Overview
Subpart 27.1 establishes the fundamental policies and applicability of Federal Acquisition Regulations regarding patents, data rights, and copyrights. It serves as the baseline for how the government balances its need for technology and data with the intellectual property (IP) rights of private contractors, emphasizing the promotion of commercialization and the protection of privately developed data.
Key Rules
- Universal Applicability: These regulations apply to all federal agencies, though agencies may adopt alternative policies to comply with specific laws, treaties, or executive orders if they publish them in their own regulations.
- Patent Infringement and Awards: The government generally will not disqualify a prospective contractor solely because they might infringe a patent; the government may "authorize and consent" to the use of patented inventions during contract performance.
- Commercial Indemnification: Contractors providing commercial products or services are typically required to indemnify the government against liability for U.S. patent infringement.
- Limited Data Rights: The government recognizes the value of data developed at private expense and restricts its demands for such data to only what is "essential" to its needs.
- Copyright Compliance: Contractors are mandated to obtain formal permission from copyright owners before incorporating third-party copyrighted material into data delivered to the government.
Responsibilities
- Federal Agencies: Responsible for publishing any agency-specific deviations or alternative IP policies in their official regulations.
- Contracting Officers/Program Managers: Responsible for limiting requests for delivery of data to only those items essential to the government’s requirements.
- Contractors (Commercial): Responsible for protecting the government from financial liability (indemnification) resulting from patent infringement related to commercial items.
- Contractors (General): Responsible for performing due diligence and securing licenses/permissions for any third-party copyrighted works included in contract deliverables.
Practical Implications
- Bid Protests: A contractor cannot easily protest an award to a competitor on the basis that the competitor’s solution infringes on the protester's patents, as the government prioritizes mission performance and has the authority to grant "authorization and consent."
- Risk Management for Vendors: Commercial vendors must be aware that they carry the financial burden of patent litigation. They should ensure their IP portfolio and licensing agreements are robust before entering into government contracts.
- Data Protection: Because the FAR limits the government’s demands for privately developed data, contractors should clearly identify and mark proprietary data to prevent "creeping" government rights into their trade secrets.
- Third-Party Software/Content: When delivering reports or software, contractors must ensure they aren't "passing through" copyrighted material (like stock photos, proprietary code libraries, or white papers) without explicit permission, or they risk being in breach of contract.