Overview
This section outlines the legal framework and mandatory contract clauses governing patent and copyright infringement liability, establishing the U.S. Government as the primary defendant for claims arising from authorized contractor activities. It details how the government allocates risk through authorization, consent, and indemnification requirements.
Key Rules
- Exclusive Remedy: Under 28 U.S.C. 1498, the sole remedy for infringement by a contractor acting with government consent is a suit for monetary damages against the Government in the Court of Federal Claims; injunctive relief is unavailable.
- Authorization and Consent: FAR clause 52.227-1 is generally required in all contracts (except for simplified acquisitions or performance entirely outside the U.S.) to provide the legal "shield" that protects contractors from direct lawsuits.
- Notice and Assistance: If a contract contains the authorization and consent clause, it must also include FAR 52.227-2, requiring the contractor to notify the Government of infringement claims and provide evidence in its defense.
- Patent Indemnity: The Government requires contractors to indemnify it against liability for infringement in contracts for commercial products, commercial services, and construction, unless specific exceptions (like Part 12 procedures) apply.
- Prohibition on Government Indemnity: Contracting officers are expressly forbidden from including any clause that requires the Government to indemnify a contractor for patent infringement.
Practical Implications
- Risk Shielding: Contractors can perform work involving patented technology without fear of a court-ordered injunction halting the project, as long as the Government has provided "Authorization and Consent."
- Indemnification Costs: In commercial and construction contracts, contractors must account for the potential cost of reimbursing the Government for infringement damages, as the Government shifts this financial risk back to the vendor.