, venue, choice
of law, etc?
No notice to commercial co’s re: terms inconsistent w/federal procurement law
Not clear which terms are actually inconsistent and who makes that determination
What happens to the terms if they are included in gov’t license?
What are the government needs and who determined them?
What do we do if a license includes terms that are inconsistent?

9. The Gov’t
Options
• Change an agreement w/out negotiation
• Rules operate automatically to strike
offending provisions
• Commercial contractor does not have to
agree
• Even if federal statute, regulation, or court
decision prohibits or allows language
gov’t can still rely on “user needs”

10. Provisions to Watch
Indemnification, automatic renewal, future upgrade purchase
requirements (Anti-Deficiency Act)
License payment provisions w/fast interest penalty (Prompt
Payment Act)
Venue, arbitration, confessed judgment (Contract Disputes Act)
Support services exclusivity (Competition in Contracting Act)
Clash between commercial warranties & gov’t warranties (FAR
12.404(a)

11. Questions?
A GovConIP overview by Antigone Peyton, Esq.
@CloudigyLaw
@GovConIP
govconip.com