1. Tim Wittig Principal Technology Management Group SAIC 202/841-0655 Wittigsall@aol.com Value Not to be Lost SBIR Data Rights Another Level of Sophistication

2. Data Rights – A Part of the IP Package The IP Package –Patents- 35 USC 202 Etc. and Bayh Dole Act –Copyright – 17 USC 105 – Government Works Not Eligible –Data Rights – Contract, SBIR, TSA and CRADA Rules –Trade Secret – State Statute Driven

3. What is “Data” in Federal Contracting Data is Anything First Fixed During the Contract or CRADA is Data Unless otherwise Defined An Invention is a Special Kind of Data Here not concerned with administrative or financial info Data Generally Belongs to the Contractor (Partner) With Government Use Rights Attached What Are Government Use Rights –Rights in Data Will Be Changed By Contract Language and Facts –Data Rights Vary From Unlimited Gov. Rights to Restricted Rights Most restrictions are driven by inclusion of prior created data –Only Gov. Paid Material, Some Private Input, All Private Input. –CRADA and SBIR Data Rights Allow for a 5 Years Proprietary Period where no “public disclosure” should be made Special Works Exception

4. Making Sense of Data Rights Data created during a Government Contract can be very valuable. –Beyond patent data, Technical Data could be the key to special processes, material, and design yield a unique and valuable product or service. –Often, companies will avoid patenting to protect vital data, avoiding costs long delays in legal proceedings, and litigation risks. However, this is a very complex area as the Government cannot make up its mind. Special rules for –Marking of SBIR and Proprietary material, Copyright –Data from CRADA and Test Service Agreements So, what are these “Rights”?

5. PARSING RIGHTS – NONCOMMERCIAL COMPUTER SOFTWARE (CS) AND TECHNICAL DATA (TD) Rights CategoryCategory CriteriaPermitted Uses Internal to Government Permitted Uses outside Government Unlimited RightsDevelopment exclusively at Government expense; also, Form, Fit & Function; Installation, Operation, Maintenance & Training. Unlimited; no restrictions Government Purpose Rights Development with mixed funding Unlimited; no restrictions Only for “Gov’t purpose”; no commercial use Limited Rights (applies to TD only) Development exclusively at private expense Unlimited; except may not be used for manufacture by others Emergency repair/overhaul; evaluation by foreign gov’t Restricted Rights (applies to CS only) Development exclusively at private expense Only one computer at a time; minimum backup copies; modification forbidden Emergency repair/overhaul; certain services and maintenance Prior Government Rights Whenever Government has previously acquired rights in the deliverable TD/CS Same as under the previous contract Specifically Negotiated License Rights Mutual agreement of the parties – nonstandard situations As negotiated by the parties; however, must not be less than limited rights in tech data, and must not be less than restricted rights in computer software 5

6. Now, what are the Regular SBIR Data Rules Data created under and SBIR phase I or II belongs to the Small Business but the Gov. may use it royalty free. However, the Gov. may not disclose to the public or its Contractors –Not like usual Government Use Rights language –But can disclose to support contractors who sign NDAs. Driven by statutes created in the 70 and 80s – the 2011 Defense Authorization Act expanded and strengthened SBIR Data Rights Data rules created in the new implementing instructions cannot be bargained away as the price of getting an SBIR Award

7. SBIR Data Rights Rules - 2 Gov. use of SBIR data is limited to use only by the Gov. and its support contractor (not like usual data) SB may request that SBIR Data be withheld from the public for 5 years (4 years for non-DoD agencies). SB can request continuation of withholding of SBIR Data as long as SBIR company is involved in furtherance of efforts of previous SBIR funded activity. –Includes other Gov. contracts but not commercial efforts maybe Different from “Proprietary Rights” in data that is brought to the contract effort by the SB. (later)

8. What businesses are eligible? Small at the time of the award –500 or less employees Different from the Usual Size Standard Rules SBA Affiliation Rules –Ownership – at least 51 percent control by individuals who do not own or control other companies such that the affiliations of these companies yields an entity larger than the SBA size standard. SBIR Rules –More than 50% owned by US Citizens or Resident Aliens –Less than 49% owned by a hedge fund, venture capital operating company or a private equity fund. What about a SBIC or MeSBIC?

9. “Proprietary” Data Here we begin another confusing arena where failure to act will causes loss of ownership in intellectual property! What is “Proprietary Data” –Generally – data created at private expense by the SB that is: Not available to the public without restriction Not previously disclosed to the government Not independently created by the government This is information the SBIR company brings to the effort. SB must: –Mark it as “proprietary” on every page, providing name of owner –Identify the data and describe basis for claim Once disclosed to the Gov., it is always disclosed!

10. There is a Ritual Here You must use specific words to mark SBIR data! Use –DEFARS 252.227.7018 for Defense Agency contracts –FAR 52.227.20 for non-defense agencies Use the exact wording Also use Williams Company Proprietary on every page where proprietary info appears (paragraph markings) You can cure by sending in remedial marking chart but any disclosure before receipt is IP lost.

11. So What??? Data can be as valuable as a patent –Know-how, processes, materials, etc. Unpatented properly marked data used to give you a competitive edge in contract competition can subsequently be withheld from disclosure for 5 years without the cost of patenting. Likewise, SBIR data can also be withheld from your competitors for 5 years Careful planning your IP protection program will allow you to reduce costs while maintaining a competitive edge and containing the ever increasing cost of patenting and the every unpredictable outcome of litigation. Don’t give the competitive edge to your competitor.

12. Questions???? Tim Wittig Principal SAIC Technology Management Advisors Wittigr@saic.com Wittigsall@aol.com 202 841 0655