# Presentation: 302507

## Patents, Data and Copyrights Under the Federal Acquisition Regulation

**Richard A. Lambert**
**Counsel for Intellectual Property**
**U.S. Department of Health Human Services**

## Introduction

- When Do You Use The Clauses Prescribed by FAR Part 27 and What Do They Accomplish?
-     But First Some Basics:

## Intellectual Property

- The United States Constitution Art. 1 Sect. 8 Clause 8
- The Congress shall have power.. 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

## Types of Intellectual Property

- So the Constitution is the basis for Intellectual Property
- Intangible personal property created by law
- A protectable creation of the mind
- 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. About 20 years.
- Does not give the inventor the right to use the invention; only to exclude others from doing so.
- 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.
- Trade Secrets: “Proprietary Data”, “Limited Rights Data” Information that provides an economic advantage that is kept secret. Unlimited term of protection so long as it’s kept secret
- Trademarks: Words or Symbols the identify the Source of Goods or Services.

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpart 27.2-Patents

- Authorization and Consent FAR 52.227-1
- Authorizes Contractor to Infringe Patents. Contractor Cannot be enjoined for Performance of the Contract. Government May be Sued in Court of Federal Claims for Money Damages
- Use in Most Contracts. May Require use of Patent Indemnity Clause

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpart 27.2-Patents

- Notice and Assistance FAR 52.227-2
- Requires Contractor to Provide Government with Notice of a Pending Suit for infringement  and to Cooperate in any Litigation
- Use in Contracts that include the Authorization and Consent Clause

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpart 27.2-Patents

-    **Patent Indemnity Clauses FAR 52.227-3 and FAR 52.227-4**
**	****Requires the Contractor to indemnify the Government for Infringement Arising from Use or Supply of Services of Material Under the Contract**
**    ****Generally used with an Authorization and Consent Clause**
**	****Not Always Required in Negotiated Contracts**

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpart 27.2-Patents

- Waiver of Indemnity FAR 52.227-5
- Only where it is determined in the Government’s interest to exempt one or more specific U.S. patents from the patent indemnity clause. Written approval from agency head of designee is required

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpart 27.2-Patents

- Royalty Information FAR 52.227-6
- 	Allows the C.O. to Determine if Royalty Payments Will be Part of Contract Costs
- Notice of Government Licensee FAR 52.227-7
- Refund of Royalties FAR 52.227-9
- 	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

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpart 27.3 PATENT RIGHTS CLAUSES

- There are Three Clauses:
- FAR 52.227-11  Contractor Ownership. The “Bayh/Dole” Clause. Used by NIH in Vast Majority of Contracts
- FAR 52.227-12 Contractor Ownership. A long form sometimes used by DOD. Not Used by NIH
- FAR 52.227-13  Government Ownership. Used in Foreign Contracts

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpat 27.3 Patent Rights Clauses

- FAR 52.227-11 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

## PATENT RIGHTS UNDER THE FEDERAL ACQUISITION REGULATIONSubpart 27.3 Patent Rights Clauses

- Determinations of Exceptional Circumstances (DEC)
- Rarely Used; Only Where Necessary to Accomplish Programmatic Goals
- Examples:
- To Obtain Proprietary Third party Materials for Screening
- Where Contractor is Producing Compounds or Animals for Use in Discovery of New Diagnostics or Therapies
- ONLY APPLIES TO SPECIFIED SUBCONTRACTS

## RIGHTS IN DATA CLAUSES UNDER THE FEDERAL ACQUISITION REGULATION Subpart 27.4

- Rights in Data – General (FAR 52.227-14)
- Representation of Limited Rights Data and Restricted Computer Software (FAR 52.227 – 15)
- Additional Data Requirements (FAR 52.227 – 16)
- Rights in Data – Special Works (FAR 52.227 – 17)
- Rights in Data -  Existing Works (FAR 52.227 – 18)
- Commercial Computer Software – Restricted Rights (FAR 52.227 – 19)
- Rights to Proposal Data (Technical) (FAR 52.227 – 23)

## Data Bottom Line:

- It All Depends on what the Contract says
- IF YOU DON”T ASK FOR IT, YOU DON”T GET IT
- Be Sure you and You Program Representative have Developed a List of Data Deliverables
-    YOUR RIGHTS IN DATA DEPEND ON  THE CONTRACT CLAUSES
- 		Consult with General Counsel if you     	aren’t sure which clauses are 	needed
- 	“WORK” Means Works of Authorship

## RIGHTS IN DATA GENERAL (FAR 52.227 – 14)

- 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

## RIGHTS IN DATA GENERAL (FAR 52.227 – 14)

- LIMITED RIGHTS DATA
- RESTRICTED COMPUTER SOFTWARE
- COPYRIGHTED DATA

## RIGHTS IN DATA GENERAL (FAR 52.227-14)

- UNLIMITED RIGHTS INCLUDE:
- 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

## RIGHTS IN DATA GENERAL (FAR 52.227-14)

- LIMITED RIGHTS Data
- Data that Embody Trade Secrets
- Contractor Protects by Withholding from Delivery
- Contractor Provides Form, Fit, and Function Unless contract Includes
- Alternate II
- MUST BE MARKED
- Limited Rights Data Delivered with MARKING  which Specifies how the Government May use  and Disclose the Data.
- Limited Rights May be Negotiated. Decide What You Need

## RIGHTS IN DATA GENERAL (FAR 52.227-15)

- RESTRICTED COMPUTER SOFTWARE
- Developed at Private Expense
- Contractor Protects By Withholding Unless Contract Includes:
- Alternate III RESTRICTED RIGHTS
- MUST BE MARKED
- Requires Delivery
- Limits the Government’s Use of Restricted Computer Software
- Rights May Be Negotiated
- For Example: Do You Need a Site License?

## RIGHTS IN DATA GENERAL (FAR 52.227-14)

- COPYRIGHT
- Contractor May Not Assert Copyright Except
- With the Permission of the C.O.
- In Scientific and Technical Articles
- Government Retains Broad License
- Government License in Computer Does Not Include the right to Distribute

## RIGHTS IN DATA GENERAL (FAR 52.227-14)

- ALTERNATE V
- If Included in the Contract, Allows the C.O. or Authorized Representative to Inspect at the Contractor’s Facility any Data Withheld from Delivery

## REPRESENTATION OF LIMITED RIGHTS DATA AND RESTRICTED COMPUTER SOFTWARE (FAR 52.227-15)

- Use in Solicitations When the 52.227-14 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

## ADDITIONAL DATA REQUIREMENTS FAR (FAR 52.227-16)

- A LIFESAVER if DATA DELIVERABLES WERE NOT SPECIFIED
- Use with FAR 52.227-14
- 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
- Data are Still Subject to Limited Rights and Restricted Rights and Any Other Limitation in FAR 52.227-14

## RIGHTS IN DATA - SPECIAL WORKS (FAR 52.227-17)

- 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
- May NOT be Appropriate for Entire Contract
- May be Limited to Particular Tasks

## RIGHTS IN DATA – SPECIAL WORKS (FAR 52.227-17

- USE SPARINGLY – NOT APPROPRIATE FOR MOST CONTRACTS Generally not to be Used in R & D Contracts
- USE FOR:
- Films, Audiovisual Works, Policy Documents
- Computer Programs that are Agency Mission Sensitive
- NIH has used the Clause in Connection with Determinations of Exceptional Circumstances where Necessary to Limit Rights in Data as well as Patent Rights

## RIGHTS IN DATA – EXISTING WORKS (FAR 52.227-18)

- 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

## COMMERCIAL COMPUTER SOFTWARE – RESTRICTED RIGHTS (FAR 52.227-19)

- 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 52.227-14

## FINAL THOUGHTS

- If Data Will Be generated Under the Contract YOU NEED:
- A Data Rights Clause (More than One Clause May Be Applicable to Various Tasks)
- A List of Data Deliverables (The Data Rights Clause Does Not Get Delivery of Data; You MUST SPECIFY THE DELIVERABLES
- If It’s and R&D Contract, DON’T FORGET THE ADDITIONAL DATA  REQUIREMENTS CLAUSE!!
- Even Purchase Orders May Need a Data Rights Clause