Overview
FAR 27.102 establishes the federal government’s broad policy framework regarding intellectual property, balancing the promotion of commercial innovation with the protection of government interests and private proprietary rights. It covers the general treatment of patents, data rights, and copyrights within the acquisition process.
Key Rules
- Commercialization of Inventions: The government actively encourages the commercial use of any inventions developed under federal contracts.
- Patent Infringement and Awards: Potential patent infringement is generally not a valid reason to deny a contract award; the government can provide "authorization and consent" for patent use during performance.
- Indemnification for Commercial Items: Contractors providing commercial products or services are typically required to indemnify the government against liability for U.S. patent infringement.
- Data Rights Limitations: The government recognizes rights in data developed at private expense, promising to limit demands for such data and only acquiring the minimum rights necessary for its needs.
- Copyright Compliance: Contractors are responsible for obtaining legal permission from third-party owners before incorporating copyrighted materials into deliverables provided to the government.
Practical Implications
- Liability Shift: While the government may authorize the use of patented technology to ensure mission success, contractors selling commercial-off-the-shelf (COTS) items bear the financial risk of any resulting patent litigation.
- Protection of Trade Secrets: Contractors can more confidently bid on projects involving their proprietary technology, knowing the FAR limits the government’s ability to demand or distribute data developed at private expense.