Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 63045 

www.usda.gov/biopreferred or 7 CFR 

Part 2902. 

(c) Insert the provision at 52.223–4, 

Recovered Material Certification, in 

solicitations that are for, or specify the 

use of, EPA-designated items. 

(d) Insert the clause at 52.223–9, 

Estimate of Percentage of Recovered 

Material Content for EPA-Designated 

Products, in solicitations and contracts 

exceeding $100,000 that are for, or 

specify the use of, EPA-designated 

products containing recovered 

materials. If technical personnel advise 

that estimates can be verified, use the 

clause with its Alternate I. 

23.701 [Removed] 

■ 12. Remove and reserve section 

23.701. 

■ 13. Amend section 23.702 by adding 

paragraph (g) to read as follows: 

23.702 Authorities. 

* * * * * 

(g) Farm Security and Rural 

Investment Act of 2002 (FSRIA) (7 

U.S.C. 8102). 

■ 14. Amend section 23.703 by revising 

paragraph (b)(7); and adding paragraph 

(b)(8) to read as follows: 

23.703 Policy. 

* * * * * 

(b) * * * 

(7) Promote the use of biobased 

products. 

(8) Purchase only plastic ring carriers 

that are degradable (7 USC 8102(c)(1), 

40 CFR part 238). 

PART 42—CONTRACT 

ADMINISTRATION AND AUDIT 

SERVICES 

■ 15. Amend section 42.302 by revising 

paragraph (a)(68)(ii) to read as follows: 

42.302 Contract administration functions. 

(a) * * * 

(68) * * * 

(ii) Monitoring contractor compliance 

with specifications or other contractual 

requirements requiring the delivery or 

use of environmentally preferable 

products, energy-efficient products, 

products containing recovered 

materials, and biobased products. This 

must occur as part of the quality 

assurance procedures set forth in Part 

46; and 

* * * * * 

PART 45—GOVERNMENT PROPERTY 

45.103 [Amended] 

■ 16. Amend section 45.103 by 

removing from paragraph (a)(1) 

‘‘11.101(c)’’ and adding ‘‘11.101(b)’’ in 

its place. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 17. Add sections 52.223–1 and 

52.223–2 to read as follows: 

52.223–1 Biobased Product Certification. 

As prescribed in 23.406(a), insert the 

following provision: 

BIOBASED PRODUCT CERTIFICATION 

[December 7, 2007] 

As required by the Farm Security and 

Rural Investment Act of 2002 and the 

Energy Policy Act of 2005 (7 U.S.C. 

8102(c)(3)), the offeror certifies, by 

signing this offer, that biobased 

products (within categories of products 

listed by the United States Department 

of Agriculture in 7 CFR part 2902, 

subpart B) to be used or delivered in the 

performance of the contract, other than 

biobased products that are not 

purchased by the offeror as a direct 

result of this contract, will comply with 

the applicable specifications or other 

contractual requirements. 

(End of provision) 

52.223–2 Affirmative Procurement of 

Biobased Products Under Service and 

Construction Contracts. 

As prescribed in 23.406(b), insert the 

following clause: 

AFFIRMATIVE PROCUREMENT OF 

BIOBASED PRODUCTS UNDER SERVICE 

AND CONSTRUCTION CONTRACTS 

[December 7, 2007] 

(a) In the performance of this contract, 

the contractor shall make maximum use 

of biobased products that are United 

States Department of Agriculture 

(USDA)-designated items unless—

(1) The product cannot be acquired—

(i) Competitively within a time frame 

providing for compliance with the 

contract performance schedule; 

(ii) Meeting contract performance 

requirements; or 

(iii) At a reasonable price. 

(2) The product is to be used in an 

application covered by a USDA 

categorical exemption (see 7 CFR 

2902.10 et seq.). For example, some 

USDA-designated items such as mobile 

equipment hydraulic fluids, diesel fuel 

additives, and penetrating lubricants are 

excluded from the preferred 

procurement requirement for the 

application of the USDA-designated 

item to one or both of the following: 

(i) Spacecraft system and launch 

support equipment. 

(ii) Military equipment, i.e., a product 

or system designed or procured for 

combat or combat-related missions. 

(b) Information about this requirement 

and these products is available at http:// 

www.usda.gov/biopreferred. 

(End of clause) 

52.223–4 [Amended] 

■ 18. Amend section 52.223–4 by 

removing from the prescription 

‘‘23.406(a)’’ and adding ‘‘23.406(c)’’ in 

its place. 

52.223–9 [Amended] 

■ 19. Amend section 52.223–9 by 

removing from the prescription and 

Alternate I ‘‘23.406(b)’’ and adding 

‘‘23.406(d)’’ respectively, in its place. 

[FR Doc. 07–5478 Filed 11–6–07; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 2, 3, 12, 15, 18, 19, 27, 

33, and 52 

[FAC 2005–21; FAR Case 1999–402; Item 

III; Docket 2007–0001; Sequence 7] 

RIN 9000–AJ64 

Federal Acquisition Regulation; FAR 

Case 1999–402, FAR Part 27 Rewrite in 

Plain Language 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to clarify, streamline, 

and update text and clauses on Patents, 

Data, and Copyrights (FAR Part 27). 

DATES: Effective Date: December 7, 2007. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Ernest Woodson, Procurement Analyst, 

at (202) 501–3775 for clarification of 

content. For information pertaining to 

status or publication schedules, contact 

the FAR Secretariat at (202) 501–4755. 

Please cite FAC 2005–21, FAR case 

1999–402. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule is a ‘‘plain language’’

rewrite of FAR Part 27 and its associated 

clauses in Part 52. Part 27 implements 

a number of statutes and executive 

orders pertaining to patents, data, and 

copyrights. This effort focused on 

clarifying, streamlining, and updating 

the text, with the ultimate goal of 

making the policies and procedures 

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63046 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 

more understandable to the reader. For 

example, the materials have been edited 

to conform to the FAR Drafting Guide 

(available at http://www.arnet.gov/far/ 

draftingguide.htm). This rewrite was not 

intended to include substantive changes 

to Part 27 policies or procedures, except 

where necessary to comply with current 

statutory or regulatory requirements, or 

to resolve internal inconsistencies 

within FAR Part 27 and its associated 

clauses. 

DoD, GSA, and NASA published a 

proposed rule in the Federal Register at 

68 FR 31790, May 28, 2003 with public 

comments due by July 28, 2003. The 

background information published with 

the proposed rule provided an overview 

of the rewrite effort, and highlighted 

examples of both plain language edits 

and additional substantive changes 

deemed within the scope of the 

revision. Accordingly, the remainder of 

the discussion below focuses on 

analysis of the public responses to the 

proposed rule, and the subsequent 

revisions to the proposed rule in 

response to those comments. Several of 

the public comments indicated general 

support for the plain language rewrite 

effort, or for specific revisions in the 

proposed rule, but these comments will 

not be discussed individually. The 

remainder of the comments was 

organized into three categories: 

Category 1: Revisions Based on Plain 

Language Rules. 

The first category included comments 

directed to the application of plain 

language rules, and thus fell clearly 

within the scope of the rewrite effort. 

These suggested edits or changes were 

evaluated based on the application of 

plain language rules (e.g., the FAR 

Drafting Guide), as follows: 

The definitions of ‘‘computer 

database’’ and ‘‘technical data’’ were 

moved from 27.401 to 2.101 because 

these terms appear in multiple FAR 

Parts. The definition of ‘‘computer 

database’’ was further revised to replace 

the term ‘‘data’’ with the term ‘‘recorded 

information’’ to avoid any confusion 

regarding the specialized use of the term 

‘‘data’’ as it is defined at 27.401. 

The definition of ‘‘computer 

software’’ at 2.101 was conformed to the 

definition of that term as included in 

27.401 of the proposed rule (and the 

definition at 27.401 was removed) to 

ensure consistent use of the term 

throughout the FAR. 

A definition of ‘‘computer software 

documentation’’ has been added at FAR 

2.101. 

The heading for Subpart 27.2 was 

revised to refer to copyrights as well as 

patents. 

In 27.201–1(a), the phrase ‘‘on behalf 

of the Government’’ was clarified to 

specify that this determination depends 

on whether the Government has 

provided its ‘‘authorization or consent.’’

In 27.201–2(c)(2)(i), the undefined 

term ‘‘noncommercial item’’ was 

clarified as ‘‘items that are not 

commercial items.’’

In 27.302(i), the revisions clarify the 

guidance for contracting officers’ review 

and approval of a contractor’s request to 

transfer that contractor’s license rights. 

In 27.304–1(h), redundant language 

that repeated (with only minor 

paraphrasing) the text from the 

associated clause was replaced with a 

cross-reference to the appropriate clause 

paragraph. 

In 52.227–1(b), 52.227–2(c), and 

52.227–10(e), clause flow down 

language was conformed to FAR 

drafting conventions. 

In 52.227–13(c)(1)(ii) and 52.227–

13(h), the language was conformed to 

the plain language describing the same 

requirements at 52.227–11(h), and 

52.227–11(g), respectively. 

In 52.227–11(k) and 52.227–13(i), the 

guidance regarding flow down of the 

clauses to subcontractors was relocated 

to be the final paragraph in each clause, 

conformed to FAR drafting conventions, 

and clarified regarding the modification 

of clauses to identify the parties when 

flowed down to lower tiers. 

In 52.227–14(d)(1), the language was 

clarified to reference prohibitions by 

any Federal law or regulation, with 

export control and national security 

being examples rather than an allinclusive listing. 

In 52.227–19, the requirement to 

place a notice on delivered software was 

highlighted by relocation from the end 

of paragraph (b)(3) to its own new 

paragraph (c). 

One respondent argued against the 

use of the defined term ‘‘made’’ instead 

of the phrase ‘‘conceived or first 

actually reduced to practice’’ within the 

definition of ‘‘subject invention’’ at 

27.301 and associated clauses. This 

suggestion is not adopted. The 

combined revisions to the definitions 

‘‘made’’ and ‘‘subject invention’’ are 

more consistent with the plain language 

guidelines. 

One respondent recommended that 

the phrase ‘‘to the Government’’ should 

be added to the end of the FAR 

27.102(e) to clarify where the data is to 

be delivered. This suggestion is 

adopted. 

The final rule also incorporates a 

number of minor editorial, 

typographical, or grammatical 

corrections noted in the public 

comments. 

Category 2: Additional Revisions 

Within the Scope of This Case. 

The second category of comments 

raised issues or suggested changes that 

go beyond mere ‘‘plain language’’

conversions, but which the Councils 

determined were necessary for 

compliance with clear statutory or 

regulatory requirements, or otherwise 

mandated to resolve internal 

inconsistencies in the FAR Part 27 

coverage. These suggestions are 

discussed below. 

A number of comments stated that the 

proposed definition of ‘‘commercial 

computer software’’ at FAR 2.101 

restricts the scope of software that is to 

be treated as a commercial item under 

FAR 12.212, and is therefore 

inconsistent with the requirements of 

the Federal Acquisition Streamlining 

Act (‘‘FASA’’), Pub. L. No. 103–355, 108 

Stat. 3243 (1994). The comments 

recommended either the elimination or 

redrafting of the proposed definition. 

The final rule resolves this issue by 

redefining commercial computer 

software as the intersection of two 

defined categories of items: ‘‘computer 

software’’ and ‘‘commercial item.’’

Two respondents recommended that 

the term ‘‘computer software 

documentation’’ be defined in a manner 

generally consistent with the definition 

of that term in the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) at 252.227–7014(a)(5). The 

term has been defined at 2.101 using the 

DFARS definition. 

One respondent noted that the time 

periods associated with the restrictive 

markings challenge procedures in the 

clause at 52.227–14(e) are inconsistent 

with the time periods specified in 41 

U.S.C. 253d. The commenter 

recommended changing the 30-day 

contractor response period to 60 days, 

and eliminating the 90-day limit. These 

corrections are implemented at 52.227–

14(e)(1)(i) and (ii), respectively. 

The phrase ‘‘without unduly 

encumbering future research and 

discovery’’ has been added to 

27.302(a)(3) and 27.304–1(c)(2) to reflect 

changes to 35 U.S.C. 200 made in 2000. 

Two respondents stated that the 

revision of the definition of ‘‘computer 

software’’ to exclude ‘‘computer 

databases’’ and the revision of the 

definition of ‘‘technical data’’ to include 

‘‘computer databases’’ were substantive 

changes and beyond the scope of this 

rulemaking. They recommended that 

databases be treated as computer 

software. These recommendations are 

not adopted. The definition of 

‘‘computer database’’ is consistent with 

the policy and intent of 27.404–2(c)(3) 

(formerly 27.404(d)(3)), and 52.227–

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Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 63047 

14(g)(2) (formerly (g)(1)). Similarly, this 

approach is consistent with the 

treatment of computer databases under 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) (see 

DFARS 252.227–7014(a)(2)). The 

individual elements of recorded 

information that are stored or formatted 

for delivery as a database must be 

distinguished from the computer 

software that may be required to view or 

manipulate the content of the database 

using a computer. 

One respondent suggested that the 

term ‘‘commercial computer software’’

had been substituted for ‘‘restricted 

computer software’’ in FAR 27.405–3 

and 52.227–19, and that these revised 

sections change acquisition policy by 

discouraging use of commercial terms 

and conditions for the acquisition of 

computer software, which is 

inconsistent with FAR 12.212. There 

has been no change in policy from that 

expressed in FAR 12.212. Under the 

preexisting Part 27 scheme, the clause at 

52.227–19 was prescribed for use with 

‘‘existing computer software,’’ which 

was defined at former 27.405(b)(2) as 

software that was normally vended 

commercially. Thus, the term 

‘‘restricted computer software’’ in that 

clause was applied only to ‘‘existing 

computer software’’ which was 

intended to mean commercial computer 

software. Furthermore, the revised 

27.405–3 expressly states that 

commercial computer software shall be 

acquired under licenses customarily 

provided to the public to the extent the 

license is consistent with Federal law 

and otherwise satisfies the 

Government’s needs, and refers to 

12.212 for further guidance in acquiring 

commercial computer software. 

Similarly, 12.212(b) has been revised to 

reference 27.405–3 for guidance when 

negotiating licenses for commercial 

computer software (e.g., when the 

standard commercial license is 

inconsistent with federal law or does 

not meet the Government’s needs). The 

use of the clause 52.227–19 is discussed 

further in the Category 3 comments 

below. 

One respondent noted that the 

reference to the ‘‘date of determination 

defined at 7 U.S.C. 2401(d’’) within the 

definition of ‘‘subject invention’’ at 

27.301 and the associated clauses is 

improper because the cited section of 

the Plant Variety Protection Act (PVPA) 

has been deleted, and recommended 

that the citation be deleted. This 

suggestion is partially adopted. 

Although the statutory citation is 

outdated, the concept of a ‘‘date of 

determination’’ is still relevant and 

required under the statutory scheme 

(see 35 U.S.C. 201) to define the 

inventive event that connects the 

invention of a plant variety to a 

particular Federal contract. 

Accordingly, the substance of the 

previously codified definition of ‘‘date 

of determination’’ has been incorporated 

into the definition of the term ‘‘made,’’

at 27.301 and the associated clauses, as 

it applies to plant varieties. 

Additionally, further changes were 

made to the clause language to remove 

ambiguities regarding the contractor’s 

ability to pursue PVPA protection as an 

alternative to patent protection (e.g., 

where the nomenclature that is used to 

reference patent requirements could 

have been mistakenly interpreted to 

exclude the equivalent under PVPA). 

One commenter argued that the 

flowdown provisions at 52.227–13(i) are 

potentially inconsistent with the BayhDole Act (BDA) when that clause is used 

in a subcontract with a small business 

or nonprofit organization that is 

otherwise entitled to the standard BDA 

terms and conditions. These flowdown 

provisions are revised to conform to the 

BDA requirements. 

After the publication of the proposed 

rule, and the expiration of the public 

comment period, the BDA 

implementing regulations at 37 CFR Part 

401 were revised (69 FR 17299) to 

provide an alternate version of the 

patent rights clause for contractors 

supporting works under cooperative 

research and development agreements. 

Thus, a change is necessary to 

implement this modification in the 

regulatory implementation of the BDA. 

The alternate language from 37 CFR 

401.14(c) as prescribed by 37 CFR 

401.3(c) is incorporated as a new 

Alternate V to the basic clause at FAR 

52.227–11, with appropriate 

prescriptive language at 27.303(b)(7). 

Additional revisions were made to the 

coverage for Small Business Innovation 

Research (SBIR), to accommodate 

changes in the relevant SBIR statute 

(Pub. L. 106–554) and the Small 

Business Administration’s SBIR 

Program Policy Directive (67 FR 60071). 

It was clarified that SBIR data rights also 

apply to phase three awards, and that 

the minimum four-year protection 

period can be extended in appropriate 

circumstances. See 27.409(h), and 

52.227–20(d). 

Category 3: Recommendations for 

Substantive Changes Beyond the Scope 

of This Case. 

The third category included 

comments suggesting edits that were 

substantive in nature, but which the 

Councils determined were not required 

to implement statutory or regulatory 

requirements. Accordingly, regardless of 

the merits of any individual 

recommendation, none of these 

comments were eligible for inclusion in 

the final rule because they exceeded the 

scope of the rulemaking effort. However, 

the Councils recognize that several of 

these comments raising substantive 

issues may be appropriate for further 

rulemaking efforts in the future. The 

following is an overview of the 

comments in this category: 

Two respondents suggested that 

27.404 and its clauses be modified to 

state more clearly that the Government’s 

unlimited rights license in technical 

data that is funded exclusively at 

Government expense is applicable only 

when delivery of that data is required as 

an element of performance and is 

necessary to ensure the competitive 

acquisition of supplies or services in 

substantial quantities in the future, 

citing 41 U.S.C. 418a(b)(1). One 

responder suggested further that the Part 

27 materials should implement the 

concept of ‘‘government purpose rights 

for mixed funding,’’ citing 41 U.S.C. 

418a(b)(2). Neither comment 

recommends specific language. The 

Councils note that Part 27 addresses 

delivery requirements independently of 

the license rights in those deliverables, 

and that there is no mention of a ‘‘mixed 

funding’’ criteria in the cited statute. In 

any case, the Part 27 implementation of 

the cited statutory requirements is well 

established, and any significant change 

in the overall scheme for specifying 

delivery requirements or license rights 

is beyond the scope of this plain 

language rewrite. 

Several respondents suggested that 

the clause at 52.227–19 be eliminated in 

favor of using the vendor’s standard 

commercial computer software license, 

arguing that this is the policy stated at 

FAR 12.212. Elimination of the clause is 

unnecessary; the policies and 

procedures at 12.212 and 27.405–3 are 

entirely consistent and have been 

revised to cross-reference one another. 

As stated at 27.405–3, the clause at 

52.227–19 is provided as one optional 

solution when the standard commercial 

computer software license is inadequate 

under the criteria specified at 12.212 

(e.g., when the standard commercial 

license is inconsistent with federal law 

or otherwise does not satisfy agency 

needs). 

One respondent recommended that 

the final rule further limit an agency’s 

ability to restrict the publication or 

release of data first produced in the 

performance of the contract. 

One respondent recommended 

revising the policies and procedures 

regarding the delivery of data without 

restrictive markings at 52.227–14(f). 

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63048 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 

One respondent recommended using 

the term ‘‘may’’ rather than ‘‘should’’ at 

27.102(c). These terms are not 

equivalent, and thus the change is more 

than a plain language edit. 

Two respondents recommended 

eliminating the requirement to obtain 

the contracting officer’s permission 

before asserting copyright in data first 

produced in the performance of the 

contract. 

One respondent suggested further 

broadening the government’s acceptance 

of standard commercial terms and 

conditions. 

Two respondents recommended 

modification of the government’s 

license rights in restricted computer 

software to more closely resemble 

commercial licenses. 

One respondent recommended the 

elimination of portions of the Rights in 

Data—General clause at FAR 52.227–14. 

One respondent recommended 

harmonizing the patent, data, and 

copyright sections of the FAR and 

DFARS. 

One respondent recommended adding 

coverage to specifically address the use 

or delivery of ‘‘open source’’ software. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

B. Regulatory Flexibility Act 

The Department of Defense, the 

General Services Administration, and 

the National Aeronautics and Space 

Administration certify that this final 

rule will not have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because most 

changes in the rule are plain language 

changes and the other changes have 

minimal economic impact. 

* The changes to the policies, 

procedures, and contract clauses 

pertaining to patents that were 

necessary to reflect current patent law 

and the current practices at the U.S. 

Patent and Trademark Office, do not 

impose any significant economic burden 

on small businesses. 

* The changes to implement the 

‘‘Small Business Innovation Research 

Program Policy Directive’’ of the Small 

Business Administration allow the 

small business contractor to extend the 

period during which it is allowed to 

treat data and software as proprietary. 

Small business entities are entirely free 

to choose whether to utilize this new 

and enhanced capability. The 

procedures for extension of the 

protection period are set forth in the 

Small Business Innovation Research 

Program Policy Directive, not this FAR 

rule, which just references the policy 

directive. 

There were no public comments from 

small entities in response to the 

statement in the Federal Register notice 

for the proposed rule that the Councils 

did not expect the proposed rule to have 

a significant economic impact on a 

substantial number of small entities. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act applies 

because, as discussed in the preamble to 

the proposed rule, the clause 52.227–12 

is being removed from the FAR and will 

be incorporated into the Defense Federal 

Acquisition Regulation Supplement 

(DFARS). The current paperwork 

burden associated with Part 27 of the 

FAR has already been cleared under 

OMB Control Numbers 9000–0090 and 

9000–0095. OMB clearance 9000–0095 

covers the burdens associated with FAR 

patent rights clauses 52.227–11, 52.227–

12, and 52.227–13. We estimate that 

removal of the clause at 52.227–12 will 

reduce the approved FAR burden by 

21,528 hours (from 45,630 hours to 

24,102 hours), but there will be a 

corresponding increase under another 

case in the estimated burden hours 

under OMB clearance 0704–0369. There 

will be no change to OMB clearance 

9000–0090, which covers FAR data 

rights clauses (52.227–14 through 

52.227–23), and is currently approved at 

2,970 hours. As a result, these changes 

to the FAR do not impose additional 

information collection requirements to 

the previously approved paperwork 

burden. 

List of Subjects in 48 CFR Parts 2, 3, 12, 

15, 18, 19, 27, 33, and 52 

Government procurement. 

Dated: October 31, 2007. 

Al Matera, 

Director, Contract Policy Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 2, 3, 12, 15, 18, 19, 

27, 33, and 52 as set forth below: 

■ 1. The authority citation for 48 CFR 

parts 2, 3, 12, 15, 18, 19, 27, 33, and 52 

continues to read as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 2—DEFINITIONS OF WORDS 

AND TERMS 

■ 2. Amend section 2.101 in paragraph 

(b)(2) by—

■ a. Adding the definitions 

‘‘Commercial computer software’’ and 

‘‘Computer database’’; 

■ b. Revising the definition ‘‘Computer 

software’’; 

■ c. Adding the definitions ‘‘Computer 

software documentation’’, ‘‘Small 

business concern’’, and ‘‘Technical 

data’’, and 

■ d. Amending the definition ‘‘United 

States’’, by redesignating paragraph (6) 

as paragraph (7), and adding a new 

paragraph (6). 

■ The added and revised text reads as 

follows: 

2.101 Definitions. 

* * * * * 

(b) * * * 

(2) * * * 

Commercial computer software means 

any computer software that is a 

commercial item. 

* * * * * 

Computer database or database 

means a collection of recorded 

information in a form capable of, and for 

the purpose of, being stored in, 

processed, and operated on by a 

computer. The term does not include 

computer software. 

Computer software—(1) Means (i) 

Computer programs that comprise a 

series of instructions, rules, routines, or 

statements, regardless of the media in 

which recorded, that allow or cause a 

computer to perform a specific 

operation or series of operations; and 

(ii) Recorded information comprising 

source code listings, design details, 

algorithms, processes, flow charts, 

formulas, and related material that 

would enable the computer program to 

be produced, created, or compiled. 

(2) Does not include computer 

databases or computer software 

documentation. 

Computer software documentation 

means owner’s manuals, user’s manuals, 

installation instructions, operating 

instructions, and other similar items, 

regardless of storage medium, that 

explain the capabilities of the computer 

software or provide instructions for 

using the software. 

* * * * * 

Small business concern means a 

concern, including its affiliates, that is 

independently owned and operated, not 

dominant in the field of operation in 

which it is bidding on Government 

contracts, and qualified as a small 

business under the criteria and size 

standards in 13 CFR part 121 (see 

19.102). Such a concern is ‘‘not 

dominant in its field of operation’’ when 

it does not exercise a controlling or 

major influence on a national basis in a 

kind of business activity in which a 

number of business concerns are 

primarily engaged. In determining 

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Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 63049 

whether dominance exists, 

consideration must be given to all 

appropriate factors, including volume of 

business, number of employees, 

financial resources, competitive status 

or position, ownership or control of 

materials, processes, patents, license 

agreements, facilities, sales territory, 

and nature of business activity. (See 15 

U.S.C. 632.) 

* * * * * 

Technical data means recorded 

information (regardless of the form or 

method of the recording) of a scientific 

or technical nature (including computer 

databases and computer software 

documentation). This term does not 

include computer software or financial, 

administrative, cost or pricing, or 

management data or other information 

incidental to contract administration. 

The term includes recorded information 

of a scientific or technical nature that is 

included in computer databases (See 41 

U.S.C. 403(8)). 

* * * * * 

United States * * * 

(6) For use in Part 27, see the 

definition at 27.001. 

* * * * * 

PART 3—IMPROPER BUSINESS 

PRACTICES AND PERSONAL 

CONFLICTS OF INTEREST 

3.104–4 [Amended] 

■ 3. Amend section 3.104–4 in 

paragraph (d)(3) by removing 

‘‘27.404(h)’’ and adding ‘‘27.404–5’’ in 

its place. 

PART 12—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 4. Amend section 12.212 by adding a 

sentence to the end of paragraph (b) to 

read as follows: 

12.212 Computer software. 

* * * * * 

(b) * * * For additional guidance 

regarding the use and negotiation of 

license agreements for commercial 

computer software, see 27.405–3. 

PART 15—CONTRACTING BY 

NEGOTIATION 

15.408 [Amended] 

■ 5. Amend section 15.408 in Table 15–

2, ‘‘II. Cost Elements’’ which follows 

paragraph (m)(4), by removing from 

paragraph ‘‘E(10)’’ ‘‘FAR 27.204’’ and 

adding ‘‘FAR 27.202’’ in its place. 

PART 18—EMERGENCY 

ACQUISITIONS 

18.119 [Amended] 

■ 6. Amend section 18.119 by removing 

‘‘See 27.208’’ and adding ‘‘See 27.204–

1’’ in its place. 

PART 19—SMALL BUSINESS 

PROGRAMS 

19.001 [Amended] 

■ 7. Amend section 19.001 by removing 

the definition ‘‘Small business 

concern’’. 

■ 8. Revise Part 27 to read as follows: 

PART 27—PATENTS, DATA, AND 

COPYRIGHTS 

Sec. 

27.000 Scope of part. 

27.001 Definition. 

Subpart 27.1—General 

27.101 Applicability. 

27.102 General guidance. 

Subpart 27.2—Patents and Copyrights 

27.200 Scope of subpart. 

27.201 Patent and copyright infringement 

liability. 

27.201–1 General. 

27.201–2 Contract clauses. 

27.202 Royalties. 

27.202–1 Reporting of royalties. 

27.202–2 Notice of Government as a 

licensee. 

27.202–3 Adjustment of royalties. 

27.202–4 Refund of royalties. 

27.202–5 Solicitation provisions and 

contract clause. 

27.203 Security requirements for patent 

applications containing classified subject 

matter. 

27.203–1 General. 

27.203–2 Contract clause. 

27.204 Patented technology under trade 

agreements. 

27.204–1 Use of patented technology under 

the North American Free Trade 

Agreement. 

27.204–2 Use of patented technology under 

the General Agreement on Tariffs and 

Trade (GATT). 

Subpart 27.3—Patent Rights under 

Government Contracts 

27.300 Scope of subpart. 

27.301 Definitions. 

27.302 Policy. 

27.303 Contract clauses. 

27.304 Procedures. 

27.304–1 General. 

27.304–2 Contracts placed by or for other 

Government agencies. 

27.304–3 Subcontracts. 

27.304–4 Appeals. 

27.305 Administration of patent rights 

clauses. 

27.305–1 Goals. 

27.305–2 Administration by the 

Government. 

27.305–3 Securing invention rights 

acquired by the Government. 

27.305–4 Protection of invention 

disclosures. 

27.306 Licensing background patent rights 

to third parties. 

Subpart 27.4—Rights in Data and 

Copyrights 

27.400 Scope of subpart. 

27.401 Definitions. 

27.402 Policy. 

27.403 Data rights—General. 

27.404 Basic rights in data clause. 

27.404–1 Unlimited rights data. 

27.404–2 Limited rights data and restricted 

computer software. 

27.404–3 Copyrighted works. 

27.404–4 Contractor’s release, publication, 

and use of data. 

27.404–5 Unauthorized, omitted, or 

incorrect markings. 

27.404–6 Inspection of data at the 

contractor’s facility. 

27.405 Other data rights provisions. 

27.405–1 Special works. 

27.405–2 Existing works. 

27.405–3 Commercial computer software. 

27.405–4 Other existing data. 

27.406 Acquisition of data. 

27.406–1 General. 

27.406–2 Additional data requirements. 

27.406–3 Major system acquisition. 

27.407 Rights to technical data in 

successful proposals. 

27.408 Cosponsored research and 

development activities. 

27.409 Solicitation provisions and contract 

clauses. 

Subpart 27.5—Foreign License and 

Technical Assistance Agreements 

27.501 General. 

27.000 Scope of part. 

This part prescribes the policies, 

procedures, solicitation provisions, and 

contract clauses pertaining to patents, 

data, and copyrights. 

27.001 Definition. 

United States, as used in this part, 

means the 50 States and the District of 

Columbia, U.S. territories and 

possessions, Puerto Rico, and the 

Northern Mariana Islands. 

Subpart 27.1—General 

27.101 Applicability. 

This part applies to all agencies. 

However, agencies are authorized to 

adopt alternative policies, procedures, 

solicitation provisions, and contract 

clauses to the extent necessary to meet 

the specific requirements of laws, 

executive orders, treaties, or 

international agreements. Any agency 

adopting alternative policies, 

procedures, solicitation provisions, and 

contract clauses should include them in 

the agency’s published regulations. 

27.102 General guidance. 

(a) The Government encourages the 

maximum practical commercial use of 

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inventions made under Government 

contracts. 

(b) Generally, the Government will 

not refuse to award a contract on the 

grounds that the prospective contractor 

may infringe a patent. The Government 

may authorize and consent to the use of 

inventions in the performance of certain 

contracts, even though the inventions 

may be covered by U.S. patents. 

(c) Generally, contractors providing 

commercial items should indemnify the 

Government against liability for the 

infringement of U.S. patents. 

(d) The Government recognizes rights 

in data developed at private expense, 

and limits its demands for delivery of 

that data. When such data is delivered, 

the Government will acquire only those 

rights essential to its needs. 

(e) Generally, the Government 

requires that contractors obtain 

permission from copyright owners 

before including copyrighted works, 

owned by others, in data to be delivered 

to the Government. 

Subpart 27.2—Patents and Copyrights 

27.200 Scope of subpart. 

This subpart prescribes policies and 

procedures with respect to—

(a) Patent and copyright infringement 

liability; 

(b) Royalties; 

(c) Security requirements for patent 

applications containing classified 

subject matter; and 

(d) Patented technology under trade 

agreements. 

27.201 Patent and copyright infringement 

liability. 

27.201–1 General. 

(a) Pursuant to 28 U.S.C. 1498, the 

exclusive remedy for patent or copyright 

infringement by or on behalf of the 

Government is a suit for monetary 

damages against the Government in the 

Court of Federal Claims. There is no 

injunctive relief available, and there is 

no direct cause of action against a 

contractor that is infringing a patent or 

copyright with the authorization or 

consent of the Government (e.g., while 

performing a contract). 

(b) The Government may expressly 

authorize and consent to a contractor’s 

use or manufacture of inventions 

covered by U.S. patents by inserting the 

clause at 52.227–1, Authorization and 

Consent. 

(c) Because of the exclusive remedies 

granted in 28 U.S.C. 1498, the 

Government requires notice and 

assistance from its contractors regarding 

any claims for patent or copyright 

infringement by inserting the clause at 

52.227–2, Notice and Assistance, 

Regarding Patent and Copyright 

Infringement. 

(d) The Government may require a 

contractor to reimburse it for liability for 

patent infringement arising out of a 

contract for commercial items by 

inserting the clause at FAR 52.227–3, 

Patent Indemnity. 

27.201–2 Contract clauses. 

(a)(1) Insert the clause at 52.227–1, 

Authorization and Consent, in 

solicitations and contracts except that 

use of the clause is—

(i) Optional when using simplified 

acquisition procedures; and 

(ii) Prohibited when both complete 

performance and delivery are outside 

the United States. 

(2) Use the clause with its Alternate 

I in all R&D solicitations and contracts 

for which the primary purpose is R&D 

work, except that this alternate shall not 

be used in construction and architectengineer contracts unless the contract 

calls exclusively for R&D work. 

(3) Use the clause with its Alternate 

II in solicitations and contracts for 

communication services with a common 

carrier and the services are unregulated 

and not priced by a tariff schedule set 

by a regulatory body. 

(b) Insert the clause at 52.227–2, 

Notice and Assistance Regarding Patent 

and Copyright Infringement, in all 

solicitations and contracts that include 

the clause at 52.227–1, Authorization 

and Consent. 

(c)(1) Insert the clause at 52.227–3, 

Patent Indemnity, in solicitations and 

contracts that may result in the delivery 

of commercial items, unless—

(i) Part 12 procedures are used; 

(ii) The simplified acquisition 

procedures of Part 13 are used; 

(iii) Both complete performance and 

delivery are outside the United States; 

or 

(iv) The contracting officer determines 

after consultation with legal counsel 

that omission of the clause would be 

consistent with commercial practice. 

(2) Use the clause with either its 

Alternate I (identification of excluded 

items) or II (identification of included 

items) if—

(i) The contract also requires delivery 

of items that are not commercial items; 

or 

(ii) The contracting officer determines 

after consultation with legal counsel 

that limitation of applicability of the 

clause would be consistent with 

commercial practice. 

(3) Use the clause with its Alternate 

III if the solicitation or contract is for 

communication services and facilities 

where performance is by a common 

carrier, and the services are unregulated 

and are not priced by a tariff schedule 

set by a regulatory body. 

(d)(1) Insert the clause at 52.227–4, 

Patent Indemnity—Construction 

Contracts, in solicitations and contracts 

for construction or that are fixed-price 

for dismantling, demolition, or removal 

of improvements. Do not insert the 

clause in contracts solely for architectengineer services. 

(2) If the contracting officer 

determines that the construction will 

necessarily involve the use of structures, 

products, materials, equipment, 

processes, or methods that are 

nonstandard, noncommercial, or 

special, the contracting officer may 

expressly exclude them from the patent 

indemnification by using the clause 

with its Alternate I. Note that this 

exclusion is for items, as distinguished 

from identified patents (see paragraph 

(e) of this subsection). 

(e) It may be in the Government’s 

interest to exempt specific U.S. patents 

from the patent indemnity clause. 

Exclusion from indemnity of identified 

patents, as distinguished from items, is 

the prerogative of the agency head. 

Upon written approval of the agency 

head, the contracting officer may insert 

the clause at 52.227–5, Waiver of 

Indemnity, in solicitations and contracts 

in addition to the appropriate patent 

indemnity clause. 

(f) If a patent indemnity clause is not 

prescribed, the contracting officer may 

include one in the solicitation and 

contract if it is in the Government’s 

interest to do so. 

(g) The contracting officer shall not 

include in any solicitation or contract 

any clause whereby the Government 

agrees to indemnify a contractor for 

patent infringement. 

27.202 Royalties. 

27.202–1 Reporting of royalties. 

(a) To determine whether royalties 

anticipated or actually paid under 

Government contracts are excessive, 

improper, or inconsistent with 

Government patent rights the 

solicitation provision at 52.227–6 

requires prospective contractors to 

furnish royalty information. The 

contracting officer shall take appropriate 

action to reduce or eliminate excessive 

or improper royalties. 

(b) If the response to a solicitation 

includes a charge for royalties, the 

contracting officer shall, before award of 

the contract, forward the information to 

the office having cognizance of patent 

matters for the contracting activity. The 

cognizant office shall promptly advise 

the contracting officer of appropriate 

action. 

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(c) The contracting officer, when 

considering the approval of a 

subcontract, shall require royalty 

information if it is required under the 

prime contract. The contracting officer 

shall forward the information to the 

office having cognizance of patent 

matters. However, the contracting 

officer need not delay consent while 

awaiting advice from the cognizant 

office. 

(d) The contracting officer shall 

forward any royalty reports to the office 

having cognizance of patent matters for 

the contracting activity. 

27.202–2 Notice of Government as a 

licensee. 

(a) When the Government is obligated 

to pay a royalty on a patent because of 

an existing license agreement and the 

contracting officer believes that the 

licensed patent will be applicable to a 

prospective contract, the Government 

should furnish the prospective offerors 

with—

(1) Notice of the license; 

(2) The number of the patent; and 

(3) The royalty rate cited in the 

license. 

(b) When the Government is obligated 

to pay such a royalty, the solicitation 

should also require offerors to furnish 

information indicating whether or not 

each offeror is the patent owner or a 

licensee under the patent. This 

information is necessary so that the 

Government may either—

(1) Evaluate an offeror’s price by 

adding an amount equal to the royalty; 

or 

(2) Negotiate a price reduction with 

an offeror when the offeror is licensed 

under the same patent at a lower royalty 

rate. 

27.202–3 Adjustment of royalties. 

(a) If at any time the contracting 

officer believes that any royalties paid, 

or to be paid, under a contract or 

subcontract are inconsistent with 

Government rights, excessive, or 

otherwise improper, the contracting 

officer shall promptly report the facts to 

the office having cognizance of patent 

matters for the contracting activity 

concerned. 

(b) In coordination with the cognizant 

office, the contracting officer shall 

promptly act to protect the Government 

against payment of royalties—

(1) With respect to which the 

Government has a royalty-free license; 

(2) At a rate in excess of the rate at 

which the Government is licensed; or 

(3) When the royalties in whole or in 

part otherwise constitute an improper 

charge. 

(c) In appropriate cases, the 

contracting officer in coordination with 

the cognizant office shall demand a 

refund pursuant to any refund of 

royalties clause in the contract (see 

27.202–4) or negotiate for a reduction of 

royalties. 

(d) For guidance in evaluating 

information furnished pursuant to 

27.202–1, see 31.205–37. See also 

31.109 regarding advance 

understandings on particular cost items, 

including royalties. 

27.202–4 Refund of royalties. 

The clause at 52.227–9, Refund of 

Royalties, establishes procedures to pay 

the contractor royalties under the 

contract and recover royalties not paid 

by the contractor when the royalties 

were included in the contractor’s fixed 

price. 

27.202–5 Solicitation provisions and 

contract clause. 

(a)(1) Insert a solicitation provision 

substantially the same as the provision 

at 52.227–6, Royalty Information, in—

(i) Any solicitation that may result in 

a negotiated contract for which royalty 

information is desired and for which 

cost or pricing data are obtained under 

15.403; or 

(ii) Sealed bid solicitations only if the 

need for such information is approved 

at a level above the contracting officer 

as being necessary for proper protection 

of the Government’s interests. 

(2) If the solicitation is for 

communication services and facilities 

by a common carrier, use the provision 

with its Alternate I. 

(b) If the Government is obligated to 

pay a royalty on a patent involved in the 

prospective contract, insert in the 

solicitation a provision substantially the 

same as the provision at 52.227–7, 

Patents—Notice of Government 

Licensee. If the clause at 52.227–6 is not 

included in the solicitation, the 

contracting officer may require offerors 

to provide information sufficient to 

provide this notice to the other offerors. 

(c) Insert the clause at 52.227–9, 

Refund of Royalties, in negotiated fixedprice solicitations and contracts when 

royalties may be paid under the 

contract. If a fixed-price incentive 

contract is contemplated, change 

‘‘price’’ to ‘‘target cost and target profit’’

wherever it appears in the clause. The 

clause may be used in costreimbursement contracts where agency 

approval of royalties is necessary to 

protect the Government’s interests. 

27.203 Security requirements for patent 

applications containing classified subject 

matter. 

27.203–1 General. 

(a) Unauthorized disclosure of 

classified subject matter, whether in 

patent applications or resulting from the 

issuance of a patent, may be a violation 

of 18 U.S.C. 792, et seq. (Chapter 37—

Espionage and Censorship), and related 

statutes, and may be contrary to the 

interests of national security. 

(b) Upon receipt of a patent 

application under paragraph (a) or (b) of 

the clause at 52.227–10, Filing of Patent 

Applications—Classified Subject Matter, 

the contracting officer shall ascertain 

the proper security classification of the 

patent application. If the application 

contains classified subject matter, the 

contracting officer shall inform the 

contractor how to transmit the 

application to the United States Patent 

Office in accordance with procedures 

provided by legal counsel. If the 

material is classified ‘‘Secret’’ or higher, 

the contracting officer shall make every 

effort to notify the contractor within 30 

days of the Government’s 

determination, pursuant to paragraph (a) 

of the clause. 

(c) Upon receipt of information 

furnished by the contractor under 

paragraph (d) of the clause at 52.227–10, 

the contracting officer shall promptly 

submit that information to legal counsel 

in order that the steps necessary to 

ensure the security of the application 

will be taken. 

(d) The contracting officer shall act 

promptly on requests for approval of 

foreign filing under paragraph (c) of the 

clause at 52.227–10 in order to avoid the 

loss of valuable patent rights of the 

Government or the contractor. 

27.203–2 Contract clause. 

Insert the clause at 52.227–10, Filing 

of Patent Applications—Classified 

Subject Matter, in all classified 

solicitations and contracts and in all 

solicitations and contracts where the 

nature of the work reasonably might 

result in a patent application containing 

classified subject matter. 

27.204 Patented technology under trade 

agreements. 

27.204–1 Use of patented technology 

under the North American Free Trade 

Agreement. 

(a) The requirements of this section 

apply to the use of technology covered 

by a valid patent when the patent holder 

is from a country that is a party to the 

North American Free Trade Agreement 

(NAFTA). 

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(b) Article 1709(10) of NAFTA 

generally requires a user of technology 

covered by a valid patent to make a 

reasonable effort to obtain authorization 

prior to use of the patented technology. 

However, NAFTA provides that this 

requirement for authorization may be 

waived in situations of national 

emergency or other circumstances of 

extreme urgency, or for public 

noncommercial use. 

(c) Section 6 of Executive Order 

12889, ‘‘Implementation of the North 

American Free Trade Act,’’ of December 

27, 1993, waives the requirement to 

obtain advance authorization for an 

invention used or manufactured by or 

for the Federal Government. However, 

the patent owner shall be notified in 

advance whenever the agency or its 

contractor knows or has reasonable 

grounds to know, without making a 

patent search, that an invention 

described in and covered by a valid U.S. 

patent is or will be used or 

manufactured without a license. In 

cases of national emergency or other 

circumstances of extreme urgency, this 

notification need not be made in 

advance, but shall be made as soon as 

reasonably practicable. 

(d) The contracting officer, in 

consultation with the office having 

cognizance of patent matters, shall 

ensure compliance with the notice 

requirements of NAFTA Article 

1709(10) and Executive Order 12889. A 

contract award should not be suspended 

pending notification to the patent 

owner. 

(e) Section 6(c) of Executive Order 

12889 provides that the notice to the 

patent owner does not constitute an 

admission of infringement of a valid 

privately-owned patent. 

(f) When addressing issues regarding 

compensation for the use of patented 

technology, Government personnel 

should be advised that NAFTA uses the 

term ‘‘adequate remuneration.’’

Executive Order 12889 equates 

‘‘remuneration’’ to ‘‘reasonable and 

entire compensation’’ as used in 28 

U.S.C. 1498, the statute that gives 

jurisdiction to the U.S. Court of Federal 

Claims to hear patent and copyright 

cases involving infringement by the 

Government. 

(g) When questions arise regarding the 

notice requirements or other matters 

relating to this section, the contracting 

officer should consult with legal 

counsel. 

27.204–2 Use of patented technology 

under the General Agreement on Tariffs and 

Trade (GATT). 

Article 31 of Annex 1C, Agreement on 

Trade-Related Aspects of Intellectual 

Property Rights, to GATT (Uruguay 

Round) addresses situations where the 

law of a member country allows for use 

of a patent without authorization, 

including use by the Government. 

Subpart 27.3—Patent Rights under 

Government Contracts 

27.300 Scope of subpart. 

This subpart prescribes policies, 

procedures, solicitation provisions, and 

contract clauses pertaining to inventions 

made in the performance of work under 

a Government contract or subcontract 

for experimental, developmental, or 

research work. Agency policies, 

procedures, solicitation provisions, and 

contract clauses may be specified in 

agency supplemental regulations as 

permitted by law, including 37 CFR 

401.1. 

27.301 Definitions. 

As used in this subpart—

Invention means any invention or 

discovery that is or may be patentable 

or otherwise protectable under title 35 

of the U.S. Code, or any variety of plant 

that is or may be protectable under the 

Plant Variety Protection Act (7 U.S.C. 

2321, et seq.) 

Made means—

(1) When used in relation to any 

invention other than a plant variety, 

means the conception or first actual 

reduction to practice of the invention; or 

(2) When used in relation to a plant 

variety, means that the contractor has at 

least tentatively determined that the 

variety has been reproduced with 

recognized characteristics. 

Nonprofit organization means a 

university or other institution of higher 

education or an organization of the type 

described in section 501(c)(3) of the 

Internal Revenue Code of 1954 (26 

U.S.C. 501(c)) and exempt from taxation 

under section 501(a) of the Internal 

Revenue Code (26 U.S.C. 501(a)), or any 

nonprofit scientific or educational 

organization qualified under a State 

nonprofit organization statute. 

Practical application means to 

manufacture, in the case of a 

composition or product; to practice, in 

the case of a process or method; or to 

operate, in the case of a machine or 

system; and, in each case, under such 

conditions as to establish that the 

invention is being utilized and that its 

benefits are, to the extent permitted by 

law or Government regulations, 

available to the public on reasonable 

terms. 

Subject invention means any 

invention of the contractor made in the 

performance of work under a 

Government contract. 

27.302 Policy. 

(a) Introduction. In accordance with 

chapter 18 of title 35, U.S.C. (as 

implemented by 37 CFR part 401), 

Presidential Memorandum on 

Government Patent Policy to the Heads 

of Executive Departments and Agencies 

dated February 18, 1983, and Executive 

Order 12591, Facilitating Access to 

Science and Technology dated April 10, 

1987, it is the policy and objective of the 

Government to—

(1) Use the patent system to promote 

the use of inventions arising from 

federally supported research or 

development; 

(2) Encourage maximum participation 

of industry in federally supported 

research and development efforts; 

(3) Ensure that these inventions are 

used in a manner to promote free 

competition and enterprise without 

unduly encumbering future research 

and discovery; 

(4) Promote the commercialization 

and public availability of the inventions 

made in the United States by United 

States industry and labor; 

(5) Ensure 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; and 

(6) Minimize the costs of 

administering patent policies. 

(b) Contractor right to elect title. (1) 

Generally, pursuant to 35 U.S.C. 202 

and the Presidential Memorandum and 

Executive order cited in paragraph (a) of 

this section, each contractor may, after 

required disclosure to the Government, 

elect to retain title to any subject 

invention. 

(2) A contract may require the 

contractor to assign to the Government 

title to any subject invention—

(i) When the contractor is not located 

in the United States or does not have a 

place of business located in the United 

States or is subject to the control of a 

foreign government (see 27.303(e)(1)(i)); 

(ii) In exceptional circumstances, 

when an agency determines that 

restriction or elimination of the right to 

retain title in any subject invention will 

better promote the policy and objectives 

of chapter 18 of title 35, U.S.C. and the 

Presidential Memorandum; 

(iii) When a Government authority, 

that is authorized by statute or executive 

order to conduct foreign intelligence or 

counterintelligence activities, 

determines that the restriction or 

elimination of the right to retain title to 

any subject invention is necessary to 

protect the security of such activities; 

(iv) When the contract includes the 

operation of a Government-owned, 

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contractor-operated facility of the 

Department of Energy (DOE) primarily 

dedicated to the Department’s naval 

nuclear propulsion or weapons related 

programs and all funding agreement 

limitations under 35 U.S.C. 202(a)(iv) 

for agreements with small business 

concerns and nonprofit organizations 

are limited to inventions occurring 

under the above two programs; or 

(v) Pursuant to statute or in 

accordance with agency regulations. 

(3) When the Government has the 

right to acquire title to a subject 

invention, the contractor may, 

nevertheless, request greater rights to a 

subject invention (see 27.304–1(c)). 

(4) Consistent with 37 CFR part 401, 

when a contract with a small business 

concern or nonprofit organization 

requires assignment of title to the 

Government based on the exceptional 

circumstances enumerated in paragraph 

(b)(2)(ii) or (iii) of this section for 

reasons of national security, the contract 

shall still provide the contractor with 

the right to elect ownership to any 

subject invention that—

(i) Is not classified by the agency; or 

(ii) Is not limited from dissemination 

by the DOE within 6 months from the 

date it is reported to the agency. 

(5) Contracts in support of DOE’s 

naval nuclear propulsion program are 

exempted from this paragraph (b). 

(6) When a contract involves a series 

of separate task orders, an agency may 

structure the contract to apply the 

exceptions at paragraph (b)(2)(ii) or (iii) 

of this section to individual task orders. 

(c) Government license. The 

Government shall have at least a 

nonexclusive, nontransferable, 

irrevocable, paid-up license to practice, 

or have practiced for or on behalf of the 

United States, any subject invention 

throughout the world. The Government 

may require additional rights in order to 

comply with treaties or other 

international agreements. In such case, 

these rights shall be made a part of the 

contract (see 27.303). 

(d) Government right to receive title. 

(1) In addition to the right to obtain title 

to subject inventions pursuant to 

paragraph (b)(2)(i) through (v) of this 

section, the Government has the right to 

receive title to an invention—

(i) If the contractor has not disclosed 

the invention within the time specified 

in the clause; or 

(ii) In any country where the 

contractor—

(A) Does not elect to retain rights or 

fails to elect to retain rights to the 

invention within the time specified in 

the clause; 

(B) Has not filed a patent or plant 

variety protection application within 

the time specified in the clause; 

(C) Decides not to continue 

prosecution of a patent or plant variety 

protection application, pay maintenance 

fees, or defend in a reexamination or 

opposition proceeding on the patent; or 

(D) No longer desires to retain title. 

(2) For the purposes of this paragraph, 

filing in a European Patent Office 

Region or under the Patent Cooperation 

Treaty constitutes election in the 

countries selected in the application(s). 

(e) Utilization reports. The 

Government has the right to require 

periodic reporting on how any subject 

invention is being used by the 

contractor or its licensees or assignees. 

In accordance with 35 U.S.C. 202(c)(5) 

and 37 CFR part 401, agencies shall not 

disclose such utilization reports to 

persons outside the Government 

without permission of the contractor. 

Contractors should mark as 

confidential/proprietary any utilization 

report to help prevent inadvertent 

release outside the Government. 

(f) March-in rights. (1) Pursuant to 35 

U.S.C. 203, agencies have certain marchin rights that require the contractor, an 

assignee, or exclusive licensee of a 

subject invention to grant a 

nonexclusive, partially exclusive, or 

exclusive license in any field of use to 

responsible applicants, upon terms that 

are reasonable under the circumstances. 

If the contractor, assignee or exclusive 

licensee of a subject invention refuses to 

grant such a license, the agency can 

grant the license itself. March-in rights 

may be exercised only if the agency 

determines that this action is 

necessary—

(i) Because the contractor or assignee 

has not taken, or is not expected to take 

within a reasonable time, effective steps 

to achieve practical application of the 

subject invention in the field(s) of use; 

(ii) To alleviate health or safety needs 

that are not reasonably satisfied by the 

contractor, assignee, or their licensees; 

(iii) To meet requirements for public 

use specified by Federal regulations and 

these requirements are not reasonably 

satisfied by the contractor, assignee, or 

licensees; or 

(iv) Because the agreement required 

by paragraph (g) of this section has 

neither been obtained nor waived, or 

because a licensee of the exclusive right 

to use or sell any subject invention in 

the United States is in breach of its 

agreement obtained pursuant to 

paragraph (g) of this section. 

(2) The agency shall not exercise its 

march-in rights unless the contractor 

has been provided a reasonable time to 

present facts and show cause why the 

proposed agency action should not be 

taken. The agency shall provide the 

contractor an opportunity to dispute or 

appeal the proposed action, in 

accordance with 27.304–1(g). 

(g) Preference for United States 

industry. In accordance with 35 U.S.C. 

204, no contractor that receives title to 

any subject invention and no assignee of 

the contractor shall grant to any person 

the exclusive right to use or sell any 

subject invention in the United States 

unless that person agrees that any 

products embodying the subject 

invention or produced through the use 

of the subject invention will be 

manufactured substantially in the 

United States. However, in individual 

cases, the requirement for this 

agreement may be waived by the agency 

upon a showing by the contractor or 

assignee that reasonable but 

unsuccessful efforts have been made to 

grant licenses on similar terms to 

potential licensees that would be likely 

to manufacture substantially in the 

United States or that under the 

circumstances domestic manufacture is 

not commercially feasible. 

(h) Special conditions for nonprofit 

organizations’ preference for small 

business concerns. (1) Nonprofit 

organization contractors are expected to 

use reasonable efforts to attract small 

business licensees (see paragraph (i)(4) 

of the clause at 52.227–11, Patent 

Rights—Ownership by the Contractor). 

What constitutes reasonable efforts to 

attract small business licensees will 

vary with the circumstances and the 

nature, duration, and expense of efforts 

needed to bring the invention to the 

market. 

(2) Small business concerns that 

believe a nonprofit organization is not 

meeting its obligations under the clause 

may report the matter to the Secretary 

of Commerce. To the extent deemed 

appropriate, the Secretary of Commerce 

will undertake informal investigation of 

the matter, and may discuss or negotiate 

with the nonprofit organization ways to 

improve its efforts to meet its 

obligations under the clause. However, 

in no event will the Secretary of 

Commerce intervene in ongoing 

negotiations or contractor decisions 

concerning the licensing of a specific 

subject invention. These investigations, 

discussions, and negotiations involving 

the Secretary of Commerce will be in 

coordination with other interested 

agencies, including the Small Business 

Administration. In the case of a contract 

for the operation of a Governmentowned, contractor-operated research or 

production facility, the Secretary of 

Commerce will coordinate with the 

agency responsible for the facility prior 

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to any discussions or negotiations with 

the contractor. 

(i) Minimum rights to contractor. (1) 

When the Government acquires title to 

a subject invention, the contractor is 

normally granted a revocable, 

nonexclusive, paid-up license to that 

subject invention throughout the world. 

The contractor’s license extends to any 

of its domestic subsidiaries and 

affiliates within the corporate structure 

of which the contractor is a part and 

includes the right to grant sublicenses to 

the extent the contractor was legally 

obligated to do so at the time of contract 

award. The contracting officer shall 

approve or disapprove, in writing, any 

contractor request to transfer its 

licenses. No approval is necessary when 

the transfer is to the successor of that 

part of the contractor’s business to 

which the subject invention pertains. 

(2) In response to a third party’s 

proper application for an exclusive 

license, the contractor’s domestic 

license may be revoked or modified to 

the extent necessary to achieve 

expeditious practical application of the 

subject invention. The application shall 

be submitted in accordance with the 

applicable provisions in 37 CFR part 

404 and agency licensing regulations. 

The contractor’s license will not be 

revoked in that field of use or the 

geographical areas in which the 

contractor has achieved practical 

application and continues to make the 

benefits of the subject invention 

reasonably accessible to the public. The 

license in any foreign country may be 

revoked or modified to the extent the 

contractor, its licensees, or its domestic 

subsidiaries or affiliates have failed to 

achieve practical application in that 

country. (See the procedures at 27.304–

1(f).) 

(j) Confidentiality of inventions. 

Publishing information concerning an 

invention before a patent application is 

filed on a subject invention may create 

a bar to a valid patent. To avoid this bar, 

agencies may withhold information 

from the public that discloses any 

invention in which the Government 

owns or may own a right, title, or 

interest (including a nonexclusive 

license) (see 35 U.S.C. 205 and 37 CFR 

part 401). Agencies may only withhold 

information concerning inventions for a 

reasonable time in order for a patent 

application to be filed. Once filed in any 

patent office, agencies are not required 

to release copies of any document that 

is a part of a patent application for those 

subject inventions. (See also 27.305–4.) 

27.303 Contract clauses. 

(a)(1) Insert a patent rights clause in 

all solicitations and contracts for 

experimental, developmental, or 

research work as prescribed in this 

section. 

(2) This section also applies to 

solicitations or contracts for 

construction work or architect-engineer 

services that include—

(i) Experimental, developmental, or 

research work; 

(ii) Test and evaluation studies; or 

(iii) The design of a Government 

facility that may involve novel 

structures, machines, products, 

materials, processes, or equipment 

(including construction equipment). 

(3) The contracting officer shall not 

include a patent rights clause in 

solicitations or contracts for 

construction work or architect-engineer 

services that call for or can be expected 

to involve only ‘‘standard types of 

construction.’’ ‘‘Standard types of 

construction’’ are those involving 

previously developed equipment, 

methods, and processes and in which 

the distinctive features include only—

(i) Variations in size, shape, or 

capacity of conventional structures; or 

(ii) Purely artistic or aesthetic (as 

distinguished from functionally 

significant) architectural configurations 

and designs of both structural and 

nonstructural members or groupings, 

whether or not they qualify for design 

patent protection. 

(b)(1) Unless an alternative patent 

rights clause is used in accordance with 

paragraph (c), (d), or (e) of this section, 

insert the clause at 52.227–11, Patent 

Rights—Ownership by the Contractor. 

(2) To the extent the information is 

not required elsewhere in the contract, 

and unless otherwise specified by 

agency supplemental regulations, the 

contracting officer may modify 52.227–

11(e) or otherwise supplement the 

clause to require the contractor to do 

one or more of the following: 

(i) Provide periodic (but not more 

frequently than annually) listings of all 

subject inventions required to be 

disclosed during the period covered by 

the report. 

(ii) Provide a report prior to the 

closeout of the contract listing all 

subject inventions or stating that there 

were none. 

(iii) Provide the filing date, serial 

number, title, patent number and issue 

date for any patent application filed on 

any subject invention in any country or, 

upon request, copies of any patent 

application so identified. 

(iv) Furnish the Government an 

irrevocable power to inspect and make 

copies of the patent application file 

when a Government employee is a coinventor. 

(3) Use the clause with its Alternate 

I if the Government must grant a foreign 

government a sublicense in subject 

inventions pursuant to a specified treaty 

or executive agreement. The contracting 

officer may modify Alternate I, if the 

agency head determines, at contract 

award, that it would be in the national 

interest to sublicense foreign 

governments or international 

organizations pursuant to any existing 

or future treaty or agreement. When 

necessary to effectuate a treaty or 

agreement, Alternate I may be 

appropriately modified. 

(4) Use the clause with its Alternate 

II in contracts that may be affected by 

existing or future treaties or agreements. 

(5) Use the clause with its Alternate 

III in contracts with nonprofit 

organizations for the operation of a 

Government-owned facility. 

(6) If the contract is for the operation 

of a Government-owned facility, the 

contracting officer may use the clause 

with its Alternate IV. 

(7) If the contract is for the 

performance of services at a 

Government owned and operated 

laboratory or at a Government owned 

and contractor operated laboratory 

directed by the Government to fulfill the 

Government’s obligations under a 

Cooperative Research and Development 

Agreement (CRADA) authorized by 15 

U.S.C. 3710a, the contracting officer 

may use the clause with its Alternate V. 

Since this provision is considered an 

exercise of an agency’s ‘‘exceptional 

circumstances’’ authority, the 

contracting officer must comply with 37 

CFR 401.3(e) and 401.4. 

(c) Insert a patent rights clause in 

accordance with the procedures at 

27.304–2 if the solicitation or contract is 

being placed on behalf of another 

Government agency. 

(d) Insert a patent rights clause in 

accordance with agency procedures if 

the solicitation or contract is for DoD, 

DOE, or NASA, and the contractor is 

other than a small business concern or 

nonprofit organization. 

(e)(1) Except as provided in paragraph 

(e)(2) of this section, and after 

compliance with the applicable 

procedures in 27.304–1(b), the 

contracting officer may insert the clause 

at 52.227–13, Patent Rights—Ownership 

by the Government, or a clause 

prescribed by agency supplemental 

regulations, if—

(i) The contractor is not located in the 

United States or does not have a place 

of business located in the United States 

or is subject to the control of a foreign 

government; 

(ii) There are exceptional 

circumstances and the agency head 

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determines that restriction or 

elimination of the right to retain title to 

any subject invention will better 

promote the policy and objectives of 

chapter 18 of title 35 of the United 

States Code; 

(iii) A Government authority that is 

authorized by statute or executive order 

to conduct foreign intelligence or 

counterintelligence activities, 

determines that restriction or 

elimination of the right to retain any 

subject invention is necessary to protect 

the security of such activities; or 

(iv) The contract includes the 

operation of a Government-owned, 

contractor-operated facility of DOE 

primarily dedicated to that 

Department’s naval nuclear propulsion 

or weapons related programs. 

(2) If an agency exercises the 

exceptions at paragraph (e)(1)(ii) or (iii) 

of this section in a contract with a small 

business concern or a nonprofit 

organization, the contracting officer 

shall use the clause at 52.227–11 with 

only those modifications necessary to 

address the exceptional circumstances 

and shall include in the modified clause 

greater rights determinations procedures 

equivalent to those at 52.227–13(b)(2). 

(3) When using the clause at 52.227–

13, Patent Rights—Ownership by the 

Government, the contracting officer may 

supplement the clause to require the 

contractor to—

(i) Furnish a copy of each subcontract 

containing a patent rights clause (but if 

a copy of a subcontract is furnished 

under another clause, a duplicate shall 

not be requested under the patent rights 

clause); 

(ii) Submit interim and final 

invention reports listing subject 

inventions and notifying the contracting 

officer of all subcontracts awarded for 

experimental, developmental, or 

research work; 

(iii) Provide the filing date, serial 

number, title, patent number, and issue 

date for any patent application filed on 

any subject invention in any country or, 

upon specific request, copies of any 

patent application so identified; and 

(iv) Submit periodic reports on the 

utilization of a subject invention. 

(4) Use the clause at 52.227–13 with 

its Alternate I if—

(i) The Government must grant a 

foreign government a sublicense in 

subject inventions pursuant to a treaty 

or executive agreement; or 

(ii) The agency head determines, at 

contract award, that it would be in the 

national interest to sublicense foreign 

governments or international 

organizations pursuant to any existing 

or future treaty or agreement. If other 

rights are necessary to effectuate any 

treaty or agreement, Alternate I may be 

appropriately modified. 

(5) Use the clause at 52.227–13 with 

its Alternate II in the contract when 

necessary to effectuate an existing or 

future treaty or agreement. 

27.304 Procedures. 

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. 

27.304–2 Contracts placed by or for other 

Government agencies. 

The following procedures apply 

unless an interagency agreement 

provides otherwise: 

(a) When a Government agency 

requests another Government agency to 

award a contract on its behalf, the 

request should explain any special 

circumstances surrounding the contract 

and specify the patent rights clause to 

be used. The clause should be selected 

and modified, if necessary, in 

accordance with the policies and 

procedures of this subpart. If, however, 

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the request states that a clause of the 

requesting agency is required (e.g., 

because of statutory requirements, a 

deviation, or exceptional 

circumstances), the awarding agency 

shall use that clause rather than those of 

this subpart. 

(1) If the request states that an agency 

clause is required and the work to be 

performed under the contract is not 

severable and is funded wholly or in 

part by the requesting agency, then 

include the requesting agency clause 

and no other patent rights clause in the 

contract. 

(2) If the request states that an agency 

clause is required, and the work to be 

performed under the contract is 

severable, then the contracting officer 

shall assure that the requesting agency 

clause applies only to that severable 

portion of the work and that the work 

for the awarding agency is subject to the 

appropriate patent rights clause. 

(3) If the request states that a 

requesting agency clause is not required 

in any resulting contract, the awarding 

agency shall use the appropriate patent 

rights clause, if any. 

(b) Any action requiring an agency 

determination, report, or deviation 

involved in the use of the requesting 

agency’s clause is the responsibility of 

the requesting agency unless the 

agencies agree otherwise. However, the 

awarding agency may not alter the 

requesting agency’s clause without prior 

approval of the requesting agency. 

(c) The requesting agency may 

require, and provide instructions 

regarding, the forwarding or handling of 

any invention disclosures or other 

reporting requirements of the specified 

clauses. Normally, the requesting 

agency is responsible for the 

administration of any subject 

inventions. This responsibility shall be 

established in advance of awarding any 

contracts. 

27.304–3 Subcontracts. 

(a) The policies and procedures in 

this subpart apply to all subcontracts at 

any tier. 

(b) Whenever a prime contractor or a 

subcontractor considers including a 

particular clause in a subcontract to be 

inappropriate or a subcontractor refuses 

to accept the clause, the contracting 

officer, in consultation with counsel, 

shall resolve the matter. 

(c) It is Government policy that 

contractors shall not use their ability to 

award subcontracts as economic 

leverage to acquire rights for themselves 

in inventions resulting from 

subcontracts. 

27.304–4 Appeals. 

(a) The designated agency official 

shall provide the contractor with a 

written statement of the basis, including 

any relevant facts, for taking any of the 

following actions: 

(1) A refusal to grant an extension to 

the invention disclosure period under 

paragraph (c)(4) of the clause at 52.227–

11; 

(2) A demand for a conveyance of title 

to the Government under 27.302(d)(1)(i) 

and (ii); 

(3) A refusal to grant a waiver under 

27.302(g), Preference for United States 

industry; or 

(4) A refusal to approve an assignment 

under 27.304–1(h). 

(b) Each agency may establish and 

publish procedures under which any of 

these actions may be appealed. These 

appeal procedures should include 

administrative due process procedures 

and standards for fact-finding. The 

resolution of any appeal shall consider 

both the factual and legal basis for the 

action and its consistency with the 

policy and objectives of 35 U.S.C. 200–

206 and 210. 

(c) To the extent that any of the 

actions described in paragraph (a) of 

this section are subject to appeal under 

the Contract Disputes Act, the 

procedures under that Act will satisfy 

the requirements of paragraph (b). 

27.305 Administration of patent rights 

clauses. 

27.305–1 Goals. 

(a) Contracts having a patent rights 

clause should be so administered that—

(1) Inventions are identified, 

disclosed, and reported as required by 

the contract, and elections are made; 

(2) The rights of the Government in 

subject inventions are established; 

(3) When patent protection is 

appropriate, patent applications are 

timely filed and prosecuted by 

contractors or by the Government; 

(4) The rights of the Government in 

filed patent applications are 

documented by formal instruments such 

as licenses or assignments; and 

(5) Expeditious commercial 

utilization of subject inventions is 

achieved. 

(b) If a subject invention is made 

under a contract funded by more than 

one agency, at the request of the 

contractor or on their own initiative, the 

agencies shall designate one agency as 

responsible for administration of the 

rights of the Government in the 

invention. 

27.305–2 Administration by the 

Government. 

(a) Agencies should establish and 

maintain appropriate follow-up 

procedures to protect the Government’s 

interest and to check that subject 

inventions are identified and disclosed, 

and when appropriate, patent 

applications are filed, and that the 

Government’s rights therein are 

established and protected. Follow-up 

activities for contracts that include a 

clause referenced in 27.304–2 should be 

coordinated with the appropriate 

agency. 

(b)(1) The contracting officer 

administering the contract (or other 

representative specifically designated in 

the contract for this purpose) is 

responsible for receiving invention 

disclosures, reports, confirmatory 

instruments, notices, requests, and other 

documents and information submitted 

by the contractor pursuant to a patent 

rights clause. 

(i) For other than confirmatory 

instruments, if the contractor fails to 

furnish documents or information as 

called for by the clause within the time 

required, the contracting officer shall 

promptly request the contractor to 

supply the required documents or 

information. If the failure persists, the 

contracting officer shall take appropriate 

action to secure compliance. 

(ii) If the contractor does not furnish 

confirmatory instruments within 6 

months after filing each patent 

application, or within 6 months after 

submitting the invention disclosure if 

the application has been previously 

filed, the contracting officer shall 

request the contractor to supply the 

required documents. 

(2) The contracting officer shall 

promptly furnish all invention 

disclosures, reports, confirmatory 

instruments, notices, requests, and other 

documents and information relating to 

patent rights clauses to legal counsel. 

(c) Contracting activities should 

establish appropriate procedures to 

detect and correct failures by the 

contractor to comply with its obligations 

under the patent rights clauses, such as 

failures to disclose and report subject 

inventions, both during and after 

contract performance. Government 

effort to review and correct contractor 

compliance with its patent rights 

obligations should be directed primarily 

toward contracts that are more likely to 

result in subject inventions significant 

in number or quality. These contracts 

include contracts of a research, 

developmental, or experimental nature; 

contracts of a large dollar amount; and 

any other contracts when there is reason 

to believe the contractor may not be 

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complying with its contractual 

obligations. Other contracts may be 

reviewed using a spot-check method, as 

feasible. Appropriate follow-up 

procedures and activities may include 

the investigation or review of selected 

contracts or contractors by those 

qualified in patent and technical matters 

to detect failures to comply with 

contract obligations. 

(d) Follow-up activities should 

include, where appropriate, use of 

Government patent personnel—

(1) To interview agency technical 

personnel to identify novel 

developments made in contracts; 

(2) To review technical reports 

submitted by contractors with cognizant 

agency technical personnel; 

(3) To check the Official Gazette of the 

United States Patent and Trademark 

Office and other sources for patents 

issued to the contractor in fields related 

to its Government contracts; and 

(4) To have cognizant Government 

personnel interview contractor 

personnel regarding work under the 

contract involved, observe the work on 

site, and inspect laboratory notebooks 

and other records of the contractor 

related to work under the contract. 

(e) If a contractor or subcontractor 

does not have a clear understanding of 

its obligations under the clause, or its 

procedures for complying with the 

clause are deficient, the contracting 

officer should explain to the contractor 

its obligations. The withholding of 

payments provision (if any) of the 

patent rights clause may be invoked if 

the contractor fails to meet the 

obligations required by the patents 

rights clause. Significant or repeated 

failures by a contractor to comply with 

the patent rights obligation in its 

contracts shall be documented and 

made a part of the general file (see 

4.801(c)(3)). 

27.305–3 Securing invention rights 

acquired by the Government. 

(a) Agencies are responsible for 

implementing procedures necessary to 

protect the Government’s interest in 

subject inventions. When the 

Government acquires the entire right, 

title, and interest in an invention by 

contract, the chain of title from the 

inventor to the Government shall be 

clearly established. This is normally 

accomplished by an assignment either 

from each inventor to the contractor and 

from the contractor to the Government, 

or from the inventor to the Government 

with the consent of the contractor. 

When the Government’s rights are 

limited to a license, there should be a 

confirmatory instrument to that effect. 

(b) Agencies may, by supplemental 

instructions, develop suitable 

assignments, licenses, and other papers 

evidencing any rights of the 

Government in patents or patents 

applications. These instruments should 

be recorded in the U.S. Patent and 

Trademark Office (see Executive Order 

9424, Establishing in the United States 

Patent Office a Register of Government 

Interests in Patents and Applications for 

Patents, (February 18, 1944). 

27.305–4 Protection of invention 

disclosures. 

(a) The Government will, to the extent 

authorized by 35 U.S.C. 205, withhold 

from disclosure to the public any 

invention disclosures reported under 

the patent rights clauses of 52.227–11 or 

52.227–13 for a reasonable time in order 

for patent applications to be filed. The 

Government will follow the policy in 

27.302(j) regarding protection of 

confidentiality. 

(b) The Government should also use 

reasonable efforts to withhold from 

disclosure to the public for a reasonable 

time other information disclosing a 

subject invention. This information 

includes any data delivered pursuant to 

contract requirements provided that the 

contractor notifies the agency as to the 

identity of the data and the subject 

invention to which it relates at the time 

of delivery of the data. This notification 

shall be provided to both the contracting 

officer and to any patent representative 

to which the invention is reported, if 

other than the contracting officer. 

(c) For more information on 

protection of invention disclosures, also 

see 37 CFR 401.13. 

27.306 Licensing background patent 

rights to third parties. 

(a) A contract with a small business 

concern or nonprofit organization shall 

not contain a provision allowing the 

Government to require the licensing to 

third parties of inventions owned by the 

contractor that are not subject 

inventions unless the agency head has 

approved and signed a written 

justification in accordance with 

paragraph (b) of this section. The agency 

head may not delegate this authority 

and may exercise the authority only if 

it is determined that the—

(1) Use of the invention by others is 

necessary for the practice of a subject 

invention or for the use of a work object 

of the contract; and 

(2) Action is necessary to achieve the 

practical application of the subject 

invention or work object. 

(b) Any determination will be on the 

record after an opportunity for a 

hearing, and the agency shall notify the 

contractor of the determination by 

certified or registered mail. The 

notification shall include a statement 

that the contractor must bring any 

action for judicial review of the 

determination within 60 days after the 

notification. 

Subpart 27.4—Rights in Data and 

Copyrights 

27.400 Scope of subpart. 

This subpart sets forth policies and 

procedures regarding rights in data and 

copyrights, and acquisition of data. The 

policy statement in 27.402 applies to all 

executive agencies. The remainder of 

the subpart applies to all executive 

agencies except the Department of 

Defense. 

27.401 Definitions. 

As used in this subpart—

Data means recorded information, 

regardless of form or the media on 

which it may be recorded. The term 

includes technical data and computer 

software. The term does not include 

information incidental to contract 

administration, such as financial, 

administrative, cost or pricing, or 

management information. 

Form, fit, and function data means 

data relating to items, components, or 

processes that are sufficient to enable 

physical and functional 

interchangeability, and data identifying 

source, size, configuration, mating and 

attachment characteristics, functional 

characteristics, and performance 

requirements. For computer software it 

means data identifying source, 

functional characteristics, and 

performance requirements, but 

specifically excludes the source code, 

algorithms, processes, formulas, and 

flow charts of the software. 

Limited rights means the rights of the 

Government in limited rights data as set 

forth in a Limited Rights Notice. 

Limited rights data means data, other 

than computer software, that embody 

trade secrets or are commercial or 

financial and confidential or privileged, 

to the extent that such data pertain to 

items, components, or processes 

developed at private expense, including 

minor modifications. (Agencies may, 

however, adopt the following alternate 

definition: Limited rights data means 

data (other than computer software) 

developed at private expense that 

embody trade secrets or are commercial 

or financial and confidential or 

privileged (see 27.404–2(b)). 

Restricted computer software means 

computer software developed at private 

expense and that is a trade secret, is 

commercial or financial and 

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confidential or privileged, or is 

copyrighted computer software, 

including minor modifications of the 

computer software. 

Restricted rights means the rights of 

the Government in restricted computer 

software as set forth in a Restricted 

Rights Notice. 

Unlimited rights means the rights of 

the Government to use, disclose, 

reproduce, prepare derivative works, 

distribute copies to the public, and 

perform publicly and display publicly, 

in any manner and for any purpose, and 

to have or permit others to do so. 

27.402 Policy. 

(a) To carry out their missions and 

programs, agencies acquire or obtain 

access to many kinds of data produced 

during or used in the performance of 

their contracts. Agencies require data 

to—

(1) Obtain competition among 

suppliers; 

(2) Fulfill certain responsibilities for 

disseminating and publishing the 

results of their activities; 

(3) Ensure appropriate utilization of 

the results of research, development, 

and demonstration activities including 

the dissemination of technical 

information to foster subsequent 

technological developments; 

(4) Meet other programmatic and 

statutory requirements; and 

(5) Meet specialized acquisition needs 

and ensure logistics support. 

(b) Contractors may have proprietary 

interests in data. In order to prevent the 

compromise of these interests, agencies 

shall protect proprietary data from 

unauthorized use and disclosure. The 

protection of such data is also necessary 

to encourage qualified contractors to 

participate in and apply innovative 

concepts to Government programs. In 

light of these considerations, agencies 

shall balance the Government’s needs 

and the contractor’s legitimate 

proprietary interests. 

27.403 Data rights—General. 

All contracts that require data to be 

produced, furnished, acquired, or used 

in meeting contract performance 

requirements, must contain terms that 

delineate the respective rights and 

obligations of the Government and the 

contractor regarding the use, 

reproduction, and disclosure of that 

data. Data rights clauses do not specify 

the type, quantity or quality of data that 

is to be delivered, but only the 

respective rights of the Government and 

the contractor regarding the use, 

disclosure, or reproduction of the data. 

Accordingly, the contract shall specify 

the data to be delivered. 

27.404 Basic rights in data clause. 

This section describes the operation 

of the clause at 52.227–14, Rights in 

Data—General, and also the use of the 

provision at 52.227–15, Representation 

of Limited Rights Data and Restricted 

Computer Software. 

27.404–1 Unlimited rights data. 

The Government acquires unlimited 

rights in the following data except for 

copyrighted works as provided in 

27.404–3: 

(a) Data first produced in the 

performance of a contract (except to the 

extent the data constitute minor 

modifications to data that are limited 

rights data or restricted computer 

software). 

(b) Form, fit, and function data 

delivered under contract. 

(c) Data (except as may be included 

with restricted computer software) that 

constitute manuals or instructional and 

training material for installation, 

operation, or routine maintenance and 

repair of items, components, or 

processes delivered or furnished for use 

under a contract. 

(d) All other data delivered under the 

contract other than limited rights data or 

restricted computer software (see 

27.404–2). 

27.404–2 Limited rights data and restricted 

computer software. 

(a) General. The basic clause at 

52.227–14, Rights in Data—General, 

enables the contractor to protect 

qualifying limited rights data and 

restricted computer software by 

withholding the data from the 

Government and instead delivering 

form, fit, and function data. 

(b) Alternate definition of limited 

rights data. For contracts that do not 

require the development, use, or 

delivery of items, components, or 

processes that are intended to be 

acquired by or for the Government, an 

agency may adopt the alternate 

definition of limited rights data set forth 

in Alternate I to the clause at 52.227–14. 

The alternate definition does not require 

that the data pertain to items, 

components, or processes developed at 

private expense; but rather that the data 

were developed at private expense and 

embody a trade secret or are commercial 

or financial and confidential or 

privileged. 

(c) Protection of limited rights data 

specified for delivery. (1) The clause at 

52.227–14 with its Alternate II enables 

the Government to require delivery of 

limited rights data rather than allow the 

contractor to withhold the data. To 

obtain delivery, the contract may 

identify and specify data to be 

delivered, or the contracting officer may 

require, by written request during 

contract performance, the delivery of 

data that has been withheld or 

identified to be withheld under 

paragraph (g)(1) of the clause. In 

addition, the contract may specifically 

identify data that are not to be delivered 

under Alternate II or which, if 

delivered, will be delivered with limited 

rights. The limited rights obtained by 

the Government are set forth in the 

Limited Rights Notice contained in 

paragraph (g)(3) of Alternate II. Agencies 

shall not, without permission of the 

contractor, use limited rights data for 

purposes of manufacture or disclose the 

data outside the Government except as 

set forth in the Notice. Any disclosure 

by the Government shall be subject to 

prohibition against further use and 

disclosure by the recipient. The 

following are examples of specific 

purposes that may be adopted by an 

agency in its supplement and added to 

the Limited Rights Notice of paragraph 

(g)(3) of Alternate II of the clause: 

(i) Use (except for manufacture) by 

support service contractors. 

(ii) Evaluation by nongovernment 

evaluators. 

(iii) Use (except for manufacture) by 

other contractors participating in the 

Government’s program of which the 

specific contract is a part. 

(iv) Emergency repair or overhaul 

work. 

(v) Release to a foreign government, or 

its instrumentalities, if required to serve 

the interests of the U.S. Government, for 

information or evaluation, or for 

emergency repair or overhaul work by 

the foreign government. 

(2) The provision at 52.227–15, 

Representation of Limited Rights Data 

and Restricted Computer Software, 

helps the contracting officer to 

determine whether the clause at 52.227–

14 should be used with its Alternate II. 

This provision requests that an offeror 

state whether limited rights data are 

likely to be delivered. Where limited 

rights data are expected to be delivered, 

use Alternate II. Where negotiations are 

based on an unsolicited proposal, the 

need for Alternate II of the clause at 

52.227–14 should be addressed during 

negotiations or discussions, and if 

Alternate II was not included initially it 

may be added by modification, if 

needed, during contract performance. 

(3) If data that would otherwise 

qualify as limited rights data is 

delivered as a computer database, the 

data shall be treated as limited rights 

data, rather than restricted computer 

software, for the purposes of paragraph 

(g) of the clause at 52.227–14. 

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(d) Protection of restricted computer 

software specified for delivery. (1) 

Alternate III of the clause at 52.227–14, 

enables the Government to require 

delivery of restricted computer software 

rather than allow the contractor to 

withhold such restricted computer 

software. To obtain delivery of restricted 

computer software the contracting 

officer shall—

(i) Identify and specify the deliverable 

computer software in the contract; or 

(ii) Require by written request during 

contract performance, the delivery of 

computer software that has been 

withheld or identified to be withheld 

under paragraph (g)(1) of the clause. 

(2) In considering whether to use 

Alternate III, contracting officers should 

note that, unlike other data, computer 

software is also an end item in itself. 

Thus, the contracting officer shall use 

Alternate III if delivery of restricted 

computer software is required to meet 

agency needs. 

(3) Unless otherwise agreed (see 

paragraph (d)(4) of this subsection), the 

restricted rights obtained by the 

Government are set forth in the 

Restricted Rights Notice contained in 

paragraph (g)(4) (Alternate III). Such 

restricted computer software will not be 

used or reproduced by the Government, 

or disclosed outside the Government, 

except that the computer software may 

be—

(i) Used or copied for use with the 

computers for which it was acquired, 

including use at any Government 

installation to which the computers may 

be transferred; 

(ii) Used or copied for use with a 

backup computer if any computer for 

which it was acquired is inoperative; 

(iii) Reproduced for safekeeping 

(archives) or backup purposes; 

(iv) Modified, adapted, or combined 

with other computer software, provided 

that the modified, adapted, or combined 

portions of the derivative software 

incorporating any of the delivered, 

restricted computer software shall be 

subject to the same restricted rights; 

(v) Disclosed to and reproduced for 

use by support service contractors or 

their subcontractors, in accordance with 

paragraphs (3)(i) through (iv) of this 

section; and 

(vi) Used or copied for use with a 

replacement computer. 

(4) The restricted rights set forth in 

paragraph (d)(3) of this subsection are 

the minimum rights the Government 

normally obtains with restricted 

computer software and will 

automatically apply when such software 

is acquired under the Restricted Rights 

Notice of paragraph (g)(4) of Alternate 

III of the clause at 52.227–14. However, 

the contracting officer may specify 

different rights in the contract, 

consistent with the purposes and needs 

for which the software is to be acquired. 

For example, the contracting officer 

should consider any networking needs 

or any requirements for use of the 

computer software from remote 

terminals. Also, in addressing such 

needs, the scope of the restricted rights 

may be different for the documentation 

accompanying the computer software 

than for the programs and databases. 

Any additions to, or limitations on, the 

restricted rights set forth in the 

Restricted Rights Notice of paragraph 

(g)(4) of Alternate III of the clause at 

52.227–14 shall be expressly stated in 

the contract or in a collateral agreement 

incorporated in and made part of the 

contract, and the notice modified 

accordingly. 

(5) The provision at 52.227–15, 

Representation of Limited Rights Data 

and Restricted Computer Software, 

helps the contracting officer determine 

whether to use the clause at 52.227–14 

with its Alternate III. This provision 

requests that an offeror state whether 

restricted computer software is likely to 

be delivered under the contract. In 

addition, the need for Alternate III 

should be addressed during negotiations 

or discussions with an offeror, 

particularly where negotiations are 

based on an unsolicited proposal. 

However, if Alternate III is not used 

initially, it may be added by 

modification, if needed, during contract 

performance. 

27.404–3 Copyrighted works. 

(a) Data first produced in the 

performance of a contract. (1) Generally, 

the contractor must obtain permission of 

the contracting officer prior to asserting 

rights in any copyrighted work 

containing data first produced in the 

performance of a contract. However, 

contractors are normally authorized, 

without prior approval of the 

contracting officer, to assert copyright in 

technical or scientific articles based on 

or containing such data that is 

published in academic, technical or 

professional journals, symposia 

proceedings and similar works. 

(2) The contractor must make a 

written request for permission to assert 

its copyright in works containing data 

first produced under the contract. In its 

request, the contractor should identify 

the data involved or furnish copies of 

the data for which permission is 

requested, as well as a statement as to 

the intended publication or 

dissemination media or other purpose 

for which the permission is requested. 

Generally, a contracting officer should 

grant the contractor’s request when 

copyright protection will enhance the 

appropriate dissemination or use of the 

data unless the—

(i) Data consist of a report that 

represents the official views of the 

agency or that the agency is required by 

statute to prepare; 

(ii) Data are intended primarily for 

internal use by the Government; 

(iii) Data are of the type that the 

agency itself distributes to the public 

under an agency program; 

(iv) Government determines that 

limitation on distribution of the data is 

in the national interest; or 

(v) Government determines that the 

data should be disseminated without 

restriction. 

(3) Alternate IV of the clause at 

52.227–14 provides a substitute 

paragraph (c)(1) granting permission for 

contractors to assert copyright in any 

data first produced in the performance 

of the contract without the need for any 

further requests. Except for contracts for 

management or operation of 

Government facilities and contracts and 

subcontracts in support of programs 

being conducted at those facilities or 

where international agreements require 

otherwise, Alternate IV shall be used in 

all contracts for basic or applied 

research to be performed solely by 

colleges and universities. Alternate IV 

shall not be used in contracts with 

colleges and universities if a purpose of 

the contract is for development of 

computer software for distribution to 

the public (including use in 

solicitations) by or on behalf of the 

Government. In addition, Alternate IV 

may be used in other contracts if an 

agency determines that it is not 

necessary for a contractor to request 

further permission to assert copyright in 

data first produced in performance of 

the contract. The contracting officer may 

exclude any data, or items or categories 

of data, from the provisions of Alternate 

IV by expressly so providing in the 

contract or by adding a paragraph (d)(4) 

to the clause, consistent with 27.404–

4(b). 

(4) Pursuant to paragraph (c)(1) of the 

clause at 52.227–14, the contractor 

grants the Government a paid-up 

nonexclusive, irrevocable, worldwide 

license to reproduce, prepare derivative 

works, distribute to the public, perform 

publicly and display publicly by or on 

behalf of the Government, for all data 

(other than computer software) first 

produced in the performance of a 

contract. For computer software, the 

scope of the Government’s license 

includes all of the above rights except 

the right to distribute to the public. 

Agencies may also obtain a license of 

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different scope if the contracting officer 

determines, after consulting with legal 

counsel, such a license will 

substantially enhance the dissemination 

of any data first produced under the 

contract or if such a license is required 

to comply with international 

agreements. If an agency obtains a 

different license, the contractor shall 

clearly state the scope of that license in 

a conspicuous place on the medium on 

which the data is recorded. For 

example, if the data is delivered as a 

report, the terms of the license shall be 

stated on the cover, or first page, of the 

report. 

(5) The clause requires the contractor 

to affix the applicable copyright notices 

of 17 U.S.C. 401 or 402, and 

acknowledgment of Government 

sponsorship, (including the contract 

number) to data when it asserts 

copyright in data. Failure to do so could 

result in such data being treated as 

unlimited rights data (see 27.404–5(b)). 

(b) Data not first produced in the 

performance of a contract. (1) 

Contractors shall not deliver any data 

that is not first produced under the 

contract without either—

(i) Acquiring for or granting to the 

Government a copyright license for the 

data; or 

(ii) Obtaining permission from the 

contracting officer to do otherwise. 

(2) The copyright license the 

Government acquires for such data will 

normally be of the same scope as 

discussed in paragraph (a)(4) of this 

subsection, and is set forth in paragraph 

(c)(2) of the clause at 52.227–14. 

However, agencies may obtain a license 

of different scope if the agency 

determines, after consultation with its 

legal counsel, that such different license 

will not be inconsistent with the 

purpose of acquiring the data. If a 

license of a different scope is acquired, 

it must be so stated in the contract and 

clearly set forth in a conspicuous place 

on the data when delivered to the 

Government. If the contractor delivers 

computer software not first produced 

under the contract, the contractor shall 

grant the Government the license set 

forth in paragraph (g)(4) of Alternate III 

if included in the clause at 52.227–14, 

or a license agreed to in a collateral 

agreement made part of the contract. 

27.404–4 Contractor’s release, publication, 

and use of data. 

(a) In contracts for basic or applied 

research with universities or colleges, 

agencies shall not place any restrictions 

on the conduct of or reporting on the 

results of unclassified basic or applied 

research, except as provided in 

applicable U.S. statutes. However, 

agencies may restrict the release or 

disclosure of computer software that is 

or is intended to be developed to the 

point of practical application (including 

for agency distribution under 

established programs). This is not 

considered a restriction on the reporting 

of the results of basic or applied 

research. Agencies may also preclude a 

contractor from asserting copyright in 

any computer software for purposes of 

established agency distribution 

programs, or where required to 

accomplish the purpose for which the 

software is acquired. 

(b) Except for the results of basic or 

applied research under contracts with 

universities or colleges, agencies may, to 

the extent provided in their FAR 

supplements, place limitations or 

restrictions on the contractor’s exercise 

of its rights in data first produced in the 

performance of the contract, including a 

requirement to assign copyright to the 

Government or another party. Any of 

these restrictions shall be expressly 

included in the contract. 

27.404–5 Unauthorized, omitted, or 

incorrect markings. 

(a) Unauthorized marking of data. (1) 

The Government has, in accordance 

with paragraph (e) of the clause at 

52.227–14, the right to either return data 

containing unauthorized markings or to 

cancel or ignore the markings. 

(2) Agencies shall not cancel or ignore 

markings without making written 

inquiry of the contractor and affording 

the contractor at least 60 days to provide 

a written justification substantiating the 

propriety of the markings. 

(i) If the contractor fails to respond or 

fails to provide a written justification 

substantiating the propriety of the 

markings within the time afforded, the 

Government may cancel or ignore the 

markings. 

(ii) If the contractor provides a written 

justification substantiating the propriety 

of the markings, the contracting officer 

shall consider the justification. 

(A) If the contracting officer 

determines that the markings are 

authorized, the contractor will be so 

notified in writing. 

(B) If the contracting officer 

determines, with concurrence of the 

head of the contracting activity, that the 

markings are not authorized, the 

contractor will be furnished a written 

determination which becomes the final 

agency decision regarding the 

appropriateness of the markings and the 

markings will be cancelled or ignored 

and the data will no longer be made 

subject to disclosure prohibitions, 

unless the contractor files suit within 90 

days in a court of competent 

jurisdiction. The markings will not be 

cancelled or ignored until final 

resolution of the matter, either by the 

contracting officer’s determination 

becoming the final agency decision or 

by final disposition of the matter by 

court decision if suit is filed. 

(3) The foregoing procedures may be 

modified in accordance with agency 

regulations implementing the Freedom 

of Information Act (5 U.S.C. 552) if 

necessary to respond to a request. In 

addition, the contractor may bring a 

claim, in accordance with the Disputes 

clause of the contract, that may arise as 

the result of the Government’s action to 

remove or ignore any markings on data, 

unless the action occurs as the result of 

a final disposition of the matter by a 

court of competent jurisdiction. 

(b) Omitted or incorrect notices. (1) 

Data delivered under a contract 

containing the clause without a limited 

rights notice or restricted rights notice, 

and without a copyright notice, will be 

presumed to have been delivered with 

unlimited rights, and the Government 

assumes no liability for the disclosure, 

use, or reproduction of the data. 

However, to the extent the data has not 

been disclosed without restriction 

outside the Government, the contractor 

may, within 6 months (or a longer 

period approved by the contracting 

officer for good cause shown), request 

permission of the contracting officer to 

have the omitted limited rights or 

restricted rights notices, as applicable, 

placed on qualifying data at the 

contractor’s expense. The contracting 

officer may permit adding appropriate 

notices if the contractor—

(i) Identifies the data for which a 

notice is to be added; 

(ii) Demonstrates that the omission of 

the proposed notice was inadvertent; 

(iii) Establishes that use of the 

proposed notice is authorized; and 

(iv) Acknowledges that the 

Government has no liability with 

respect to any disclosure or use of any 

such data made prior to the addition of 

the notice or resulting from the 

omission of the notice. 

(2) The contracting officer may also—

(i) Permit correction, at the 

contractor’s expense, of incorrect 

notices if the contractor identifies the 

data on which correction of the notice 

is to be made, and demonstrates that the 

correct notice is authorized; or 

(ii) Correct any incorrect notices. 

27.404–6 Inspection of data at the 

contractor’s facility. 

Contracting officers may obtain the 

right to inspect data at the contractor’s 

facility by use of the clause at 52.227–

14 with its Alternate V, which adds 

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paragraph (j) to provide that right. 

Agencies may also adopt Alternate V for 

general use. The data subject to 

inspection may be data withheld or 

withholdable under paragraph (g)(1) of 

the clause. Inspection may be made by 

the contracting officer or designee 

(including nongovernmental personnel 

under the same conditions as the 

contracting officer) for the purpose of 

verifying a contractor’s assertion 

regarding the limited rights or restricted 

rights status of the data, or for 

evaluating work performance under the 

contract. This right may be exercised up 

to 3 years after acceptance of all items 

to be delivered under the contract. The 

contract may specify data items that are 

not subject to inspection under 

paragraph (j) of the Alternate. If the 

contractor demonstrates to the 

contracting officer that there would be 

a possible conflict of interest if 

inspection were made by a particular 

representative, the contracting officer 

shall designate an alternate 

representative. 

27.405 Other data rights provisions. 

27.405–1 Special works. 

(a) The clause at 52.227–17, Rights in 

Data—Special Works, is for use in 

contracts (or may be made applicable to 

portions thereof) that are primarily for 

the production or compilation of data 

(other than limited rights data or 

restricted computer software) for the 

Government’s own use, or when there is 

a specific need to limit distribution and 

use of the data or to obtain indemnity 

for liabilities that may arise out of the 

content, performance, or disclosure of 

the data. Examples are contracts for—

(1) The production of audiovisual 

works, including motion pictures or 

television recordings with or without 

accompanying sound, or for the 

preparation of motion picture scripts, 

musical compositions, sound tracks, 

translation, adaptation, and the like; 

(2) Histories of the respective 

agencies, departments, services, or units 

thereof; 

(3) Surveys of Government 

establishments; 

(4) Works pertaining to the instruction 

or guidance of Government officers and 

employees in the discharge of their 

official duties; 

(5) The compilation of reports, books, 

studies, surveys, or similar documents 

that do not involve research, 

development, or experimental work; 

(6) The collection of data containing 

personally identifiable information such 

that the disclosure thereof would violate 

the right of privacy or publicity of the 

individual to whom the information 

relates; 

(7) Investigatory reports; 

(8) The development, accumulation, 

or compilation of data (other than that 

resulting from research, development, or 

experimental work performed by the 

contractor), the early release of which 

could prejudice follow-on acquisition 

activities or agency regulatory or 

enforcement activities; or 

(9) The development of computer 

software programs, where the program—

(i) May give a commercial advantage; 

or 

(ii) Is agency mission sensitive, and 

release could prejudice agency mission, 

programs, or follow-on acquisitions. 

(b) The contract may specify the 

purposes and conditions (including 

time limitations) under which the data 

may be used, released, or reproduced 

other than for contract performance. 

Contracts for the production of 

audiovisual works, sound recordings, 

etc., may include limitations in 

connection with talent releases, music 

licenses, and the like that are consistent 

with the purposes for which the works 

are acquired. 

(c) Paragraph (c)(1)(ii) of the clause, 

which enables the Government to obtain 

assignment of copyright in any data first 

produced in the performance of the 

contract, may be deleted if the 

contracting officer determines that such 

assignment is not needed to further the 

objectives of the contract. 

(d) Paragraph (e) of the clause, which 

requires the contractor to indemnify the 

Government against any liability 

incurred as the result of any violation of 

trade secrets, copyrights, right of 

privacy or publicity, or any libelous or 

other unlawful matter arising out of or 

contained in any production or 

compilation of data that are subject to 

the clause, may be deleted or limited in 

scope where the contracting officer 

determines that, because of the nature of 

the particular data involved, such 

liability will not arise. 

(e) When the audiovisual or other 

special works are produced to 

accomplish a public purpose other than 

acquisition for the Government’s own 

use (such as for production and 

distribution to the public of the works 

by other than a Federal agency) agencies 

are authorized to modify the clause for 

use in contracts, with rights in data 

provisions that meet agency mission 

needs yet protect free speech and 

freedom of expression, as well as the 

artistic license of the creator of the 

work. 

27.405–2 Existing works. 

The clause at 52.227–18, Rights in 

Data—Existing Works, is for use in 

contracts exclusively for the acquisition 

(without modification) of existing works 

such as, motion pictures, television 

recordings, and other audiovisual 

works; sound recordings; musical, 

dramatic, and literary works; 

pantomimes and choreographic works; 

pictorial, graphic, and sculptural works; 

and works of a similar nature. The 

contract may set forth limitations 

consistent with the purposes for which 

the works covered by the contract are 

being acquired. Examples of these 

limitations are means of exhibition or 

transmission, time, type of audience, 

and geographical location. However, if 

the contract requires that works of the 

type indicated in this paragraph are to 

be modified through editing, translation, 

or addition of subject matter, etc. (rather 

than purchased in existing form), then 

see 27.405–1. 

27.405–3 Commercial computer software. 

(a) When contracting other than from 

GSA’s Multiple Award Schedule 

contracts for the acquisition of 

commercial computer software, no 

specific contract clause prescribed in 

this subpart need be used, but the 

contract shall specifically address the 

Government’s rights to use, disclose, 

modify, distribute, and reproduce the 

software. Section 12.212 sets forth the 

guidance for the acquisition of 

commercial computer software and 

states that commercial computer 

software or commercial computer 

software documentation shall be 

acquired under licenses customarily 

provided to the public to the extent the 

license is consistent with Federal law 

and otherwise satisfies the 

Government’s needs. The clause at 

52.227–19, Commercial Computer 

Software License, may be used when 

there is any confusion as to whether the 

Government’s needs are satisfied or 

whether a customary commercial 

license is consistent with Federal law. 

Additional or lesser rights may be 

negotiated using the guidance 

concerning restricted rights as set forth 

in 27.404–2(d), or the clause at 52.227–

19. If greater rights than the minimum 

rights identified in the clause at 52.227–

19 are needed, or lesser rights are to be 

acquired, they shall be negotiated and 

set forth in the contract. This includes 

any additions to, or limitations on, the 

rights set forth in paragraph (b) of the 

clause at 52.227–19 when used. 

Examples of greater rights may be those 

necessary for networking purposes or 

use of the software from remote 

terminals communicating with a host 

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computer where the software is located. 

If the computer software is to be 

acquired with unlimited rights, the 

contract shall also so state. In addition, 

the contract shall adequately describe 

the computer programs and/or 

databases, the media on which it is 

recorded, and all the necessary 

documentation. 

(b) If the contract incorporates, makes 

reference to, or uses a vendor’s standard 

commercial lease, license, or purchase 

agreement, the contracting officer shall 

ensure that the agreement is consistent 

with paragraph (a)(1) of this subsection. 

The contracting officer should exercise 

caution in accepting a vendor’s terms 

and conditions, since they may be 

directed to commercial sales and may 

not be appropriate for Government 

contracts. Any inconsistencies in a 

vendor’s standard commercial 

agreement shall be addressed in the 

contract and the contract terms shall 

take precedence over the vendor’s 

standard commercial agreement. If the 

clause at 52.227–19 is used, 

inconsistencies in the vendor’s standard 

commercial agreement regarding the 

Government’s right to use, reproduce or 

disclose the computer software are 

reconciled by that clause. 

(c) If a prime contractor under a 

contract containing the clause at 

52.227–14, Rights in Data—General, 

with paragraph (g)(4) (Alternate III) in 

the clause, acquires restricted computer 

software from a subcontractor (at any 

tier) as a separate acquisition for 

delivery to or for use on behalf of the 

Government, the contracting officer may 

approve any additions to, or limitations 

on the restricted rights in the Restricted 

Rights Notice of paragraph (g)(4) in a 

collateral agreement incorporated in and 

made part of the contract. 

27.405–4 Other existing data. 

(a) Except for existing works pursuant 

to 27.405–2 or commercial computer 

software pursuant to 27.405–3, no 

clause contained in this subpart is 

required to be included in—

(1) Contracts solely for the acquisition 

of books, periodicals, and other printed 

items in the exact form in which these 

items are to be obtained unless 

reproduction rights are to be acquired; 

or 

(2) Other contracts that require only 

existing data (other than limited rights 

data) to be delivered and the data are 

available without disclosure 

prohibitions, unless reproduction rights 

to the data are to be obtained. 

(b) If the reproduction rights to the 

data are to be obtained in any contract 

of the type described in paragraph (b)(1) 

(i) or (ii) of this section, the rights shall 

be specifically set forth in the contract. 

No clause contained in this subpart is 

required to be included in contracts 

substantially for on-line data base 

services in the same form as they are 

normally available to the general public. 

27.406 Acquisition of data. 

27.406–1 General. 

(a) It is the Government’s practice to 

determine, to the extent feasible, its data 

requirements in time for inclusion in 

solicitations. The data requirements 

may be subject to revision during 

contract negotiations. Since the 

preparation, reformatting, maintenance 

and updating, cataloging, and storage of 

data represents an expense to both the 

Government and the contractor, efforts 

should be made to keep the contract 

data requirements to a minimum, 

consistent with the purposes of the 

contract. 

(b) The contracting officer shall 

specify in the contract all known data 

requirements, including the time and 

place for delivery and any limitations 

and restrictions to be imposed on the 

contractor in the handling of the data. 

Further, and to the extent feasible, in 

major system acquisitions, the 

contracting officer shall set out data 

requirements as separate contract line 

items. In establishing the contract data 

requirements and in specifying data 

items to be delivered by a contractor, 

agencies may, consistent with paragraph 

(a) of this subsection, develop their own 

contract schedule provisions. Agency 

procedures may, among other things, 

provide for listing, specifying, 

identifying source, assuring delivery, 

and handling any data required to be 

delivered, first produced, or specifically 

used in the performance of the contract. 

(c) Data delivery requirements should 

normally not require that a contractor 

provide the Government, as a condition 

of the procurement, unlimited rights in 

data that qualify as limited rights data 

or restricted computer software. Rather, 

form, fit, and function data may be 

furnished with unlimited rights instead 

of the qualifying data, or the qualifying 

data may be furnished with limited 

rights or restricted rights if needed (see 

27.404–2(c) and (d)). If greater rights are 

needed, they should be clearly set forth 

in the solicitation and the contractor 

fairly compensated for the greater rights. 

27.406–2 Additional data requirements. 

(a) In some contracting situations, 

such as experimental, developmental, 

research, or demonstration contracts, it 

may not be feasible to ascertain all the 

data requirements at contract award. 

The clause at 52.227–16, Additional 

Data Requirements, may be used to 

enable the subsequent ordering by the 

contracting officer of additional data 

first produced or specifically used in the 

performance of these contracts as the 

actual requirements become known. The 

clause shall normally be used in 

solicitations and contracts involving 

experimental, developmental, research 

or demonstration work (other than basic 

or applied research to be performed 

under a contract solely by a university 

or college when the contract amount 

will be $500,000 or less) unless all the 

requirements for data are believed to be 

known at the time of contracting and 

specified in the contract. If the contract 

is for basic or applied research to be 

performed by a university or college, 

and the contracting officer believes the 

contract effort will in the future exceed 

$500,000, even though the initial award 

does not, the contracting officer may 

include the clause in the initial award. 

(b) Data may be ordered under the 

clause at 52.227–16 at any time during 

contract performance or within a period 

of 3 years after acceptance of all items 

to be delivered under the contract. The 

contractor is to be compensated for 

converting the data into the prescribed 

form, for reproduction, and for delivery. 

In order to minimize storage costs for 

the retention of data, the contracting 

officer may relieve the contractor of the 

retention requirements for specified 

data items at any time during the 

retention period required by the clause. 

The contracting officer may permit the 

contractor to identify and specify in the 

contract data not to be ordered for 

delivery under the clause if the data is 

not necessary to meet the Government’s 

requirements for data. Also, the 

contracting officer may alter the clause 

by deleting the term ‘‘or specifically 

used’’ in paragraph (a) of the clause if 

delivery of the data is not necessary to 

meet the Government’s requirements for 

data. Any data ordered under this clause 

will be subject to the clause at 52.227–

14, Rights in Data—General, (or other 

equivalent clause setting forth the 

respective rights of the Government and 

the contractor) in the contract. Data 

authorized to be withheld under such 

clause will not be required to be 

delivered under the clause at 52.227–16, 

except as provided in Alternate II or 

Alternate III, if included (see 27.404–

2(c) and (d)). 

(c) Absent an established program for 

dissemination of computer software, 

agencies should not order additional 

computer software under the clause at 

52.227–16, for the sole purpose of 

disseminating or marketing the software 

to the public. In ordering software for 

internal purposes, the contracting 

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officer shall consider, consistent with 

the Government’s needs, not ordering 

particular source codes, algorithms, 

processes, formulas, or flow charts of 

the software if the contractor shows that 

this aids its efforts to disseminate or 

market the software. 

27.406–3 Major system acquisition. 

(a) The clause at 52.227–21, Technical 

Data Declaration, Revision, and 

Withholding of Payment—Major 

Systems, implements 41 U.S.C. 418a(d). 

When using the clause at 52.227–21, the 

section of the contract specifying data 

delivery requirements (see 27.406–1(b)) 

shall expressly identify those line items 

of technical data to which the clause 

applies. Upon delivery of the technical 

data, the contracting officer shall review 

the technical data and the contractor’s 

declaration relating to it to assure that 

the data are complete, accurate, and 

comply with contract requirements. If 

the data are not complete, accurate, or 

compliant, the contracting officer 

should request the contractor to correct 

the deficiencies, and may withhold 

payment. Final payment shall not be 

made under the contract until it has 

been determined that the delivery 

requirements of those line items of data 

to which the clause applies have been 

satisfactorily met. 

(b) In a contract for, or in support of, 

a major system awarded by a civilian 

agency other than NASA or the U.S. 

Coast Guard, the following applies: 

(1) The contracting officer shall 

require the delivery of any technical 

data relating to the major system or 

supplies for the major system, that are 

to be developed exclusively with 

Federal funds if the delivery of the 

technical data is needed to ensure the 

competitive acquisition of supplies or 

services that will be required in 

substantial quantities in the future. The 

clause at 52.227–22, Major System—

Minimum Rights, is used in addition to 

the clause at 52.227–14, Rights in 

Data—General, and other required 

clauses, to ensure that the Government 

acquires at least those rights required by 

Pub. L. 98–577 in technical data 

developed exclusively with Federal 

funds. 

(2) Technical data, relating to a major 

system or supplies for a major system, 

procured or to be procured by the 

Government and also relating to the 

design, development, or manufacture of 

products or processes offered or to be 

offered for sale to the public (except for 

such data as may be necessary for the 

Government to operate or maintain the 

product, or use the process if obtained 

by the Government as an element of 

performance under the contract), shall 

not be required to be provided to the 

Government from persons who have 

developed such products or processes as 

a condition for the procurement of such 

products or processes by the 

Government. 

27.407 Rights to technical data in 

successful proposals. 

The clause at 52.227–23, Rights to 

Proposal Data (Technical), allows the 

Government to acquire unlimited rights 

to technical data in successful 

proposals. Pursuant to the clause, the 

prospective contractor is afforded the 

opportunity to specifically identify 

pages containing technical data to be 

excluded from the grant of unlimited 

rights. This exclusion is not dispositive 

of the protective status of the data, but 

any excluded technical data, as well as 

any commercial and financial 

information contained in the proposal, 

will remain subject to the policies in 

Subpart 15.2 or 15.6 (or agency 

supplements) relating to proposal 

information (e.g., will be used for 

evaluation purposes only). If there is a 

need to have access to any of the 

excluded technical data during contract 

performance, consideration should be 

given to acquiring the data with limited 

rights, if they so qualify, in accordance 

with 27.404–2(c). 

27.408 Cosponsored research and 

development activities. 

(a) In contracts involving cosponsored 

research and development that require 

the contractor to make substantial 

contributions of funds or resources (e.g., 

by cost-sharing or by repayment of 

nonrecurring costs), and the contractor’s 

and the Government’s respective 

contributions to any item, component, 

process, or computer software, 

developed or produced under the 

contract are not readily segregable, the 

contracting officer may limit the 

acquisition of, or acquire less than 

unlimited rights to, any data developed 

and delivered under the contract. 

Agencies may regulate the use of this 

authority in their supplements. Lesser 

rights shall, at a minimum, assure use 

of the data for agreed-to Governmental 

purposes (including reprocurement 

rights as appropriate), and address any 

disclosure limitations or restrictions to 

be imposed on the data. Also, 

consideration may be given to requiring 

the contractor to directly license others 

if needed to carry out the objectives of 

the contract. Since the purpose of the 

cosponsored research and development, 

the legitimate proprietary interests of 

the contractor, the needs of the 

Government, and the respective 

contributions of both parties may vary, 

no specific clauses are prescribed, but a 

clause providing less than unlimited 

rights in the Government for data 

developed and delivered under the 

contract (such as license rights) may be 

tailored to the circumstances consistent 

with the foregoing and the policy set 

forth in 27.402. As a guide, a clause may 

be appropriate when the contractor 

contributes money or resources, or 

agrees to make repayment of 

nonrecurring costs, of a value of 

approximately 50 percent of the total 

cost of the contract (i.e., Government, 

contractor, and/or third party paid 

costs), and the respective contributions 

are not readily segregable for any work 

element to be performed under the 

contract. A clause may be used for all 

or for only specifically identified tasks 

or work elements under the contract. In 

the latter instance, its use will be in 

addition to whatever other data rights 

clause is prescribed under this subpart, 

with the contract specifically 

identifying which clause is to apply to 

which tasks or work elements. Further, 

this type of clause may not be 

appropriate where the purpose of the 

contract is to produce data for 

dissemination to the public, or to 

develop or demonstrate technologies 

that will be available, in any event, to 

the public for its direct use. 

(b) Where the contractor’s 

contributions are readily segregable (by 

performance requirements and the 

funding for the contract) and so 

identified in the contract, any resulting 

data may be treated under this clause as 

limited rights data or restricted 

computer software in accordance with 

27.404–2(c) or (d), as applicable; or if 

this treatment is inconsistent with the 

purpose of the contract, rights to the 

data may, if so negotiated and stated in 

the contract, be treated in a manner 

consistent with paragraph (a) of this 

section. 

27.409 Solicitation provisions and 

contract clauses 

(a) Generally, a contract should 

contain only one data rights clause. 

However, where more than one is 

needed, the contract should distinguish 

the portion of contract performance to 

which each pertains. 

(b)(1) Insert the clause at 52.227–14, 

Rights in Data—General, in solicitations 

and contracts if it is contemplated that 

data will be produced, furnished, or 

acquired under the contract, unless the 

contract is—

(i) For the production of special works 

of the type set forth in 27.405–1, 

although in these cases insert the clause 

at 52.227–14, Rights in Data—General, 

and make it applicable to data other 

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than special works, as appropriate (see 

paragraph (e) of this section); 

(ii) For the acquisition of existing 

data, commercial computer software, or 

other existing data, as described in 

27.405–2 through 27.405–4 (see 

paragraphs (f) and (g) of this section); 

(iii) A small business innovation 

research contract (see paragraph (h) of 

this section); 

(iv) To be performed outside the 

United States (see paragraph (i)(1) of 

this section); 

(v) For architect-engineer services or 

construction work (see paragraph (i)(2) 

of this section); 

(vi) For the management, operation, 

design, or construction of a 

Government-owned facility to perform 

research, development, or production 

work (see paragraph (i)(3) of this 

section); or 

(vii) A contract involving cosponsored 

research and development in which a 

clause providing for less than unlimited 

right has been authorized (see 27.408). 

(2) If an agency determines, in 

accordance with 27.404–2(b), to adopt 

the alternate definition of ‘‘Limited 

Rights Data’’ in paragraph (a) of the 

clause, use the clause with its Alternate 

I. 

(3) If a contracting officer determines, 

in accordance with 27.404–2(c) that it is 

necessary to obtain limited rights data, 

use the clause with its Alternate II. The 

contracting officer shall complete 

paragraph (g)(3) to include the purposes, 

if any, for which limited rights data are 

to be disclosed outside the Government. 

(4) In accordance with 27.404–2(d), if 

a contracting officer determines it is 

necessary to obtain restricted computer 

software, use the clause with its 

Alternate III. Any greater or lesser rights 

regarding the use, reproduction, or 

disclosure of restricted computer 

software than those set forth in the 

Restricted Rights Notice of paragraph 

(g)(4) of the clause shall be specified in 

the contract and the notice modified 

accordingly. 

(5) Use the clause with its Alternate 

IV in contracts for basic or applied 

research (other than those for the 

management or operation of 

Government facilities, and contracts and 

subcontracts in support of programs 

being conducted at those facilities or 

where international agreements require 

otherwise) to be performed solely by 

universities and colleges. The clause 

may be used with its Alternate IV in 

other contracts if in accordance with 

27.404–3(a), an agency determines to 

grant permission for the contractor to 

assert claim to copyright subsisting in 

all data first produced without further 

request being made by the contractor. 

When Alternate IV is used, the contract 

may exclude items or categories of data 

from the permission granted, either by 

express provisions in the contract or by 

the addition of a paragraph (d)(4) to the 

clause (see 27.404–4). 

(6) In accordance with 27.404–6, if the 

Government needs the right to inspect 

certain data at a contractor’s facility, use 

the clause with its Alternate V. 

(c) In accordance with 27.404–2(c)(2) 

and 27.404–2(d)(5), if the contracting 

officer desires to have an offeror state in 

response to a solicitation whether 

limited rights data or restricted 

computer software are likely to be used 

in meeting the data delivery 

requirements set forth in the 

solicitation, insert the provision at 

52.227–15, Representation of Limited 

Rights Data and Restricted Computer 

Software, in any solicitation containing 

the clause at 52.227–14, Rights in 

Data—General. The contractor’s 

response may provide an aid in 

determining whether the clause should 

be used with Alternate II and/or 

Alternate III. 

(d) Insert the clause at 52.227–16, 

Additional Data Requirements, in 

solicitations and contracts involving 

experimental, developmental, research, 

or demonstration work (other than basic 

or applied research to be performed 

solely by a university or college where 

the contract amount will be $500,000 or 

less) unless all the requirements for data 

are believed to be known at the time of 

contracting and specified in the contract 

(see 27.406–2). This clause may also be 

used in other contracts when considered 

appropriate. For example, if the contract 

is for basic or applied research to be 

performed by a university or college, 

and the contracting officer believes the 

contract effort will in the future exceed 

$500,000, even though the initial award 

does not, the contracting officer may 

include the clause in the initial award. 

(e) In accordance with 27.405–1, 

insert the clause at 52.227–17, Rights in 

Data—Special Works, in solicitations 

and contracts primarily for the 

production or compilation of data (other 

than limited rights data or restricted 

computer software) for the 

Government’s internal use, or when 

there is a specific need to limit 

distribution and use of the data or to 

obtain indemnity for liabilities that may 

arise out of the content, performance, or 

disclosure of the data. Examples of such 

contracts are set forth in 27.405–1. 

(1) Insert the clause if existing works 

are to be modified, as by editing, 

translation, addition of subject matter, 

etc. 

(2) The contract may specify the 

purposes and conditions (including 

time limitations) under which the data 

may be used, released, or reproduced by 

the contractor for other than contract 

performance. 

(3) Contracts for the production of 

audiovisual works, sound recordings, 

etc. may include limitations in 

connection with talent releases, music 

licenses, and the like that are consistent 

with the purposes for which the data is 

acquired. 

(4) The clause may be modified in 

accordance with paragraphs (c) through 

(e) of 27.405–1. 

(f) Insert the clause at 52.227–18, 

Rights in Data—Existing Works, in 

solicitations and contracts exclusively 

for the acquisition, without 

modification, of existing audiovisual 

and similar works of the type set forth 

in 27.405–2. The contract may set forth 

limitations consistent with the purposes 

for which the work is being acquired. 

While no specific clause of this subpart 

is required to be included in contracts 

solely for the acquisition, without 

disclosure prohibitions, of books, 

publications, and similar items in the 

exact form in which the items exist 

prior to the request for purchase (i.e., 

the off-the-shelf purchase of such 

items), or in other contracts where only 

existing data available without 

disclosure prohibitions is to be 

furnished, if reproduction rights are to 

be acquired, the contract shall include 

terms addressing such rights. (See 

27.405–4.) 

(g) In accordance with 27.405–3, 

when contracting (other than from 

GSA’s Multiple Award Schedule 

contracts) for the acquisition of 

commercial computer software, the 

contracting officer may insert the clause 

at 52.227–19, Commercial Computer 

Software License, in the solicitation and 

contract. In any event, the contracting 

officer shall assure that the contract 

contains terms to obtain sufficient rights 

for the Government to fulfill the need 

for which the software is being acquired 

and is otherwise consistent with 

27.405–3). 

(h) If the contract is a Small Business 

Innovation Research (SBIR) contract, 

insert the clause at 52.227–20, Rights in 

Data—SBIR Program in all Phase I, 

Phase II, and Phase III contracts 

awarded under the Small Business 

Innovation Research Program 

established pursuant to 15 U.S.C. 638. 

The SBIR protection period may be 

extended in accordance with the Small 

Business Administration’s ‘‘Small 

Business Innovation Research Program 

Policy Directive’’ (September 24, 2002). 

(i) Agencies may prescribe in their 

procedures, as appropriate, a clause 

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consistent with the policy of 27.402 in 

contracts—

(1) To be performed outside the 

United States; 

(2) For architect-engineer services and 

construction work, e.g., the clause at 

52.227–17, Rights in Data—Special 

Works); or 

(3) For management, operation, 

design, or construction of Governmentowned research, development, or 

production facilities, and in contracts 

and subcontracts in support of programs 

being conducted at such facilities. 

(j) In accordance with 27.406–3(a), 

insert the clause at 52.227–21, 

Technical Data Declaration, Revision, 

and Withholding of Payment—Major 

Systems, in contracts for major systems 

acquisitions or for support of major 

systems acquisitions. This requirement 

includes contracts for detailed design, 

development, or production of a major 

system and contracts for any individual 

part, component, subassembly, 

assembly, or subsystem integral to the 

major system, and other property that 

may be replaced during the service life 

of the system, including spare parts. 

When used, this clause requires that the 

technical data to which it applies be 

specified in the contract (see 27.406–

3(a)). 

(k) In accordance with 27.406–3(b), in 

the case of civilian agencies other than 

NASA and the U.S. Coast Guard, insert 

the clause at 52.227–22, Major System—

Minimum Rights, in contracts for major 

systems or contracts in support of major 

systems. 

(l) In accordance with 27.407, if a 

contracting officer desires to acquire 

unlimited rights in technical data 

contained in a successful proposal upon 

which a contract award is based, insert 

the clause at 52.227–23, Rights to 

Proposal Data (Technical). Rights to 

technical data in a proposal are not 

acquired by mere incorporation by 

reference of the proposal in the contract, 

and if a proposal is incorporated by 

reference, the contracting officer shall 

follow 27.404 to assure that the rights 

are appropriately addressed. 

Subpart 27.5—Foreign License and 

Technical Assistance Agreements 

27.501 General. 

Agencies shall provide necessary 

policy and procedures regarding foreign 

technical assistance agreements and 

license agreements involving 

intellectual property, including 

avoiding unnecessary royalty charges. 

PART 33—PROTESTS, DISPUTES, 

AND APPEALS 

33.104 [Amended] 

■ 9. Amend section 33.104 in paragraph 

(h)(5) introductory text by removing 

‘‘19.001’’ and adding ‘‘2.101’’ in its 

place. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 10. Amend section 52.227–1 by 

revising the introductory paragraph, 

date of the clause, and paragraphs (a) 

and (b) of the clause; and revising the 

introductory paragraphs of Alternate I 

and II to read as follows: 

52.227–1 Authorization and Consent. 

As prescribed in 27.201–2(a)(1), insert 

the following clause: 

AUTHORIZATION AND CONSENT (DEC 

2007) 

(a) 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—

(1) Embodied in the structure or 

composition of any article the delivery of 

which is accepted by the Government under 

this contract; or 

(2) 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. 

(b) The Contractor shall include the 

substance of this clause, including this 

paragraph (b), in all subcontracts that are 

expected to exceed the simplified acquisition 

threshold. However, omission of this clause 

from any subcontract, including those at or 

below the simplified acquisition threshold, 

does not affect this authorization and 

consent. 

(End of Clause) 

Alternate I (Apr 1984). As prescribed in 

27.201–2(a)(2), substitute the following 

paragraph (a) for paragraph (a) of the basic 

clause: 

* * * * * 

Alternate II (Apr 1984). As prescribed in 

27.201–2(a)(3), substitute the following 

paragraph (a) for paragraph (a) of the basic 

clause: 

* * * * * 

■ 11. Amend section 52.227–2 by 

revising the introductory paragraph, 

date of the clause, and paragraphs (b) 

and (c) to read as follows: 

52.227–2 Notice and Assistance 

Regarding Patent and Copyright 

Infringement. 

As prescribed in 27.201–2(b), insert 

the following clause: 

NOTICE AND ASSISTANCE REGARDING 

PATENT AND COPYRIGHT INFRINGEMENT 

(DEC 2007) 

* * * * * 

(b) In the event of any claim or suit against 

the Government on account of any alleged 

patent or copyright infringement arising out 

of the performance of this contract or out of 

the use of any supplies furnished or work or 

services performed under this contract, the 

Contractor shall furnish to the Government, 

when requested by the Contracting Officer, 

all evidence and information in the 

Contractor’s possession pertaining to such 

claim or suit. Such evidence and information 

shall be furnished at the expense of the 

Government except where the Contractor has 

agreed to indemnify the Government. 

(c) The Contractor shall include the 

substance of this clause, including this 

paragraph (c), in all subcontracts that are 

expected to exceed the simplified acquisition 

threshold. 

(End of clause) 

■ 12. Amend section 52.227–3 by 

revising the introductory paragraph and 

the introductory paragraphs of Alternate 

I, II, and III to read as follows: 

52.227–3 Patent Indemnity. 

As prescribed in 27.201–2(c)(1), insert 

the following clause: 

* * * * * 

Alternate I (Apr 1984). As prescribed in 

27.201–2(c)(2), add the following paragraph 

(c) to the basic clause: 

* * * * * 

Alternate II (Apr 1984). As prescribed in 

27.201–2(c)(2), add the following paragraph 

(c) to the basic clause: 

* * * * * 

Alternate III (Jul 1995). As prescribed in 

27.201–2(c)(3), add the following paragraph 

to the basic clause: 

* * * * * 

■ 13. Revise section 52.227–4 to read as 

follows: 

52.227–4 Patent Indemnity—Construction 

Contracts. 

As prescribed in 27.201–2(d)(1), insert 

the following clause: 

PATENT INDEMNITY—CONSTRUCTION 

CONTRACTS (DEC 2007) 

Except as otherwise provided, the 

Contractor shall indemnify the Government 

and its officers, agents, and employees 

against liability, including costs and 

expenses, for infringement of any United 

States patent (except a patent issued upon an 

application that is now or may hereafter be 

withheld from issue pursuant to a Secrecy 

Order under 35 U.S.C. 181) arising out of 

performing this contract or out of the use or 

disposal by or for the account of the 

Government of supplies furnished or work 

performed under this contract. 

(End of clause) 

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63066 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 

Alternate I (DEC 2007). As prescribed in 

27.201–2(d)(2), designate the first paragraph 

of the basic clause as paragraph (a) and add 

the following paragraph (b) to the basic 

clause: 

(b) This patent indemnification shall not 

apply to the following items: 

lllllllllllllll 

[Contracting Officer list the items to be 

excluded.] 

52.227–5 [Amended] 

■ 14. Amend the introductory paragraph 

of section 52.227–5 by removing ‘‘at 

27.203–6’’ and adding ‘‘in 27.201–2(e)’’

in its place. 

■ 15. Amend section 52.227–6 by 

revising the introductory paragraph and 

the introductory paragraph of Alternate 

I to read as follows: 

52.227–6 Royalty Information. 

As prescribed in 27.202–5(a)(1), insert 

the following provision: 

* * * * * 

Alternate I (Apr 1984). As prescribed in 

27.202–5(a)(2), substitute the following for 

the introductory portion of paragraph (a) of 

the basic provision: 

* * * * * 

52.227–7 [Amended] 

■ 16. Amend the introductory paragraph 

of section 52.227–7 by removing 

‘‘27.204–3(c)’’ and adding ‘‘27.202–5(b)’’

in its place. 

■ 17. Amend section 52.227–9 by 

revising the introductory paragraph to 

read as follows: 

52.227–9 Refund of Royalties. 

As prescribed in 27.202–5(c), insert 

the following clause: 

* * * * * 

■ 18. Amend section 52.227–10 by 

revising the introductory paragraph, the 

date of the clause, and paragraph (e) to 

read as follows: 

52.227–10 Filing of Patent Applications—

Classified Subject Matter. 

As prescribed at 27.203–2, insert the 

following clause: 

FILING OF PATENT APPLICATIONS—

CLASSIFIED SUBJECT MATTER (DEC 2007) 

* * * * * 

(e) The Contractor shall include the 

substance of this clause, including this 

paragraph (e), in all subcontracts that cover 

or are likely to cover classified subject 

matter. 

(End of clause) 

■ 19. Revise section 52.227–11 to read 

as follows: 

52.227–11 Patent Rights—Ownership by 

the Contractor. 

As prescribed in 27.303((b)(1), insert 

the following clause: 

PATENT RIGHTS—OWNERSHIP BY THE 

CONTRACTOR (DEC 2007) 

(a) As used in this clause—

Invention means any invention or 

discovery that is or may be patentable or 

otherwise protectable under title 35 of the 

U.S. Code, or any variety of plant that is or 

may be protectable under the Plant Variety 

Protection Act (7 U.S.C. 2321, et seq.) 

Made means—

(1) When used in relation to any invention 

other than a plant variety, the conception or 

first actual reduction to practice of the 

invention; or 

(2) When used in relation to a plant 

variety, that the Contractor has at least 

tentatively determined that the variety has 

been reproduced with recognized 

characteristics. 

Nonprofit organization means a university 

or other institution of higher education or an 

organization of the type described in section 

501(c)(3) of the Internal Revenue Code of 

1954 (26 U.S.C. 501(c)) and exempt from 

taxation under section 501(a) of the Internal 

Revenue Code (26 U.S.C. 501(a)), or any 

nonprofit scientific or educational 

organization qualified under a State 

nonprofit organization statute. 

Practical application means to 

manufacture, in the case of a composition of 

product; to practice, in the case of a process 

or method; or to operate, in the case of a 

machine or system; and, in each case, under 

such conditions as to establish that the 

invention is being utilized and that its 

benefits are, to the extent permitted by law 

or Government regulations, available to the 

public on reasonable terms. 

Subject invention means any invention of 

the Contractor made in the performance of 

work under this contract. 

(b) Contractor’s rights. (1) Ownership. The 

Contractor may retain ownership of each 

subject invention throughout the world in 

accordance with the provisions of this clause. 

(2) License. (i) The Contractor shall retain 

a nonexclusive royalty-free license 

throughout the world in each subject 

invention to which the Government obtains 

title, unless the Contractor fails to disclose 

the invention within the times specified in 

paragraph (c) of this clause. The Contractor’s 

license extends to any domestic subsidiaries 

and affiliates within the corporate structure 

of which the Contractor is a part, and 

includes the right to grant sublicenses to the 

extent the Contractor was legally obligated to 

do so at contract award. The license is 

transferable only with the written approval of 

the agency, except when transferred to the 

successor of that part of the Contractor’s 

business to which the invention pertains. 

(ii) The Contractor’s license may be 

revoked or modified by the agency to the 

extent necessary to achieve expeditious 

practical application of the subject invention 

in a particular country in accordance with 

the procedures in FAR 27.302(i)(2) and 

27.304–1(f). 

(c) Contractor’s obligations. (1) The 

Contractor shall disclose in writing each 

subject invention to the Contracting Officer 

within 2 months after the inventor discloses 

it in writing to Contractor personnel 

responsible for patent matters. The disclosure 

shall identify the inventor(s) and this 

contract under which the subject invention 

was made. It shall be sufficiently complete in 

technical detail to convey a clear 

understanding of the subject invention. The 

disclosure shall also identify any publication, 

on sale (i.e., sale or offer for sale), or public 

use of the subject invention, or whether a 

manuscript describing the subject invention 

has been submitted for publication and, if so, 

whether it has been accepted for publication. 

In addition, after disclosure to the agency, 

the Contractor shall promptly notify the 

Contracting Officer of the acceptance of any 

manuscript describing the subject invention 

for publication and any on sale or public use. 

(2) The Contractor shall elect in writing 

whether or not to retain ownership of any 

subject invention by notifying the 

Contracting Officer within 2 years of 

disclosure to the agency. However, in any 

case where publication, on sale, or public use 

has initiated the 1-year statutory period 

during which valid patent protection can be 

obtained in the United States, the period for 

election of title may be shortened by the 

agency to a date that is no more than 60 days 

prior to the end of the statutory period. 

(3) The Contractor shall file either a 

provisional or a nonprovisional patent 

application or a Plant Variety Protection 

Application on an elected subject invention 

within 1 year after election. However, in any 

case where a publication, on sale, or public 

use has initiated the 1-year statutory period 

during which valid patent protection can be 

obtained in the United States, the Contractor 

shall file the application prior to the end of 

that statutory period. If the Contractor files a 

provisional application, it shall file a 

nonprovisional application within 10 months 

of the filing of the provisional application. 

The Contractor shall file patent applications 

in additional countries or international 

patent offices within either 10 months of the 

first filed patent application (whether 

provisional or nonprovisional) or 6 months 

from the date permission is granted by the 

Commissioner of Patents to file foreign patent 

applications where such filing has been 

prohibited by a Secrecy Order. 

(4) The Contractor may request extensions 

of time for disclosure, election, or filing 

under paragraphs (c)(1), (c)(2), and (c)(3) of 

this clause. 

(d) Government’s rights—(1) Ownership. 

The Contractor shall assign to the agency, on 

written request, title to any subject 

invention—

(i) If the Contractor fails to disclose or elect 

ownership to the subject invention within 

the times specified in paragraph (c) of this 

clause, or elects not to retain ownership; 

provided, that the agency may request title 

only within 60 days after learning of the 

Contractor’s failure to disclose or elect within 

the specified times. 

(ii) In those countries in which the 

Contractor fails to file patent applications 

within the times specified in paragraph (c) of 

this clause; provided, however, that if the 

Contractor has filed a patent application in 

a country after the times specified in 

paragraph (c) of this clause, but prior to its 

receipt of the written request of the agency, 

the Contractor shall continue to retain 

ownership in that country. 

(iii) In any country in which the Contractor 

decides not to continue the prosecution of 

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any application for, to pay the maintenance 

fees on, or defend in reexamination or 

opposition proceeding on, a patent on a 

subject invention. 

(2) License. If the Contractor retains 

ownership of any subject invention, the 

Government shall have a nonexclusive, 

nontransferable, irrevocable, paid-up license 

to practice, or have practiced for or on its 

behalf, the subject invention throughout the 

world. 

(e) Contractor action to protect the 

Government’s interest. (1) The Contractor 

shall execute or have executed and promptly 

deliver to the agency all instruments 

necessary to—

(i) Establish or confirm the rights the 

Government has throughout the world in 

those subject inventions in which the 

Contractor elects to retain ownership; and 

(ii) Assign title to the agency when 

requested under paragraph (d) of this clause 

and to enable the Government to obtain 

patent protection and plant variety protection 

for that subject invention in any country. 

(2) The Contractor shall require, by written 

agreement, its employees, other than clerical 

and nontechnical employees, to disclose 

promptly in writing to personnel identified 

as responsible for the administration of 

patent matters and in the Contractor’s format, 

each subject invention in order that the 

Contractor can comply with the disclosure 

provisions of paragraph (c) of this clause, and 

to execute all papers necessary to file patent 

applications on subject inventions and to 

establish the Government’s rights in the 

subject inventions. The disclosure format 

should require, as a minimum, the 

information required by paragraph (c)(1) of 

this clause. The Contractor shall instruct 

such employees, through employee 

agreements or other suitable educational 

programs, as to the importance of reporting 

inventions in sufficient time to permit the 

filing of patent applications prior to U.S. or 

foreign statutory bars. 

(3) The Contractor shall notify the 

Contracting Officer of any decisions not to 

file a nonprovisional patent application, 

continue the prosecution of a patent 

application, pay maintenance fees, or defend 

in a reexamination or opposition proceeding 

on a patent, in any country, not less than 30 

days before the expiration of the response or 

filing period required by the relevant patent 

office. 

(4) The Contractor shall include, within the 

specification of any United States 

nonprovisional patent or plant variety 

protection application and any patent or 

plant variety protection certificate issuing 

thereon covering a subject invention, the 

following statement, ‘‘This invention was 

made with Government support under 

(identify the contract) awarded by (identify 

the agency). The Government has certain 

rights in the invention.’’

(f) Reporting on utilization of subject 

inventions. The Contractor shall submit, on 

request, periodic reports no more frequently 

than annually on the utilization of a subject 

invention or on efforts at obtaining 

utilization of the subject invention that are 

being made by the Contractor or its licensees 

or assignees. The reports shall include 

information regarding the status of 

development, date of first commercial sale or 

use, gross royalties received by the 

Contractor, and other data and information as 

the agency may reasonably specify. The 

Contractor also shall provide additional 

reports as may be requested by the agency in 

connection with any march-in proceeding 

undertaken by the agency in accordance with 

paragraph (h) of this clause. The Contractor 

also shall mark any utilization report as 

confidential/proprietary to help prevent 

inadvertent release outside the Government. 

As required by 35 U.S.C. 202(c)(5), the 

agency will not disclose that information to 

persons outside the Government without the 

Contractor’s permission. 

(g) Preference for United States industry. 

Notwithstanding any other provision of this 

clause, neither the Contractor nor any 

assignee shall grant to any person the 

exclusive right to use or sell any subject 

invention in the United States unless the 

person agrees that any products embodying 

the subject invention or produced through 

the use of the subject invention will be 

manufactured substantially in the United 

States. However, in individual cases, the 

requirement for an agreement may be waived 

by the agency upon a showing by the 

Contractor or its assignee that reasonable but 

unsuccessful efforts have been made to grant 

licenses on similar terms to potential 

licensees that would be likely to manufacture 

substantially in the United States, or that 

under the circumstances domestic 

manufacture is not commercially feasible. 

(h) March-in rights. The Contractor 

acknowledges that, with respect to any 

subject invention in which it has retained 

ownership, the agency has the right to 

require licensing pursuant to 35 U.S.C. 203 

and 210(c), and in accordance with the 

procedures in 37 CFR 401.6 and any 

supplemental regulations of the agency in 

effect on the date of contract award. 

(i) Special provisions for contracts with 

nonprofit organizations. If the Contractor is 

a nonprofit organization, it shall—

(1) Not assign rights to a subject invention 

in the United States without the written 

approval of the agency, except where an 

assignment is made to an organization that 

has as one of its primary functions the 

management of inventions, provided, that the 

assignee shall be subject to the same 

provisions as the Contractor; 

(2) Share royalties collected on a subject 

invention with the inventor, including 

Federal employee co-inventors (but through 

their agency if the agency deems it 

appropriate) when the subject invention is 

assigned in accordance with 35 U.S.C. 202(e) 

and 37 CFR 401.10; 

(3) Use the balance of any royalties or 

income earned by the Contractor with respect 

to subject inventions, after payment of 

expenses (including payments to inventors) 

incidental to the administration of subject 

inventions for the support of scientific 

research or education; and 

(4) Make efforts that are reasonable under 

the circumstances to attract licensees of 

subject inventions that are small business 

concerns, and give a preference to a small 

business concern when licensing a subject 

invention if the Contractor determines that 

the small business concern has a plan or 

proposal for marketing the invention which, 

if executed, is equally as likely to bring the 

invention to practical application as any 

plans or proposals from applicants that are 

not small business concerns; provided, that 

the Contractor is also satisfied that the small 

business concern has the capability and 

resources to carry out its plan or proposal. 

The decision whether to give a preference in 

any specific case will be at the discretion of 

the Contractor. 

(5) Allow the Secretary of Commerce to 

review the Contractor’s licensing program 

and decisions regarding small business 

applicants, and negotiate changes to its 

licensing policies, procedures, or practices 

with the Secretary of Commerce when the 

Secretary’s review discloses that the 

Contractor could take reasonable steps to 

more effectively implement the requirements 

of paragraph (i)(4) of this clause. 

(j) Communications. [Complete according 

to agency instructions.] 

(k) Subcontracts. (1) The Contractor shall 

include the substance of this clause, 

including this paragraph (k), in all 

subcontracts for experimental, 

developmental, or research work to be 

performed by a small business concern or 

nonprofit organization. 

(2) The Contractor shall include in all other 

subcontracts for experimental, 

developmental, or research work the 

substance of the patent rights clause required 

by FAR Subpart 27.3. 

(3) At all tiers, the patent rights clause 

must be modified to identify the parties as 

follows: references to the Government are not 

changed, and the subcontractor has all rights 

and obligations of the Contractor in the 

clause. The Contractor shall not, as part of 

the consideration for awarding the 

subcontract, obtain rights in the 

subcontractor’s subject inventions. 

(4) In subcontracts, at any tier, the agency, 

the subcontractor, and the Contractor agree 

that the mutual obligations of the parties 

created by this clause constitute a contract 

between the subcontractor and the agency 

with respect to the matters covered by the 

clause; provided, however, that nothing in 

this paragraph is intended to confer any 

jurisdiction under the Contract Disputes Act 

in connection with proceedings under 

paragraph (h) of this clause. 

(End of clause) 

Alternate I (Jun 1989). As prescribed in 

27.303(b)(3), add the following sentence at 

the end of paragraph (d)(2) of the basic 

clause: 

The license shall include the right of the 

Government to sublicense foreign 

governments, their nationals and 

international organizations pursuant to the 

following treaties or international 

agreements: lllllll* 

[* Contracting Officer complete with the 

names of applicable existing treaties or 

international agreements. The above 

language is not intended to apply to treaties 

or agreements that are in effect on the date 

of the award but are not listed.] 

Alternate II (DEC 2007). As prescribed in 

27.303(b)(4), add the following sentence at 

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the end of paragraph (d)(2) of the basic 

clause: 

The agency reserves the right to 

unilaterally amend this contract to identify 

specific treaties or international agreements 

entered into by the Government before or 

after the effective date of the contract and 

effectuate those license or other rights that 

are necessary for the Government to meet its 

obligations to foreign governments, their 

nationals, and international organizations 

under the treaties or international agreements 

with respect to subject inventions made after 

the date of the amendment. 

Alternate III (Jun 1989). As prescribed in 

27.303(b)(5), substitute the following 

paragraph (i)(3) in place of paragraph (i)(3) of 

the basic clause: 

(3) After payment of patenting costs, 

licensing costs, payments to inventors, and 

other expenses incidental to the 

administration of subject inventions, the 

balance of any royalties or income earned 

and retained by the Contractor during any 

fiscal year on subject inventions under this 

or any successor contract containing the 

same requirement, up to any amount equal to 

5 percent of the budget of the facility for that 

fiscal year, shall be used by the Contractor for 

the scientific research, development, and 

education consistent with the research and 

development mission and objectives of the 

facility, including activities that increase the 

licensing potential of other inventions of the 

facility. If the balance exceeds 5 percent, 75 

percent of the excess above 5 percent shall 

be paid by the Contractor to the Treasury of 

the United States and the remaining 25 

percent shall be used by the Contractor only 

for the same purposes as described above. To 

the extent it provides the most effective 

technology transfer, the licensing of subject 

inventions shall be administered by 

Contractor employees on location at the 

facility. 

Alternate IV (Jun 1989). As prescribed in 

27.303(b)(6), include the following paragraph 

(e)(5) in paragraph (e) of the basic clause: 

(5) The Contractor shall establish and 

maintain active and effective procedures to 

ensure that subject inventions are promptly 

identified and timely disclosed, and shall 

submit a description of the procedures to the 

Contracting Officer so that the Contracting 

Officer may evaluate and determine their 

effectiveness. 

Alternate V (DEC 2007). As prescribed in 

27.303(b)(7), include the following paragraph 

(d)(3) in paragraph (d) of the basic clause: 

(d)(3) CRADA licensing. If the Contractor 

performs services at a Government owned 

and operated laboratory or at a Government 

owned and Contractor operated laboratory 

directed by the Government to fulfill the 

Government’s obligations under a 

Cooperative Research and Development 

Agreement (CRADA) authorized by 15 U.S.C. 

3710a, the Government may require the 

Contractor to negotiate an agreement with the 

CRADA collaborating party or parties 

regarding the allocation of rights to any 

subject invention the Contractor makes, 

solely or jointly, under the CRADA. The 

agreement shall be negotiated prior to the 

Contractor undertaking the CRADA work or, 

with the permission of the Government, upon 

the identification of a subject invention. In 

the absence of such an agreement, the 

Contractor agrees to grant the collaborating 

party or parties an option for a license in its 

inventions of the same scope and terms set 

forth in the CRADA for inventions made by 

the Government. 

52.227–12 [Removed] 

■ 20. Remove and reserve section 

52.227–12. 

■ 21. Revise sections 52.227–13 through 

52.227–15 to read as follows: 

52.227–13 Patent Rights—Ownership by 

the Government. 

As prescribed at 27.303(e), insert the 

following clause: 

PATENT RIGHTS—OWNERSHIP BY THE 

GOVERNMENT (DEC 2007) 

(a) Definitions. As used in this clause—

Invention means any invention or 

discovery that is or may be patentable or 

otherwise protectable under title 35 of the 

U.S. Code or any variety of plant that is or 

may be protectable under the Plant Variety 

Protection Act (7 U.S.C. 2321, et seq.) 

Made means—

(1) When used in relation to any invention 

other than a plant variety, means the 

conception or first actual reduction to 

practice of the invention; or 

(2) When used in relation to a plant 

variety, means that the Contractor has at least 

tentatively determined that the variety has 

been reproduced with recognized 

characteristics. 

Practical application, means to 

manufacture, in the case of a composition or 

product; to practice, in the case of a process 

or method; or to operate, in the case of a 

machine or system; and, in each case, under 

such conditions as to establish that the 

invention is being utilized and that its 

benefits are, to the extent permitted by law 

or Government regulations, available to the 

public on reasonable terms. 

Subject invention, means any invention of 

the Contractor made in the performance of 

work under this contract. 

(b) Ownership. (1) Assignment to the 

Government. The Contractor shall assign to 

the Government title throughout the world to 

each subject invention, except to the extent 

that rights are retained under paragraphs 

(b)(2) and (d) of this clause. 

(2) Greater rights determinations. (i) The 

Contractor, or an employee-inventor after 

consultation with the Contractor, may 

request greater rights than the nonexclusive 

license provided in paragraph (d) of this 

clause. The request for a greater rights must 

be submitted to the Contracting Officer at the 

time of the first disclosure of the subject 

invention pursuant to paragraph (e)(2) of this 

clause, or not later than 8 months thereafter, 

unless a longer period is authorized in 

writing by the Contracting Officer for good 

cause shown in writing by the Contractor. 

Each determination of greater rights under 

this contract normally shall be subject to 

paragraph (c) of this clause, and to the 

reservations and conditions deemed to be 

appropriate by the agency. 

(ii) Upon request, the Contractor shall 

provide the filing date, serial number and 

title, a copy of the patent application 

(including an English-language version if 

filed in a language other than English), and 

patent number and issue date for any subject 

invention in any country for which the 

Contractor has retained title. 

(iii) Upon request, the Contractor shall 

furnish the agency an irrevocable power to 

inspect and make copies of the patent 

application file. 

(c) Minimum rights acquired by the 

Government. (1) Regarding each subject 

invention to which the Contractor retains 

ownership, the Contractor agrees as follows: 

(i) The Government will have a 

nonexclusive, nontransferable, irrevocable, 

paid-up license to practice, or have practiced 

for or on its behalf, the subject invention 

throughout the world. 

(ii) The agency has the right to require 

licensing pursuant to 35 U.S.C. 203 and 

210(c) and in accordance with the procedures 

set forth in 37 CFR 401.6 and any 

supplemental regulations of the agency in 

effect on the date of the contract award. 

(iii) Upon request, the Contractor shall 

submit periodic reports no more frequently 

than annually on the utilization, or efforts to 

obtain utilization, of a subject invention by 

the Contractor or its licensees or assignees. 

The reports shall include information 

regarding the status of development, date of 

first commercial sale or use, gross royalties 

received by the Contractor, and any other 

data and information as the agency may 

reasonably specify. The Contractor also shall 

provide additional reports as may be 

requested by the agency in connection with 

any march-in proceedings undertaken by the 

agency in accordance with paragraph 

(c)(1)(ii) of this clause. To the extent data or 

information supplied under this section is 

considered by the Contractor, or its licensees, 

or assignees to be privileged and confidential 

and is so marked, the agency, to the extent 

permitted by law, will not disclose such 

information to persons outside the 

Government. 

(iv) When licensing a subject invention, the 

Contractor shall—

(A) Ensure that no royalties are charged on 

acquisitions involving Government funds, 

including funds derived through a Military 

Assistance Program of the Government or 

otherwise derived through the Government; 

(B) Refund any amounts received as royalty 

charges on a subject invention in acquisitions 

for, or on behalf of, the Government; 

(C) Provide for this refund in any 

instrument transferring rights in the subject 

invention to any party. 

(v) When transferring rights in a subject 

invention, the Contractor shall provide for 

the Government’s rights set forth in 

paragraphs (c)(1)(i) through (c)(1)(iv) of this 

clause. 

(2) Nothing contained in paragraph (c) of 

this clause shall be deemed to grant to the 

Government rights in any invention other 

than a subject invention. 

(d) Minimum rights to the Contractor. (1) 

The Contractor is hereby granted a revocable, 

nonexclusive, paid-up license in each patent 

application filed in any country on a subject 

invention and any resulting patent in which 

the Government obtains title, unless the 

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Contractor fails to disclose the subject 

invention within the times specified in 

paragraph (e)(2) of this clause. The 

Contractor’s license extends to any of its 

domestic subsidiaries and affiliates within 

the corporate structure of which the 

Contractor is a part, and includes the right to 

grant sublicenses to the extent the Contractor 

was legally obligated to do so at contract 

award. The license is transferable only with 

the written approval of the agency except 

when transferred to the successor of that part 

of the Contractor’s business to which the 

subject invention pertains. 

(2) The Contractor’s license may be 

revoked or modified by the agency to the 

extent necessary to achieve expeditious 

practical application of the subject invention 

in a particular country in accordance with 

the procedures in FAR 27.302(i)(2) and 

27.304–1(f). 

(3) When the Government elects not to 

apply for a patent in any foreign country, the 

Contractor retains rights in that foreign 

country to apply for a patent, subject to the 

Government’s rights in paragraph (c)(1) of 

this clause. 

(e) Invention identification, disclosures, 

and reports. (1) The Contractor shall 

establish and maintain active and effective 

procedures to educate its employees in order 

to assure that subject inventions are promptly 

identified and disclosed to Contractor 

personnel responsible for patent matters. The 

procedures shall include the maintenance of 

laboratory notebooks or equivalent records 

and other records as are reasonably necessary 

to document the conception and/or the first 

actual reduction to practice of subject 

inventions, and records that show the 

procedures for identifying and disclosing 

subject inventions are followed. Upon 

request, the Contractor shall furnish the 

Contracting Officer a description of these 

procedures for evaluation and for a 

determination as to their effectiveness. 

(2) The Contractor shall disclose in writing 

each subject invention to the Contracting 

Officer within 2 months after the inventor 

discloses it in writing to Contractor 

personnel responsible for patent matters or, 

if earlier, within 6 months after the 

Contractor becomes aware that a subject 

invention has been made, but in any event 

before any on sale (i.e., sale or offer for sale), 

public use, or publication of the subject 

invention known to the Contractor. The 

disclosure shall identify the contract under 

which the subject invention was made and 

the inventor(s). It shall be sufficiently 

complete in technical detail to convey a clear 

understanding of the subject invention. The 

disclosure shall also identify any publication, 

on sale, or public use of the subject invention 

and whether a manuscript describing the 

subject invention has been submitted for 

publication and, if so, whether it has been 

accepted for publication. In addition, after 

disclosure to the agency, the Contractor shall 

promptly notify the Contracting Officer of the 

acceptance of any manuscript describing the 

subject invention for publication and any on 

sale or public use. 

(3) The Contractor shall furnish the 

Contracting Officer the following: 

(i) Interim reports every 12 months (or a 

longer period as may be specified by the 

Contracting Officer) from the date of the 

contract, listing subject inventions during 

that period, and stating that all subject 

inventions have been disclosed (or that there 

are none) and that the procedures required by 

paragraph (e)(1) of this clause have been 

followed. 

(ii) A final report, within 3 months after 

completion of the contracted work, listing all 

subject inventions or stating that there were 

none, and listing all subcontracts at any tier 

containing a patent rights clause or stating 

that there were none. 

(4) The Contractor shall require, by written 

agreement, its employees, other than clerical 

and nontechnical employees, to disclose 

promptly in writing to personnel identified 

as responsible for the administration of 

patent matters and in the Contractor’s format 

each subject invention in order that the 

Contractor can comply with the disclosure 

provisions of paragraph (c) of this clause, and 

to execute all papers necessary to file patent 

applications on subject inventions and to 

establish the Government’s rights in the 

subject inventions. This disclosure format 

should require, as a minimum, the 

information required by paragraph (e)(2) of 

this clause. The Contractor shall instruct 

such employees, through employee 

agreements or other suitable educational 

programs, as to the importance of reporting 

inventions in sufficient time to permit the 

filing of patent applications prior to U.S. or 

foreign statutory bars. 

(5) Subject to FAR 27.302(i), the Contractor 

agrees that the Government may duplicate 

and disclose subject invention disclosures 

and all other reports and papers furnished or 

required to be furnished pursuant to this 

clause. 

(f) Examination of records relating to 

inventions. (1) The Contracting Officer or any 

authorized representative shall, until 3 years 

after final payment under this contract, have 

the right to examine any books (including 

laboratory notebooks), records, and 

documents of the Contractor relating to the 

conception or first actual reduction to 

practice of inventions in the same field of 

technology as the work under this contract to 

determine whether—

(i) Any inventions are subject inventions; 

(ii) The Contractor has established and 

maintains the procedures required by 

paragraphs (e)(1) and (e)(4) of this clause; and 

(iii) The Contractor and its inventors have 

complied with the procedures. 

(2) The Contractor shall disclose to the 

Contracting Officer, for the determination of 

ownership rights, any unreported invention 

that the Contracting Officer believes may be 

a subject invention. 

(3) Any examination of records under 

paragraph (f) of this clause will be subject to 

appropriate conditions to protect the 

confidentiality of the information involved. 

(g) Withholding of payment. (This 

paragraph does not apply to subcontracts.) 

(1) Any time before final payment under this 

contract, the Contracting Officer may, in the 

Government’s interest, withhold payment 

until a reserve not exceeding $50,000 or 5 

percent of the amount of this contract, 

whichever is less, shall have been set aside 

if, in the Contracting Officer’s opinion, the 

Contractor fails to—

(i) Establish, maintain, and follow effective 

procedures for identifying and disclosing 

subject inventions pursuant to paragraph 

(e)(1) of this clause; 

(ii) Disclose any subject invention pursuant 

to paragraph (e)(2) of this clause; 

(iii) Deliver acceptable interim reports 

pursuant to paragraph (e)(3)(i) of this clause; 

or 

(iv) Provide the information regarding 

subcontracts pursuant to paragraph (i)(4) of 

this clause. 

(2) The Contracting Officer will withhold 

the reserve or balance until the Contracting 

Officer has determined that the Contractor 

has rectified whatever deficiencies exist and 

has delivered all reports, disclosures, and 

other information required by this clause. 

(3) The Contracting Officer will not make 

final payment under this contract before the 

Contractor delivers to the Contracting Officer, 

as required by this clause, all disclosures of 

subject inventions, an acceptable final report, 

and all due confirmatory instruments. 

(4) The Contracting Officer may decrease or 

increase the sums withheld up to the 

maximum authorized. The Contracting 

Officer will not withhold any amount under 

this paragraph while the amount specified by 

this paragraph is being withheld under other 

provisions of the contract. The withholding 

of any amount or the subsequent payment 

shall not be construed as a waiver of any 

Government rights. 

(h) Preference for United States industry. 

Unless provided otherwise, neither the 

Contractor nor any assignee shall grant to any 

person the exclusive right to use or sell any 

subject invention in the United States unless 

the person agrees that any products 

embodying the subject invention or produced 

through the use of the subject invention will 

be manufactured substantially in the United 

States. However, in individual cases, the 

requirement may be waived by the agency 

upon a showing by the Contractor or assignee 

that reasonable but unsuccessful efforts have 

been made to grant licenses on similar terms 

to potential licensees that would be likely to 

manufacture substantially in the United 

States or that, under the circumstances, 

domestic manufacture is not commercially 

feasible. 

(i) Subcontracts. (1) The Contractor shall 

include the substance of the patent rights 

clause required by FAR Subpart 27.3 in all 

subcontracts for experimental, 

developmental, or research work. The 

prescribed patent rights clause must be 

modified to identify the parties as follows: 

references to the Government are not 

changed, and the subcontractor has all rights 

and obligations of the Contractor in the 

clause. The Contractor shall not, as part of 

the consideration for awarding the 

subcontract, obtain rights in the 

subcontractor’s subject inventions. 

(2) In the event of a refusal by a 

prospective subcontractor to accept the 

clause, the Contractor—

(i) Shall promptly submit a written notice 

to the Contracting Officer setting forth the 

subcontractor’s reasons for such refusal and 

other pertinent information that may 

expedite disposition of the matter; and 

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(ii) Shall not proceed with such 

subcontract without the written authorization 

of the Contracting Officer. 

(3) In subcontracts at any tier, the agency, 

the subcontractor, and the Contractor agree 

that the mutual obligations of the parties 

created by the patent rights clause constitute 

a contract between the subcontractor and the 

agency with respect to those matters covered 

by this clause. 

(4) The Contractor shall promptly notify 

the Contracting Officer in writing upon the 

award of any subcontract at any tier 

containing a patent rights clause by 

identifying the subcontractor, the applicable 

patent rights clause, the work to be 

performed under the subcontract, and the 

dates of award and estimated completion. 

Upon request of the Contracting Officer, the 

Contractor shall furnish a copy of such 

subcontract, and, no more frequently than 

annually, a listing of the subcontracts that 

have been awarded. 

(End of clause) 

Alternate I (Jun 1989). As prescribed in 

27.303(e) (4), add the following sentence at 

the end of paragraph (c)(1)(i) of the basic 

clause: 

The license will include the right of the 

Government to sublicense foreign 

governments, their nationals, and 

international organizations pursuant to the 

following treaties or international 

agreements: llllllll* 

[*Contracting Officer complete with the 

names of applicable existing treaties or 

international agreements. The above 

language is not intended to apply to treaties 

or agreements that are in effect on the date 

of the award but are not listed.] 

Alternate II (DEC 2007). As prescribed in 

27.303(e) (5), add the following sentence at 

the end of paragraph (c)(1)(i) of the basic 

clause: 

The agency reserves the right to 

unilaterally amend this contract to identify 

specific treaties or international agreements 

entered into by the Government before or 

after the effective date of this contract, and 

effectuate those license or other rights that 

are necessary for the Government to meet its 

obligations to foreign governments, their 

nationals, and international organizations 

under treaties or international agreements 

with respect to subject inventions made after 

the date of the amendment. 

52.227–14 Rights in Data—General. 

As prescribed in 27.409(b)(1), insert 

the following clause with any 

appropriate alternates: 

RIGHTS IN DATA—GENERAL (DEC 2007) 

(a) Definitions. As used in this clause—

Computer database or database means a 

collection of recorded information in a form 

capable of, and for the purpose of, being 

stored in, processed, and operated on by a 

computer. The term does not include 

computer software. 

Computer software—(1) Means (i) 

Computer programs that comprise a series of 

instructions, rules, routines, or statements, 

regardless of the media in which recorded, 

that allow or cause a computer to perform a 

specific operation or series of operations; and 

(ii) Recorded information comprising 

source code listings, design details, 

algorithms, processes, flow charts, formulas, 

and related material that would enable the 

computer program to be produced, created, 

or compiled. 

(2) Does not include computer databases or 

computer software documentation. 

Computer software documentation means 

owner’s manuals, user’s manuals, installation 

instructions, operating instructions, and 

other similar items, regardless of storage 

medium, that explain the capabilities of the 

computer software or provide instructions for 

using the software. 

Data means recorded information, 

regardless of form or the media on which it 

may be recorded. The term includes 

technical data and computer software. The 

term does not include information incidental 

to contract administration, such as financial, 

administrative, cost or pricing, or 

management information. 

Form, fit, and function data means data 

relating to items, components, or processes 

that are sufficient to enable physical and 

functional interchangeability, and data 

identifying source, size, configuration, 

mating and attachment characteristics, 

functional characteristics, and performance 

requirements. For computer software it 

means data identifying source, functional 

characteristics, and performance 

requirements but specifically excludes the 

source code, algorithms, processes, formulas, 

and flow charts of the software. 

Limited rights means the rights of the 

Government in limited rights data as set forth 

in the Limited Rights Notice of paragraph 

(g)(3) if included in this clause. 

Limited rights data means data, other than 

computer software, that embody trade secrets 

or are commercial or financial and 

confidential or privileged, to the extent that 

such data pertain to items, components, or 

processes developed at private expense, 

including minor modifications. 

Restricted computer software means 

computer software developed at private 

expense and that is a trade secret, is 

commercial or financial and confidential or 

privileged, or is copyrighted computer 

software, including minor modifications of 

the computer software. 

Restricted rights, as used in this clause, 

means the rights of the Government in 

restricted computer software, as set forth in 

a Restricted Rights Notice of paragraph (g) if 

included in this clause, or as otherwise may 

be provided in a collateral agreement 

incorporated in and made part of this 

contract, including minor modifications of 

such computer software. 

Technical data, means recorded 

information (regardless of the form or method 

of the recording) of a scientific or technical 

nature (including computer databases and 

computer software documentation). This 

term does not include computer software or 

financial, administrative, cost or pricing, or 

management data or other information 

incidental to contract administration. The 

term includes recorded information of a 

scientific or technical nature that is included 

in computer databases (See 41 U.S.C. 403(8)). 

Unlimited rights means the rights of the 

Government to use, disclose, reproduce, 

prepare derivative works, distribute copies to 

the public, and perform publicly and display 

publicly, in any manner and for any purpose, 

and to have or permit others to do so. 

(b) Allocation of rights. (1) Except as 

provided in paragraph (c) of this clause, the 

Government shall have unlimited rights in—

(i) Data first produced in the performance 

of this contract; 

(ii) Form, fit, and function data delivered 

under this contract; 

(iii) Data delivered under this contract 

(except for restricted computer software) that 

constitute manuals or instructional and 

training material for installation, operation, 

or routine maintenance and repair of items, 

components, or processes delivered or 

furnished for use under this contract; and 

(iv) All other data delivered under this 

contract unless provided otherwise for 

limited rights data or restricted computer 

software in accordance with paragraph (g) of 

this clause. 

(2) The Contractor shall have the right to—

(i) Assert copyright in data first produced 

in the performance of this contract to the 

extent provided in paragraph (c)(1) of this 

clause; 

(ii) Use, release to others, reproduce, 

distribute, or publish any data first produced 

or specifically used by the Contractor in the 

performance of this contract, unless provided 

otherwise in paragraph (d) of this clause; 

(iii) Substantiate the use of, add, or correct 

limited rights, restricted rights, or copyright 

notices and to take other appropriate action, 

in accordance with paragraphs (e) and (f) of 

this clause; and 

(iv) Protect from unauthorized disclosure 

and use those data that are limited rights data 

or restricted computer software to the extent 

provided in paragraph (g) of this clause. 

(c) Copyright—(1) Data first produced in 

the performance of this contract. (i) Unless 

provided otherwise in paragraph (d) of this 

clause, the Contractor may, without prior 

approval of the Contracting Officer, assert 

copyright in scientific and technical articles 

based on or containing data first produced in 

the performance of this contract and 

published in academic, technical or 

professional journals, symposia proceedings, 

or similar works. The prior, express written 

permission of the Contracting Officer is 

required to assert copyright in all other data 

first produced in the performance of this 

contract. 

(ii) When authorized to assert copyright to 

the data, the Contractor shall affix the 

applicable copyright notices of 17 U.S.C. 401 

or 402, and an acknowledgment of 

Government sponsorship (including contract 

number). 

(iii) For data other than computer software, 

the Contractor grants to the Government, and 

others acting on its behalf, a paid-up, 

nonexclusive, irrevocable, worldwide license 

in such copyrighted data to reproduce, 

prepare derivative works, distribute copies to 

the public, and perform publicly and display 

publicly by or on behalf of the Government. 

For computer software, the Contractor grants 

to the Government, and others acting on its 

behalf, a paid-up, nonexclusive, irrevocable, 

worldwide license in such copyrighted 

computer software to reproduce, prepare 

derivative works, and perform publicly and 

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display publicly (but not to distribute copies 

to the public) by or on behalf of the 

Government. 

(2) Data not first produced in the 

performance of this contract. The Contractor 

shall not, without the prior written 

permission of the Contracting Officer, 

incorporate in data delivered under this 

contract any data not first produced in the 

performance of this contract unless the 

Contractor—

(i) Identifies the data; and 

(ii) Grants to the Government, or acquires 

on its behalf, a license of the same scope as 

set forth in paragraph (c)(1) of this clause or, 

if such data are restricted computer software, 

the Government shall acquire a copyright 

license as set forth in paragraph (g)(4) of this 

clause (if included in this contract) or as 

otherwise provided in a collateral agreement 

incorporated in or made part of this contract. 

(3) Removal of copyright notices. The 

Government will not remove any authorized 

copyright notices placed on data pursuant to 

this paragraph (c), and will include such 

notices on all reproductions of the data. 

(d) Release, publication, and use of data. 

The Contractor shall have the right to use, 

release to others, reproduce, distribute, or 

publish any data first produced or 

specifically used by the Contractor in the 

performance of this contract, except—

(1) As prohibited by Federal law or 

regulation (e.g., export control or national 

security laws or regulations); 

(2) As expressly set forth in this contract; 

or 

(3) If the Contractor receives or is given 

access to data necessary for the performance 

of this contract that contain restrictive 

markings, the Contractor shall treat the data 

in accordance with such markings unless 

specifically authorized otherwise in writing 

by the Contracting Officer. 

(e) Unauthorized marking of data. (1) 

Notwithstanding any other provisions of this 

contract concerning inspection or 

acceptance, if any data delivered under this 

contract are marked with the notices 

specified in paragraph (g)(3) or (g) (4) if 

included in this clause, and use of the 

notices is not authorized by this clause, or if 

the data bears any other restrictive or limiting 

markings not authorized by this contract, the 

Contracting Officer may at any time either 

return the data to the Contractor, or cancel 

or ignore the markings. However, pursuant to 

41 U.S.C. 253d, the following procedures 

shall apply prior to canceling or ignoring the 

markings. 

(i) The Contracting Officer will make 

written inquiry to the Contractor affording 

the Contractor 60 days from receipt of the 

inquiry to provide written justification to 

substantiate the propriety of the markings; 

(ii) If the Contractor fails to respond or fails 

to provide written justification to 

substantiate the propriety of the markings 

within the 60-day period (or a longer time 

approved in writing by the Contracting 

Officer for good cause shown), the 

Government shall have the right to cancel or 

ignore the markings at any time after said 

period and the data will no longer be made 

subject to any disclosure prohibitions. 

(iii) If the Contractor provides written 

justification to substantiate the propriety of 

the markings within the period set in 

paragraph (e)(1)(i) of this clause, the 

Contracting Officer will consider such 

written justification and determine whether 

or not the markings are to be cancelled or 

ignored. If the Contracting Officer determines 

that the markings are authorized, the 

Contractor will be so notified in writing. If 

the Contracting Officer determines, with 

concurrence of the head of the contracting 

activity, that the markings are not authorized, 

the Contracting Officer will furnish the 

Contractor a written determination, which 

determination will become the final agency 

decision regarding the appropriateness of the 

markings unless the Contractor files suit in 

a court of competent jurisdiction within 90 

days of receipt of the Contracting Officer’s 

decision. The Government will continue to 

abide by the markings under this paragraph 

(e)(1)(iii) until final resolution of the matter 

either by the Contracting Officer’s 

determination becoming final (in which 

instance the Government will thereafter have 

the right to cancel or ignore the markings at 

any time and the data will no longer be made 

subject to any disclosure prohibitions), or by 

final disposition of the matter by court 

decision if suit is filed. 

(2) The time limits in the procedures set 

forth in paragraph (e)(1) of this clause may 

be modified in accordance with agency 

regulations implementing the Freedom of 

Information Act (5 U.S.C. 552) if necessary to 

respond to a request thereunder. 

(3) Except to the extent the Government’s 

action occurs as the result of final disposition 

of the matter by a court of competent 

jurisdiction, the Contractor is not precluded 

by paragraph (e) of the clause from bringing 

a claim, in accordance with the Disputes 

clause of this contract, that may arise as the 

result of the Government removing or 

ignoring authorized markings on data 

delivered under this contract. 

(f) Omitted or incorrect markings. (1) Data 

delivered to the Government without any 

restrictive markings shall be deemed to have 

been furnished with unlimited rights. The 

Government is not liable for the disclosure, 

use, or reproduction of such data. 

(2) If the unmarked data has not been 

disclosed without restriction outside the 

Government, the Contractor may request, 

within 6 months (or a longer time approved 

by the Contracting Officer in writing for good 

cause shown) after delivery of the data, 

permission to have authorized notices placed 

on the data at the Contractor’s expense. The 

Contracting Officer may agree to do so if the 

Contractor—

(i) Identifies the data to which the omitted 

notice is to be applied; 

(ii) Demonstrates that the omission of the 

notice was inadvertent; 

(iii) Establishes that the proposed notice is 

authorized; and 

(iv) Acknowledges that the Government 

has no liability for the disclosure, use, or 

reproduction of any data made prior to the 

addition of the notice or resulting from the 

omission of the notice. 

(3) If data has been marked with an 

incorrect notice, the Contracting Officer 

may—

(i) Permit correction of the notice at the 

Contractor’s expense if the Contractor 

identifies the data and demonstrates that the 

correct notice is authorized; or 

(ii) Correct any incorrect notices. 

(g) Protection of limited rights data and 

restricted computer software. (1) The 

Contractor may withhold from delivery 

qualifying limited rights data or restricted 

computer software that are not data 

identified in paragraphs (b)(1)(i), (ii), and (iii) 

of this clause. As a condition to this 

withholding, the Contractor shall—

(i) Identify the data being withheld; and 

(ii) Furnish form, fit, and function data 

instead. 

(2) Limited rights data that are formatted as 

a computer database for delivery to the 

Government shall be treated as limited rights 

data and not restricted computer software. 

(3) [Reserved] 

(h) Subcontracting. The Contractor shall 

obtain from its subcontractors all data and 

rights therein necessary to fulfill the 

Contractor’s obligations to the Government 

under this contract. If a subcontractor refuses 

to accept terms affording the Government 

those rights, the Contractor shall promptly 

notify the Contracting Officer of the refusal 

and shall not proceed with the subcontract 

award without authorization in writing from 

the Contracting Officer. 

(i) Relationship to patents or other rights. 

Nothing contained in this clause shall imply 

a license to the Government under any patent 

or be construed as affecting the scope of any 

license or other right otherwise granted to the 

Government. 

(End of clause) 

Alternate I (DEC 2007). As prescribed in 

27.409(b)(2), substitute the following 

definition for limited rights data in paragraph 

(a) of the basic clause: 

Limited rights data means data, other than 

computer software, developed at private 

expense that embody trade secrets or are 

commercial or financial and confidential or 

privileged. 

Alternate II (DEC 2007). As prescribed in 

27.409(b)(3), insert the following paragraph 

(g)(3) in the basic clause: 

(g)(3) Notwithstanding paragraph (g)(1) of 

this clause, the contract may identify and 

specify the delivery of limited rights data, or 

the Contracting Officer may require by 

written request the delivery of limited rights 

data that has been withheld or would 

otherwise be entitled to be withheld. If 

delivery of that data is required, the 

Contractor shall affix the following ‘‘Limited 

Rights Notice’’ to the data and the 

Government will treat the data, subject to the 

provisions of paragraphs (e) and (f) of this 

clause, in accordance with the notice: 

LIMITED RIGHTS NOTICE (DEC 2007) 

(a) These data are submitted with limited 

rights under Government Contract No. 

llllllll (and subcontract 

llllllll, if appropriate). These data 

may be reproduced and used by the 

Government with the express limitation that 

they will not, without written permission of 

the Contractor, be used for purposes of 

manufacture nor disclosed outside the 

Government; except that the Government 

may disclose these data outside the 

Government for the following purposes, if 

any; provided that the Government makes 

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such disclosure subject to prohibition against 

further use and disclosure: [Agencies may list 

additional purposes as set forth in 27.404–

2(c)(1) or if none, so state.] 

(b) This notice shall be marked on any 

reproduction of these data, in whole or in 

part. 

(End of notice) 

Alternate III (DEC 2007). As prescribed in 

27.409(b)(4), insert the following paragraph 

(g)(4) in the basic clause: 

(g)(4)(i) Notwithstanding paragraph (g)(1) 

of this clause, the contract may identify and 

specify the delivery of restricted computer 

software, or the Contracting Officer may 

require by written request the delivery of 

restricted computer software that has been 

withheld or would otherwise be entitled to 

be withheld. If delivery of that computer 

software is required, the Contractor shall 

affix the following ‘‘Restricted Rights Notice’’

to the computer software and the 

Government will treat the computer software, 

subject to paragraphs (e) and (f) of this 

clause, in accordance with the notice: 

RESTRICTED RIGHTS NOTICE (DEC 2007) 

(a) This computer software is submitted 

with restricted rights under Government 

Contract No. llllllll (and 

subcontract llllllll, if 

appropriate). It may not be used, reproduced, 

or disclosed by the Government except as 

provided in paragraph (b) of this notice or as 

otherwise expressly stated in the contract. 

(b) This computer software may be—

(1) Used or copied for use with the 

computer(s) for which it was acquired, 

including use at any Government installation 

to which the computer(s) may be transferred; 

(2) Used or copied for use with a backup 

computer if any computer for which it was 

acquired is inoperative; 

(3) Reproduced for safekeeping (archives) 

or backup purposes; 

(4) Modified, adapted, or combined with 

other computer software, provided that the 

modified, adapted, or combined portions of 

the derivative software incorporating any of 

the delivered, restricted computer software 

shall be subject to the same restricted rights; 

(5) Disclosed to and reproduced for use by 

support service Contractors or their 

subcontractors in accordance with 

paragraphs (b)(1) through (4) of this notice; 

and 

(6) Used or copied for use with a 

replacement computer. 

(c) Notwithstanding the foregoing, if this 

computer software is copyrighted computer 

software, it is licensed to the Government 

with the minimum rights set forth in 

paragraph (b) of this notice. 

(d) Any other rights or limitations 

regarding the use, duplication, or disclosure 

of this computer software are to be expressly 

stated in, or incorporated in, the contract. 

(e) This notice shall be marked on any 

reproduction of this computer software, in 

whole or in part. 

(End of notice) 

(ii) Where it is impractical to include the 

Restricted Rights Notice on restricted 

computer software, the following short-form 

notice may be used instead: 

RESTRICTED RIGHTS NOTICE SHORT 

FORM (Jun 1987) 

Use, reproduction, or disclosure is subject 

to restrictions set forth in Contract No. 

llllllll (and subcontract, if 

appropriate) with llllllll (name of 

Contractor and subcontractor). 

(End of notice) 

(iii) If restricted computer software is 

delivered with the copyright notice of 17 

U.S.C. 401, it will be presumed to be licensed 

to the Government without disclosure 

prohibitions, with the minimum rights set 

forth in paragraph (b) of this clause. 

Alternate IV (DEC 2007). As prescribed in 

27.409(b)(5), substitute the following 

paragraph (c)(1) for paragraph (c)(1) of the 

basic clause: 

(c) Copyright—(1) Data first produced in 

the performance of the contract. Except as 

otherwise specifically provided in this 

contract, the Contractor may assert copyright 

in any data first produced in the performance 

of this contract. When asserting copyright, 

the Contractor shall affix the applicable 

copyright notice of 17 U.S.C. 401 or 402, and 

an acknowledgment of Government 

sponsorship (including contract number), to 

the data when such data are delivered to the 

Government, as well as when the data are 

published or deposited for registration as a 

published work in the U.S. Copyright Office. 

For data other than computer software, the 

Contractor grants to the Government, and 

others acting on its behalf, a paid-up, 

nonexclusive, irrevocable, worldwide license 

for all such data to reproduce, prepare 

derivative works, distribute copies to the 

public, and perform publicly and display 

publicly, by or on behalf of the Government. 

For computer software, the Contractor grants 

to the Government and others acting on its 

behalf, a paid-up, nonexclusive, irrevocable, 

worldwide license for all such computer 

software to reproduce, prepare derivative 

works, and perform publicly and display 

publicly (but not to distribute copies to the 

public), by or on behalf of the Government. 

Alternate V (DEC 2007). As prescribed in 

27.409(b)(6), add the following paragraph (j) 

to the basic clause: 

(j) The Contractor agrees, except as may be 

otherwise specified in this contract for 

specific data deliverables listed as not subject 

to this paragraph, that the Contracting Officer 

may, up to three years after acceptance of all 

deliverables under this contract, inspect at 

the Contractor’s facility any data withheld 

pursuant to paragraph (g)(1) of this clause, for 

purposes of verifying the Contractor’s 

assertion of limited rights or restricted rights 

status of the data or for evaluating work 

performance. When the Contractor whose 

data are to be inspected demonstrates to the 

Contracting Officer that there would be a 

possible conflict of interest if a particular 

representative made the inspection, the 

Contracting Officer shall designate an 

alternate inspector. 

52.227–15 Representation of Limited 

Rights Data and Restricted Computer 

Software. 

As prescribed in 27.409(c), insert the 

following provision: 

REPRESENTATION OF LIMITED RIGHTS 

DATA AND RESTRICTED COMPUTER 

SOFTWARE (DEC 2007) 

(a) This solicitation sets forth the 

Government’s known delivery requirements 

for data (as defined in the clause at 52.227–

14, Rights in Data—General). Any resulting 

contract may also provide the Government 

the option to order additional data under the 

Additional Data Requirements clause at 

52.227–16, if included in the contract. Any 

data delivered under the resulting contract 

will be subject to the Rights in Data—General 

clause at 52.227–14 included in this contract. 

Under the latter clause, a Contractor may 

withhold from delivery data that qualify as 

limited rights data or restricted computer 

software, and deliver form, fit, and function 

data instead. The latter clause also may be 

used with its Alternates II and/or III to obtain 

delivery of limited rights data or restricted 

computer software, marked with limited 

rights or restricted rights notices, as 

appropriate. In addition, use of Alternate V 

with this latter clause provides the 

Government the right to inspect such data at 

the Contractor’s facility. 

(b) By completing the remainder of this 

paragraph, the offeror represents that it has 

reviewed the requirements for the delivery of 

technical data or computer software and 

states [offeror check appropriate block]—

( ) None of the data proposed for fulfilling 

the data delivery requirements qualifies as 

limited rights data or restricted computer 

software; or 

( ) Data proposed for fulfilling the data 

delivery requirements qualify as limited 

rights data or restricted computer software 

and are identified as follows: 

llllllllllllllll 

llllllllllllllll 

llllllllllllllll 

(c) Any identification of limited rights data 

or restricted computer software in the 

offeror’s response is not determinative of the 

status of the data should a contract be 

awarded to the offeror. 

(End of provision) 

52.227–16 [Amended] 

■ 22. Amend section 52.227–16 by 

removing from the introductory 

paragraph ‘‘27.409(h)’’ and adding 

‘‘27.409(d)’’ in its place. 

■ 23. Revise section 52.227–17 to read 

as follows: 

52.227–17 Rights in Data—Special Works. 

As prescribed in 27.409(e), insert the 

following clause: 

RIGHTS IN DATA—SPECIAL WORKS 

(DEC 2007) 

(a) Definitions. As used in this clause—

Data means recorded information, 

regardless of form or the media on which it 

may be recorded. The term includes 

technical data and computer software. The 

term does not include information incidental 

to contract administration, such as financial, 

administrative, cost or pricing, or 

management information. 

Unlimited rights means the rights of the 

Government to use, disclose, reproduce, 

prepare derivative works, distribute copies to 

the public, and perform publicly and display 

publicly, in any manner and for any purpose, 

and to have or permit others to do so. 

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(b) Allocation of Rights. (1) The 

Government shall have—

(i) Unlimited rights in all data delivered 

under this contract, and in all data first 

produced in the performance of this contract, 

except as provided in paragraph (c) of this 

clause. 

(ii) The right to limit assertion of copyright 

in data first produced in the performance of 

this contract, and to obtain assignment of 

copyright in that data, in accordance with 

paragraph (c)(1) of this clause. 

(iii) The right to limit the release and use 

of certain data in accordance with paragraph 

(d) of this clause. 

(2) The Contractor shall have, to the extent 

permission is granted in accordance with 

paragraph (c)(1) of this clause, the right to 

assert claim to copyright subsisting in data 

first produced in the performance of this 

contract. 

(c) Copyright—(1) Data first produced in 

the performance of this contract. (i) The 

Contractor shall not assert or authorize others 

to assert any claim to copyright subsisting in 

any data first produced in the performance of 

this contract without prior written 

permission of the Contracting Officer. When 

copyright is asserted, the Contractor shall 

affix the appropriate copyright notice of 17 

U.S.C. 401 or 402 and acknowledgment of 

Government sponsorship (including contract 

number) to the data when delivered to the 

Government, as well as when the data are 

published or deposited for registration as a 

published work in the U.S. Copyright Office. 

The Contractor grants to the Government, 

and others acting on its behalf, a paid-up, 

nonexclusive, irrevocable, worldwide license 

for all delivered data to reproduce, prepare 

derivative works, distribute copies to the 

public, and perform publicly and display 

publicly, by or on behalf of the Government. 

(ii) If the Government desires to obtain 

copyright in data first produced in the 

performance of this contract and permission 

has not been granted as set forth in paragraph 

(c)(1)(i) of this clause, the Contracting Officer 

shall direct the Contractor to assign (with or 

without registration), or obtain the 

assignment of, the copyright to the 

Government or its designated assignee. 

(2) Data not first produced in the 

performance of this contract. The Contractor 

shall not, without prior written permission of 

the Contracting Officer, incorporate in data 

delivered under this contract any data not 

first produced in the performance of this 

contract and that contain the copyright notice 

of 17 U.S.C. 401 or 402, unless the Contractor 

identifies such data and grants to the 

Government, or acquires on its behalf, a 

license of the same scope as set forth in 

paragraph (c)(1) of this clause. 

(d) Release and use restrictions. Except as 

otherwise specifically provided for in this 

contract, the Contractor shall not use, release, 

reproduce, distribute, or publish any data 

first produced in the performance of this 

contract, nor authorize others to do so, 

without written permission of the 

Contracting Officer. 

(e) Indemnity. The Contractor shall 

indemnify the Government and its officers, 

agents, and employees acting for the 

Government against any liability, including 

costs and expenses, incurred as the result of 

the violation of trade secrets, copyrights, or 

right of privacy or publicity, arising out of 

the creation, delivery, publication, or use of 

any data furnished under this contract; or 

any libelous or other unlawful matter 

contained in such data. The provisions of 

this paragraph do not apply unless the 

Government provides notice to the 

Contractor as soon as practicable of any claim 

or suit, affords the Contractor an opportunity 

under applicable laws, rules, or regulations 

to participate in the defense of the claim or 

suit, and obtains the Contractor’s consent to 

the settlement of any claim or suit other than 

as required by final decree of a court of 

competent jurisdiction; and these provisions 

do not apply to material furnished to the 

Contractor by the Government and 

incorporated in data to which this clause 

applies. 

(End of clause) 

52.227–18 [Amended] 

■ 24. Amend section 52.227–18 by—

■ a. Removing from the introductory 

paragraph ‘‘27.409(j)’’ and adding 

‘‘27.409(f)’’ in its place; 

■ b. Revising the date of the clause to 

read ‘‘(DEC 2007)’’; and 

■ c. Removing from paragraph (b) 

‘‘thereof’’ and adding ‘‘of the claim or 

suit’’ in its place, and removing ‘‘suit or 

claim’’ and adding ‘‘claim or suit’’ in its 

place. 

■ 25. Revise sections 52.227–19 thru 

52.227–21 to read as follows: 

52.227–19 Commercial Computer Software 

License. 

As prescribed in 27.409(g), insert the 

following clause: 

COMMERCIAL COMPUTER SOFTWARE 

LICENSE (DEC 2007) 

(a) Notwithstanding any contrary 

provisions contained in the Contractor’s 

standard commercial license or lease 

agreement, the Contractor agrees that the 

Government will have the rights that are set 

forth in paragraph (b) of this clause to use, 

duplicate or disclose any commercial 

computer software delivered under this 

contract. The terms and provisions of this 

contract shall comply with Federal laws and 

the Federal Acquisition Regulation. 

(b)(1) The commercial computer software 

delivered under this contract may not be 

used, reproduced, or disclosed by the 

Government except as provided in paragraph 

(b)(2) of this clause or as expressly stated 

otherwise in this contract. 

(2) The commercial computer software may 

be—

(i) Used or copied for use with the 

computer(s) for which it was acquired, 

including use at any Government installation 

to which the computer(s) may be transferred; 

(ii) Used or copied for use with a backup 

computer if any computer for which it was 

acquired is inoperative; 

(iii) Reproduced for safekeeping (archives) 

or backup purposes; 

(iv) Modified, adapted, or combined with 

other computer software, provided that the 

modified, adapted, or combined portions of 

the derivative software incorporating any of 

the delivered, commercial computer software 

shall be subject to same restrictions set forth 

in this contract; 

(v) Disclosed to and reproduced for use by 

support service Contractors or their 

subcontractors, subject to the same 

restrictions set forth in this contract; and 

(vi) Used or copied for use with a 

replacement computer. 

(3) If the commercial computer software is 

otherwise available without disclosure 

restrictions, the Contractor licenses it to the 

Government without disclosure restrictions. 

(c) The Contractor shall affix a notice 

substantially as follows to any commercial 

computer software delivered under this 

contract: 

Notice—Notwithstanding any other lease 

or license agreement that may pertain to, or 

accompany the delivery of, this computer 

software, the rights of the Government 

regarding its use, reproduction and 

disclosure are as set forth in Government 

Contract No. llllllll. 

(End of clause) 

52.227–20 Rights in Data—SBIR Program. 

As prescribed in 27.409(h), insert the 

following clause: 

RIGHTS IN DATA—SBIR PROGRAM (DEC 

2007) 

(a) Definitions. As used in this clause—

Computer database or database means a 

collection of recorded information in a form 

capable of, and for the purpose of, being 

stored in, processed, and operated on by a 

computer. The term does not include 

computer software. 

Computer software—(1) Means (i) 

Computer programs that comprise a series of 

instructions, rules, routines, or statements, 

regardless of the media in which recorded, 

that allow or cause a computer to perform a 

specific operation or series of operations; and 

(ii) Recorded information comprising 

source code listings, design details, 

algorithms, processes, flow charts, formulas, 

and related material that would enable the 

computer program to be produced, created, 

or compiled. 

(2) Does not include computer databases or 

computer software documentation. 

Computer software documentation means 

owner’s manuals, user’s manuals, installation 

instructions, operating instructions, and 

other similar items, regardless of storage 

medium, that explain the capabilities of the 

computer software or provide instructions for 

using the software. 

Data means recorded information, 

regardless of form or the media on which it 

may be recorded. The term includes 

technical data and computer software. The 

term does not include information incidental 

to contract administration, such as financial, 

administrative, cost or pricing or 

management information. 

Form, fit, and function data means data 

relating to items, components, or processes 

that are sufficient to enable physical and 

functional interchangeability, and data 

identifying source, size, configuration, 

mating and attachment characteristics, 

functional characteristics, and performance 

requirements. For computer software it 

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means data identifying source, functional 

characteristics, and performance 

requirements but specifically excludes the 

source code, algorithms, processes, formulas, 

and flow charts of the software. 

Limited rights data means data (other than 

computer software) developed at private 

expense that embody trade secrets or are 

commercial or financial and confidential or 

privileged. 

Restricted computer software means 

computer software developed at private 

expense and that is a trade secret, is 

commercial or financial and confidential or 

privileged, or is copyrighted computer 

software, including minor modifications of 

the computer software. 

SBIR data means data first produced by a 

Contractor that is a small business concern in 

performance of a small business innovation 

research contract issued under the authority 

of 15 U.S.C. 638, which data are not generally 

known, and which data without obligation as 

to its confidentiality have not been made 

available to others by the Contractor or are 

not already available to the Government. 

SBIR rights means the rights in SBIR data 

set forth in the SBIR Rights Notice of 

paragraph (d) of this clause. 

Technical data means recorded 

information (regardless of the form or method 

of the recording) of a scientific or technical 

nature (including computer databases and 

computer software documentation). This 

term does not include computer software or 

financial, administrative, cost or pricing, or 

management data or other information 

incidental to contract administration. The 

term includes recorded information of a 

scientific or technical nature that is included 

in computer databases. (See 41 U.S.C. 

403(8).) 

Unlimited rights means the right of the 

Government to use, disclose, reproduce, 

prepare derivative works, distribute copies to 

the public, and perform publicly and display 

publicly, in any manner and for any purpose 

whatsoever, and to have or permit others to 

do so. 

(b) Allocation of rights. (1) Except as 

provided in paragraph (c) of this clause 

regarding copyright, the Government shall 

have unlimited rights in—

(i) Data specifically identified in this 

contract as data to be delivered without 

restriction; 

(ii) Form, fit, and function data delivered 

under this contract; 

(iii) Data delivered under this contract 

(except for restricted computer software) that 

constitute manuals or instructional and 

training material for installation, operation, 

or routine maintenance and repair of items, 

components, or processes delivered or 

furnished for use under this contract; and 

(iv) All other data delivered under this 

contract unless provided otherwise for SBIR 

data in accordance with paragraph (d) of this 

clause or for limited rights data or restricted 

computer software in accordance with 

paragraph (f) of this clause. 

(2) The Contractor shall have the right to—

(i) Assert copyright in data first produced 

in the performance of this contract to the 

extent provided in paragraph (c)(1) of this 

clause; 

(ii) Protect SBIR rights in SBIR data 

delivered under this contract in the manner 

and to the extent provided in paragraph (d) 

of this clause; 

(iii) Substantiate use of, add, or correct 

SBIR rights or copyright notices and to take 

other appropriate action, in accordance with 

paragraph (e) of this clause; and 

(iv) Withhold from delivery those data 

which are limited rights data or restricted 

computer software to the extent provided in 

paragraph (f) of this clause. 

(c) Copyright—(1) Data first produced in 

the performance of this contract. (i) Except as 

otherwise specifically provided in this 

contract, the Contractor may assert copyright 

subsisting in any data first produced in the 

performance of this contract. 

(ii) When asserting copyright, the 

Contractor shall affix the applicable 

copyright notice of 17 U.S.C. 401 or 402 and 

an acknowledgment of Government 

sponsorship (including contract number). 

(iii) For data other than computer software, 

the Contractor grants to the Government, and 

others acting on its behalf, a paid-up 

nonexclusive, irrevocable, worldwide license 

to reproduce, prepare derivative works, 

distribute copies to the public, and perform 

publicly and display publicly, by or on 

behalf of the Government. For computer 

software, the Contractor grants to the 

Government, and others acting on its behalf, 

a paid-up, nonexclusive, irrevocable, 

worldwide license in such copyrighted 

computer software to reproduce, prepare 

derivative works, and perform publicly and 

display publicly, by or on behalf of the 

Government. 

(2) Data not first produced in the 

performance of this contract. The Contractor 

shall not, without prior written permission of 

the Contracting Officer, incorporate in data 

delivered under this contract any data that 

are not first produced in the performance of 

this contract unless the Contractor (i) 

identifies such data and (ii) grants to the 

Government, or acquires on its behalf, a 

license of the same scope as set forth in 

paragraph (c)(1) of this clause. 

(3) Removal of copyright notices. The 

Government will not remove any copyright 

notices placed on data pursuant to this 

paragraph (c), and will include such notices 

on all reproductions of the data. 

(d) Rights to SBIR data. (1) The Contractor 

is authorized to affix the following ‘‘SBIR 

Rights Notice’’ to SBIR data delivered under 

this contract and the Government will treat 

the data, subject to the provisions of 

paragraphs (e) and (f) of this clause, in 

accordance with the notice: 

SBIR RIGHTS NOTICE (DEC 2007) 

These SBIR data are furnished with SBIR 

rights under Contract No.llllllll 

(and subcontract llllllll, if 

appropriate). For a period of 4 years, unless 

extended in accordance with FAR 27.409(h), 

after acceptance of all items to be delivered 

under this contract, the Government will use 

these data for Government purposes only, 

and they shall not be disclosed outside the 

Government (including disclosure for 

procurement purposes) during such period 

without permission of the Contractor, except 

that, subject to the foregoing use and 

disclosure prohibitions, these data may be 

disclosed for use by support Contractors. 

After the protection period, the Government 

has a paid-up license to use, and to authorize 

others to use on its behalf, these data for 

Government purposes, but is relieved of all 

disclosure prohibitions and assumes no 

liability for unauthorized use of these data by 

third parties. This notice shall be affixed to 

any reproductions of these data, in whole or 

in part. 

(End of notice) 

(2) The Government’s sole obligation with 

respect to any SBIR data shall be as set forth 

in this paragraph (d). 

(e) Omitted or incorrect markings. (1) Data 

delivered to the Government without any 

notice authorized by paragraph (d) of this 

clause shall be deemed to have been 

furnished with unlimited rights. The 

Government assumes no liability for the 

disclosure, use, or reproduction of such data. 

(2) If the unmarked data has not been 

disclosed without restriction outside the 

Government, the Contractor may request, 

within 6 months (or a longer time approved 

by the Contracting Officer in writing for good 

cause shown) after delivery of the data, 

permission to have authorized notices placed 

on the data at the Contractor’s expense, and 

the Contracting Officer may agree to do so if 

the Contractor—

(i) Identifies the data to which the omitted 

notice is to be applied; 

(ii) Demonstrates that the omission of the 

notice was inadvertent; 

(iii) Establishes that the use of the 

proposed notice is authorized; and 

(iv) Acknowledges that the Government 

has no liability with respect to the disclosure 

or use of any such data made prior to the 

addition of the notice or resulting from the 

omission of the notice. 

(3) If the data has been marked with an 

incorrect notice, the Contracting Officer 

may—

(i) Permit correction of the notice at the 

Contractor’s expense, if the Contractor 

identifies the data and demonstrates that the 

correct notice is authorized, or 

(ii) Correct any incorrect notices. 

(f) Protection of limited rights data and 

restricted computer software. The Contractor 

may withhold from delivery qualifying 

limited rights data and restricted computer 

software that are not identified in paragraphs 

(b)(1)(i), (ii), and (iii) of this clause. As a 

condition to this withholding, the Contractor 

shall identify the data being withheld, and 

furnish form, fit, and function data instead. 

(g) Subcontracting. The Contractor shall 

obtain from its subcontractors all data and 

rights therein necessary to fulfill the 

Contractor’s obligations to the Government 

under this contract. If a subcontractor refuses 

to accept terms affording the Government 

those rights, the Contractor shall promptly 

notify the Contracting Officer of the refusal 

and not proceed with the subcontract award 

without further authorization in writing from 

the Contracting Officer. 

(h) Relationship to patents. Nothing 

contained in this clause shall imply a license 

to the Government under any patent or be 

construed as affecting the scope of any 

license or other right otherwise granted to the 

Government. 

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Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 63075 

(End of clause) 

52.227–21 Technical Data Declaration, 

Revision, and Withholding of Payment—

Major Systems. 

As prescribed in 27.409(j), insert the 

following clause: 

TECHNICAL DATA DECLARATION, 

REVISION, AND WITHHOLDING OF 

PAYMENT—MAJOR SYSTEMS (DEC 2007) 

(a) Scope of declaration. The Contractor 

shall provide, in accordance with 41 U.S.C. 

418a (d)(7), the following declaration with 

respect to all technical data that relate to a 

major system and that are delivered or 

required to be delivered under this contract 

or that are delivered within 3 years after 

acceptance of all items (other than technical 

data) delivered under this contract unless a 

different period is set forth in the contract. 

The Contracting Officer may release the 

Contractor from all or part of the 

requirements of this clause for specifically 

identified technical data items at any time 

during the period covered by this clause. 

(b) Technical data declaration. (1) All 

technical data that are subject to this clause 

shall be accompanied by the following 

declaration upon delivery: 

Technical Data Declaration (Jan 1997) 

The Contractor, llllllll, hereby 

declares that, to the best of its knowledge and 

belief, the technical data delivered herewith 

under Government contract No. 

llllllll (and subcontract 

llllllll, if appropriate) are 

complete, accurate, and comply with the 

requirements of the contract concerning such 

technical data. 

(End of declaration) 

(2) The Government may, at any time 

during the period covered by this clause, 

direct correction of any deficiencies that are 

not in compliance with contract 

requirements. The corrections shall be made 

at the expense of the Contractor. 

Unauthorized markings on data shall not be 

considered a deficiency for the purpose of 

this clause, but will be treated in accordance 

with paragraph (e) of the Rights in Data—

General clause included in this contract. 

(c) Technical data revision. The Contractor 

also shall, at the request of the Contracting 

Officer, revise technical data that are subject 

to this clause to reflect engineering design 

changes made during the performance of this 

contract and affecting the form, fit, and 

function of any item (other than technical 

data) delivered under this contract. The 

Contractor may submit a request for an 

equitable adjustment to the terms and 

conditions of this contract for any revisions 

to technical data made pursuant to this 

paragraph. 

(d) Withholding of payment. (1) At any 

time before final payment under this contract 

the Contracting Officer may withhold 

payment as a reserve up to an amount not 

exceeding $100,000 or 5 percent of the 

amount of this contract, whichever is less, if 

the Contractor fails to—

(i) Make timely delivery of the technical 

data; 

(ii) Provide the declaration required by 

paragraph (b)(1) of this clause; 

(iii) Make the corrections required by 

paragraph (b)(2) of this clause; or 

(iv) Make revisions requested under 

paragraph (c) of this clause. 

(2) The Contracting Officer may withhold 

the reserve until the Contractor has complied 

with the direction or requests of the 

Contracting Officer or determines that the 

deficiencies relating to delivered data, arose 

out of causes beyond the control of the 

Contractor and without the fault or 

negligence of the Contractor. 

(3) The withholding of any reserve under 

this clause, or the subsequent payment of the 

reserve, shall not be construed as a waiver of 

any Government rights. 

(End of clause) 

52.227–22 [Amended] 

■ 26. Amend section 52.227–22 by 

removing from the introductory 

paragraph ‘‘27.409(r)’’ and adding ‘‘

27.409(k)’’ in its place. 

52.227–23 [Amended] 

■ 27. Amend section 52.227–23 by 

removing from the introductory 

paragraph ‘‘27.409(s)’’ and adding 

‘‘27.409(l)’’ in its place. 

[FR Doc. 07–5475 Filed 11–6–07; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 2, 4, 5, and 13 

[FAC 2005–21; FAR Case 2006–015; Item 

IV; Docket 2007–0001; Sequence 10] 

RIN 9000–AK68 

Federal Acquisition Regulation; FAR 

Case 2006–015, Federal Computer 

Network (FACNET) Architecture 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to delete references to 

FACNET. 

DATES: Effective Date: December 7, 2007 

FOR FURTHER INFORMATION CONTACT Mr. 

Ernest Woodson, Procurement Analyst, 

at (202) 501–3775 for clarification of 

content. For information pertaining to 

status or publication schedules, contact 

the FAR Secretariat at (202) 501–4755. 

Please cite FAC 2005–21, FAR case 

2006–015. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The Councils published a proposed 

rule with request for comments in the 

Federal Register at 72 FR 4675 on 

February 1, 2007, to amend the FAR to 

remove FACNET references and provide 

the opportunity to recognize the 

evolution of alternative technologies 

and processes, etc., that Federal 

agencies are using and will use to satisfy 

their acquisition needs without 

removing the use of FACNET for 

Federal agencies that may use the 

system. The comment period closed 

April 2, 2007. No public comments were 

received on the rule. The Councils have 

agreed to adopt the proposed rule as 

final without change. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

B. Regulatory Flexibility Act 

DoD, GSA, and NASA certify that this 

final rule will not have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because the 

rule addresses the deletion of a term 

used to describe a system for the 

electronic data interchange of 

acquisition information between the 

private sector and the Federal 

Government without removing the use 

of the system. The rule does not present 

new requirements that impose a burden 

on contractors. No comments were 

received with regard to an impact on 

small business. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the changes to the 

FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. 3501, et 

seq. 

List of Subjects in 48 CFR Parts 2, 4, 5, 

and 13. 

Government procurement. 

Dated: October 31, 2007. 

Al Matera, 

Director, Office of Acquisition Policy. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 2, 4, 5, and 13 as 

set forth below: 

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