# Presentation: 665271

- David Walker, Chief Patent Counsel
- April 13, 2005

- Intellectual Property in
- Government Contracting

- Procurement Training

## Intellectual Property (IP)

- What is IP?
- How to Protect IP
- Why is IP important?
- Patent and Data Rights Clauses
- FAR
- NASA FAR Supplement
- Software
- Handling 3rd Party Proprietary/Govt. sensitive information
- Administratively Controlled Information

## What is IP?

- Valuable intangible property created by the human mind.
- Provided for in the Constitution
- To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. Art. 1, sec. 8, cl. 8.

## What is IP?

- Patent - A grant of a property right by the Government to an inventor which allows the inventor “to exclude others from making, using, or selling the invention.”
- Copyright - A form of protection provided by U.S. law to authors of  “original works or authorship” fixed in any tangible medium of expression.
- Trade Secrets - A formula, a device, or other information that is secret and gives a commercial advantage over competitors who do not know or use it.
- Trademarks - Anything used in the marketplace to distinguish goods or services of one source from those of other sources.  Typically, it is a word or symbol, but it can also be other things.

## Patent

- Patent - A grant of a property right by the Government to an inventor which allows the inventor “to exclude others from making, using, or selling the invention.”
- Utility.
- Machines.
- Articles of Manufacture.
- Compositions of Matter.
- Processes.
- Improvements.
- Design.
- Plant.
- Right to exclude others from making, using or selling the claimed invention.
- Duration - 20 years from patent application filing date

## Real Invention – Unknown Potential

- 2001

**Notes:**
Jumping forward to 2001, recognizing that some folks most of the time and most folks some of the time need a little extra kick in the morning to get going, Joe H. Cheng invented the?
User-Operated Amusement Apparatus for Kicking the User’s Buttocks.
Examples intended to give you a flavor relating to the important role that patents have played in the development of our country – both from a social perspective and a technological perspective.

What is not patentable.
Principles or laws of nature -- Scientific Formulas (e.g., E=mc,  F=ma) and Mathematical Algorithms per se
Naturally occurring articles -- Naturally occurring cells and organisms (e.g., a shrimp with the head and digestive tract removed, while an article of manufacture, is not patentable), and a naturally occurring (or discovered) compounds.
Physical phenomena --  New  properties of  materials and mechanisms and new  benefits derived from known materials and mechanisms (caveat:  new  uses are patentable  as a process 35 USC 100(b)).
Abstract Ideas -- e.g., moving faster than the speed of light.
Mental processes -- e.g., how to compute the area of a triangle.
Printed matter --  e.g., a new form (may be copyrighted, however).  1/2 recipe measuring cup is patentable.

## Copyright

- A form of protection provided by U.S. law to authors of  “original works or authorship” fixed in any tangible medium of expression.
- Types of works - literary, dramatic, musical, artistic, and others (including software)
- Copyright owner has enumerated rights to reproduce (make copies), prepare Derivative Works, distribute, perform, and display
- Duration
- Individuals - life of author plus 70 years
- Companies (works made for hire) 95 years from publication

## Copyright

- Civil Servant authored works are “Government works”
- No copyright in the US
- Copyright outside of US
- Government can own copyright in the US by receiving assignment of rights from contractors who authored works
- FAR 52.227-14, as modified by NFS 1852.227-14, allows NASA to control copyright in work created under NASA contract

## Trademark

- Anything used in the marketplace to distinguish goods or services of one source from those of other sources.  Typically, it is a word or symbol, but it can also be other things.
- Prevent others from using mark
- Likelihood of confusion is the test
- Unlimited duration if properly protected
- Examples
- NASA Meatball
- NASA Worm

## Trade Secret

- Any information that allows you to make money because it is not generally known.
- A trade secret could be a formula, computer program, process, method, device, technique, pricing information, customer lists or other non-public information.
- If the economic value of a piece of information relies on it being kept private, it could be a trade secret.
- Unlimited duration if properly protected
- U.S. Government cannot have trade secrets, but may withhold technology for different reasons:
- National Security
- Up to 5 years to preserve rights
- Example
- Coca-Cola

## Why is IP important?

- To insure that the Government can use the technology/information it pays to develop
- Identify use (licensing) and fees up front for incoming/background technologies
- Full and open competition
- Government honors others’ IP rights
- Government Employees covered by Trade Secrets Act (18 U.S.C. § 1905)

## Patent Rights

- Definitions
- Invention means any invention or discovery that is or may be patentable
- Subject Invention means any invention of the contractor conceived or first actually reduced to practice in the performance of work under a Government contract

## Patent Clauses

- 52.227-1 Authorization and Consent, Alt I for R&D
- 52.227-2 Notice and Assistance Regarding Patent and 			Copyright Infringement
- 52.227-3 Patent Indemnity - Commercial
- 52.227-11Patent Rights - Retention by the Contractor
- 			(and NFS)
- Small Business and Non-Profit
- 1852.227-70 New Technology
- Large Entities
- 1852.227-72 Designation of New Technology 				Representative and Patent Representative
- 1852.227-71 Requests for Waiver of Rights to Inventions
- 1852.227-84 Patent Rights Clauses

## Patent Issues

- Reporting Inventions
- COTR and Contract Close-Out
- Waivers (for large entities)
- Advance waiver/Identified waiver
- Election by small businesses, non-profits, and universities
- Licensing
- Negotiate as soon as possible
- Infringement/License Proffers

## Slide 15

## Data

- Definition
- Recorded information, regardless of form or the media on which it may be recorded.  The term includes technical data and computer software.
- Does not include information incidental to contract administration, such as financial, administrative, cost or pricing, or management information.

## Drafting Requirements/Rights

- Will data be produced, furnished, acquired or specifically used in meeting contract performance requirements?
- If yes -- must delineate rights and obligations of Government and contractor regarding use, duplication, and disclosure
- Generally
- Rights in Data-General  (52.227-14/1852.227-14 using alternates as appropriate)
- Representation of Limited Rights Data and Restricted Computer software (52.227-15)
- Rights in Data – Special Works (52.227-17) – special cases, e.g. open source software
- Rights to Proposal Data (52.227-23)
- Additional Data Requirements (52.227-16)
- Also, remember that
- other clauses may be necessary
- Cooperative Agreements--standard clauses not always sufficient, need to tailor data clause to address Government needs/uses

## Drafting Requirements/Rights

- The Statement of Work (SOW) should accurately state the type, quality, quantity and delivery time for each desired data item.
- When developing SOW, also determine the desired/needed Government rights in the data and software.
- Ensure that the contract language adequately captures the Government’s desires/needs.
- If software will be developed:
- Will software be a deliverable? Is delivery of source code desired?  If so – specifically state as a deliverable
- Basic data guidance:
- FAR -- Subpart 27.4 - Rights in Data and Copyrights
- NFS -- Subpart 1827.404 - Rights in Data and Copyrights

## Data Clauses

- 52.227-14  Rights in Data-General (and NFS)
- 52.227-15 Representation of Limited Rights Data and
- 			Restricted Computer Software
- 52.227-16  Additional Data Requirements
- 52.227-17  Rights in Data-Special Works (and NFS)
- 52.227-19  Commercial Computer Software-Restricted Rights 			(and NFS) - replace with 1852.227-86 (see below)
- 52.227-20  Rights in Data-SBIR Program
- 52.227-21  Technical Data Declaration, Revision, and 				Withholding of Payment-Major Systems - rare
- 52.227-22  Major System-Minimum Rights - rare
- 52.227-23  Rights to Proposal Data (Technical)
- 1852.227-86  Commercial Computer Software-Licensing

## Rights in Data-General

- Government has unlimited rights in:
- data first produced in performance of contract
- form, fit and function data
- data in the form of manuals or instructional and training material for installation, operation, maintenance and repair
- all other delivered data **other than limited rights or restricted computer software**
**CO permission needed before contractor can apply background data to contract performance**

## Rights in Data-General

- Contractor has right to:
- use, release to others, reproduce, distribute, or publish data first produced or specifically used by contractor in performance of contract **except computer software and as otherwise specified**
- contractor may not copyright, publish or release to others any computer software first produced in performance of contract without CO’s prior written permission
- contractor is allowed to publish and copyright scientific and technical articles based on data first produced in performance of contract not subject to other restrictions (see Handling of Data)

## Trade Secrets

- Data rights clauses deal with trade secrets (and more)
- Special trade secret labels in government contracts.
- Limited rights, limited rights data.
- For other than computer software.
- Restricted rights, restricted computer software.
- For computer software.
- SBIR rights, SBIR data.
- For SBIR contracts.
- Other commonly used labels for trade secrets outside of government contracts.
- Company proprietary.
- Proprietary data/information.
- Confidential data/information.
- Competition sensitive.

**Notes:**
Discussion can get very confusing if one does not understand the differences between the four types of intellectual property and the labels that are used to describe trade secrets.

## Data Rights – General clause

- FAR 52.227-14 without any *Alternates, *Contractor must withhold limited rights data or restricted computer software.
- Vast majority of contracts in this category.
- FAR 52.227-14 with *Alternate II* requires Contractor to deliver limited rights data.
- be sure to add any desired extra data purposes - see FAR 27.404(d)(1) for examples
- Example:  use by support service contractors and use by other contractors participating in the Government program
- FAR 52.227-14 with *Alternate III* requires Contractor to deliver restricted computer software.
- Alternate IV - copyright for Universities - do not use without Patent Counsel input
- Alternate V Inspection of Withheld Data
- Must negotiate for sufficient rights when using Alt II and III - consult Patent Counsel.

**Notes:**
Typically, we advise contractors to meet their deliverable requirements without the delivery of limited rights data.  However, this is not the case for SLI (i.e., OSP and NGLT).

Unauthorized marking – the clause includes procedures for returning the data, canceling the markings, or ignoring the marking.

Omitted or incorrect markings – the clause includes procedures for the contractor to make corrections

The proper marking of limited rights data – see next chart.

## Getting the right data delivered

- Rights in data - General.
- Without *Alternates II and III *in the contract, the Government should only receive unlimited rights data.
- With *Alternates II and/or III *in the contract, the Government gets limited rights data and/or restricted computer software.
- FAR 52.227-15 can help

**Notes:**
Don’t get so elated with the receipt of the data that you forget to deal with the markings.  It is very difficult, if not impossible, to deal with an inappropriate marking at a later point in time because people change and memories fade.

With respect to data rights disputes, the clause can provide for the examination of books and records.  FAR 52.227-14 Alternate V.

## Representation of Limited Rights Data and Restricted Computer Software FAR 52.227-15

- Use in all solicitations for R&D contracts
- Answers given by contractor are important
- Answers indicate whether contractor desires to impose restrictions on background data
- Aid to determine whether to use Alternate II and/or III
- CO to consult with COTR and Patent Counsel regarding restrictions

## SBIR Contracts

- If marked with SBIR Rights Notice, Government may not disclose data to any party, other than support service contractor, for 4 years after acceptance of last deliverable
- Contractor can copyright all data (including software) without permission from CO
- CO permission required to apply background data to contract performance - CO permission is critical as no ability to require delivery of limited rights data/restricted rights software
- Must negotiate up front with Patent Counsel input

## Are you still with me?

## Delivered Data

- Marked with notice or legend such as:
- limited rights data, restricted computer software
- SBIR data
- proposal data (technical)
- Copyright
- Confidential or Proprietary
- Ensure marked data is authorized to be marked.
- Data really was developed at private expense (i.e., not developed under the contract).
- If not, follow contract (52.227-14/1852.227-14) for appropriate treatment

## Handling Proprietary Data

- Civil servants –
- severe penalties exist for improper handling by civil servants- Trade Secrets Act - loss of federal job, fine, jail
- Contractors – should be covered by contract
- 52.227-14(d)(2) requires contractors to handle marked data in accordance with markings
- Consider including GSFC 52.203-90 Handling of Data
- Limits use and release of government provided data
- Contractor must contractually bind employees to same limits
- Non-Disclosure Agreements (NDA’s)- generally disfavored - consult Patent Counsel

## Marking data

- Limited rights data

**Notes:**
No other label or marking is permitted to protect technical data.

Notice the blanks to be filled in before the contract is executed.

In Alternate II is not in the contract, will you see this marking on deliverables?  

## Marking data

- Restricted rights software

**Notes:**
No other label or marking is permitted to protect computer software.

Here, all of the government rights are spelled out.

## Marking Data

- SBIR data

**Notes:**
Previous chart provided data clause for SBIR contracts, FAR 52.227-20.

Under SBIR contracts, the contractor may assert SBIR rights in data developed under the contract (i.e., data developed with government funds).  To the extent the contractor asserts such rights, the Government must protect SBIR data for a period of four years. 

## Government Provided Data

- Administratively Controlled Information -
- Export control/ITAR information
- Privacy Act Information
- Trade secret/proprietary information
- Inventions that are or may become subject of patent application
- Limited Rights Data/Restricted Rights Computer Software
- Information Subject to 5-year NASA withholding period
- Use ACI coversheet (NF 1686) and mark each page

**Notes:**
What is ACI? - official information and material, of a sensitive but unclassified nature which ...cannot be classified, but nonetheless, should still be protected against inappropriate disclosure
Excluded from FOIA

## Delivered data as ACI

- Limited rights data, restricted computer software, and SBIR data qualify as administratively controlled information (ACI) and must be handled accordingly (NPR 1620.1 and NPG 1600.1).
- Attended when in use.
- Need-to-know access.
- Limit number of hard copies.
- Locked up when not in use.
- ACI cover sheet (Yellow NASA Form 1686).
- Secure electronic storage.
- No further dissemination without approval.
- Encrypted e-mail.
- Secure fax.
- Destroyed when no longer needed.

## Slide 35

## Contractor Request for Permission to Assert Copyright

- CO permission required to assert copyright for all data, other than technical publications (unless Alt IV applies)
- Contractor to formally request right to assert and retain copyright
- CO to consult with COTR and Patent Counsel
- Contractor to provide commercialization plan
- If decide to grant permission, then modify contract to require assignment to Government if fail to commercialize

## Government Purpose License and Government Assignment of Copyright

- License retained by Government
- For material other than software: can reproduce, prepare derivative works, distribute to public, perform or display publicly
- Software: can reproduce, prepare derivative works, perform or display publicly, but not distribute to public
- Assignment of Copyright
- NASA can request assignment from contractor and license to others
- NASA can require assignment from other than SBIR

## Software

- Off-the-shelf Computer Software
- Vendor’s standard license agreement may be integrated into the acquisition
- License may be signed by the contracting officer
- Office of Chief Counsel needs to review prior to signature or acceptance for integration into acquisition
- External Release
- NPD2210.1, NPR 2210.1 – External Release of NASA Software; Center Software Release Authority
- Allows for several release categories
- Software developed under contract potentially has both copyright and patent protection available.  Software must be disclosed (Patent Rights/New Technology clauses) like any other innovation.

## Open Source

- Open source is one release category allowed by 2210.1
- Free distribution of source code and modifications
- Incoming
- How to incorporate into NASA software
- Contract provisions
- Distribution requirements
- Outgoing
- Benefit back to NASA - use improvements
- Rights - NASA Open Source Agreement

## Parting thoughts

- Contractor needs to report inventions.
- Question all markings on contract deliverables.
- Don’t hesitate to call Office of Patent Counsel (x6-7351) if questions arise

## Questions?