[Federal Register Volume 60, Number 176 (Tuesday, September 12, 1995)]
[Rules and Regulations]
[Pages 47310-47312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22573]



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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1827 and 1852

[NFS Case 940013]
RIN 2700-AB72


NASA FAR Supplement; Assignment of Copyright in Software

AGENCY: Office of Procurement, National Aeronautics and Space 
Administration (NASA).

ACTION: Final rule.

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SUMMARY: This is a revision of the NASA FAR Supplement to allow the 
Contracting Officer to direct the contractor to claim copyright in 
computer software and assign the copyright to the Government or another 
party. Assignment to the Government can only be directed when the 
Contractor has not previously been granted permission to claim 
copyright on its own behalf. This is needed because existing contract 
clauses do not provide this authority for some types of contracts.

EFFECTIVE DATE: October 1, 1995.

FOR FURTHER INFORMATION CONTACT:
Nina Lawrence, (202) 358-2424, or Tom Deback, (202) 358-0431.

SUPPLEMENTARY INFORMATION:

A. Background

    NASA published a Proposed Rule on October 13, 1994 (59 FR 51936), 
amending the NASA FAR Supplement (NFS) to allow the Contracting Officer 
to direct the contractor to claim the copyright in computer software 
and assign the copyright to the Government or another party. Assignment 
to the Government can only be directed when the contractor has not 
previously been granted permission to claim copyright on its own 
behalf. NASA is publishing this Final Rule with some changes in the 
provisions set forth in the Proposed Rule, which reflect some of the 
comments received.
    FAR clause 52.227-14, Rights in Data--General, as modified by the 
NFS, currently provides that a contractor may establish (assert) claim 
to copyright in software developed under the contract provided the 
contractor obtains the Contracting Officer's prior written permission. 
This revision will not restrict this right. However, if a contractor is 
not interested in claiming copyright, or developing the software, and 
is unwilling to assign the copyright to NASA or its designee, no 
copyright can be claimed for the software. In many, if not most, cases 
this does not matter. However, in some situations where further 
development of software is needed before the software can be marketed, 
the U.S. private sector may be unwilling to invest in developing and 
marketing the software without the availability of copyright 
protection. This revision will provide authority to acquire assignments 
of copyright in such situations.
    It is NASA's intent to announce to the public the availability of 
licensable software and the criteria which will be utilized in 
selecting licensees. Exclusive and partially exclusive licenses will be 
granted only after public notice and opportunity to file written 
objections.
    FAR 27.404(g)(3) authorizes agencies to include contractual 
requirements to assign copyright to the Government or another party. 
The FAR further directs that any such requirements established by 
agencies should be added to clause 52.227-14, Rights in Data--General. 
This authority is the same as is presently contained in FAR clause 
52.227-17, Rights in Data--Special Works. That clause is specifically 
tailored for acquisitions where data is the main deliverable; it lacks 
many elements necessary in contracts involving a mix of deliverables. 
The proposed revision will result in a clause that more appropriately 
addresses NASA's needs in acquisitions involving mixed deliverables. 
Further, with the increased emphasis in recent years on promoting U.S. 
competitiveness and the commercialization of Government-generated 
technology, it is important that steps be taken to protect computer 
software that has a significant technology transfer value. The 
availability of copyright protection will enable NASA to enhance U.S. 
competitiveness and more effectively transfer valuable computer 
software technology.
    This revision does not apply to or affect contracts for basic or 
applied research with a university or college (see NFS 1827.404(e)(1) 
or 1827.409(e)).
    Comments on the Proposed Rule were received from four 
organizations, and a number of comments were duplicative in subject 
matter. Several comments related to the rights of contractors. One 
organization commented that the contractor assigning the copyright 
would not retain a copyright license, and that to avoid potentially 
becoming an infringer, the contractor would be motivated to seek the 
Contracting Officer's permission to claim the copyright. The authority 
to direct assignment of copyright is presently contained in FAR clause 
52.227-17, Rights in Data--Special Works, which has been in use for 
many years. Contractors have not been motivated to request permission 
to claim copyright in order to avoid potential infringement, even 
though the clause provides that the contractor may use the data first 
produced only for the performance of the contract. Rather, contractors 
have requested permission to claim copyright for the purpose of further 
developing and/or commercializing the software.
    Some commenters expressed concern that a contractor would not be 
given the opportunity to copyright software, or NASA would arbitrarily 
refuse to grant the contractor permission to copyright. The purpose of 
the revision proposed by NASA is to effect the further 

[[Page 47311]]
development and/or commercialization of the software, and if the 
contractor has a plan for accomplishing such further development and/or 
commercialization, permission to copyright will be granted. NFS 
1827.404(e)(2) sets forth guidelines covering when the Contracting 
Officer may, in consultation with the installation's patent or 
intellectual property counsel, grant the contractor permission to 
copyright, publish, or release to others computer software first 
produced in the performance of the contract. For example, permission to 
copyright will be granted if (i) the contractor has identified an 
existing commercial computer software product line, or proposes a new 
one, and states a positive intention of incorporating the computer 
software first produced under the contract into that line, either 
directly itself or through a licensee; or (ii) the contractor has made, 
or will be required to make, significant contributions to the 
development of the computer software by co-funding or by cost sharing, 
or by contributing resources.
    Another group of comments related to the question of when copyright 
arises and use of the word ``establish'' in the proposed revision. 
There is no question that under 17 U.S.C. 102(a) ``copyright protection 
subsists * * * in original works of authorship fixed in any tangible 
medium of expression * * *'' and that under 17 U.S.C. 201, ownership of 
the copyright vest initially in the author or authors. However, it is 
also clear from the legislative history of the Copyright Act of 1976 
that contract provisions can determine whether a contractor can claim 
copyright protection in data first produced under the contract. See the 
discussion of Section 105, U.S. Government works, in the legislative 
history of the Copyright Act of 1976, i.e., H.R. Report 94-1476, 94th 
Congress Second Session, pages 58-59 and S. Report 94-473, 94th 
Congress, First Session, pages 56-57. Both reports state: ``As the bill 
is written, the Government agency concerned could determine in each 
case whether to allow an independent contractor or grantee to secure 
copyright in works prepared in whole or in part with the use of 
Government funds.''
    NASA is aware that use of the word ``establish'' presents 
difficulties, and, for the purpose of conformity with the copyright 
statute, has construed the word ``establish'' to mean ``assert''. NASA 
is taking this opportunity to revise the NFS so that if reflects 
copyright law by using ``assert'' in the Final Rule in lieu of 
``establish,'' and by requiring in the NFS that a provision be added to 
the FAR Rights in Data--General and Special Works clauses which states 
that the word ``establish'' in those clauses shall be construed as 
meaning ``assert''.
    Some comments related to the necessity for the revision, e.g., lack 
of evidence that the U.S. private sector is unwilling to invest in the 
software without copyright protection; vagueness of Proposed Rule's 
goals; and the availability of copyright protection for derivative 
works based on public domain software. NASA's goal is to more 
effectively transfer valuable computer software technology to the 
private sector thereby enhancing commercialization of Government-
generated technology and U.S. competitiveness. Disseminating software 
to the public without restriction works well for many computer software 
products. However, it has been the experience of Federal agencies that 
in situations where further development of software is needed before 
the software can be marketed, the U.S. private sector is unwilling to 
invest in developing and marketing the software without copyright 
protection. The GAO in its June 1992 report, entitled ``Technology 
Transfer: Copyright Law Constrains Commercialization of Some Federal 
Software'', concluded that although many factors affect a company's 
decision whether to invest in Federal software, lack of copyright 
protection for that software is a consideration. The principle is well 
established with respect to the U.S. general public that technology 
which is freely available to everyone is often not of interest to 
anyone where considerable risk capital is required to achieve 
commercialization.
    The Final Rule will provide the flexibility needed to ensure the 
transfer and commercialization of valuable computer software in 
situations where the contractor is not interested in further 
development and commercialization of the software.
B. Executive Order 12866

    The Office of Information and Regulatory Affairs has determined 
that this rule is significant under E.O. 12866. This regulation is 
needed on an urgent and compelling basis because valuable computer 
software developed under NASA contracts may become part of the public 
domain, and thereby lose its value, if the software is not copyrighted. 
Current regulations grant the contractor the right to request 
permission to claim copyright, but there is no procedure to force the 
contractor to exercise that right or to transfer the copyright to the 
Government. The regulation meets the need, i.e., provides protection 
for the software's value, by allowing NASA to direct the contractor to 
claim copyright and assign the copyright to NASA or another party. The 
potential costs for this regulatory action are limited to the nominal 
costs involved in claiming and transferring copyright. These costs may 
vary, but are estimated to be less than $100 per copyright, and it is 
anticipated that less than 10 contractors annually would each be 
required to incur this expense one time. Because the contracts under 
which valuable software is likely to be developed are usually cost-
reimbursable research and development contracts, the costs for 
copyright and transfer would normally be charged to the Government. The 
potential benefits are the value of the protected software. This value 
cannot be measured, as it depends on future discoveries and 
developments. This value cannot be considered to be taken away from 
contractors, because it never belonged to them.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
changes to the NASA FAR Supplement do not impose any recordkeeping or 
information collection requirements, or collections of information from 
offerors, contractors, or members of the public which require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

D. Regulatory Flexibility Act

    NASA certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

List of Subjects in 48 CFR Parts 1827 and 1852

    Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.

    Accordingly, 48 CFR Parts 1827 and 1852 are amended as follows.
    1. The authority citation for 48 CFR Parts 1827 and 1852 continues 
to read as follows:

    Authority: 42 U.S.C. 2473(c)(1).

PART 1827--PATENTS, DATA, AND COPYRIGHTS

    2. In section 1827.404, paragraphs (d)(1) and (e)(1) are revised 
and paragraphs (e)(4) and (e)(5) are added to read as follows:


1827.404  Basic rights in data clause.

* * * * *

[[Page 47312]]

    (d) * * *
    (1) The Contracting Officer shall consult with the installation's 
Patent or Intellectual Property Counsel before granting in accordance 
with FAR 27.404(f)(1)(ii) permission for a contractor to claim 
copyright subsisting in data, other than computer software, first 
produced under the contract. For copyright of computer software first 
produced under the contract, see paragraph (e) of this section.
    (e) * * *
    (1) Paragraph (3) (see 1827.409(e) and 1852.227-14) is to be added 
to paragraph (d) of the clause at FAR 52.227-14, Rights in Data--
General, whenever that clause is used in any contract other than one 
for basic or applied research with a university or college. Paragraph 
(d)(3)(i) of the clause provides that the contractor may not assert 
claim to copyright, publish, or release to others computer software 
first produced in the performance of a contract without the contracting 
officer's prior written permission. This is in accordance with NASA 
policy and procedures for the distribution of computer software 
developed by NASA and its contractors.
* * * * *
    (4) If the contractor has not been granted permission to copyright 
in accordance with paragraphs (e)(1) and (e)(2) of this section, 
paragraph (d)(3)(ii) of the clause at FAR 52.227-14, Rights in Data--
General (as modified by 1852.227-14), enables NASA to direct the 
contractor to assert claim to copyright in computer software first 
produced under the contract and to assign, or obtain the assignment of, 
such copyright to the Government or its designee. The Contracting 
Officer may, in consultation with the installation patent or 
intellectual property counsel, so direct the contractor in situations 
where copyright protection is considered necessary in furtherance of 
agency mission objectives, needed to support specific agency programs, 
or necessary to meet statutory requirements.
    (5) In order to insure consistency with copyright law, paragraph 
(d)(3)(iii) clarifies that the word ``establish'' in FAR 52.227-14, 
Rights in Data--General shall be construed as ``assert'' when used with 
reference to a claim to copyright.
* * * * *
    3. In section 1827.405, paragraph (c) is added to read as follows:


1827.405  Other data rights provisions.

* * * * *
    (c) Production of special works. Paragraph (f) of the clause at 
1852.227-15 is to be added to the clause at FAR 52.227-17, Rights in 
Data--Special Works, whenever that clause is used in any NASA contract.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. In section 1852.227-14, paragraph (3) of the addition to the FAR 
clause is redesignated as paragraph (3)(i) and new paragraphs (3)(ii) 
and (iii) are added as follows:


1852.227-14  Rights in Data--General.

* * * * *
    (3)(i) * * *
    (ii) If the Government desires to obtain copyright in computer 
software first produced in the performance of this contract and 
permission has not been granted as set forth in paragraph (d)(3)(i) 
of this clause, the Contracting Officer may direct the contractor to 
assert, or authorize the assertion of, claim to copyright in such 
data and to assign, or obtain the assignment of, such copyright to 
the Government or its designated assignee.
    (iii) Whenever the word ``establish'' is used in this clause, 
with reference to a claim to copyright, it shall be construed to 
mean ``assert''.

(End of addition)

    5. Section 1852.227-15 is added to Part 1852 to read as follows:


1852.227-15  Rights in Data--Special Works

    As prescribed in 1827.405(c), add the following paragraph (f) to 
the basic clause at FAR 52.227-17:

    (f) Whenever the words ``establish'' and ``establishment'' are 
used in this clause, with reference to a claim to copyright, they 
shall be construed to mean ``assert'' and ``assertion'', 
respectively.

(End of addition)

[FR Doc. 95-22573 Filed 9-11-95; 8:45 am]
BILLING CODE 7510-01-M