FAR Part 27

Question 1

Part 27

Answer 1

Patents, Data, and Copyrights

Question 2

FAR Part 27: Patents, Data, and Copyrights

Overview of FAR Part 27 - Patents, Data, and Copyrights

Purpose: Establishes policies and procedures for managing
intellectual property (IP) in government contracts (FAR 27.000).

Key Sections:

Answer 2

27.1 General

27.2 Patents and Copyrights

27.3 Patent Rights Under Government Contracts

27.4 Rights in Data and Copyrights

27.5 Foreign License and Technical Assistance Agreements

Question 3

FAR Part 27: Patents, Data, and Copyrights

Subpart 27.1 - General

Purpose: Provides general policies and guidelines for IP management
in government contracts (FAR 27.101).

Key Features:

Answer 3

Definitions of key terms related to IP (FAR 27.102).

General responsibilities of contracting officers regarding IP (FAR 27.103).

Question 4

FAR Part 27: Patents, Data, and Copyrights

Subpart 27.2 - Patents and Copyrights

Purpose: Establishes policies for managing patents and copyrights in
government contracts (FAR 27.201).

Key Features:

Answer 4

Procedures for securing patents and copyrights (FAR 27.202).

Guidelines for handling patent infringement claims (FAR 27.203).

Policies for acquiring copyrights and data rights (FAR 27.204).

Question 5

FAR Part 27: Patents, Data, and Copyrights

Subpart 27.3 - Patent Rights Under Government Contracts

Purpose: Details the rights and obligations related to patents in
government contracts (FAR 27.301).

Key Features:

Answer 5

Allocation of patent rights between the government and contractors (FAR
27.302).

Procedures for reporting and disclosing inventions (FAR 27.303).

Requirements for including patent rights clauses in contracts (FAR 27.304).

Question 6

FAR Part 27: Patents, Data, and Copyrights

Subpart 27.4 - Rights in Data and Copyrights

Purpose: Defines the rights in data and copyrights for works created
under government contracts (FAR 27.401).

Key Features:

Answer 6

Categories of data rights, including unlimited, limited, and restricted rights (FAR
27.402).

Procedures for marking and identifying data rights (FAR 27.403).

Policies for managing data rights in commercial and noncommercial items (FAR 27.404).

Question 7

FAR Part 27: Patents, Data, and Copyrights

Subpart 27.5 - Foreign License and Technical Assistance Agreements

Purpose: Provides guidelines for foreign license and technical assistance agreements related to IP (FAR 27.501).

Key Features:

Answer 7

Procedures for negotiating and executing foreign license agreements (FAR
27.502).

Guidelines for technical assistance agreements involving IP (FAR 27.503).

Requirements for reporting and monitoring foreign licenses (FAR 27.504)

Question 8

General Policies

The Government:

Answer 8

Encourages commercial use of inventions made under
government contracts

Will not generally refuse to award a contract on the grounds
that a patent may be infringed

Should generally be indemnified against liability for patent
infringement

Recognizes rights in privately-developed data

Requires contractors to obtain permission to use
copyrighted material

Question 9

Patent

Answer 9

A government grant of exclusive rights to an inventor that prohibits others from
making, using, or selling an invention

The current term for patents is generally 20 years (increased in 1995 from 17 years)

Question 10

Trademark

Answer 10

Distinctive mark of authenticity

Words, symbols, devices, or designs affixed to or placed on an article or its container to identify an article offered for sale

Question 11

Copyright

Answer 11

A royalty-free, non-exclusive, and irrevocable license to reproduce, translate, publish, use, and dispose of written or recorded
material, and ot authorize others ot do so

Valid for the life of the author plus 70 for works published after 1978

Question 12

Patent and Copyright Infringement

For infringement by or on behalf of the government:

Answer 12

No injunctive relief is available

There is no direct cause of action against the infringing contractor

Remedy is a suit for monetary damages against the government in the Court of Federal Claim

Question 13

Patent and Copyright Infringement

Notice and Assistance Clause FAR52.227-2

Answer 13

Requires the contractor to report any notices of infringement to the CO

Requires the contractor to provide any relevant evidence in the event of an infringement suit against the government

Question 14

Patent and Copyright Infringement

Patent Indemnity Clause FAR 52.227-3

Answer 14

fI the contractor has been informed by the government that a patent infringement has been alleged, requires the contractor to indemnify the government against any liability for the infringement

Question 15

Royalty

Royalty payment

Answer 15

A payment made by one party (the licensee to another that owns a particular asset (the licensor) for the right to ongoing use of that asset

Royalties must be: *Reasonable
* Proper
* Consistent with government patent rights

The contracting officer makes this determination by obtaining royalty information from prospective contractors

Al information about royalties shall be provided to the office having cognizance of patent matters for the contracting agency

Royalty information must be provided for subcontractors fi ti is required for the prime contract

Question 16

Classified Technology and Trade Agreements

Unauthorized disclosure of classified

Answer 16

information may
violate U.S. espionage law or compromise national security.

The contracting officer must determine the correct security classification for patent applications to prevent such disclosure.

Unauthorized disclosure of classified information may violate U.S. espionage law or compromise national security.

For material classified “Secret”
or higher, the contracting officer should be informed of these
procedures within 30 days.

Classified material should be transmitted to the U.S. Patent
Office using procedures provided by legal counsel.

Question 17

Classified Technology and Trade Agreements

There are specific notice requirements when the
patent holder is from a country that is a party to the North American Free Trade Agreement (NAFTA).

Answer 17

NAFTA generally requires a
user of technology covered by a valid patent to make a
reasonable effort to obtain
authorization before using the patented technology.

This requirement may be waived in situations of national
emergency or for public, noncommercial use.

Question 18

The Government’s Rights in Patents

Answer 18

The policy of the government is to use the patent system to promote the use of federally supported inventions, and to encourage participation of
industry in research and development.

Question 19

The Government’s Rights in Patents

Title

Answer 19

The legal right to control and dispose of property

Generally, a contractor may retain title to an invention made under a federal contract, except:
* If the contractor has no place of business in the United States
* In exceptional circumstances, fi the agency determines it to be in the best interest of the government
* To protect foreign intelligence or counterintelligence activities, or certain military and weapons programs
* Pursuant to statute or in accordance with agency regulations

Question 20

The Government’s Rights in Patents

At a minimum, the government shall have a:

Answer 20

Nonexclusive,

Nontransferable,

Irrevocable,

Paid-up license

To practice (use) any subject invention

Or have the invention practiced on its behalf,

Throughout the world.

Question 21

The Government’s Rights in Patents

March-in rights

Answer 21

The right of an agency to require a contractor to grant a non-exclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, with respect to any invention of the contractor conceived or first actually reduced to practice in the performance of work under a government contract in which the contractor has acquired title

fI the contractor refuses such a request, the agency is granted a license fi the agency determines that such action is necessary.

Question 22

The Government’s Rights in Patents

When the government acquires title to a subject invention, the contractor shall be granted a

Answer 22

Revocable,

Nontransferable,

Paid-up license

To that subject invention

Throughout the world.

Question 23

The Government’s Rights in Data

Contracts that require data to be produced, furnished, acquired, or used in fulfilling contracts must contain:

Answer 23

The rights and obligations of the government, and

The rights and obligations of the contractor regarding its
* Use
* Reproduction, and
* Disclosure

Question 24

The Government’s Rights in Data

Data rights clauses specify:

Answer 24

The data to b e delivered

The respective rights of government and contractor

Question 25

The Government’s Rights in Data

Date rights clauses do not specify

Answer 25

The type

The quantity, or

The quality of the data

Question 26

Unlimited Rights Data

Unlimited rights

Answer 26

Rights to use, duplicate, release, or disclose technical data or computer software in whole or in part in any manner and for any purpose and to have or permit others to do so

Except for copyrighted works, the government acquires unlimited rights in:
* Data first produced in the performance of a contract
* Except minor modifications to limited rights data or restricted
computer software

Except for copyrighted works, the government acquires unlimited rights in:
* Form, fit, and function data delivered under contract

Except for copyrighted works, the government acquires unlimited rights in:
* All other data delivered under the contract other than limited rights data or restricted computer software.

Question 27

Limited Rights Data

Limited rights

Answer 27

The rights to use, duplicate, or disclose technical data in whole or in part, by or for
the government, with the express written permission of the party furnishing the technical data

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

Question 28

Form, fit and function data

Answer 28

A type of data that provide a basic technical description of an item’s characteristics and capabilities, to describe an item to such a degree as to allow the government to procure comparable items

Question 29

Limited Rights Data

Rights in Data Clause (Alternate I) FAR52.227-14

Answer 29

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 confidential

Question 30

Limited Rights Data

Rights in Data Clause (Alternate II) FAR52.227-14

Answer 30

Enables the government to require delivery of limited rights data rather than allow the contractor to withhold the data

Question 31

The Government’s Rights in Copyrighted Works

Generally, the contractor must obtain the contracting officer’s permission to assert rights in any copyrighted work containing
data first produced ni the performance of a contract.

Contractors are normally authorized, without prior approval of the contracting officer, to assert copyright in:

Answer 31

Technical or scientific articles published in academic,
technical or professional journals,

Symposia proceedings, and

Similar works

Question 32

The Government’s Rights in Copyrighted Works

Generally, the contractor must obtain the contracting officer’s permission to assert rights in any copyrighted work containing
data first produced ni the performance of a contract.

Contractors shall not deliver any data that is not first produced under the contract without either:

Answer 32

Acquiring for or granting to the government a license for the data, or

Obtaining permission from the contracting officer to do otherwise.

Question 33

Publication and Marking of Data

Answer 33

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.

Agencies shall not restrict the publication or release of the results of unclassified basic or applied research performed under contract with universities or colleges.

Agencies may place limitations or restrictions on the contractor’s exercise of its rights in any other data first produced ni the performance of a contract.

The government may reject any
such data delivered to it that is incorrectly marked.

Question 34

Foreign Licensing Agreements

Answer 34

*50 states
* District of Columbia
* Guam
* U.S. Virgin Islands
* American Samoa
* Puerto Rico
* Northern Mariana Islands

For foreign technical assistance agreements and license agreements involving intellectual property, agencies shall:
* Provide necessary policy and procedures, and
* Avoid unnecessary royalty charges

Question 35

FAR PART 27. PATENTS, DATA, AND COPYRIGHTS
FAR part 27 covers patents,

Answer 35

data, and copyrights and 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.

As with many areas of the FAR, this part is extremely complex and has many nuances associated with its application in contracts and in industry. The information in this guide is meant as a summary, and any specific questions or detailed issues should be referred to a specialist in this field.

Question 36

A. GENERAL (FAR 27.1)

The government encourages the maximum practical commercial use of inventions made under government contracts. Generally,

Answer 36

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.

Generally, contractors providing commercial items should indemnify the government against liability of the infringement of U.S. patents. 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.

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.

Question 37

B. PATENTS AND COPYRIGHTS (FAR 27.2)
The exclusive remedy for patent or copyright infringement by or on behalf of the government is

Answer 37

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).

The government may expressly authorize and consent to a contractor’s use or manufacture of inventions covered by U.S. patents byinserting the clause at 52.227-1, AUTHORIZATION AND CONSENT.

Question 38

Because of the exclusive remedies granted in 28 U.S.C. 1498, the government requires notice and assistance from its contractors

Answer 38

regarding any claims for patent or copyright infringement by inserting the clause at FAR 52.227-2, NOTICE AND ASSISTANCE, REGARDING PATENT, AND COPYRIGHT INFRINGEMENT.

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.

Question 39

Prospective contractors are required to furnish royalty information in proposals so the contracting officer can determine whether

Answer 39

royalties anticipated or actually paid under government contracts are excessive, improper, or inconsistent with government patent rights.

The contracting officer shall take appropriate action to reduce or eliminate excessive or improper royalties.

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.

Question 40

The contracting officer, when considering the approval of a subcontract, shall require royalty information if it is required

Answer 40

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.

The contracting officer shall forward any royalty reports to the office having cognizance of patent matters for the contracting activity.

Question 41

If at any time the contracting officer believes that any royalties paid, or to be paid, under a contract or subcontract are inconsistent with

Answer 41

government rights, excessive, or otherwise improper, the contracting officer shall promptly report the facts to the office having cognizance of patent matters for the contractingactivity concerned.

In coordination with the cognizant office, the contracting officer shall promptly act to protect the government against payment of royalties where the government has a royalty-free license, where the rate is in excess of the government license, or where the royalties in whole or in part constitute an improper charge.

Question 42

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 seg. (Chapter 37-Espionage and Censorship) and related statutes, and may be contrary to the interests of national security. To prevent such disclosures,

Answer 42

upon receipt of a patent application 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 U.S. 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. Upon receipt of information furnished by the contractor, 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.

The contracting officer shall act promptly on requests for approval of foreign filing in order to avoid the loss of valuable patent rights of the government or the contractor.

Question 43

With respect to patented technology covered under trade agreements, there are specific notice requirements when the patent holder is from a country that is a party to the North American Free Trade Agreement (NAFTA). Article 1709(10) of NAFTA generally requires a user of technology covered by a valid patent to make a reasonable effort to obtain

Answer 43

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. Section 6 of Executive Order 12889, “Implementation of the North AmericanFree 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.

Question 44

C. PATENT RIGHTS UNDER GOVERNMENT
CONTRACTS (FAR 27.3)

t is the policy and objective of the government to use the patent system to promote the use of inventions arising from federally supported research or development, and to encourage maximum participation of industry in federally supported research and development efforts. It is in the government’s interest

Answer 44

to ensure that these inventions are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery, as well as ensuring that the government retains sufficient rights in these inventions to meet its needs and protect the public against unreasonable use or nonuse while minimizing the cost of administering patents and their policies.

It is highly desirable to promote the commercialization and public availability of the inventions made in the United States by United States industry and labor.

Generally, each contractor may, after required disclosure to the government, elect to retain title to any subject invention.

Question 45

C. PATENT RIGHTS UNDER GOVERNMENT
CONTRACTS (FAR 27.3)

t is the policy and objective of the government to use the patent system to promote the use of inventions arising from federally supported research or development, and to encourage maximum participation of industry in federally supported research and development efforts

Exceptions to this general policy exist and are fully documented in FAR 27.302(b).

Answer 45

These exceptions generally occur when contractors are outside the U.S. or there are issues or concerns relating to foreign governments or national security, particularly with respect to nuclear programs. However, even when the government has the right to acquire title to a subject invention, the contractor may nevertheless request greater rights.

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, an y 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.

Question 46

Pursuant to 35 U.S.C. 203, agencies have certain march-in rights that require

Answer 46

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 1s necessary.

Question 47

When the government acquires title to a subject invention, the contractor is normally granted

Answer 47

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.

The contracting officer shall approve or disapprove, in writing, any contractor request to transfer its licenses.

Question 48

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,

Answer 48

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).

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.

Question 49

D. RIGHTS IN DATA AND COPYRIGHTS
(FAR 27.4)
All contracts that require data to be produced, furnished, acquired, or used in meeting contract performance requirements must contain terms that

Answer 49

delineate the respective rights and obligations of thegovernment 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.

Question 50

The government acquires unlimited rights in the following data, except for copyrighted works:

Answer 50

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);

Form, fit, and function data delivered under contract;

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; and

All other data delivered under the contract other than limited rights data or restricted computer software. (FAR 27.404-2)

The basic clause at FAR 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.

Question 51

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 FAR
52.227-14. The alternate definition

Answer 51

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.

The clause at FAR 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.

Alternate III of the clause at FAR 52.227-14 enables the government to require delivery of restricted computer software rather than allow the contractor to withhold such restricted computer software.

Question 51

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

Answer 51

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.

There are alternate versions of the contract clause that permit various usage, and the most appropriate one should be selected. Contractors shall not deliver any data that is not first produced under the contract without either acquiring for or granting to the government a copyright license for the data or obtaining permission from the contracting officer to do otherwise.

Data delivered to the government with any restrictions on its use must be marked correctly and conspicuously.

The government may reject any data delivered to it that is incorrectly marked.