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-Part 27 - Patents, Data, and Copyrights ....................................................................................77+Part 27 - Patents, Data, and Copyrights
+FC 27.000 General guidance.
+The government encourages the maximum practical commercial use of inventions made under
+government contracts. Generally, the government will not refuse to award a contract on the
+grounds that the prospective contractor may infringe a patent. The government may authorize
+and consent to the use of inventions in the performance of certain contracts, even though the
+inventions may be covered by U.S. patents. Generally, contractors providing commercial
+products and commercial services should indemnify the government against liability for the
+infringement of U.S. patents.
+The government recognizes rights in data developed at private expense, and limits its demands
+for delivery of that data. When such data is delivered, the government will acquire only those
+rights essential to its needs. Generally, the government requires that contractors obtain
+permission from copyright owners before including copyrighted works, owned by others, in data
+to be delivered to the government.
+Given the complex nature of intellectual property, it is a best practice for the contracting officer
+to consult agency-designated legal counsel about any patents, data, and copyrights issues.
+FC 27.000 Foreign license and technical assistance agreements.
+Agencies should provide necessary policy and procedures regarding foreign technical
+assistance agreements and license agreements involving intellectual property, including
+avoiding unnecessary royalty charges.
+FC 27.202 Reporting of royalties.
+To determine whether royalties anticipated or actually paid under government contracts are
+excessive, improper, or inconsistent with government patent rights, the solicitation provision at
+52.227-6 requires prospective contractors to furnish royalty information. The contracting officer
+should take appropriate action to reduce or eliminate excessive or improper royalties.
+If the response to a solicitation includes a charge for royalties, the contracting officer should,
+before award of the contract, forward the information to the office having cognizance of patent
+matters for the contracting activity. The cognizant office should promptly advise the contracting
+officer of appropriate action.
+When considering the approval of a subcontract, the contracting officer should require royalty
+information if it is required under the prime contract. The contracting officer should forward the
+information to the office having cognizance of patent matters. However, the contracting officer
+need not delay consent while awaiting advice from the cognizant office.
+The contracting officer should forward any royalty reports to the office having cognizance of
+patent matters.
+FC 27.3 Policy on patent rights under government contracts.
+It is the policy objective of the government to promote the use of federally funded inventions,
+encourage industry participation, ensure free competition, promote U.S. commercialization,
+secure government rights, and minimize administration costs.
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+Generally, contractors may elect to retain title to subject inventions after disclosure to the
+government. However, the government may require title assignment if the contractor is foreign
+located or controlled, in exceptional circumstances, for national security reasons, for specific
+DOE nuclear programs, or as per statute/regulations. Even if the government has a right to title,
+contractors can request greater rights. Small businesses and nonprofits, even with national
+security exceptions requiring title assignment, generally retain the right to elect ownership if the
+invention is unclassified or not limited from dissemination by DOE within six months. Contracts
+in support of DOE naval nuclear propulsion programs are exempt from this. For contracts with
+task orders, exceptions can apply to individual orders.
+The government receives a nonexclusive, nontransferable, irrevocable, paid-up worldwide
+license for any subject invention and may require additional rights for treaties. The government
+can also receive title if the invention is not disclosed, if the contractor doesn't elect or fails to
+retain rights in a country, doesn't file or prosecute a patent, or no longer desires title. The
+government can require utilization reports, which are confidential and not disclosed outside the
+government without contractor permission.
+Agencies have "march-in rights" to compel licensing if the invention isn't being practically
+applied, to alleviate health/safety needs, to meet public use requirements, or if the U.S.
+manufacturing agreement is breached. Ensure contractors are provided the opportunity to
+respond before march-in rights are exercised. Contractors receiving title or their assignees need
+to agree that U.S. sales/use of the invention require substantial U.S. manufacturing, unless
+waived by the agency due to unsuccessful licensing efforts or commercial infeasibility.
+Nonprofit contractors should try to attract small business licensees. The Secretary of Commerce
+can informally investigate if a nonprofit isn't meeting this obligation but won't intervene in
+ongoing licensing negotiations or contractor decisions concerning the licensing of a specific
+subject invention.
+If the government acquires title, the contractor typically receives a revocable, nonexclusive,
+paid-up worldwide license, extendable to domestic subsidiaries/affiliates. This license can be
+revoked or modified for expeditious practical application, but not in areas where the contractor
+has already achieved practical application. Foreign licenses can be revoked if practical
+application hasn't been achieved.
+Agencies can withhold information about inventions in which the government has rights for a
+reasonable time to allow patent applications to be filed. Once filed, copies of patent application
+documents are not required to be released.
+FC 27.3 Administration of patent rights clauses.
+Contracts with patent rights clauses require active administration to protect the government's
+interests. Your administration should ensure five key outcomes:
+1. Inventions are identified, disclosed, and reported as required by the contract.
+2. The government's rights in subject inventions are established.
+3. Patent applications are timely filed and prosecuted when appropriate.
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+4. The government's rights in filed patent applications are documented through formal
+instruments like licenses or assignments.
+5. Subject inventions achieve expeditious commercial utilization.
+When a subject invention results from a contract funded by multiple agencies, designate one
+agency to administer the government's rights in the invention, either at the contractor's request
+or proactively.
+Your agency should establish follow-up procedures to verify that subject inventions are properly
+identified, disclosed, and protected. For contracts containing clauses referenced in FAR 27.304-
+2, coordinate these activities with the appropriate agency. As the contracting officer, you are
+responsible for receiving all invention-related documents from the contractor, including
+disclosures, reports, confirmatory instruments, notices, and requests. When contractors fail to
+provide required documents on time, promptly request the missing information. For confirmatory
+instruments specifically, if not received within 6 months after filing a patent application (or within
+6 months after submitting the invention disclosure if the application was previously filed),
+request these documents from the contractor. Take appropriate action to secure compliance if
+failures persist. Forward all patent-related documents promptly to legal counsel.
+Focus your compliance review efforts on contracts most likely to produce significant inventions:
+research, developmental, or experimental contracts; high-dollar contracts; and any contracts
+where non-compliance is suspected. Use spot-checks for other contracts as feasible. Deploy
+government patent personnel to interview technical staff about novel developments, review
+technical reports with agency experts, check the Official Gazette of the United States Patent
+and Trademark Office for contractor patents in related fields, and conduct on-site interviews and
+inspections of contractor work and records. When contractors don't understand their obligations
+or have deficient procedures, explain their requirements clearly. You may invoke the withholding
+of payments provision in the patent rights clause for non-compliance. Document significant or
+repeated failures in the general file per FAR part 4.
+FC 27.3 Securing invention rights acquired by the government.
+When the government acquires full rights to an invention, establish a clear chain of title from
+inventor to government through assignments—either from each inventor to the contractor and
+then to the government, or directly from inventor to government with the contractor's consent.
+For limited government rights, obtain a confirmatory license. Your agency may develop its own
+assignment and license forms, which should be recorded in the U.S. Patent and Trademark
+Office per Executive Order 9424 (February 18, 1944).
+FC 27.3 Protection of invention disclosures.
+Under clauses 52.227-11 or 52.227-13, the government must protect invention disclosures
+reported from public disclosure for a reasonable time to allow patent filing, as authorized by 35
+U.S.C. 205. As you follow the confidentiality policy in FAR subpart 27.3, also protect other
+information disclosing subject inventions when the contractor identifies both the data and related
+invention at delivery, notifying both the contracting officer and any designated patent
+representative. Refer to 37 CFR 401.13 for additional guidance on protecting invention
+disclosures.
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+FC 27.4 Treatment of rights in data and copyrights.
+Agencies acquire or obtain access to many types of data through their contracts to fulfill mission
+requirements. You need data for several critical purposes: to obtain competition among
+suppliers; to fulfill responsibilities for disseminating and publishing the results of your activities;
+to ensure appropriate utilization of research, development, and demonstration results, including
+disseminating technical information to foster future technological developments; to meet other
+programmatic and statutory requirements; and to meet specialized acquisition needs and
+ensure logistics support.
+At the same time, contractors often have proprietary interests in data that require protection
+from unauthorized use and disclosure. This protection is essential not only to prevent
+compromise of contractor interests but also to encourage qualified contractors to participate in
+government programs and contribute innovative concepts. Your responsibility is to balance the
+government's legitimate needs for data with the contractor's legitimate proprietary interests. This
+balanced approach ensures the government obtains necessary data while maintaining an
+environment where contractors are willing to share their innovations and compete for
+government work.
+FC 27.4 Cosponsored research and development activities.
+In contracts involving cosponsored research and development where the contractor makes
+substantial contributions of funds or resources, such as through cost-sharing or repayment of
+nonrecurring costs, and the respective contributions to any item developed or produced under
+the contract are not readily segregable, the contracting officer has the authority to limit the
+acquisition of, or acquire less than unlimited rights to, any data developed and delivered under
+the contract. Agencies have the flexibility to regulate the use of this authority through their
+supplements. When acquiring less than unlimited rights, the government should, at a minimum,
+ensure that it can use the data for agreed-upon government purposes, including reprocurement
+rights where appropriate, and address any limitations on disclosure. The contracting officer may
+also consider requiring the contractor to directly license others if necessary to achieve the
+contract's objectives.
+The decision to limit data rights should be made with consideration of the contract's purpose,
+the contractor's legitimate proprietary interests, the government's needs, and the respective
+contributions of both parties. As a general guideline, a clause limiting data rights may be
+appropriate when the contractor's contribution is approximately 50 percent of the total contract
+cost, and the contributions are not readily segregable for any specific work element. This type of
+clause can be applied to the entire contract or specific tasks, and its use may be in addition to
+other data rights clauses prescribed under this subpart. The contract should clearly identify
+which clause applies to which tasks or work elements. However, limiting data rights may not be
+suitable when the contract aims to produce data for public dissemination or develop
+technologies that will be available to the public for direct use, as outlined in FC 27.4, Treatment
+of rights in data and copyrights.
+When the contractor's contributions are clearly identifiable and segregable by performance
+requirements and funding, as specified in the contract, the resulting data can be treated as
+limited rights data or restricted computer software in accordance with 27.404-2(c) or (d).
+Alternatively, if this treatment is inconsistent with the contract's purpose, the rights to the data
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+can be negotiated and stated in the contract in a manner consistent with paragraph (a) of this
+section. This approach ensures that the data rights are handled in a way that balances the
+needs of both the government and the contractor.
+FC 27.406 Acquisition of data.
+It is the government's practice to determine, to the extent feasible, its data requirements in time
+for inclusion in solicitations. The data requirements may be subject to revision during contract
+negotiations. Since the preparation, reformatting, maintenance and updating, cataloging, and
+storage of data represents an expense to both the government and the contractor, efforts
+should be made to keep the contract data requirements to a minimum, consistent with the
+purposes of the contract.