Intellectual Property and Technical Data Rights Under the DFARS

Intellectual Property and Technical Data Rights Under the DFARS
Presentation Title April 21, 2017 Intellectual Property and Technical Data Rights Under the DFARS John J. Horn Senior Intellectual Property Attorney March 21, 2011 Copyright © 2011 Raytheon Company. All rights reserved. Customer Success Is Our Mission is a registered trademark of Raytheon Company. Speaker Name

Presentation Title April 21, 2017 The IP Situation A Problem: A major change in government policy and tactics on Intellectual Property (IP) rights. In general, the government is seeking broad IP rights Emphasis is now on no limitations on re-use of data and competitive re-procurement A shift in procurement philosophy, methodologies/approaches and business processes Certain government agencies are particularly aggressive Both new procurements and older “Data Rights” affected The Impact: Potential loss of key competitive advantages afforded by IP rights in IR&D funded technology. IP allows us to legally protect technologies we develop with our own funds Should translate into exclusivity and improved margins across products Not all situations allow for such legal protections but many do Must be actively managed to extract value from the company’s technology investments The Solution: Greater knowledge and awareness of IP issues, improved processes, better implementation and more process discipline. Identification, Handling and Marking procedures for establishing and protecting IP Rights ver. 1 Speaker Name

Presentation Title April 21, 2017 System Concepts IP: IP refers to various legal constructs that allow for different kinds of protection appropriate to different types of material 4 classic types of IP: Patents, Copyrights, Trade Secrets, and Trademarks Each type creates a defined set of legal rights for the IP owner and has an associated set of steps and requirements to come into (and stay in) existence The same item can occasionally be covered by multiple types of IP Unless one or another type of IP applies, technology is unprotected. Important differences in the government contracts context versus the commercial arena Patents limited by “Authorization and Consent” (28 USC 1498) Copyrights and Trade Secrets merged under the FAR/DFARS to create a different system for Data and Software “protection” Technical Data Rights ( ) Rights in Computer Software ( ) SBIR Rights ( ) ver. 1 Speaker Name

Presentation Title April 21, 2017 System Concepts Under most cases Data and Software Rights are probably the single most important type of IP for Defense Contractors (and the other business units as well) The primary focus of this course Several requirements must be fulfilled and active steps taken Multi-step efforts extending over a lengthy period usually required. Collaboration of several different departments usually required. Failure to fulfill any of the requirements or take the necessary steps to achieve Technical Data Rights protection generally results in a forfeiture of the Company’s rights. ver. 1 Speaker Name

IP can be an important source of competitive advantage.
Presentation Title April 21, 2017 System Concepts Course Objective: It’s important for all the Participants in Technical Data Rights efforts to understand the overall concepts and basic procedures involved for the Company to be able to successfully establish a Defense Contractor’s rights on a consistent basis. Final Point: IP can be an important source of competitive advantage. Understand it and use it. ver. 1 Speaker Name

What is Intellectual Property?
Presentation Title April 21, 2017 What is Intellectual Property? ver. 1 Speaker Name

What is Intellectual Property? – Trade Secrets
Presentation Title April 21, 2017 What is Intellectual Property? – Trade Secrets Covers traditional scientific secrets, confidential financial data and business information. Requires a PIA or NDA to protect when shared with other private companies. Protected when in Government hands under the Trade Secret Act, Procurement Integrity Act, Economic Espionage Act, and other laws. Traditional marking: COMPANY PROPRIETARY, COMPANY SECRET, COMPANY CONFIDENTIAL ver. 1 Speaker Name

What is Intellectual Property? – Patents
Presentation Title April 21, 2017 What is Intellectual Property? – Patents Protect functional aspects of new or improved technology. Issued by the Government after an involved Examination process. Require technological novelty – new and different. Prohibit others from making, using, or selling the technology covered by the patent claims and allow royalties for infringement. ver. 1 Speaker Name

Presentation Title April 21, 2017 What is Intellectual Property? – Patents Can have a broad sweep, depends on the scope of the patent claims. Under the FAR Authorization and Consent clause contractors are empowered to infringe the patents of other private contractors. The only remedy the patent holder has is to bring a claim against the U.S. Government for royalties. Traditional marking: US Patent No. 9,999,999 ver. 1 Speaker Name

Presentation Title April 21, 2017 What is Intellectual Property? – Patents From the FAR: Authorization and Consent. As prescribed in (a)(1), insert the following clause: Authorization and Consent (Dec 2007) The Government authorizes and consents to all use and manufacture, in performing this contract or any subcontract at any tier, of any invention described in and covered by a United States patent— Embodied in the structure or composition of any article the delivery of which is accepted by the Government under this contract; or Used in machinery, tools, or methods whose use necessarily results from compliance by the Contractor or a subcontractor with (i) specifications or written provisions forming a part of this contract or (ii) specific written instructions given by the Contracting Officer directing the manner of performance. the entire liability to the Government for infringement of a United States patent shall be determined solely by the provisions of the indemnity clause, if any, included in this contract or any subcontract hereunder (including any lower-tier subcontract), and the Government assumes liability for all other infringement to the extent of the authorization and consent hereinabove granted. (Note: emphasis added) ver. 1 Speaker Name

What is Intellectual Property? – Copyrights
Presentation Title April 21, 2017 What is Intellectual Property? – Copyrights Cover creative works of authorship. Government-granted, long-term right to prevent others from copying, distributing, preparing derivative works, displaying, etc. Covers specific creative expressions of ideas, but not functional aspects; more about form than technical content. Books, articles, music, drama, pictures, graphics, audio-visual works, computer program code. Useful for but can be narrow. Traditional marking: © 2011 ABC Company ver. 1 Speaker Name

What is Intellectual Property? – Tech Data/Software
Presentation Title April 21, 2017 What is Intellectual Property? – Tech Data/Software Applies to Technical Data or Computer Software specifically required by contract to be delivered (e.g. under a CDRL) to the U.S. Government [see DFARs ,7014,7018]. The Government always gets a license to use Data or Software delivered under a Government contract. The key question is the scope of that license and the rights the Government receives to use the Data or Software for activities such as re-procurement. ver. 1 Speaker Name

Presentation Title April 21, 2017 What is Intellectual Property? – Tech Data/Software Technical Data Rights and Computer Software Rights are all about the rights the U.S. Government gets – broad or narrow. Contractor retains ultimate ownership and the right to use and reuse the Data. The DFARS provide a special system for determining these rights based primarily on development funding. This system is a thing onto itself different from other areas of IP law. The system applies only and exclusively to Technical Data and Computer Software delivered under U.S. Government contracts. ver. 1 Speaker Name

Presentation Title April 21, 2017 What is Intellectual Property? – Tech Data/Software Determined by the source of funds (color of money) used to develop the item, component, or process. Limited Rights (for Technical Data) or Restricted Rights (for Software) Government Purpose Rights (GPR) Unlimited Rights Specifically Negotiated Rights ver. 1 Speaker Name

Presentation Title April 21, 2017 What is Intellectual Property? – Tech Data/Software Government gets Limited Rights if the technology was developed exclusively at private expense. Government gets GPR if data was developed with both private and public funds (mixed funding). Government gets Specially Negotiated Rights if it was negotiated and originally agreed to have special rights apply. Government gets Unlimited Rights if it was developed exclusively at Government expense (the default case). ver. 1 Speaker Name

Presentation Title April 21, 2017 What is Intellectual Property? – Tech Data/Software Limited Rights prohibit the sharing of data with other defense contractors. GPR allows the Government to share data for all government purposes, but not commercial purposes. Scope of Specifically Negotiated Rights is unknown until negotiated (but can never be less than Limited Rights). Unlimited Rights allow the Government to use data for ANY purpose whatsoever. ver. 1 Speaker Name

Why Protect Technical Data Rights / Computer Software Rights?
Presentation Title April 21, 2017 Why Protect Technical Data Rights / Computer Software Rights? Can restrict the U.S. Government from revealing or using your technology for competitive re-procurement ver. 1 Speaker Name

Who Protects Technical Data Rights / Computer Software Rights?
Presentation Title April 21, 2017 Who Protects Technical Data Rights / Computer Software Rights? ver. 1 Speaker Name

Presentation Title April 21, 2017 Technical Data Rights / Computer Software Rights TIMELINE Copyright Raytheon Company Speaker Name

When Protect Technical Data Rights / Computer Software Rights?
Presentation Title April 21, 2017 When Protect Technical Data Rights / Computer Software Rights? ver. 1 Speaker Name

Protect Technical Data Rights / Computer Software Rights
Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Different funding results in different US Government rights in Technical Data and Software “delivered” under a Government Contract: If developed exclusively with private expense: Limited Rights If developed exclusively with Government funds: Unlimited Rights If developed with Mixed Funding: GPR Necessary to plan ahead to develop “key” technologies exclusively at private expense. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Factors to consider: How important is it to keep this Technical Data or Software out of our competitors’ hands. Will the product or prototype be easily reverse engineered. Whether Technical Data or Software is publicly available or has been previously released without restriction. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights More factors to consider: Whether Data or Software is form, fit, or function data or necessary for installation, operation, maintenance, or training. Will we have enough Private funding to continue private funding of the development effort all the way through to the “Workability” stage. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights TECHNICAL DATA Limited Rights in Technical Data depend on funding the Development of Items, Components, or Processes (ICPs) to which the Data relates through to Workability EXCLUSIVELY at private expense. ICPs defined according to the concept of “Segregability” which can be selected to be at the lowest practical level. Some combination of functional distinctiveness and ability to physically separate parts required for Segregability. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights COMPUTER SOFTWARE Restricted Rights in Computer Software depend on funding the Development of Software modules through to Workability EXCLUSIVELY at private expense. Software modules defined according to the concept of “Segregability” which can be selected to be at the lowest practical level. Some degree and combination of functional distinctiveness and ability to physical separate the code modules required for Segregability. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Concepts of Workability and Segregability are linked. It is a contractor’s advantage to Segregate in defining ICPs and Software modules to the level at which key ICPs and modules are developed exclusively at private expense. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Development and Workability have slightly different definitions for Technical Data ICPs and Computer Software: Technical Data Workability means- the Data-related ICP constructed or practiced and analyzed and tested sufficiently to demonstrate a high probability of working as intended. Computer Software Workability means- the Software module successfully operated in a computer and tested to the extent sufficient to demonstrate that it can reasonably be expected to perform its intended purpose. Careful simulation may demonstrate Workability. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Create, save, and maintain: Technology development results and and concurrent financial records; Lab notebooks illustrating development work; Dated engineering progress reports; Dated schematics of prototype designs; Corresponding charge records for indirect accounts; Produce any other type of record that helps tell the story of technology development and related indirect charges. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Submit at time of contract formation. Provides summary listing of all restrictions affecting Technical Data and Software Deliverables under the contract. Notifies Government of Company’s Limited Rights and GPR claims. If possible verify the basic facts supporting the assertions to assure compliance. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Prime contractors required to request subcontractors to provide their Data and Software Assertions. Subcontractor Assertions need to be added to the Prime’s Assertion Table and thereby flowed through to the Government. The Prime contractor is not responsible for the accuracy of subcontractor Assertions (except maybe in extreme cases where they are very clearly in error). ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights SAMPLE ASSERTION TABLE Technical Data/Computer Software to be Furnished with Restrictions Basis for Assertion Asserted Rights Category Name of Person Asserting Restrictions 1) Sensor Array Temperature Compensation Circuit, All materials describing the circuit such as schematics and performance data Developed exclusively at Private Expense Limited Rights ABC Company 2) Flight Stabilization Software including Feed Forward Source Code and all Flowcharts Restricted Rights XYZ Supplier Company 3) Two Stage Long-Range/Short-Range Thrust Deflectors Schematics and all other related Technical Data ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Markings on Deliverables appear on transmittal document AND each applicable page exactly as shown in the Regulations. Portions of things subject to Restrictions should be identified by underscoring, circling, or call-outs. Deliverables Categories: Limited Rights (Technical Data) Restricted Rights (Software) Government Purpose Rights (GPR) Unlimited Rights Specifically Negotiated Rights ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights SAMPLE TECHNICAL DATA LEGEND From DFARS (f) LIMITED RIGHTS Contract Number ___________ Contractor Name ___________ Contractor Address _________________ The Government’s rights to use, modify, reproduce, release, perform, display, or disclose these technical data are restricted by paragraph (b)(3) of the Rights in Technical Data – Noncommercial Items clause contained in the above identified contract. Any reproduction of technical data or portions thereof marked with this legend must also reproduce the markings. Any person, other than the Government, who has been provided access to such data must promptly notify the above named Contractor. Unpublished work Copyright 2011 ABC Company ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Asserted Rights and Markings do NOT automatically flow through to new contracts, follow-on contracts, subsequent blocks. Must Re-Assert in a new Assertion Table, possibly renegotiate, and Re-Mark all Data to be delivered, even if the Data was marked the same way when previously delivered. Entries for Re-Asserted material should indicate that it was previously delivered (DFARS section ). ver. 1 Speaker Name

When Protect Technical Data Rights / Computer Software Rights?
Presentation Title April 21, 2017 When Protect Technical Data Rights / Computer Software Rights? ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Please Note: Separate provisions cover the protection and the Marking of Bid and Proposal Information: See DFAR , FAR , 41 USC 423 Differences in solicited versus unsolicited cases ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Push for credit where rightfully due for Company investments in new technology! The flip side of Data Rights is always the question of what is required to be delivered. If it isn’t required to be delivered then Data Rights issues should never even come up (except for Deferred Ordering, ). Attempt to limit delivery requirements (i.e. CDRLs) that apply to valuable Technical Data and Computer Software. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Regulations and Law envision that contractors should be able to Assert their Rights. If pressed, try to negotiate “Specifically Negotiated License Rights” as allowed and endorsed by the Regulations and the Law. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Many different possibilities exist for Specifically Negotiated Licenses: GPR but limited to a particular program or product, Limited Rights for a fixed period, Limited Rights but will qualify a second source under license for a royalty, Other options as well. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Distinguish Technical Data and Software “Delivered” under CDRLs or other specific delivery requirements from data being “informally” shared in materials, such as: Progress Reports Electronic Databases (e.g. PDM) Distinguish deliverable Technical Data and Computer Software from administrative, management and financial data. Different markings are required. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights “ABC Proprietary” is generally the correct marking for: Technical Data and Computer Software that may be Deliverables, but are not yet being formally delivered; Technical Data and Computer Software that are not Deliverables, but are being furnished to the US Government anyway; All administrative, management, and financial data whether it’s being “Delivered” or not. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Please note that some US Government Agencies claim that everything that they touch is or magically becomes a contract Deliverable. ABC Company believes this is contrary to: the Law [see especially 10USC2320(a)(3)(b)], many years of settled custom and practice involving the use of CRDLs to specify Deliverables, the common sense contract law idea that Deliverables should be known items supplied at a specified time. This continues to be a major bone of contention with some Agencies. ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights SAMPLE PROPRIETARY LEGEND ABC COMPANY PROPRIETARY This document contains proprietary data or information pertaining to items, or components, or processes, or other matter developed or acquired at the private expense of ABC Company and is restricted to use only by persons authorized by ABC in writing to use it. Disclosure to unauthorized persons would likely cause substantial competitive harm to ABC’s business position. This technical data or information shall not be furnished or disclosed to or copied or used by persons outside ABC without the express written approval of ABC. Unpublished work Copyright ABC Company ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights From the DFARs: Noncommercial items or processes Policy DoD policy is to acquire only the technical data, and rights in data, necessary to satisfy agency needs. Solicitations and Contracts shall – Specify the technical data to be delivered under a contract and delivery schedules for the data; Establish or reference procedures for determining the acceptability of technical data; Establish separate contract line items, to the extent practicable for the technical data to be delivered under a contract and require offerors and contractors to price separately each deliverable data item; and Require offerors to identify, the extent practicable, technical data to be furnished with restrictions on the Government’s rights and require contractors to identify technical data to be delivered with such restrictions prior to delivery. Offerors shall not be required, either as a condition of being responsive to a solicitation or as a condition of award, to sell or otherwise relinquish to the Government any rights in technical data related to items, components or processes developed except for the data identified at (a)(2) and (a)(4) through(9). Offerors and contractors shall not be prohibited or discouraged from furnishing or offering to furnish items, components or processes developed at private expenses solely because the Government’s rights to use, modify, release, reproduce, perform, display or disclose technical data pertaining to those items may be restricted. (Note: emphasis added) ver. 1 Speaker Name

Presentation Title April 21, 2017 Protect Technical Data Rights / Computer Software Rights Asserted Rights and Markings do NOT automatically flow through to new contracts, follow-on contracts, subsequent blocks. Must Re-Assert in a new Assertion Table, possibly renegotiate, and Re-Mark all Data to be delivered, even if the Data was marked the same way when previously delivered. Entries for Re-Asserted material should indicate that it was previously delivered (DFARS section ). ver. 1 Speaker Name

Presentation Title April 21, 2017 KNOWLEDGE CHECK Speaker Name

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Under the FAR and DFARs are other private contractors afforded the right to infringe ABC Company patents in performance of U.S. Government contracts? Yes No Not Sure ver. 1 Speaker Name Speaker Name 50

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Do Limited Rights afford the U.S. Government the right to use ABC Company’s Technical Data for competitive re-procurements? Yes No Not Sure ver. 1 Speaker Name Speaker Name 51

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Do Government Purpose Rights (GPR) afford the U.S. Government the right to use ABC’s Technical Data for competitive re-procurements? Yes No Not Sure ver. 1 Speaker Name Speaker Name 52

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Are financial and administrative data delivered under a CDRL covered under the Technical Data Rights provisions of the Defense Federal Acquisition Regulation Supplement (DFARS)? Yes No Not Sure ver. 1 Speaker Name Speaker Name 53

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Can you claim Limited Rights in material that you have allowed third parties unrestricted access without the benefit of nondisclosure protection under a PIA or similar agreement? Yes No Not Sure ver. 1 Speaker Name Speaker Name 54

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Can you properly mark a deliverable Computer Software module as Restricted Rights if there is no corresponding entry in the Assertion Table for the U.S. Government contract? Yes No Not Sure ver. 1 Speaker Name Speaker Name 55

Presentation Title Presentation Title April 21, 2017 April 21, 2017 You properly include an entry for Technical Data in an Assertion Table, are there other any other active steps required to maintain ABC’s rights? Yes No Not Sure ver. 1 Speaker Name Speaker Name 56

Presentation Title Presentation Title April 21, 2017 April 21, 2017 ABC Company has properly asserted its rights for the BLK I TXT contract; does ABC need to again provide both a new Assertion Table and repeated Data Markings for the BLK II TXT contract? Yes No Not Sure ver. 1 Speaker Name Speaker Name 57

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Can information included in a software user’s or operator’s manual be considered Restricted Rights material under a DoD contract? Yes No Not Sure ver. 1 Speaker Name Speaker Name 58

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Under the DFARs, can a prime contractor demand IP rights from a subcontractor in Technical Data or Software being developed with U.S. Government funding by the subcontractor? Yes No Not Sure ver. 1 Speaker Name Speaker Name 59

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Does the U.S. Government have to have a reason to request information from a contractor supporting a Technical Data Rights Assertion? Yes No Not Sure ver. 1 Speaker Name Speaker Name 60

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Does the U.S. Government have to have a reason to Challenge a Technical Data Rights or Computer Software Assertion by a private contractor? Yes No Not Sure ver. 1 Speaker Name Speaker Name 61

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Is ABC required to request Technical Data and Computer Software Assertions from its subcontractors and include them in ABC’s Assertion Tables? Yes No Not Sure ver. 1 Speaker Name Speaker Name 62

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Is ABC Company required to provide a listing of commercial software delivered under a U.S. Government Contract where the software is subject to commercial license terms that may restrict its use? Yes No Not Sure ver. 1 Speaker Name Speaker Name 63

Presentation Title Presentation Title April 21, 2017 April 21, 2017 Under the DFARs can a Government Agency force a private contractor to give up its Technical Data Rights as a precondition to bidding on a U.S. Government contract? Yes No Not Sure ver. 1 Speaker Name Speaker Name 64

Questions ? Presentation Title Presentation Title April 21, 2017
ver. 1 Speaker Name Speaker Name 65

Intellectual Property and Technical Data Rights Under the DFARS

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Intellectual Property and Technical Data Rights Under the DFARS

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