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FAR Part 27 PATENTS, DATA, AND COPYRIGHTS 1. Intellectual Property IP means patents, copyrights, trademarks, and trade secrets. In dealing with IP rights,

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Presentation on theme: "FAR Part 27 PATENTS, DATA, AND COPYRIGHTS 1. Intellectual Property IP means patents, copyrights, trademarks, and trade secrets. In dealing with IP rights,"— Presentation transcript:

1 FAR Part 27 PATENTS, DATA, AND COPYRIGHTS 1

2 Intellectual Property IP means patents, copyrights, trademarks, and trade secrets. In dealing with IP rights, the Government has promulgated policies and regulations on copyrights, patents, technical data, and computer software. 2

3 Patents The right to exclude others from making, using selling offering for sale or importing a new, useful unobvious invention for a limited period of time. Period of Time = Approximately 20 years. Does not give the inventor the right to use the invention; only to exclude others from doing so. Copyrights Copyright: Exclusive right of author to make copies prepare derivative works of an original work of authorship. Protects the expression of an idea, not the idea itself Vests in the author as soon as the work is created Term varies but is at least the life of the author plus 70 years Works of U.S. Government employees are not copyrightable under U.S. law. BUT CONTRACTOR WORKS ARE. 3

4 THE GOVERNMENT Encourages the maximum practical commercial use of inventions made under Government Contracts Will not refuse to award a contract on the grounds that the prospective contractor may infringe a patent. May authorize and consent to the use of inventions in the performance of certain contracts, even though the inventions maybe covered by U.S. patents Will be Indemnified against liability of the infringement of U.S. patents by contractors providing commercial items Recognizes rights in data to be developed at private expense, and limits its demands for the deliver of that data When such data is delivered, Government will acquire only those rights essential to its needs. Requires that contractors obtain permission from copyright owners before including copyrighted works, owned by others, in data to be delivered to the Government – General Guidelines

5 Subpart 27.2 – Patents & Copyrights Patent and Copyright Infringement liability; Royalties Security requirements for patent applications containing classified subject matter; and Patented technology under trade agreements 5

6 Contract Clauses – 1: Authorization and Consent - The Government authorizes and consents to all use and manufacture of any invention described in and covered by a US patent. The liability to the Gov. for infringement of a patent will be determined by the provisions of the indemnity clause, if any, in a contract or subcontract. Use this clause with Alternate I for research and development [sub]contracts, as prescribed in (a2). Use this clause with Alternate II for communication services with a common carrier and the services are unregulated and not priced by a tariff schedule set by a regulatory body. 6

7 : Notice and Assistance Regarding Patent and Copyright Infringement - Contractor shall report to Contracting Officer each notice or claim of patent or copyright infringement. Only required when contract value exceeds simplified acquisition threshold : Patent Indemnity - Contractor required to reimburse Government for liability for patent infringement. Applicable to construction or contracts for supplies and services that normally are or have been sold or offered to sale by any supplier to the public. Not applicable to R & D contracts. Not used when , "Authorization and Consent," with its alternate I, is used. ( , Alt. I says Government consents to use of all patented inventions in performance of contract.) 7

8 : Patent Indemnity-Construction Contracts – in solicitations and contracts for construction or that are fixed-price contracts for dismantling, demolition, or removal of improvements : Waiver of Indemnity – It may be in the Government’s interest to exempt specific U.S. Patents from the patent indemnity clause. Contracting Officer identifies patents waived of indemnification. 8

9 Royalties 9 FAR : Royalty Information - When costs or charges for royalties total more than $250; detailed information required on each item of royalty or license fee. Allows the C.O. to Determine if Royalty Payments Will be Part of Contract Costs FAR : Notice of Government Licensee - The Gov't is obligated to pay a royalty applicable to the proposed acquisition and Contracting Officer must fill in patent number and royalty rate. FAR : Refund of Royalties - Describes when a refund should be made of royalties. Include in Solicitations and Contracts that May Involve Payment of a Royalty Requires Disclosure of Royalty Information so the C.O. Can Determine if Government Already has a License in a Patent or Copyright

10 Royalties 10 FAR : Filing of Patent Applications - Classified Subject Matter Clause says before Contractor files patent application disclosing subject matter of contract classified as "Secret" or higher, Contractor shall transmit application 30 days prior to application. Applicable only to contracts dealing with classified material.

11 Subpart 27.3 Patent Rights Under Government Contracts One of the highly legally complex subparts in the FAR. This subpart primarily implements the Bayh-Dole Act (Title 35 U.S.C. Chapter 18), subpart Main Concept of Bayh-Dole Act is to allow small businesses and nonprofits to commercialize subject inventions. The Bayh-Dole Act makes the Department of Commerce responsible for issuing regulations concerning its implementation. Therefore, any changes to the FAR must conform to the Department of Commerce's regulations in Title 37 of the Code of Federal Regulations, Part 401 (37 CFR Part 401). 11

12 Policy simply states that a contractor may elect to retain title to any subject invention. The rest of FAR (b) is structured to emphasize that the government only acquires title to a subject invention in very limited circumstances – Policy

13 FAR : Patent Rights - Retention by Contractor (Short Form) - Contractor retains rights to inventions Contractor Ownership. The “Bayh/Dole” Clause. Used by NIH in Vast Majority of Contracts Required by Law and Regulation for Most Domestic Contracts Except: Where a Determination of Exceptional Circumstances Limiting the Contractor’s Rights has been made by the Funding Agency FAR : Patent Rights - Retention by Contractor (Long Form) Contractor Ownership - for most contracts with large businesses. A long form sometimes used by DOD. Not Used by NIH FAR : Patent Rights - Acquisition by the Government - Describes allocations of patent rights. Government Ownership. Used in Foreign Contracts – Contract Clauses

14 Rights in Data and Copyrights is a regulation which concerns the rights of the Government and Contractors with whom the Government contracts, regarding the use, reproduction, and disclosure of information developed under such contracts. The delineation of such rights is necessary in order to protect the contractor's rights to not disclose proprietary data and to ensure that data developed with public funds is available to the public. 14 SUBPART 27.4 – Rights in Data and Copyrights

15 (a) To carry out their missions and programs, agencies acquire or obtain access to many kinds of data produced during or used in the performance of their contracts. Agencies require data to- (1) Obtain competition among suppliers; (2) Fulfill certain responsibilities for disseminating and publishing the results of their activities; (3)Ensure appropriate utilization of the results of research, development, and demonstration activities including the dissemination of technical information to foster subsequent technological developments; (4) Meet other programmatic and statutory requirements; and (5) Meet specialized acquisition needs and ensure logistics support. (b) Contractors may have proprietary interests in data. In order to prevent the compromise of these interests, agencies shall protect proprietary data from unauthorized use and disclosure. The protection of such data is also necessary to encourage qualified contractors to participate in and apply innovative concepts to Government programs. In light of these considerations, agencies shall balance the Government's needs and the contractor’s legitimate proprietary 15 SUBPART – Policy

16 FAR : Rights in Data General - Defines Government and Contractor Rights. Without it Government could Pay for Creation of Data but Have No Rights in it Use in R & D Contracts and Other Contracts where Data will be Produced or Delivered. Does NOT Get Delivery of Data Contractor Protects Proprietary Data by Withholding it or Delivering it with Restrictive Markings Specified by the FAR Government gets Unlimited Rights in ALL Data first produced in the Performance of the Contract Data Delivered Under the Contact EXCEPT FOR: Limited Rights Data Restricted Computer Software Copyrighted Data – Basic Rights in Data Clause

17 – Unlimited VS Limited UNLIMITED Right to use, disclose, reproduce prepare derivative works, distribute copies to the public, and perform publicly, in any manner and for any purpose and to have or permit others to do so LIMITED Data that Embody Trade Secrets Contractor Protects by Withholding from Delivery Contractor Provides Form, Fit, and Function Unless contract Includes 17

18 FAR : Representation of Limited Rights Data and Restricted Computer Software – Requires action to prevent gov't from obtaining unlimited rights in deliveree data if contractor will withhold any data or delivery of data under the contract that qualifies as limited rights data, the contractor must certify by checking a box for the requirements of the delivery of data - as none limited or some limited (must ID it). Use in Solicitations When the Clause Will be Used Requires the Proposer to Identify Data it will Withhold or Deliver as Limited Rights Data (Alt.II) or Restricted Computer Software (Alt.III) Allows C.O. to Determine Whether Alts. II or III should be Used – Contract Clause

19 FAR : Additional Data Requirements – Allows C.O. to Order Data First Produced or Specifically Used in the Contract AT ANY TIME DURING the Contract and for Up to THREE YEARS after Completion of the Contract Use with FAR Data are Still Subject to Limited Rights and Restricted Rights and Any Other Limitation in FAR – Contract Clause

20 FAR : Rights in Data - Special Works–Allocates unlimited rights to gov't on data; gives gov't right to limit the exercise of claim to copyright in data and may limit release and use of date. Lists release, use restrictions and indemnity information also. Use When the Government Needs to Limit the Contractor’s Rights In Data Contractor May Be Required to Assign Copyright to Government Contractor’s Right to Use or Release Can be Prohibited – Contract Clause

21 FAR : Rights in Data - Existing Works - The Contractor grants the Govt the right to reproduce & display publicly (w/o modification) the material or subject matter called for under this contract, or for which the clause is specifically made applicable. Use in Contracts Requiring Contractor to Supply Existing Works, such as Books, and Audiovisual Works Without Modification Requires Contractor to Obtain Broad License for the Government Requires Contractor to Indemnify Government – Contract Clause

22 FAR : Commercial Computer Software – RESTRICTED – The Government shall have the right to use, duplicate, or disclose any restricted computer software delivered under the contract. Use in Contracts for the Acquisition of Commercial Software Clause takes Precedence over Contractor’s Commercial License to Insure that Government gets the Minimum Rights it Needs Mirrors the Restricted Computer Software License of Alt. III of FAR – Contract Clause

23 FAR : Rights in Data – SBIR Program – The Government shall have unlimited rights in the data except where the small business has retained the rights and given a notice accordingly. The contractor shall have the right to protect data delivered and establish claims to copyrighted material in accordance with the clause procedures – Contract Clause

24 FAR : Technical Data Declaration, Revision, and Withholding of Payment—Major Systems –The contractor must make a declaration that the technical data delivered under the contract is complete and accurate and complies with the requirements of the contract. The Government has the right to withhold payment until data requirements are properly satisfied. FAR : Major System—Minimum Rights - The Government shall have unlimited rights in any technical data, other than computer software, developed in the performance of this contract – Contract Clause

25 FAR : Rights to Proposal Data (Technical) - As a condition to the award of the contract, the Government shall have unlimited rights in and to the technical data contained in the proposal upon which the contract is based, except for those pages marked by the offeror as proprietary – Contract Clause

26 As the Government participates more and more in the commercial community and tries to act more like a commercial entity in its dealings with the civilian marketplace, the Government will have to assume a more commercial mindset when acquiring IP rights. Flexibility and collaboration will be the hallmarks of future Government/industry R&D agreements. It is, therefore, in the Government’s best interest to understand, and when possible and appropriate, accommodate industry’s concerns for protecting its IP. Only in this way will the Government be able to tap into the billions of dollars worth of R&D, cutting-edge technologies, and state-of-the- art commercial products. 26 SUMMARY


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