27.304-1 General.

(a) Status as small business concern or nonprofit organization. If an agency has reason to question

the size or nonprofit status of the prospective contractor, the agency may require the prospective

contractor to furnish evidence of its nonprofit status or may file a size protest in accordance with

FAR 19.302.

(b) Exceptions.

(1) Before using any of the exceptions under 27.303(e)(1) in a contract with a small business concern

or a nonprofit organization and before using the exception of 27.303(e)(1)(ii) for any contractor, the

agency shall follow the applicable procedures at 37 CFR 401.

(2) A small business concern or nonprofit organization is entitled to an administrative review of the

use of the exceptions at 27.303(e)(1)(i) through (e)(1)(iv) in accordance with agency procedures and

37 CFR part 401.

(c) Greater rights determinations. Whenever the contract contains the clause at 52.227-13, Patent

Rights-Ownership by the Government, or a patent rights clause modified pursuant to 27.303(e)(2),

the contractor (or an employee-inventor of the contractor after consultation with the contractor) may

request greater rights to an identified invention within the period specified in the clause. The

contracting officer may grant requests for greater rights if the contracting officer determines that

the interests of the United States and the general public will be better served. In making these

determinations, the contracting officer shall consider at least the following objectives (see 37 CFR

401.3(b) and 401.15):

(1) Promoting the utilization of inventions arising from federally supported research and

development.

(2) Ensuring that inventions are used in a manner to promote full and open competition and free

enterprise without unduly encumbering future research and discovery.

(3) Promoting public availability of inventions made in the United States by United States industry

and labor.

(4) Ensuring that the Government obtains sufficient rights in federally supported inventions to meet

the needs of the Government and protect the public against nonuse or unreasonable use of

inventions.

(d) Retention of rights by inventor. If the contractor elects not to retain title to a subject invention,

the agency may consider and, after consultation with the contractor, grant requests for retention of

rights by the inventor. Retention of rights by the inventor will be subject to the conditions in

paragraphs (d) (except paragraph (d)(1)(i)), (e)(4), (f), (g), and (h) of the clause at 52.227-11, Patent

Rights-Ownership by the Contractor.

(e) Government assignment to contractor of rights in Government employees’ inventions. When a

Government employee is a co-inventor of an invention made under a contract with a small business

concern or nonprofit organization, the agency employing the co-inventor may license or assign

whatever rights it may acquire in the subject invention from its employee to the contractor, subject

at least to the conditions of 35 U.S. C. 202-204.
(f) Revocation or modification of contractor’s minimum rights. Before revoking or modifying the

contractor’s license in accordance with 27.302(i)(2), the contracting officer shall furnish the

contractor a written notice of intention to revoke or modify the license. The agency shall allow the

contractor at least 30 days (or another time as may be authorized for good cause by the contracting

officer) after the notice to show cause why the license should not be revoked or modified. The

contractor has the right to appeal, in accordance with applicable regulations in 37 CFR part 404 and

agency licensing regulations, any decisions concerning the revocation or modification.

(g) Exercise of march-in rights. When exercising march-in rights, agencies shall follow the

procedures set forth in 37 CFR 401.6.

(h) Licenses and assignments under contracts with nonprofit organizations. If the contractor is a

nonprofit organization, paragraph (i) of the clause at 52.227-11 provides that certain contractor

actions require agency approval.

Parent topic: 27.304 Procedures.