McCarter Business Development

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Transcript McCarter Business Development

PROTECTING YOUR INTELLECTUAL PROPERTY WHEN DOING BUSINESS WITH THE GOVERNMENT

March 10, 2010

Panel:

David Burns – McCarter & English, LLP Dan Kelly – McCarter & English, LLP

Up in the Air

Up

District Nine

Precious

The Blind Side

A Serious Man

The Hurt Locker

AVATAR

Inglourious Basterds

An Education

2

An Education

3

An Education

by

A Serious Man

4

An Education

by

A Serious Man

So you are not

Up in the Air

5

An Education

by

A Serious Man

So you are not To protect what is

Up in the Air

Precious

6

An Education

by

A Serious Man

So you are not To protect what is

Up in the Air

Precious

from the

Inglourious Basterds

7

An Education

by

A Serious Man

So you are not To protect what is

Up in the Air

Precious

from the

Inglourious Basterds

So you don’t wind

Up

8

An Education

by

A Serious Man

So you are not To protect what is

Up in the Air

Precious

from the

Inglourious Basterds

So you don’t wind

Up

in

The Hurt Locker

9

The Most Common Types of Intellectual Property Protection

   

Patents Trade Secrets Copyrights Trademarks and Service Marks

10

Patents

Type of IP Protection Patents Protectable Subject Matter Nature of Protection/Rights Granted to the IP Owner Processes, machines, articles of manufacture, and compositions of matter.

Right to exclude others from making, using, selling, or importing the invention; sometimes referred to as the right to exclude others from “practicing” the invention.

11

Trade Secrets

Type of IP Protection Trade Secrets Protectable Subject Matter Nature of Protection/Rights Granted to the IP Owner Any information having commercial value by being kept secret (e.g., technical, business, or financial information.

Right to control the disclosure and use of the information through contracts or nondisclosure agreements; protection against theft or misappropriation of that information, but not from independent creation or discovery by another party.

12

Copyrights

Type of IP Protection Protectable Subject Matter Nature of Protection/Rights Granted to the IP Owner Copyrights Original, creative works fixed in a tangible medium of expression (e.g., literary, musical, or audiovisual works; computer programs).

Exclusive rights to: (1) copy; (2) modify; (3) perform; (4) display; and (5) distribute copies of the copyrighted work. No protection against independent creation of similar works, or against certain “fair uses.” 13

Trademarks & Service Marks

Type of IP Protection Protectable Subject Matter Nature of Protection/Rights Granted to the IP Owner Trademarks and Service Marks Distinctive words, phrases, or symbols that identify the source of goods or services.

Protection from confusingly similar marks, deception, and unfair competition in the marketing of goods and services.

14

Preserving Technology Action Items

Know the ground rules!

– What kind of contract is it? Who is the agency?

 

What are you being asked to do? What are you delivering to the government?

Of the “

Precious

” you are delivering, how much was done before the contract award?

What inventions have already been conceived or reduced to practice?

– Are they documented?

15

Preserving Technology Action Items

  

What trade secrets have already been developed and paid for?

– Are they documented?

Are the deliverables commercial items or data associated with commercial items?

Disclose!

Negotiate!

16

Patents

Governed by Title 35 of U.S. Code and Part 27 of FAR and 227 of DFARS Operative Clauses for Subject Inventions FAR 52.227-11- (Ownership by the Contractor) DFARS 252.227-7038 (Ownership by the Contractor –Large Business) FAR 52.227-13 (Ownership by the Government) 17

First Level of Inquiry – Patents

Is the Contract a Research, Experimental and Developmental Contract?

Clauses should not be used for Non Developmental Work

18

Second Level of Inquiry: Background Invention or Subject Invention?

Subject Inventions are any Contractor Invention

Conceived

or

First Actually Reduced to Practice

of the Contract in the Performance

19

“Conception” generally defined as “the complete performance of the mental part of the inventive act”

Must be contemporaneous recognition and appreciation of the invention

Must be a complete and operative invention

20

 “Reduction to practice” can be an actual or constructive reduction to practice  Constructive reduction to practice requires written description sufficient to allow one skilled in the art to make and use the invention (e.g., a patent application)  In some cases (materials, chemicals) conception and reduction to practice may occur at the same time 21

Note that provisions apply if conception occurs pre-contract but reduction to practice occurs during performance under contract

No equitable considerations regarding time or effort spent by contractor prior to contract

22

Patent Rights Two Mandatory Provisions

1.

Government receives right “to practice or have practiced for on behalf of the United States the subject invention throughout the world.” Known as Government Use Rights.

2. Government entitled to March-In Rights. If Contractor has not made reasonable progress in bringing it to the commercial market, agency has right to require contractor to grant licenses to third parties

.

23

How a Contractor Retains Patent Rights

1. Disclose invention to Government (Two Months) 2. Elect to retain title (2 Years – Civilian Agencies and Small Business under DOD, DOE and NASA Contracts; - 8 Months – Large Business under DOD, DOE and NASA Contracts) 3. Diligently prosecute patent application 24

Diligent Prosecution

  

Must file an initial patent application within one year after election of title (sooner if required by statutory period) Foreign filings must be made within 10 months of initial filing Shorter time period for foreign filings than generally permitted under Patent Cooperation Treaty

25

Patent Rights and Subcontracts

Mandatory Flow Down Provisions for Subcontractors which require Developmental Work

Prime Contractor not free to negotiate away Subcontractor’s Rights - Flow Directly to Government

Recent FAR changes Prohibit Mindless Flow Down

26

 Note Alternative Clause Giving Government Title – 52.227-13 (Large For Profit Business or Foreign Business Performing Outside U.S./DOE and NASA Contracts)  If FAR 52.227-13 applies, Government always retains title and contractor has a royalty free license to use in any country for any purpose.

27

Patent Rights Opportunities to Negotiate

1. Conceived vs. Reduced to Practice 2. Extensions to File Patent Applications Before “Statutory Bar” Period (One Year after Publication, Public Use or Public Sale) 3. Negotiating Non-Election of Title by Contractor or Government Preserving Patentable Subject Invention as Trade Secret 4. Extension of Time for March-In Rights 28

Background Inventions

– Inventions conceived and reduced to practice prior to contract – Government does not have any special rights to invention; Government may negotiate license and Contractor may obtain royalties

29

Authorization and Consent

If the patented invention is used “by or for the United States,”

Then a patent owner-plaintiff is limited to:

– (1) Who it can sue (only the Government) – (2) What court it can sue in (COFC) – (3) Remedy for infringement (damages) 30

Authorization and Consent

Two forms:

– (1) Implied (direction of contracting officer, knowledge of government, specifications or drawings) – (2) Express through clause: FAR 52.227-1 (Limited) and Alternate I (Broad) (R&D Contracts) 31

Patent Indemnity

FAR 52.227-3 / FAR 52.212-4(h)

– Government has the right to be indemnified (upon proper notice) in instances where the contract results in the delivery of commercial items. 32

Trade Secrets - Key Concepts

TD: Technical Data and Computer Software Recorded information of a scientific or technical nature. Both FAR and DFARS now include in definition: computer software documentation, including owner’s manuals, training and instruction manuals operating instructions and computer data bases. CS: Programs, source code, source code listings, object code listings, algorithms, etc. and related material that enables software to be reproduced, recreated or recompiled 33

Trade Secrets - Key Concepts

Commercial Items   FAR Part 2.101

Product or service developed or regularly used for non-governmental purposes which – Has been sold or licensed to the public; or – Has been offered for sale or license to the public  May be modified as long as there is no significant change in the “function” or “purpose” 34

Trade Secrets - Key Concepts

Commercial Computer Software Until December 7, 2007 – No Operative Definition in FAR FAR 2.101 Revised: Defined as “any computer software that is a commercial item” FAR and DOD both mandate that when an agency is requiring commercial computer software, the software is to be acquired “under licenses customarily provided to the public to the extent the license is consistent with federal laws and otherwise satisfies government needs.” 35

Rights 1 in Noncommercial Computer Software (CS) and Technical Data (TD) Covering Noncommercial Items Rights Category 2 Unlimited Rights (UR) Government Purpose Rights (GPR) Applicable to TD or CS?

Both TD and CS Both TD and CS Criteria for Applying Rights Category Development exclusively at Government expense; funding.

5 4 also any deliverable of certain types – regardless of Development with mixed funding.

4 Permitted Uses within Government Permitted Uses outside Government 3 Unlimited; no restrictions.

Limited Rights (LR) Restricted Rights (RR) Prior Government Rights Specifically Negotiated License Rights (SNLR) TD only CS only Both TD and CS Both TD and CS Development exclusively at private expense.

4 Development 1 exclusively at private expense.

4 Whenever Government has previously acquired rights in the deliverable TD/CS.

Mutual agreement of the parties; use whenever the standard rights categories do not meet both parties’ needs.

Unlimited; no restrictions.

Unlimited, except may not be used for manufacture Only for “Government purposes”; no commercial use. (5 year window) Emergency repair/ overhaul; evaluation by foreign government.

Only one computer at a time; minimum backup copies; modification.

Emergency repair/ overhaul; certain service/maintenance contracts.

Same as under the previous contract.

As negotiated by the parties; however, must not be less than LR in TD, and must not be less than RR in CS.

6 Notes: 1.

Critical Need to Specify Deliverables. The standard clauses address rights but do

not

include delivery requirements. The contract must explicitly specify the content, format, and delivery medium for all IP deliverables that are necessary to meet DoD’s needs. For TD, it is necessary to specify the level of detail and requirements for delivery in preferred electronic/digital formats. For CS, it is critical to specify requirements for both the executable code and the source code.

2.

Mandatory Listing Requirements. All TD and CS to be delivered with less than UR

must

be identified in a list attached to the contract. Pre-award listing requirements are specified at DFARS 252.227-7017; post-award requirements are at DFARS 252.227-7013(e) and -7014(e).

3.

4.

5.

6.

Release Procedures/Restrictions. All authorized third-party recipients of TD/CS with other than UR must either sign the standard NDA from DFARS 227-7103-7 or receive the TD/CS under a contract containing DFARS 252.227-7025. Additional notice requirements exist for releases of LR data or RR software.

Source of Development Funding at the “Lowest Practicable Level.” For TD, the determination is based on the funding for the development of the item, component, or process (ICP) to which that data pertains (vice the development of the technical data itself). For CS, the determination is based on the source of funding for that software. If the ICP or software is developed with mixed funding, the default GPR license may be inequitable if the Government has funded only a small portion of the overall development costs. This imbalance is resolved by determining the source of funding at “lowest practicable level”: the deliverable ICP or software is divided into segregable components (e.g., sub-elements of ICPs, or sub routines of CS), and the funding determination is made for each of the components individually. For TD, see DFARS 227.7103-4(b) and 252.227-7013(a)(6)-(9); for CS, see DFARS 227.7203-4(b) and 252.227-7014(a)(6)-(9).

Unlimited Rights-Regardless of Funding Source. Paragraph (b)(1) of the DFARS 252.227-7013 and -7014 clauses establish numerous categories for which the Government is entitled to receive UR, regardless of which party funded the development of the underlying technology. For example, “form, fit, and function” data; or data/software that is publicly available without restrictions. See 10 U.S.C. 2320(a)(2)(C).

Minimum Rights. For TD, the minimum rights are established by statute (10 U.S.C. 2320) and are non-negotiable. For CS, the minimum rights are based solely on the DFARS, for which the parties could seek a deviation in circumstances in which DoD’s requirements can be satisfied with less than RR.

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1 in Noncommercial Computer Software (CS) and Technical Data (TD) Covering Noncommercial Items Rights Category 2 Applicable to TD or CS?

Criteria for Applying Rights Category Unlimited Rights (UR) Both TD and CS Development exclusively at Government expense; regardless of funding.

4 5 also any deliverable of certain types – Permitted Uses within Government Permitted Uses outside Government 3 Unlimited; no restrictions.

Notes: 1.

Critical Need to Specify Deliverables. The standard clauses address rights but do executable code and the source code.

not

include delivery requirements. The contract must explicitly specify the content, format, and delivery medium for all IP deliverables that are necessary to meet DoD’s needs. For TD, it is necessary to specify the level of detail and requirements for delivery in preferred electronic/digital formats. For CS, it is critical to specify requirements for both the 2.

3.

4.

Mandatory Listing Requirements. All TD and CS to be delivered with less than UR

must

be identified in a list attached to the contract. Pre-award listing requirements are specified at DFARS 252.227-7017; post-award requirements are at DFARS 252.227-7013(e) and -7014(e).

Release Procedures/Restrictions. All authorized third-party recipients of TD/CS with other than UR must either sign the standard NDA from DFARS 227-7103-7 or receive the TD/CS under a contract containing DFARS 252.227-7025. Additional notice requirements exist for releases of LR data or RR software.

Source of Development Funding at the “Lowest Practicable Level.” For TD, the determination is based on the funding for the development of the item, component, or process (ICP) to which that data pertains (vice the development of the technical data itself). For CS, the determination is based on the source of funding for that software. If the ICP or software is developed with mixed funding, the default GPR license may be inequitable if the Government has funded only a small portion of the overall development costs. This imbalance is resolved by determining the source of funding at “lowest practicable level”: the deliverable ICP or software is divided into segregable components (e.g., sub-elements of ICPs, or sub-routines of CS), and the funding determination is made for each of the components individually. For TD, see DFARS 227.7103-4(b) and 252.227-7013(a)(6)-(9); for CS, see DFARS 227.7203-4(b) and 252.227-7014(a)(6)-(9).

5.

Unlimited Rights-Regardless of Funding Source. Paragraph (b)(1) of the DFARS 252.227-7013 and -7014 clauses establish numerous categories for which the Government is entitled to receive UR, regardless of which party funded the development of the underlying technology. For example, “form, fit, and function” data; or data/software that is publicly available without restrictions. See 10 U.S.C. 2320(a)(2)(C).

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1 in Noncommercial Computer Software (CS) and Technical Data (TD) Covering Noncommercial Items Rights Category 2 Applicable to TD or CS?

Government Purpose Rights (GPR) Both TD and CS Criteria for Applying Rights Category Development with mixed funding.

4 Permitted Uses within Government Unlimited; no restrictions.

Permitted Uses outside Government 3 Only for “Government purposes”; no commercial use. (5 year window) Notes: 1.

Critical Need to Specify Deliverables. The standard clauses address rights but do executable code and the source code.

not

include delivery requirements. The contract must explicitly specify the content, format, and delivery medium for all IP deliverables that are necessary to meet DoD’s needs. For TD, it is necessary to specify the level of detail and requirements for delivery in preferred electronic/digital formats. For CS, it is critical to specify requirements for both the 2.

3.

4.

Mandatory Listing Requirements. All TD and CS to be delivered with less than UR

must

be identified in a list attached to the contract. Pre-award listing requirements are specified at DFARS 252.227-7017; post-award requirements are at DFARS 252.227-7013(e) and -7014(e).

Release Procedures/Restrictions. All authorized third-party recipients of TD/CS with other than UR must either sign the standard NDA from DFARS 227-7103-7 or receive the TD/CS under a contract containing DFARS 252.227-7025. Additional notice requirements exist for releases of LR data or RR software.

Source of Development Funding at the “Lowest Practicable Level.” For TD, the determination is based on the funding for the development of the item, component, or process (ICP) to which that data pertains (vice the development of the technical data itself). For CS, the determination is based on the source of funding for that software. If the ICP or software is developed with mixed funding, the default GPR license may be inequitable if the Government has funded only a small portion of the overall development costs. This imbalance is resolved by determining the source of funding at “lowest practicable level”: the deliverable ICP or software is divided into segregable components (e.g., sub-elements of ICPs, or sub-routines of CS), and the funding determination is made for each of the components individually. For TD, see DFARS 227.7103-4(b) and 252.227-7013(a)(6)-(9); for CS, see DFARS 227.7203-4(b) and 252.227-7014(a)(6)-(9).

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1 in Noncommercial Computer Software (CS) and Technical Data (TD) Covering Noncommercial Items Rights Category 2 Applicable to TD or CS?

Limited Rights (LR) TD only Criteria for Applying Rights Category Development exclusively at private expense.

4 Permitted Uses within Government Unlimited, except may not be used for manufacture Permitted Uses outside Government 3 Emergency repair/ overhaul; evaluation by foreign government.

Notes: 1.

Critical Need to Specify Deliverables. The standard clauses address rights but do executable code and the source code.

not

include delivery requirements. The contract must explicitly specify the content, format, and delivery medium for all IP deliverables that are necessary to meet DoD’s needs. For TD, it is necessary to specify the level of detail and requirements for delivery in preferred electronic/digital formats. For CS, it is critical to specify requirements for both the 2.

3.

4.

Mandatory Listing Requirements. All TD and CS to be delivered with less than UR

must

be identified in a list attached to the contract. Pre-award listing requirements are specified at DFARS 252.227-7017; post-award requirements are at DFARS 252.227-7013(e) and -7014(e).

Release Procedures/Restrictions. All authorized third-party recipients of TD/CS with other than UR must either sign the standard NDA from DFARS 227-7103-7 or receive the TD/CS under a contract containing DFARS 252.227-7025. Additional notice requirements exist for releases of LR data or RR software.

Source of Development Funding at the “Lowest Practicable Level.” For TD, the determination is based on the funding for the development of the item, component, or process (ICP) to which that data pertains (vice the development of the technical data itself). For CS, the determination is based on the source of funding for that software. If the ICP or software is developed with mixed funding, the default GPR license may be inequitable if the Government has funded only a small portion of the overall development costs. This imbalance is resolved by determining the source of funding at “lowest practicable level”: the deliverable ICP or software is divided into segregable components (e.g., sub-elements of ICPs, or sub-routines of CS), and the funding determination is made for each of the components individually. For TD, see DFARS 227.7103-4(b) and 252.227-7013(a)(6)-(9); for CS, see DFARS 227.7203-4(b) and 252.227-7014(a)(6)-(9).

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1 in Noncommercial Computer Software (CS) and Technical Data (TD) Covering Noncommercial Items Rights Category 2 Applicable to TD or CS?

Restricted Rights (RR) CS only Criteria for Applying Rights Category Development 1 exclusively at private expense.

4 Permitted Uses within Government Only one computer at a time; minimum backup copies; modification.

Permitted Uses outside Government 3 Emergency repair/ overhaul; certain service/maintenance contracts.

Notes: 1.

Critical Need to Specify Deliverables. The standard clauses address rights but do executable code and the source code.

not

include delivery requirements. The contract must explicitly specify the content, format, and delivery medium for all IP deliverables that are necessary to meet DoD’s needs. For TD, it is necessary to specify the level of detail and requirements for delivery in preferred electronic/digital formats. For CS, it is critical to specify requirements for both the 2.

3.

4.

Mandatory Listing Requirements. All TD and CS to be delivered with less than UR

must

be identified in a list attached to the contract. Pre-award listing requirements are specified at DFARS 252.227-7017; post-award requirements are at DFARS 252.227-7013(e) and -7014(e).

Release Procedures/Restrictions. All authorized third-party recipients of TD/CS with other than UR must either sign the standard NDA from DFARS 227-7103-7 or receive the TD/CS under a contract containing DFARS 252.227-7025. Additional notice requirements exist for releases of LR data or RR software.

Source of Development Funding at the “Lowest Practicable Level.” For TD, the determination is based on the funding for the development of the item, component, or process (ICP) to which that data pertains (vice the development of the technical data itself). For CS, the determination is based on the source of funding for that software. If the ICP or software is developed with mixed funding, the default GPR license may be inequitable if the Government has funded only a small portion of the overall development costs. This imbalance is resolved by determining the source of funding at “lowest practicable level”: the deliverable ICP or software is divided into segregable components (e.g., sub-elements of ICPs, or sub-routines of CS), and the funding determination is made for each of the components individually. For TD, see DFARS 227.7103-4(b) and 252.227-7013(a)(6)-(9); for CS, see DFARS 227.7203-4(b) and 252.227-7014(a)(6)-(9).

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1 in Noncommercial Computer Software (CS) and Technical Data (TD) Covering Noncommercial Items Rights Category 2 Applicable to TD or CS?

Prior Government Rights Both TD and CS Criteria for Applying Rights Category Whenever Government has previously acquired rights in the deliverable TD/CS.

Permitted Uses within Government Permitted Uses outside Government 3 Same as under the previous contract.

Notes: 1.

Critical Need to Specify Deliverables. The standard clauses address rights but do executable code and the source code.

not

include delivery requirements. The contract must explicitly specify the content, format, and delivery medium for all IP deliverables that are necessary to meet DoD’s needs. For TD, it is necessary to specify the level of detail and requirements for delivery in preferred electronic/digital formats. For CS, it is critical to specify requirements for both the 2.

3.

Mandatory Listing Requirements. All TD and CS to be delivered with less than UR

must

be identified in a list attached to the contract. Pre-award listing requirements are specified at DFARS 252.227-7017; post-award requirements are at DFARS 252.227-7013(e) and -7014(e).

Release Procedures/Restrictions. All authorized third-party recipients of TD/CS with other than UR must either sign the standard NDA from DFARS 227-7103-7 or receive the TD/CS under a contract containing DFARS 252.227-7025. Additional notice requirements exist for releases of LR data or RR software.

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1 in Noncommercial Computer Software (CS) and Technical Data (TD) Covering Noncommercial Items Rights Category 2 Applicable to TD or CS?

Specifically Negotiated License Rights (SNLR) Both TD and CS Criteria for Applying Rights Category Mutual agreement of the parties; use whenever the standard rights categories do not meet both parties’ needs.

Permitted Uses within Government Permitted Uses outside Government 3 As negotiated by the parties; however, must not be less than LR in TD, and must not be less than RR in CS.

6 Notes: 1.

Critical Need to Specify Deliverables. The standard clauses address rights but do executable code and the source code.

not

include delivery requirements. The contract must explicitly specify the content, format, and delivery medium for all IP deliverables that are necessary to meet DoD’s needs. For TD, it is necessary to specify the level of detail and requirements for delivery in preferred electronic/digital formats. For CS, it is critical to specify requirements for both the 2.

3.

6.

Mandatory Listing Requirements. All TD and CS to be delivered with less than UR

must

be identified in a list attached to the contract. Pre-award listing requirements are specified at DFARS 252.227-7017; post-award requirements are at DFARS 252.227-7013(e) and -7014(e).

Release Procedures/Restrictions. All authorized third-party recipients of TD/CS with other than UR must either sign the standard NDA from DFARS 227-7103-7 or receive the TD/CS under a contract containing DFARS 252.227-7025. Additional notice requirements exist for releases of LR data or RR software.

Minimum Rights. For TD, the minimum rights are established by statute (10 U.S.C. 2320) and are non-negotiable. For CS, the minimum rights are based solely on the DFARS, for which the parties could seek a deviation in circumstances in which DoD’s requirements can be satisfied with less than RR.

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1,2 in Commercial Computer Software 3,4 (CS) and Technical Data (TD) Covering Commercial Items 3,4 Rights Category 5 Unlimited Rights (UR) Applicable to TD or CS?

TD only Standard DFARS “7015” Rights TD only Standard Commercial License Specifically Negotiated License Rights (SNLR) CS only Both TD and CS Criteria for Applying Rights Category Any TD of certain specified types or classes, regardless of commercial status.

6 Default rights category for all TD covering commercial items except those qualifying for UR as stated above.

Default rights category for all commercial CS.

Mutual agreement of the parties; should be used whenever the standard rights do not meet both parties’ needs.

Permitted Uses within Government Unlimited; no restrictions.

Unlimited, except may not be used for manufacture.

Permitted Uses outside Government overhaul.

3 Only for emergency repair As specified in the license customarily offered to the public, DoD must negotiate for any specialized needs.

As negotiated by the parties; however, by statute, the Government cannot accept less than the minimum standard 7015 rights in TD.

7 Notes: 1.

2.

3.

4.

5.

6.

7.

Critical Impact on IP Delivery Requirements. DoD policy is to acquire, in addition to lesser rights, only those IP deliverables that are customarily offered to the public. In many cases this will be substantially different (e.g., less detailed TD; no source doe for CS) than the deliverables DoD typically receives for noncommercial TD or CS. DoD must specifically negotiate for any additional IP deliverables that it requires.

Key: Early Identification of Commercial Technologies. Because both the IP deliverables and the license rights are significantly affected when acquiring commercial technologies, it is critical to identify how these issues affect the acquisition strategy early in the acquisition process.

Definitions . “Commercial item” is defined at FAR 2.101 (and 52.202-1), and “commercial computer software” is defined in FAR 2.101 and DFARS 252.227-7014(a)(1).

Adapting/Modifying Commercial Items . Commercial items may be modified to meet DoD’s requirements without losing their commercial status, as long as the adaptations qualify as “minor modifications” or modifications “of a type customarily available in the commercial marketplace.” See FAR 2.101(c), and DFARS 252.227-7014(a)(1) and (12).

DFARS Rights versus Standard Commercial Licenses. Rights in TD covering commercial items are specified at DFARS 252.227-7015; the default rights are similar to limited rights that apply to noncommercial TD. FAR 52.227 19 gives the Government “restricted rights” in commercial computer software and is to be used when “there is confusion as to whether the Government’s needs are satisfied or whether a customary commercial license is consistent with Federal Laws.” In the DFARS, there is no clause covering commercial CS; DoD takes the rights customarily offered to the public (often a “shrink-wrap” or “click-wrap” license) unless those rights do not meet DoD’s minimum needs or violate Federal procurement law. In all cases, a copy of the standard commercial license agreement or any SNLR must be attached to the contract.

Unlimited Rights-Regardless of Commercial Status. DFARS 252.227-7015(b)(1) lists numerous categories of TD for which the Government is entitled to receive UR based on 10 U.S.C. 2320(a)(2)(C).

– regardless of the commercial status or source of funding for the technology. For example, “form, fit, and function” data or data/software that is publicly available without restrictions. The categories are Minimum Rights. For TD, the minimum rights are established by statute (10 U.S.C. 2320) and are non-negotiable.

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1,2 in Commercial Computer Software 3,4 (CS) and Technical Data (TD) Covering Commercial Items 3,4 Rights Category 5 Applicable to TD or CS?

Unlimited Rights (UR) TD only Criteria for Applying Rights Category Any TD of certain specified types or classes, regardless of commercial status.

6 Permitted Uses within Government Unlimited; no restrictions.

Permitted Uses outside Government 3 Notes: 1.

Critical Impact on IP Delivery Requirements. DoD policy is to acquire, in addition to lesser rights, only those IP deliverables that are customarily offered to the public. In many cases this will be substantially different (e.g., less detailed TD; no source doe for CS) than the deliverables DoD typically receives for noncommercial TD or CS. DoD must specifically negotiate for any additional IP deliverables that it requires.

2.

3.

4.

5.

6.

Key: Early Identification of Commercial Technologies. Because both the IP deliverables and the license rights are significantly affected when acquiring commercial technologies, it is critical to identify how these issues affect the acquisition strategy early in the acquisition process.

Definitions . “Commercial item” is defined at FAR 2.101 (and 52.202-1), and “commercial computer software” is defined in FAR 2.101 and DFARS 252.227-7014(a)(1).

Adapting/Modifying Commercial Items . Commercial items may be modified to meet DoD’s requirements without losing their commercial status, as long as the adaptations qualify as “minor modifications” or modifications “of a type customarily available in the commercial marketplace.” See FAR 2.101(c), and DFARS 252.227-7014(a)(1) and (12).

DFARS Rights versus Standard Commercial Licenses. Rights in TD covering commercial items are specified at DFARS 252.227-7015; the default rights are similar to limited rights that apply to noncommercial TD. FAR 52.227 19 gives the Government “restricted rights” in commercial computer software and is to be used when “there is confusion as to whether the Government’s needs are satisfied or whether a customary commercial license is consistent with Federal Laws.” In the DFARS, there is no clause covering commercial CS; DoD takes the rights customarily offered to the public (often a “shrink-wrap” or “click-wrap” license) unless those rights do not meet DoD’s minimum needs or violate Federal procurement law. In all cases, a copy of the standard commercial license agreement or any SNLR must be attached to the contract.

Unlimited Rights-Regardless of Commercial Status. DFARS 252.227-7015(b)(1) lists numerous categories of TD for which the Government is entitled to receive UR – regardless of the commercial status or source of funding for the technology. For example, “form, fit, and function” data or data/software that is publicly available without restrictions. The categories are based on 10 U.S.C. 2320(a)(2)(C).

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1,2 in Commercial Computer Software 3,4 (CS) and Technical Data (TD) Covering Commercial Items 3,4 Rights Category 5 Applicable to TD or CS?

Standard DFARS “7015” Rights TD only Criteria for Applying Rights Category Default rights category for all TD covering commercial items except those qualifying for UR as stated above.

Permitted Uses within Government Unlimited, except may not be used for manufacture.

Permitted Uses outside Government 3 Only for emergency repair overhaul.

Notes: 1.

Critical Impact on IP Delivery Requirements. DoD policy is to acquire, in addition to lesser rights, only those IP deliverables that are customarily offered to the public. In many cases this will be substantially different (e.g., less detailed TD; no source doe for CS) than the deliverables DoD typically receives for noncommercial TD or CS. DoD must specifically negotiate for any additional IP deliverables that it requires.

2.

3.

4.

5.

Key: Early Identification of Commercial Technologies. Because both the IP deliverables and the license rights are significantly affected when acquiring commercial technologies, it is critical to identify how these issues affect the acquisition strategy early in the acquisition process.

Definitions . “Commercial item” is defined at FAR 2.101 (and 52.202-1), and “commercial computer software” is defined in FAR 2.101 and DFARS 252.227-7014(a)(1).

Adapting/Modifying Commercial Items . Commercial items may be modified to meet DoD’s requirements without losing their commercial status, as long as the adaptations qualify as “minor modifications” or modifications “of a type customarily available in the commercial marketplace.” See FAR 2.101(c), and DFARS 252.227-7014(a)(1) and (12).

DFARS Rights versus Standard Commercial Licenses. Rights in TD covering commercial items are specified at DFARS 252.227-7015; the default rights are similar to limited rights that apply to noncommercial TD. FAR 52.227 19 gives the Government “restricted rights” in commercial computer software and is to be used when “there is confusion as to whether the Government’s needs are satisfied or whether a customary commercial license is consistent with Federal Laws.” In the DFARS, there is no clause covering commercial CS; DoD takes the rights customarily offered to the public (often a “shrink-wrap” or “click-wrap” license) unless those rights do not meet DoD’s minimum needs or violate Federal procurement law. In all cases, a copy of the standard commercial license agreement or any SNLR must be attached to the contract.

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1,2 in Commercial Computer Software 3,4 (CS) and Technical Data (TD) Covering Commercial Items 3,4 Rights Category 5 Applicable to TD or CS?

Standard Commercial License CS only Criteria for Applying Rights Category Default rights category for all commercial CS.

Permitted Uses within Government Permitted Uses outside Government 3 As specified in the license customarily offered to the public, DoD must negotiate for any specialized needs.

Notes: 1.

Critical Impact on IP Delivery Requirements. DoD policy is to acquire, in addition to lesser rights, only those IP deliverables that are customarily offered to the public. In many cases this will be substantially different (e.g., less detailed TD; no source doe for CS) than the deliverables DoD typically receives for noncommercial TD or CS. DoD must specifically negotiate for any additional IP deliverables that it requires.

2.

3.

4.

5.

Key: Early Identification of Commercial Technologies. Because both the IP deliverables and the license rights are significantly affected when acquiring commercial technologies, it is critical to identify how these issues affect the acquisition strategy early in the acquisition process.

Definitions . “Commercial item” is defined at FAR 2.101 (and 52.202-1), and “commercial computer software” is defined in FAR 2.101 and DFARS 252.227-7014(a)(1).

Adapting/Modifying Commercial Items . Commercial items may be modified to meet DoD’s requirements without losing their commercial status, as long as the adaptations qualify as “minor modifications” or modifications “of a type customarily available in the commercial marketplace.” See FAR 2.101(c), and DFARS 252.227-7014(a)(1) and (12).

DFARS Rights versus Standard Commercial Licenses. Rights in TD covering commercial items are specified at DFARS 252.227-7015; the default rights are similar to limited rights that apply to noncommercial TD. FAR 52.227 19 gives the Government “restricted rights” in commercial computer software and is to be used when “there is confusion as to whether the Government’s needs are satisfied or whether a customary commercial license is consistent with Federal Laws.” In the DFARS, there is no clause covering commercial CS; DoD takes the rights customarily offered to the public (often a “shrink-wrap” or “click-wrap” license) unless those rights do not meet DoD’s minimum needs or violate Federal procurement law. In all cases, a copy of the standard commercial license agreement or any SNLR must be attached to the contract.

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Rights 1,2 in Commercial Computer Software 3,4 (CS) and Technical Data (TD) Covering Commercial Items 3,4 Rights Category 5 Specifically Negotiated License Rights (SNLR) Applicable to TD or CS?

Both TD and CS Criteria for Applying Rights Category Mutual agreement of the parties; should be used whenever the standard rights do not meet both parties’ needs.

Permitted Uses within Government Permitted Uses outside Government 3 As negotiated by the parties; however, by statute, the Government cannot accept less than the minimum standard 7015 rights in TD.

7 Notes: 1.

Critical Impact on IP Delivery Requirements. DoD policy is to acquire, in addition to lesser rights, only those IP deliverables that are customarily offered to the public. In many cases this will be substantially different (e.g., less detailed TD; no source doe for CS) than the deliverables DoD typically receives for noncommercial TD or CS. DoD must specifically negotiate for any additional IP deliverables that it requires.

2.

3.

4.

5.

7.

Key: Early Identification of Commercial Technologies. Because both the IP deliverables and the license rights are significantly affected when acquiring commercial technologies, it is critical to identify how these issues affect the acquisition strategy early in the acquisition process.

Definitions . “Commercial item” is defined at FAR 2.101 (and 52.202-1), and “commercial computer software” is defined in FAR 2.101 and DFARS 252.227-7014(a)(1).

Adapting/Modifying Commercial Items . Commercial items may be modified to meet DoD’s requirements without losing their commercial status, as long as the adaptations qualify as “minor modifications” or modifications “of a type customarily available in the commercial marketplace.” See FAR 2.101(c), and DFARS 252.227-7014(a)(1) and (12).

DFARS Rights versus Standard Commercial Licenses. Rights in TD covering commercial items are specified at DFARS 252.227-7015; the default rights are similar to limited rights that apply to noncommercial TD. FAR 52.227 19 gives the Government “restricted rights” in commercial computer software and is to be used when “there is confusion as to whether the Government’s needs are satisfied or whether a customary commercial license is consistent with Federal Laws.” There is no clause covering commercial CS; DoD takes the rights customarily offered to the public (often a “shrink-wrap” or “click-wrap” license) unless those rights do not meet DoD’s minimum needs or violate Federal procurement law. In all cases, a copy of the standard commercial license agreement or any SNLR must be attached to the contract.

Minimum Rights. For TD, the minimum rights are established by statute (10 U.S.C. 2320) and are non-negotiable.

SOURCE: Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics,

Intellectual Property: Navigating Through Commercial Waters

(Oct. 15, 2001),

available at

www.acq.osd.mil/dpap/Docs/intelprop.pdf.

Deliverables

What is Required to be Delivered under Contract Data Rights clauses do not specify Agency has discretion to draft content, record/storage format and delivery/storage medium

48

Deliverables

→ Deliverables can be altered → Life Cycle Maintenance/Support Agreements → Deferred Ordering DFARS 252.227-7027 (3 year expiration date after acceptance of all items on termination of contract) → Deferred Delivery Procedures (“Deferred Delivery” data or software) (2 year window) → Third Party Escrow Arrangements 49

Identification of Pre-Existing IP That will be Delivered

 Precondition for government getting less than unlimited rights  Must identify technical data and computer software to be furnished with restrictions, the basis, and asserted rights category. Must be signed by someone with binding authority. – DFARS 252.227-7017, 252.227-7013(e), 252.227-7014(e)  List commercial computer software and commercial technical data even though not covered  Separately list background inventions – identify U.S. Patent or Patent Application covering invention and information regarding license rights. 50

Identification of Pre-Existing IP That will be Delivered Note: Assertions are binding on contractor; government has up to three years after final payment or termination to challenge assertions DFARS 252.227-7019 (software) DFARS 252.227-7037 (technical data)

51

Use of Restrictive Markings and Control of Deliverables Proposals

Solicited Proposals – DFARS 252.227-7016 Restricts Government’s Use pre-award in evaluation of proposal. Data Rights clauses kick in after award. Need appropriate restrictive legends.

Unsolicited Proposals – FAR 15.609 contains special legend which must be included 52

Use of Restrictive Markings and Control of Deliverables Deliverables

Legend Menu for Non-Commercial Deliverables 1.

2.

3.

4.

Copyright Notice from 17 U.S.C.

§§ 401-402 Government Purpose Rights (for TD and CS) Special License Rights (for TD and CS) Limited Rights (For TD) 5.

Restricted Rights (For CS) See DFARS 252.227-7013 and 252.227-7014 EVERYTHING ELSE IS NON-CONFORMING 53

Use of Restrictive Markings and Control of Deliverables

Legend for Commercial Technologies For Technical Data – DFARS 252.227-7015(d) requires a legend but there is no format Legend should reference government use restrictions or separate license agreement For computer software – follow standard commercial practices 54

WHEN IN DOUBT, GET HELP

         Get help from a lawyer Conduct intellectual property audits Develop form contracts Review solicitations, proposals and contract awards Negotiate with primes and the government Resolve disputes Enforce rights Develop internal business policies Train administrative, legal, and engineering staff 55

Panel Members

David Burns

McCarter & English, LLP 265 Franklin Street Boston, MA 02110 617.449.6564

[email protected]

Dan Kelly

McCarter & English, LLP 265 Franklin Street Boston, MA 02110 617.449.6526

[email protected]

56