[Federal Register Volume 68, Number 102 (Wednesday, May 28, 2003)]
[Proposed Rules]
[Pages 31790-31817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12891]



[[Page 31789]]

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Part III





Department of Defense

General Services Administration

National Aeronautics and Space Administration





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48 CFR Parts 2, et al.



Federal Acquisition Regulation; FAR Part 27 Rewrite in Plain Language; 
Proposed Rule

  Federal Register / Vol. 68, No. 102 / Wednesday, May 28, 2003 / 
Proposed Rules  

[[Page 31790]]



DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 19, 27, 52

[FAR Case 1999-402]
RIN 9000-AJ64


Federal Acquisition Regulation; FAR Part 27 Rewrite in Plain 
Language

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to clarify, streamline, and update 
guidance and clauses on patents, data, and copyrights to provide a more 
logical presentation of this complex material.

DATES: Interested parties should submit comments in writing on or 
before July 28, 2003 to be considered in the formulation of a final 
rule.

ADDRESSES: Submit written comments to--General Services Administration, 
FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, ATTN: Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to--farcase.1999-
[email protected].
    Please submit comments only and cite FAR case 1999-402 in all 
correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC, 20405, at (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-
4764. Please cite FAR case 1999-402.

SUPPLEMENTARY INFORMATION: 

A. Background

    The rule constitutes a rewrite of FAR Part 27 and its associated 
clauses in Part 52. Part 27 implements a number of statutes and 
executive orders pertaining to patents, data, and copyrights. The 
effort to rewrite FAR Part 27 was undertaken to make the various 
policies and procedures that implement these statutes and executive 
orders more succinct and understandable to the reader. In addition to 
numerous editorial and structural changes, some existing policies and 
procedures were clarified to eliminate potential confusion among 
responsible parties and make clearer the distinction between the rights 
and obligations of the contractor and the Government. While this FAR 
case was designed primarily to make the contents of FAR Part 27 easier 
to understand, as opposed to changing underlying policies, some 
substantive changes have also been made to reflect changes to the 
various laws covering the subject matter in FAR Part 27. A discussion 
of the proposed substantive changes and the associated rationale for 
these changes are provided below along with a description of the 
``plain language'' changes that have been made.
    The following more specifically summarizes the proposed changes:
    1. General. We have identified and moved the prescriptive language 
for the solicitation provisions and contract clauses into discrete 
subsections. Additionally, an effort has been made to eliminate 
language in the text that duplicates existing clause language.
    2. Definitions. A definition of ``commercial computer software'' 
was added to FAR Part 2 because this term is referenced in both Parts 
12 and 27. A consistent definition for ``commercial computer software'' 
is needed to distinguish ``commercial computer software'' from 
``restricted computer software,'' the distinction being that commercial 
computer software must have been sold commercially and restricted 
computer software may have not been so sold, leased, or licensed. The 
clause at 52.227-19 helps contracting officers because FAR 12.212 does 
not provide much guidance with respect to what is and what is not 
permissible in Government contracts. In particular, FAR Part 12 does 
not provide much guidance to contracting officers with respect to that 
which is consistent with Federal law and that which would normally 
satisfy Government needs. The clause at 52.227-19, if a contracting 
officer decides to insert it, ensures that the customary commercial 
license is consistent with Federal law and normally covers all the 
rights that the Government needs in commercial computer software.
    A definition of ``United States,'' unique to part 27, was added at 
FAR 27.001.
    3. FAR subpart 27.1 was rewritten to make it more succinct and to 
eliminate extraneous text. FAR 27.103, Policy, was deleted in its 
entirety because it merely stated the policies concerning patents, 
copyrights, and data that were in Part 27. An obsolete description of 
commercial items was removed from FAR 27.102 and replaced with the term 
``commercial item,'' which is defined in Part 2.
    4. FAR Subpart 27.2 was rewritten to better explain the purpose 
behind the use of the authorization and consent clause and its 
alternatives, the notification and assistance clause, the patent 
indemnity clause and its alternatives, and the patent royalty clause. 
Related sections were grouped together under section headings to more 
accurately reflect the specific subject matter and guidance presented 
to the contracting officer (e.g., ``27.201, Patent and copyright 
infringement liability,'' currently under current sections 27.201 
through 27.203).
    Much of the general explanation of the Authorization and Consent 
clause in FAR 27.201 was extraneous and unnecessarily complicated given 
that the clause is required in the vast majority of contracts and the 
exceptions to the use of the clause are very clear. New clear and 
succinct guidance points out that the notice and assistance clause is 
to be used when the authorization and consent clause is used. This 
eliminated the need to repeat when the authorization and consent clause 
is used in the prescriptive language for the notice and assistance 
clause. The lengthy descriptions for use of the patent indemnity clause 
and its alternates have been eliminated. The text was amended by using 
the term, ``commercial item,'' and referencing the simplified 
acquisition procedures as an exclusion to the clause's use. This was 
done because the FAR clause at 52.212-4 has a patent indemnity 
provision in it and it greatly simplified the prescriptive language 
using common reference terms with which contracting officers are 
familiar.
    In the new FAR section 27.202, Royalties, the coverage on refund of 
royalties was consolidated to one sentence to eliminate confusion 
resulting from mixing prescriptive language and explanatory text.
    The new FAR section 27.203 replaces 27.207, and the title is 
changed from ``Classified contracts'' to ``Security requirements for 
patent applications containing classified subject matter.'' The new 
title more accurately addresses any patent application that may include 
classified subject matter, regardless of the classification of the 
contract.
    5. FAR Subpart 27.3 is one of the more legally complex subparts in 
the FAR. Therefore, it was difficult to edit any portion of this 
subpart without substantively changing the meaning of the prescriptive 
language and/or procedures. This subpart primarily implements the Bayh-
Dole Act (Act),

[[Page 31791]]

Title 35 U.S.C., Chapter 18. This Act has a long and involved history, 
which is why there are so many legal nuances to this subpart. A brief 
history of the distinction that the Act makes between small businesses/
nonprofit organization and large for-profit business will put this in 
perspective. Initially, the Act was only made applicable to small 
business firms and nonprofit organizations. This was changed when 
President Reagan issued a Presidential memorandum and, later, an 
Executive order that made the Act applicable to all entities regardless 
of size. However, Congress later amended the Act to make only several 
of its sections applicable to large for-profit businesses. Accordingly, 
there is an inherent statutory distinction between small business/
nonprofits and large for-profits. While this proposed rule maintains 
this distinction, many of the sections were retitled and alternate 
words were used to help clarify some of the misinterpretations of this 
subpart that have occurred in the past.
    It should be emphasized that the Act makes the Department of 
Commerce responsible for issuing regulations concerning its 
implementation. Therefore, any changes to the FAR must conform to 37 
CFR part 401.
    Extraneous text at FAR 27.302(b)(1) was eliminated to simply state 
that pursuant to law, a contractor may elect to retain title to any 
subject invention. This is the main concept behind the Act; that is, to 
allow small businesses and nonprofits to commercialize subject 
inventions. Paragraphs (b)(2) through (b)(5) of FAR 27.302 were 
restructured in order to emphasize that the Government only acquires 
title to a subject invention in very limited circumstances.
    FAR 27.303 was reorganized for clarity as follows:
    [sbull] Language previously located at FAR 27.304-3, which was 
merely referenced in 27.303 pertaining to solicitations or contracts 
for construction work or architect-engineer services, was moved to 
27.303(a)(2) for readability.
    [sbull] The title of the clause at 52.227-11 was changed to provide 
a more accurate description of the clause content. Currently, the FAR 
clauses at 52.227-11 and 52.227-12 are titled ``Short Form'' and ``Long 
Form,'' respectively. While 52.227-11 may be a little shorter as it is 
currently written, it is still a sizable clause, so the distinction 
between short and long has never proved very helpful. Further, the term 
``Retention'' was removed from the title of the clause at 52.227-11 and 
replaced with ``Ownership'', which is a more common term. Additionally, 
since the Department of Defense is apparently the only agency using the 
clause at 52.227-12, it was deleted from the FAR and will be moved to 
the Defense Federal Acquisition Regulation Supplement under a separate 
case.
    [sbull] The clause prescriptive language throughout FAR 27.303(b) 
was amended to conform to FAR plain language convention.
    [sbull] FAR 27.303(e)(1)(iv) was language taken in large part from 
27.303(d).
    [sbull] FAR 27.303(e)(2) was reorganized to more clearly describe 
the implementation procedures of 37 CFR part 401 that pertain to the 
exceptions in a contract with a small business concern or a nonprofit 
organization.
    [sbull] FAR 27.303(e)(3) was more appropriately moved to 27.304-
1(b)(2) because it is not prescriptive language.
    FAR 27.304 was similarly reorganized for clarity as follows:
    [sbull] The procedures for a small business/nonprofit organization 
to appeal an agency's exercise of the exceptions at FAR 27.303(c)(1)(i) 
through (c)(1)(iv) or of march-in rights were deleted in their entirety 
and replaced with a sentence referencing the Department of Commerce's 
regulations on the subject. Since these procedures are copied verbatim 
from the Commerce regulations, they did not need to be repeated. 
Moreover, agencies rarely exercise these rights and, accordingly, it 
was further felt that these procedures did not have to be included in 
the FAR.
    [sbull] The additional requirements delineated at FAR 27.304-1(e) 
were deleted because they duplicated existing language at 27.303(b)(2) 
and (c)(3). However, the language pertaining to the contractor's 
responsibility for delivering confirmation of the right of the 
contracting officer to inspect and make copies of the patent 
application file at 27.304-1(e)(3) was retained and moved to 27.305.
    In FAR 27.305, slightly different titles to the subsections were 
used to make them more accurately depict the subject matter. Also, 
27.305-2 was deleted because it duplicated language already contained 
in the patent rights clause.
    6. FAR Subpart 27.4 was changed to provide clarity and updated 
information as follows:
    [sbull] In FAR 27.401, a definition of ``Computer data base'' was 
added to provide consistency throughout the rest of the part. As noted 
previously, a definition for ``Commercial computer software'' was added 
to FAR Part 2 because this term is used in Parts 12 and 27. The 
definition of ``Computer software'' was changed to provide a more 
meaningful and accurate definition of the term. The definition of this 
term is derived from the definition of the same term in the Department 
of Energy Acquisition Regulation (DEAR) (see 48 CFR 927.409). Further, 
the definition of ``Technical data'' was rewritten to comply with the 
definition of ``Technical data'' in 41 U.S.C. 403.
    FAR 27.404 was subdivided into several subsections for better 
readability. 27.404-2(c)(3) was redrafted to expressly state that 
computer databases must be treated as technical data and not computer 
software. This accurately reflects the law in this area.
    [sbull] The most significant change made in FAR Subpart 27.4 was 
made to, what is now designated, 27.404-3. Currently, the coverage of 
copyrighted works in the FAR is premised on law that has long been 
changed. Since under existing law, an original work of authorship is 
copyrighted as soon as it is put in a tangible media (e.g., writing 
something down). Therefore, the use of the term, ``establish'' is 
inappropriate. Instead, the term ``assert'' was substituted to 
accurately reflect that a contractor already has a copyright in any 
data first produced under a contract. The use of the term ``assert,'' 
however, gives the Government the opportunity to provide permission 
before the contractor can act on its rights in the copyright, as is the 
current practice. This section was also redrafted to reflect the 
current practice of normally allowing contractors to assert their 
copyrights in data first produced under a contract. The information 
previously contained in paragraphs 27.404(f)(2)(ii) and (iii) was 
rewritten to reflect current law on notice/publication requirements for 
copyrights.
    [sbull] The clause prescriptive language pertinent to use of the 
clause at 52.227-17, Rights in Data--Special Works, which was 
previously located within the text material at 52.405-1(c), (d), and 
(e), has been moved to 27.409.
    [sbull] Section 27.405(c) was deleted. This language duplicates 
language in the clause.
    7. FAR Subpart 27.6 was redesignated as 27.5, Foreign License and 
Technical Assistance Agreements, and was reduced to a single sentence. 
The remainder of the coverage of this part was addressed in the other 
parts.
    8. FAR 52.227 clauses and provisions were largely redrafted to 
reflect ``plain language'' changes that may substantially improve 
clarity as follows:
    [sbull] 52.227-11 and 52.227-13 will be addressed together because 
most of the changes were of a similar nature. The changes to the titles 
have already been discussed. The clause at FAR 52.227-11 was 
restructured to make the distinction between the rights and obligations 
of the contractor and the Government clearer.

[[Page 31792]]

While this looks like a substantial revision, it really only involves 
moving different paragraphs to places that fit the designated 
restructure. In new paragraph (c)(3), a distinction of different types 
of patent applications had to be made, i.e., between provisional and 
nonprovisional patent applications, to accurately reflect current 
practices at the United States Patent and Trademark Office. As 
discussed previously, new paragraph (i) was substantially rewritten to 
eliminate the entire section on march-in rights, leaving only a 
reference to the provision of the Bayh-Dole Act that requires these 
rights. It was felt that this is sufficient because the rights of the 
Government stem directly from the statute and need not be reiterated in 
the clauses. Similarly, in the new paragraph (d)(2) of the clause at 
52.227-13, much of the procedures to review a decision to revoke a 
license have been removed and the prescriptive language has been cited.
    [sbull] Any changes to the clause at 52.227-14 conform to the 
prescriptive text changes at FAR Subpart 27.4, Rights in Data and 
Copyrights.
    [sbull] Only ``plain language'' changes were made to the remaining 
clauses at 52.227-15, 52.227-17, 52.227-19, 52.227-20, and 52.227-21.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Councils do not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because while we have made changes in accordance with plain language 
guidelines, we have only made minimal substantive changes to the 
policies, procedures, and contract clauses pertaining to patents or the 
directions to agencies to develop coverage for rights in data and 
copyrights. An Initial Regulatory Flexibility Analysis has, therefore, 
not been performed. We invite comments from small businesses and other 
interested parties. The Councils will consider comments from small 
entities concerning the affected FAR Parts 2, 19, 27, and 52 in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 601, et seq. (FAR case 
1999-402), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
proposed rule contains information collection requirements. The current 
paperwork burden associated with FAR Subpart 27.3 (under OMB Control 
Number 9000-0095) will be modified to account for the reduction of 
burden associated with the removal of the clause at 52.227-12 from the 
FAR. We estimate a burden reduction of 13,689 hours (30 percent of the 
45,630 total burden) associated with this clause. The burden hours 
associated with this clause will be added to OMB Control Number 0704-
0369 under a separate case.

List of Subjects in 48 CFR Parts 2, 19, 27, and 52

    Government procurement.

    Dated: May 16, 2003.
Laura G. Smith,
Director, Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 19, 
27, and 52 as set forth below:
    1. The authority citation for 48 CFR parts 2, 19, 27, and 52 is 
revised to read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 2--DEFINITIONS OF WORDS AND TERMS

    2. Amend section 2.101 by adding, in alphabetical order, the 
definitions ``Commercial computer software'' and ``Small business 
concern'', and by revising the definition ``United States'' to read as 
follows:


2.101  Definitions.

* * * * *
    Commercial computer software means any computer program, computer 
data base, or documentation that has been sold, leased, or licensed to 
the general public.
* * * * *
    Small business concern means a concern, including its affiliates, 
that is independently owned and operated, not dominant in the field of 
operation in which it is bidding on Government contracts, and qualified 
as a small business under the criteria and size standards in 13 CFR 
part 121 (see 19.102). Such a concern is ``not dominant in its field of 
operation'' when it does not exercise a controlling or major influence 
on a national basis in a kind of business activity in which a number of 
business concerns are primarily engaged. In determining whether 
dominance exists, consideration must be given to all appropriate 
factors, including volume of business, number of employees, financial 
resources, competitive status or position, ownership or control of 
materials, processes, patents, license agreements, facilities, sales 
territory, and nature of business activity.
* * * * *
    United States, when used in a geographic sense, means the 50 States 
and the District of Columbia, except as follows:
    (1) For use in subpart 22.8, see the definition at 22.801.
    (2) For use in subpart 22.10, see the definition at 22.1001.
    (3) For use in part 25, see the definition at 25.003.
    (4) For use in part 27, see the definition at 27.001.
    (5) For use in subpart 47.4, see the definition at 47.401.
* * * * *

PART 19--SMALL BUSINESS PROGRAMS


19.001  [Amended]

    3. Amend section 19.001 by removing the definition ``Small business 
concern.''
    4. Revise part 27 to read as follows:

PART 27--PATENTS, DATA, AND COPYRIGHTS

Sec.
27.000 Scope of part.
27.001 Definition.
Subpart 27.1--General
27.101 Applicability.
27.102 General guidance.
Subpart 27.2--Patents
27.200 Scope of subpart.
27.201 Patent and copyright infringement liability.
27.201-1 General.
27.201-2 Contract clauses.
27.202 Royalties.
27.202-1 Reporting of royalties.
27.202-2 Notice of Government as a licensee.
27.202-3 Adjustment of royalties.
27.202-4 Refund of royalties.
27.202-5 Solicitation provisions and contract clause.
27.203 Security requirements for patent applications containing 
classified subject matter.
27.203-1 General.
27.203-2 Contract clause.
27.204 Patented technology under trade agreements.
27.204-1 Use of patented technology under the North American Free 
Trade Agreement.
27.204-2 Use of patented technology under the General Agreement on 
Tariffs and Trade (GATT).

[[Page 31793]]

Subpart 27.3--Patent Rights Under Government Contracts
27.300 Scope of subpart.
27.301 Definitions.
27.302 Policy.
27.303 Contract clauses.
27.304 Procedures.
27.304-1 General.
27.304-2 Contracts placed by or for other Government agencies.
27.304-3 Subcontracts.
27.304-4 Appeals.
27.305 Administration of patent rights clauses.
27.305-1 Goals.
27.305-2 Administration by the Government.
27.305-3 Securing invention rights acquired by the Government.
27.305-4 Protection of invention disclosures.
27.306 Licensing background patent rights to third parties.
Subpart 27.4--Rights in Data and Copyrights
27.400 Scope of subpart.
27.401 Definitions.
27.402 Policy.
27.403 Data rights--General.
27.404 Basic rights in Data clause.
27.404-1 Unlimited rights data.
27.404-2 Limited rights data and restricted computer software.
27.404-3 Copyrighted works.
27.404-4 Contractor's release, publication, and use of data.
27.404-5 Unauthorized, omitted, or incorrect markings.
27.404-6 Inspection of data at the contractor's facility.
27.405 Other data rights provisions.
27.405-1 Special works.
27.405-2 Existing works.
27.405-3 Commercial computer software.
27.406 Acquisition of data.
27.406-1 General.
27.406-2 Additional data requirements.
27.406-3 Major system acquisition.
27.407 Rights to technical data in successful proposals.
27.408 Cosponsored research and development activities.
27.409 Solicitation provisions and contract clauses.
Subpart 27.5--Foreign License and Technical Assistance Agreements
27.501 General.

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).


27.000  Scope of part.

    This part prescribes the policies, procedures, solicitation 
provisions, and contract clauses pertaining to patents, data, and 
copyrights.


27.001  Definition.

    United States, as used in this part, means the 50 States and the 
District of Columbia, U.S. territories and possessions, Puerto Rico, 
and the Northern Mariana Islands.


27.101  Applicability.

    This part applies to all agencies. However, agencies are authorized 
to adopt alternate policies, procedures, solicitation provisions, and 
contract clauses to the extent necessary to meet the specific 
requirements of laws, executive orders, treaties, or international 
agreements. Any agency adopting alternate policies, procedures, 
solicitation provisions, and contract clauses should include them in 
the agency's published regulations.


27.102  General guidance.

    (a) The Government encourages the maximum practical commercial use 
of inventions made under Government contracts.
    (b) Generally, the Government will not refuse to award a contract 
on the grounds that the prospective contractor may infringe a patent. 
The Government may authorize and consent to the use of inventions in 
the performance of certain contracts, even though the inventions may be 
covered by U.S. patents.
    (c) Generally, contractors providing commercial items should 
indemnify the Government against liability for the infringement of U.S. 
patents.
    (d) The Government recognizes rights in data developed at private 
expense, and limits its demands for delivery of that data. When such 
data is delivered, the Government will acquire only those rights 
essential to its needs.
    (e) Generally, the Government requires that contractors obtain 
permission from copyright owners before including copyrighted works, 
owned by others, in data to be delivered.

Subpart 27.2--Patents


27.200  Scope of subpart.

    This subpart prescribes policies and procedures with respect to--
    (a) Patent and copyright infringement liability;
    (b) Royalties;
    (c) Security requirements for patent applications containing 
classified subject matter; and
    (d) Patented technology under trade agreements.


27.201  Patent and copyright infringement liability.


27.201-1  General.

    (a) Pursuant to 28 U.S.C. 1498, the exclusive remedy for patent or 
copyright infringement by or on behalf of the Government is a suit for 
monetary damages against the Government in the Court of Federal Claims. 
There is no injunctive relief available, and there is no direct cause 
of action against a contractor that is infringing a patent or copyright 
on behalf of the Government (e.g., while performing a contract).
    (b) The Government may expressly authorize and consent to a 
contractor's use or manufacture of inventions covered by U.S. patents 
by inserting the clause at 52.227-1, Authorization and Consent.
    (c) Because of the exclusive remedies granted in 28 U.S.C. 1498, 
the Government requires notice and assistance from its contractors 
regarding any claims for patent or copyright infringement by inserting 
the clause at 52.227-2, Notice and Assistance Regarding Patent and 
Copyright Infringement.
    (d) The Government may require a contractor to reimburse it for 
liability for patent infringement arising out of a contract for 
commercial items by inserting the clause at FAR 52.227-3, Patent 
Indemnity.


27.201-2  Contract clauses.

    (a)(1) Insert the clause at 52.227-1, Authorization and Consent, in 
solicitations and contracts except that use of the clause is--
    (i) Optional when using simplified acquisition procedures; and
    (ii) Prohibited when both complete performance and delivery are 
outside the United States.
    (2) Use the clause with its Alternate I in all R&D solicitations 
and contracts for which the primary purpose is R&D work, except that 
this alternate shall not be used in construction and architect-engineer 
contracts unless the contract calls exclusively for R&D work.
    (3) Use the clause with its Alternate II in solicitations and 
contracts for communication services with a common carrier and if 
services are unregulated and not priced by a tariff schedule set by a 
regulatory body.
    (b) Insert the clause at 52.227-2, Notice and Assistance Regarding 
Patent and Copyright Infringement, in all solicitations and contracts 
that include the clause at 52.227-1, Authorization and Consent.
    (c)(1) Insert the clause at 52.227-3, Patent Indemnity, in 
solicitations and contracts that may result in the delivery of 
commercial items, unless--
    (i) The simplified acquisition procedures of Part 13 are used;
    (ii) Part 12 procedures are used;
    (iii) Both complete performance and delivery are outside the United 
States; or
    (iv) The contracting officer determines after consultation with 
legal counsel that omission of the clause would be consistent with 
commercial practice.
    (2) Use the clause with either its Alternate I (identification of 
excluded

[[Page 31794]]

items) or II (identification of included items) if--
    (i) The contract also requires delivery of noncommercial items; or
    (ii) The contracting officer determines after consultation with 
legal counsel that limitation of applicability of the clause would be 
consistent with commercial practice.
    (3) Use the clause with its Alternate III if the solicitation or 
contract is for communication services and facilities where performance 
is by a common carrier, and the services are unregulated and are not 
priced by a tariff schedule set by a regulatory body.
    (d)(1) Insert the clause at 52.227-4, Patent Indemnity--
Construction Contracts, in solicitations and contracts for construction 
or that are fixed-price for dismantling, demolition, or removal of 
improvements. Do not insert the clause in contracts solely for 
architect-engineer services.
    (2) If the contracting officer determines that the construction 
will necessarily involve the use of structures, products, materials, 
equipment, processes, or methods that are nonstandard, noncommercial, 
or special, the contracting officer may expressly exclude them from the 
patent indemnification by using the clause with its Alternate I. Note 
that this exclusion is for items, as distinguished from identified 
patents (see paragraph (e) of this subsection).
    (e) It may be in the Government's interest to exempt specific U.S. 
patents from the patent indemnity clause. Exclusion from indemnity of 
identified patents, as distinguished from items, is the prerogative of 
the agency head. Upon written approval of the agency head, the 
contracting officer may insert the clause at 52.227-5, Waiver of 
Indemnity, in solicitations and contracts in addition to the 
appropriate patent indemnity clause.
    (f) If a patent indemnity clause is not prescribed, the contracting 
officer may include one in the solicitation and contract if it is in 
the Government's interest to do so.
    (g) The contracting officer shall not include in any solicitation 
or contract any clause whereby the Government agrees to indemnity a 
contractor for patent infringement.


27.202  Royalties.


27.202-1  Reporting of royalties.

    (a) To determine whether royalties anticipated or actually paid 
under Government contracts are excessive, improper, or inconsistent 
with Government patent rights, the solicitation provision at 52.227-6 
requires prospective contractors to furnish royalty information. The 
contracting officer shall take appropriate action to reduce or 
eliminate excessive or improper royalties.
    (b) If the response to a solicitation includes a charge for 
royalties, the contracting officer shall, before award of the contract, 
forward the information to the office having cognizance of patent 
matters for the contracting activity. The cognizant office shall 
promptly advise the contracting officer of appropriate action.
    (c) The contracting officer, when considering the approval of a 
subcontract, must require royalty information if it is required under 
the prime contract. The contracting officer shall forward the 
information to the office having cognizance of patent matters. However, 
the contracting officer need not delay consent while awaiting advice 
from the cognizant office.
    (d) The contracting officer shall forward any royalty reports to 
the office having cognizance of patent matters for the contracting 
activity.


27.202-2  Notice of Government as a licensee.

    (a) When the Government is obligated to pay a royalty on a patent 
because of an existing license agreement and the contracting officer 
believes that the licensed patent will be applicable to a prospective 
contract, the Government should furnish the prospective offerors with--
    (1) Notice of the license;
    (2) The number of the patent; and
    (3) The royalty rate cited in the license.
    (b) When the Government is obligated to pay such a royalty, the 
solicitation should also require offerors to furnish information 
indicating whether or not each offeror is the patent owner or a 
licensee under the patent. This information is necessary so that the 
Government may either--
    (1) Evaluate an offeror's price by adding an amount equal to the 
royalty; or
    (2) Negotiate a price reduction with an offeror when the offeror is 
licensed under the same patent at a lower royalty rate.


27.202-3  Adjustment of royalties.

    (a) If at any time the contracting officer believes that any 
royalties paid, or to be paid, under a contract or subcontract are 
inconsistent with Government rights, excessive, or otherwise improper, 
the contracting officer shall promptly report the facts to the office 
having cognizance of patent matters for the contracting activity 
concerned.
    (b) In coordination with the cognizant office, the contracting 
officer shall promptly act to protect the Government against payment of 
royalties--
    (1) With respect to which the Government has a royalty-free 
license;
    (2) At a rate in excess of the rate at which the Government is 
licensed; or
    (3) When the royalties in whole or in part otherwise constitute an 
improper charge.
    (c) In appropriate cases, the contracting officer, in coordination 
with the cognizant office, shall demand a refund pursuant to any refund 
of royalties clause in the contract (see 27.202-4) or negotiate for a 
reduction of royalties.
    (d) For guidance in evaluating information furnished pursuant to 
27.202-1, see 31.205-37. See also 31.109 regarding advance 
understandings on particular cost items, including royalties.


27.202-4  Refund of royalties.

    The clause at 52.227-9, Refund of Royalties, establishes procedures 
to pay the contractor royalties under the contract and recover 
royalties not paid by the contractor when the royalties were included 
in the contractor's fixed price.


27.202-5  Solicitation provisions and contract clause.

    (a)(1) Insert a solicitation provision substantially the same as 
the provision at 52.227-6, Royalty Information, in--
    (i) Any solicitation that may result in a negotiated contract for 
which royalty information is desired and for which cost or pricing data 
are obtained under 15.403; or
    (ii) Sealed bid solicitations only if the need for such information 
is approved at a level above the contracting officer as being necessary 
for proper protection of the Government's interests.
    (2) If the solicitation is for communication services and 
facilities by a common carrier, use the provision with its Alternate I.
    (b) If the Government is obligated to pay a royalty on a patent 
involved in the prospective contract, insert in the solicitation a 
provision substantially the same as the provision at 52.227-7, 
Patents--Notice of Government Licensee. If the clause at 52.227-6 is 
not included in the solicitation, the contracting officer may require 
offerors to provide information sufficient to provide this notice to 
the other offerors.
    (c) Insert the clause at 52.227-9, Refund of Royalties, in 
negotiated fixed-price solicitations and contracts when

[[Page 31795]]

royalties may be paid under the contract. If a fixed-price incentive 
contract is contemplated, change ``price'' to ``target cost and target 
profit'' wherever it appears in the clause. The clause may be used in 
cost-reimbursement contracts where agency approval of royalties is 
necessary to protect the Government's interests.


27.203  Security requirements for patent applications containing 
classified subject matter.


27.203-1  General.

    (a) Unauthorized disclosure of classified subject matter, whether 
in patent applications or resulting from the issuance of a patent, may 
be a violation of 18 U.S.C. 792, et seq. (Espionage and Censorship), 
and related statutes, and may be contrary to the interests of national 
security.
    (b) Upon receipt of a patent application under paragraph (a) or (b) 
of the clause at 52.227-10, Filing of Patent Applications--Classified 
Subject Matter, the contracting officer shall ascertain the proper 
security classification of the patent application. If the application 
contains classified subject matter, the contracting officer shall 
inform the contractor how to transmit the application to the United 
States Patent Office in accordance with procedures provided by legal 
counsel. If the material is classified ``Secret'' or higher, the 
contracting officer shall make every effort to notify the contractor 
within 30 days of the Government's determination, pursuant to paragraph 
(a) of the clause.
    (c) Upon receipt of information furnished by the contractor under 
paragraph (d) of the clause at 52.227-10, the contracting officer shall 
promptly submit that information to legal counsel in order that the 
steps necessary to ensure the security of the application will be 
taken.
    (d) The contracting officer shall act promptly on requests for 
approval of foreign filing under paragraph (c) of the clause at 52.227-
10 in order to avoid the loss of valuable patent rights of the 
Government or the contractor.


27.203-2  Contract clause.

    Insert the clause at 52.227-10, Filing of Patent Applications--
Classified Subject Matter, in all classified solicitations and 
contracts and in all solicitations and contracts where the nature of 
the work reasonably might result in a patent application containing 
classified subject matter.


27.204  Patented technology under trade agreements.


27.204-1  Use of patented technology under the North American Free 
Trade Agreement.

    (a) The requirements of this section apply to the use of technology 
covered by a valid patent when the patent holder is from a country that 
is a party to the North American Free Trade Agreement (NAFTA).
    (b) Article 1709(10) of NAFTA generally requires a user of 
technology covered by a valid patent to make a reasonable effort to 
obtain authorization prior to use of the patented technology. However, 
NAFTA provides that this requirement for authorization may be waived in 
situations of national emergency or other circumstances of extreme 
urgency, or for public noncommercial use.
    (c) Section 6 of Executive Order 12889, ``Implementation of the 
North American Free Trade Act,'' of December 27, 1993, waives the 
requirement to obtain advance authorization for an invention used or 
manufactured by or for the Federal Government. However, the patent 
owner shall be notified in advance whenever the agency or its 
contractor knows or has reasonable grounds to know, without making a 
patent search, that an invention described in and covered by a valid 
U.S. patent is or will be used or manufactured without a license. In 
cases of national emergency or other circumstances of extreme urgency, 
this notification need not be made in advance, but must be made as soon 
as reasonably practicable.
    (d) The contracting officer, in consultation with the office having 
cognizance of patent matters, shall ensure compliance with the notice 
requirements of NAFTA Article 1709(10) and Executive Order 12889. A 
contract award should not be suspended pending notification to the 
patent owner.
    (e) Section 6(c) of Executive Order 12889 provides that the notice 
to the patent owner does not constitute an admission of infringement of 
a valid privately owned patent.
    (f) When addressing issues regarding compensation for the use of 
patented technology, Government personnel should be advised that NAFTA 
uses the term ``adequate remuneration.'' Executive Order 12889 equates 
``remuneration'' to ``reasonable and entire compensation'' as used in 
28 U.S.C. 1498, the statute that gives jurisdiction to the U.S. Court 
of Federal Claims to hear patent and copyright cases involving 
infringement by the Government.
    (g) When questions arise regarding the notice requirements or other 
matters relating to this section, the contracting officer should 
consult with legal counsel.


27.204-2  Use of patented technology under the General Agreement on 
Tariffs and Trade (GATT).

    Article 31 of Annex 1C, Agreement on Trade-Related Aspects of 
Intellectual Property Rights, to GATT (Uruguay Round) addresses 
situations where the law of a member country allows for use of a patent 
without authorization, including use by the Government.

Subpart 27.3--Patent Rights Under Government Contracts


27.300  Scope of subpart.

    This subpart prescribes policies, procedures, solicitation 
provisions, and contract clauses pertaining to inventions made in the 
performance of work under a Government contract or subcontract for 
experimental, developmental, or research work. Agency policies, 
procedures, solicitation provisions, and contract clauses may be 
specified in agency supplemental regulations as permitted by law.


27.301  Definitions.

    As used in this subpart--
    Invention means any invention or discovery that is or may be 
patentable or otherwise protectable under title 35 of the U.S. Code, or 
any novel variety of plant that is or may be protectable under the 
Plant Variety Protection Act (7 U.S.C. 2321, et seq.).
    Made, when used in relation to any invention, means the conception 
or first actual reduction to practice of the invention.
    Nonprofit organization means a university or other institution of 
higher education or an organization of the type described in section 
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and 
exempt from taxation under section 501(a) of the Internal Revenue Code 
(26 U.S.C. 501(a)), or any nonprofit scientific or educational 
organization qualified under a State nonprofit organization statute.
    Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in each 
case, under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations,

[[Page 31796]]

available to the public on reasonable terms.
    Subject invention means any invention of the contractor made in the 
performance of work under a Government contract; provided, that in the 
case of a variety of plant, the date of determination defined in 7 
U.S.C. 2401(d) must also occur during the period of contract 
performance.


27.302  Policy.

    (a) Introduction. In accordance with chapter 18 of title 35, U.S.C. 
(as implemented by 37 CFR part 401), Presidential Memorandum on 
Government Patent Policy to the Heads of Executive Departments and 
Agencies dated February 18, 1983, and Executive Order 12591, 
Facilitating Access to Science and Technology dated April 10, 1987, it 
is the policy and objective of the Government to--
    (1) Use the patent system to promote the use of inventions arising 
from federally supported research or development;
    (2) Encourage maximum participation of industry in federally 
supported research and development efforts;
    (3) Ensure that these inventions are used in a manner to promote 
free competition and enterprise;
    (4) Promote the commercialization and public availability of the 
inventions made in the United States by United States industry and 
labor;
    (5) Ensure that the Government obtains sufficient rights in 
federally supported inventions to meet the needs of the Government and 
protect the public against nonuse or unreasonable use of inventions; 
and
    (6) Minimize the costs of administering patent policies.
    (b) Contractor right to elect title. (1) Generally, pursuant to 35 
U.S.C. 202 and the Presidential memorandum and Executive order cited in 
paragraph (a) of this section, each contractor may, after required 
disclosure to the Government, elect to retain title to any subject 
invention.
    (2) A contract may require the contractor to assign to the 
Government title to any subject invention--
    (i) When the contractor is not located in the United States or does 
not have a place of business located in the United States or is subject 
to the control of a foreign government (see 27.303(c));
    (ii) In exceptional circumstances, when an agency determines that 
restriction or elimination of the right to retain title in any subject 
invention will better promote the policy and objectives of chapter 18 
of title 35, U.S.C. and the Presidential memorandum;
    (iii) When a Government authority, that is authorized by statute or 
Executive order to conduct foreign intelligence or counterintelligence 
activities, determines that the restriction or elimination of the right 
to retain title to any subject invention is necessary to protect the 
security of such activities;
    (iv) When the contract includes the operation of a Government-
owned, contractor-operated facility of the Department of Energy (DoE) 
primarily dedicated to the Department's naval nuclear propulsion or 
weapons related programs and all funding agreement limitations under 35 
U.S.C. 202(a)(iv) for agreements with small business concerns and 
nonprofit organizations are limited to inventions occurring under the 
above two programs; or
    (v) Pursuant to statute or in accordance with agency regulations.
    (3) When the Government has the right to acquire title to a subject 
invention, the contractor may, nevertheless, request greater rights to 
a subject invention (see 27.304-1(c)).
    (4) Consistent with 37 CFR part 401, when a contract with a small 
business concern or nonprofit organization requires assignment of title 
to the Government based on the exceptional circumstances enumerated in 
paragraph (b)(2)(ii) of this section for reasons of national security, 
the contract shall still provide the contractor with the right to elect 
ownership to any subject invention that--
    (i) Is not classified by the agency; or
    (ii) Is not limited from dissemination by the DoE within 6 months 
from the date it is reported to the agency.
    (5) Contracts in support of DoE's naval nuclear propulsion program 
are exempted from this paragraph (b).
    (6) When a contract involves a series of separate task orders, an 
agency may apply the exceptions at paragraph (b)(2)(ii) or (iii) of 
this section to individual task orders.
    (c) Government license. The Government shall have at least a 
nonexclusive, nontransferable, irrevocable, paid-up license to 
practice, or have practiced for or on behalf of the United States, any 
subject invention throughout the world. The Government may require 
additional sublicense rights in order to comply with treaties or other 
international agreements. In such case, the sublicense rights must be 
made a part of the contract (see 27.303).
    (d) Government right to receive title. (1) In addition to the right 
to obtain title to subject inventions pursuant to paragraphs (b)(2)(i) 
through (b)(2)(v) of this section, the Government has the right to 
receive title to an invention--
    (i) If the contractor has not disclosed the invention within the 
time specified in the clause; or
    (ii) In any country where the contractor--
    (A) Does not elect to retain rights or fails to elect to retain 
rights to the invention within the time specified in the clause;
    (B) Has not filed a patent application within the time specified in 
the clause;
    (C) Decides not to continue prosecution of a patent application, 
pay maintenance fees, or defend in a reexamination or opposition 
proceeding on the patent; or
    (D) No longer desires to retain title.
    (2) For the purposes of this paragraph, filing in a European Patent 
Office Region or under the Patent Cooperation Treaty constitutes 
election in the countries selected in the application(s).
    (e) Utilization reports. The Government has the right to require 
periodic reporting on how any subject invention is being used by the 
contractor or its licensees or assignees. In accordance with 35 U.S.C. 
202(c)(5) and 37 CFR part 401, agencies shall not disclose such 
utilization reports to persons outside the Government without 
permission of the contractor. Contractors should mark as confidential/
proprietary any utilization report to help prevent inadvertent release 
outside the Government.
    (f) March-in rights. (1) Pursuant to 35 U.S.C. 203, agencies have 
certain march-in rights that require the contractor, an assignee, or 
exclusive licensee of a subject invention to grant a nonexclusive, 
partially exclusive, or exclusive license in any field of use to 
responsible applicants upon terms that are reasonable under the 
circumstances. If the contractor, assignee or exclusive licensee of a 
subject invention refuses to grant such a license, the agency can grant 
the license itself. March-in rights may be exercised only if the agency 
determines that this action is necessary--
    (i) Because the contractor or assignee has not taken, or is not 
expected to take within a reasonable time, effective steps to achieve 
practical application of the subject invention in the field(s) of use;
    (ii) To alleviate health or safety needs that are not reasonably 
satisfied by the contractor, assignee, or their licensees;
    (iii) To meet requirements for public use specified by Federal 
regulations and these requirements are not reasonably satisfied by the 
contractor, assignee, or licensees; or
    (iv) Because the agreement required by paragraph (g) of this 
section has neither been obtained nor waived, or because a licensee of 
the exclusive right to use or sell any subject invention in the United 
States is in breach of its

[[Page 31797]]

agreement obtained pursuant to paragraph (g) of this section.
    (2) The agency shall not exercise its march-in rights unless the 
contractor has been provided a reasonable time to present facts and 
show cause why the proposed agency action should not be taken. The 
agency shall provide the contractor an opportunity to dispute or appeal 
the proposed action in accordance with 27.304-1(g).
    (g) Preference for United States industry. Unless provided 
otherwise in accordance with 27.304-1(f), contracts provide that no 
contractor that receives title to any subject invention and no assignee 
of the contractor shall grant to any person the exclusive right to use 
or sell any subject invention in the United States unless that person 
agrees that any products embodying the subject invention or produced 
through the use of the subject invention will be manufactured 
substantially in the United States (see 35 U.S.C. 204). However, in 
individual cases, the requirement for this agreement may be waived by 
the agency upon a showing by the contractor or assignee that reasonable 
but unsuccessful efforts have been made to grant licenses on similar 
terms to potential licensees that would be likely to manufacture 
substantially in the United States or that under the circumstances 
domestic manufacture is not commercially feasible.
    (h) Special conditions for nonprofit organizations' preference for 
small business concerns. (1) Nonprofit organization contractors are 
expected to use reasonable efforts to attract small business licensees 
(see paragraph (j)(4) of the clause at 52.227-11, Patent Rights--
Retention by the Contractor). What constitutes reasonable efforts to 
attract small business licensees will vary with the circumstances and 
the nature, duration, and expense of efforts needed to bring the 
invention to the market.
    (2) Small business concerns that believe a nonprofit organization 
is not meeting its obligations under the clause may report the matter 
to the Secretary of Commerce. To the extent deemed appropriate, the 
Secretary of Commerce will undertake informal investigation of the 
matter and may discuss or negotiate with the nonprofit organization 
ways to improve its efforts to meet its obligations under the clause. 
However, in no event will the Secretary of Commerce intervene in 
ongoing negotiations or contractor decisions concerning the licensing 
of a specific subject invention. These investigations, discussions, and 
negotiations involving the Secretary of Commerce will be in 
coordination with other interested agencies, including the Small 
Business Administration. In the case of a contract for the operation of 
a Government-owned, contractor-operated research or production 
facility, the Secretary of Commerce will coordinate with the agency 
responsible for the facility prior to any discussions or negotiations 
with the contractor.
    (i) Minimum rights to contractor. (1) When the Government acquires 
title to a subject invention, the contractor is normally granted a 
revocable, nonexclusive, paid-up license to that subject invention 
throughout the world. The contractor's license extends to its domestic 
subsidiaries and affiliates, if any, within the corporate structure of 
which the contractor is a part and includes the right to grant 
sublicenses to the extent the contractor was legally obligated to do so 
at the time of contract award. The contracting officer shall approve 
any transfer of the contractor's licenses except when the transfer is 
to the successor of that part of the contractor's business to which the 
subject invention pertains.
    (2) In response to a third party's proper application for an 
exclusive license, the contractor's domestic license may be revoked or 
modified to the extent necessary to achieve expeditious practical 
application of the subject invention. The application shall be 
submitted in accordance with the applicable provisions in 37 CFR part 
404 and agency licensing regulations. The contractor's license will not 
be revoked in that field of use or the geographical areas in which the 
contractor has achieved practical application and continues to make the 
benefits of the subject invention reasonably accessible to the public. 
The license in any foreign country may be revoked or modified to the 
extent the contractor, its licensees, or its domestic subsidiaries or 
affiliates have failed to achieve practical application in that 
country. (See the procedures at 27.304-1(f).)
    (j) Confidentiality of inventions. Publishing information 
concerning an invention before a patent application is filed on a 
subject invention may create a bar to a valid patent. To avoid this 
bar, agencies may withhold information from the public that discloses 
any invention in which the Federal Government owns or may own a right, 
title, or interest (including a nonexclusive license) (see 35 U.S.C. 
205 and 37 CFR part 401). Agencies may only withhold information 
concerning inventions for a reasonable time in order for a patent 
application to be filed. Once filed in any patent office, agencies are 
not required to release copies of any document that is a part of a 
patent application for those subject inventions.


27.303  Contract clauses.

    (a)(1) Insert a patent rights clause in all solicitations and 
contracts for experimental, developmental, or research work as 
prescribed in this section.
    (2) This section also applies to solicitations or contracts for 
construction work or architect-engineer services that include--
    (i) Experimental, developmental, or research work;
    (ii) Test and evaluation studies; or
    (iii) The design of a Government facility that may involve novel 
structures, machines, products, materials, processes, or equipment 
(including construction equipment).
    (3) The contracting officer shall not include a patent rights 
clause in solicitations or contracts for construction work or 
architect-engineer services that call for or can be expected to involve 
only ``standard types of construction.'' ``Standard types of 
construction'' are those involving previously developed equipment, 
methods, and processes and in which the distinctive features include 
only--
    (i) Variations in size, shape, or capacity of conventional 
structures; or
    (ii) Purely artistic or aesthetic (as distinguished from 
functionally significant) architectural configurations and designs of 
both structural and nonstructural members or groupings, whether or not 
they qualify for design patent protection.
    (b)(1) Unless an alternative patent rights clause is used in 
accordance with paragraph (c), (d), or (e) of this section, insert the 
clause at 52.227-11, Patent Rights--Ownership by the Contractor.
    (2) To the extent the information is not required elsewhere in the 
contract, and unless otherwise specified by agency supplemental 
regulations, the contracting officer may modify 52.227-11(e) or 
otherwise supplement the clause to require the contractor to do one or 
more of the following:
    (i) Provide periodic (but not more frequently than annually) 
listings of all subject inventions required to be disclosed during the 
period covered by the report.
    (ii) Provide a report prior to the closeout of the contract listing 
all subject inventions or stating that there were none.
    (iii) Provide the filing date, serial number, title, patent number, 
and issue date for any patent application filed on any subject 
invention in any country or, upon request, copies of any patent 
application so identified.

[[Page 31798]]

    (iv) Furnish the Government an irrevocable power to inspect and 
make copies of the patent application file when a Federal Government 
employee is a co-inventor.
    (3) Use the clause with its Alternate I if the Government must 
grant a foreign government a sublicense in subject inventions pursuant 
to a specified treaty or executive agreement. The contracting officer 
may modify Alternate I, if the agency head determines, at contract 
award, that it would be in the national interest to sublicense foreign 
governments or international organizations pursuant to any existing or 
future treaty or agreement. When necessary to effectuate a treaty or 
agreement, Alternate I may be appropriately modified.
    (4) Use the clause with its Alternate II in contracts that may be 
affected by existing or future treaties or agreements.
    (5) Use the clause with its Alternate III in contracts with 
nonprofit organizations for the operation of a Government-owned 
facility.
    (6) If the contract is for the operation of a Government-owned 
facility, the contracting officer may use the clause with its Alternate 
IV.
    (c) Insert a patent rights clause in accordance with the procedures 
at 27.304-2 if the solicitation or contract is being placed on behalf 
of another Government agency.
    (d) Insert a patent rights clause in accordance with agency 
procedures if the solicitation or contract is for DoD, DoE, or NASA, 
and the contractor is other than a small business concern or nonprofit 
organization.
    (e)(1) Except as provided in paragraph (e)(2) of this section, and 
after compliance with the applicable procedures in 27.304-1(b), the 
contracting officer may insert the clause at 52.227-13, Patent Rights--
Ownership by the Government, or a clause prescribed by agency 
supplemental regulations, if--
    (i) The contractor is not located in the United States or does not 
have a place of business located in the United States or is subject to 
the control of a foreign government;
    (ii) There are exceptional circumstances and the agency head 
determines that restriction or elimination of the right to retain title 
to any subject invention will better promote the policy and objectives 
of chapter 18 of title 35 of the United States Code;
    (iii) A Government authority that is authorized by statute or 
Executive order to conduct foreign intelligence or counterintelligence 
activities determines that restriction or elimination of the right to 
retain any subject invention is necessary to protect the security of 
such activities; or
    (iv) The contract includes the operation of a Government-owned, 
contractor-operated facility of the Department of Energy primarily 
dedicated to that Department's naval nuclear propulsion or weapons 
related programs.
    (2) If an agency exercises the exceptions at paragraph (e)(1)(ii) 
or (iii) of this section in a contract with a small business concern or 
a nonprofit organization, the contracting officer shall use the clause 
at 52.227-11 with only those modifications necessary to address the 
exceptional circumstances and shall include in the modified clause 
greater rights determinations procedures equivalent to those at 52.227-
13(b)(2).
    (3) When using the clause at 52.227-13, Patent Rights--Ownership by 
the Government, the contracting officer may supplement the clause to 
require the contractor to--
    (i) Furnish a copy of each subcontract containing a patent rights 
clause (but if a copy of a subcontract is furnished under another 
clause, a duplicate shall not be requested under the patent rights 
clause);
    (ii) Submit interim and final invention reports listing subject 
inventions and notifying the contracting officer of all subcontracts 
awarded for experimental, developmental, or research work;
    (iii) Provide the filing date, serial number, title, patent number, 
and issue date for any patent application filed on any subject 
invention in any country or, upon specific request, copies of any 
patent application so identified; and
    (iv) Submit periodic reports on the utilization of a subject 
invention.
    (4) Use the clause at 52.227-13 with its Alternate I if--
    (i) The Government must grant a foreign government a sublicense in 
subject inventions pursuant to a treaty or executive agreement; or
    (ii) The agency head determines, at contract award, that it would 
be in the national interest to sublicense foreign governments or 
international organizations pursuant to any existing or future treaty 
or agreement. If other rights are necessary to effectuate any treaty or 
agreement, Alternate I may be appropriately modified.
    (5) Use the clause at 52.227-13 with its Alternate II in the 
contract when necessary to effectuate an existing or future treaty or 
agreement.


27.304  Procedures.


27.304-1  General.

    (a) Status as small business concern or nonprofit organization. If 
an agency has reason to question the size or nonprofit status of the 
prospective contractor, the agency may require the prospective 
contractor to furnish evidence of its status or file a protest in 
accordance with 13 CFR 121.1005.
    (b) Exceptions. (1) Before using any of the exceptions under 
27.303(e)(1) in a contract with a small business concern or a nonprofit 
organization and before using the exception of 27.303(e)(1)(ii) for any 
contractor, the agency shall follow the applicable procedures at 37 CFR 
part 401.
    (2) A small business concern or nonprofit organization is entitled 
to an administrative review of the use of the exceptions at 
27.303(e)(1)(i) through (e)(1)(iv) pursuant to agency procedures and 37 
CFR part 401.
    (c) Greater rights determinations. Whenever the contract contains 
the clause at 52.227-13, Patent Rights--Ownership by the Government, or 
a patent rights clause modified pursuant to 27.303(e)(2), the 
contractor (or an employee-inventor of the contractor after 
consultation with the contractor) may request greater rights to an 
identified invention within the period specified in the clause. The 
contracting officer may grant requests for greater rights if the 
contracting officer determines that the interests of the United States 
and the general public will be better served.
    In making these determinations, the contracting officer shall 
consider at least the following objectives:
    (1) Promoting the utilization of inventions arising from federally 
supported research and development.
    (2) Ensuring that inventions are used in a manner to promote full 
and open competition and free enterprise.
    (3) Promoting public availability of inventions made in the United 
States by United States industry and labor.
    (4) Ensuring that the Government obtains sufficient rights in 
federally supported inventions to meet the needs of the Government and 
protect the public against nonuse or unreasonable use of inventions.
    (d) Retention of rights by inventor. If the contractor elects not 
to retain title to a subject invention, the agency may consider and, 
after consultation with the contractor, grant requests for retention of 
rights by the inventor. Retention of rights by the inventor will be 
subject to the conditions in paragraphs (d) (except paragraph 
(d)(1)(i)), (e)(4), (g), (h), and

[[Page 31799]]

(i) of the clause at 52.227-11, Patent Rights--Ownership by the 
Contractor.
    (e) Government assignment to contractor of rights in Government 
employees' inventions. When a Government employee is a co-inventor of 
an invention made under a contract with a small business concern or 
nonprofit organization, the agency employing the co-inventor may 
transfer or assign whatever rights it may acquire in the subject 
invention from its employee to the contractor, subject at least to the 
conditions of 35 U.S.C. 202-204.
    (f) Revocation or modification of contractor's minimum rights. 
Before revoking or modifying the contractor's license in accordance 
with 27.302(i)(2), the contracting officer shall furnish the contractor 
a written notice of intention to revoke or modify the license. The 
agency shall allow the contractor at least 30 days (or another time as 
may be authorized for good cause by the contracting officer) after the 
notice to show cause why the license should not be revoked or modified. 
The contractor has the right to appeal, in accordance with applicable 
regulations in 37 CFR part 404 and agency licensing regulations, any 
decisions concerning the revocation or modification.
    (g) Exercise of march-in rights. When exercising march-in rights, 
agencies must follow the procedures set forth in 37 CFR 401.6.
    (h) Licenses and assignments under contracts with nonprofit 
organizations. If the contractor is a nonprofit organization, the 
clause at 52.227-11 provides that certain contractor actions require 
agency approval, as specified below. A contractor may not assign rights 
to a subject invention in the United States without the written 
approval of the agency, except when the assignment is made to an 
organization that has as one of its primary functions the management of 
inventions (provided that the assignee is subject to the same 
provisions as the contractor).


27.304-2  Contracts placed by or for other Government agencies.

    The following procedures apply unless an interagency agreement 
provides otherwise:
    (a) When a Government agency requests another Government agency to 
award a contract on its behalf, the request should explain any special 
circumstances surrounding the contract and specify the patent rights 
clause to be used. The clause should be selected and modified, if 
necessary, in accordance with the policies and procedures of this 
subpart. If, however, the request states that a clause of the 
requesting agency is required (e.g., because of statutory requirements, 
a deviation, or exceptional circumstances), the awarding agency shall 
use that clause rather than those of this subpart.
    (1) If the request states that an agency clause is required and the 
work to be performed under the contract is not severable and is funded 
wholly or in part by the requesting agency, then include the requesting 
agency clause and no other patent rights clause in the contract.
    (2) If the request states that an agency clause is required, and 
the work to be performed under the contract is severable, then the 
contracting officer shall assure that the requesting agency clause 
applies only to that severable portion of the work and that the work 
for the awarding agency is subject to the appropriate patent rights 
clause.
    (3) If the request states that a requesting agency clause is not 
required in any resulting contract, the awarding agency shall use the 
appropriate patent rights clause, if any.
    (b) Any action requiring an agency determination, report, or 
deviation involved in the use of the requesting agency's clause is the 
responsibility of the requesting agency unless the agencies agree 
otherwise. However, the awarding agency may not alter the requesting 
agency's clause without prior approval of the requesting agency.
    (c) The requesting agency may require, and provide instructions 
regarding, the forwarding or handling of any invention disclosures or 
other reporting requirements of the specified clauses. Normally, the 
requesting agency is responsible for the administration of any subject 
inventions. This responsibility shall be established in advance of 
awarding any contracts.


27.304-3  Subcontracts.

    (a) The policies and procedures in this subpart apply to all 
subcontracts at any tier.
    (b) Whenever a prime contractor or a subcontractor considers 
including a particular clause in a subcontract to be inappropriate or a 
subcontractor refuses to accept the clause, the contracting officer, in 
consultation with counsel, shall resolve the matter.
    (c) It is Government policy that contractors shall not use their 
ability to award subcontracts as economic leverage to acquire rights 
for themselves in inventions resulting from subcontracts.


27.304-4  Appeals.

    (a) The designated agency official shall provide the contractor 
with a written statement of the basis, including any relevant facts, 
for taking any of the following actions:
    (1) A refusal to grant an extension to the invention disclosure 
period under paragraph (c)(4) of the clause at 52.227-11.
    (2) A demand for a conveyance of title to the Government under 
27.302(d)(1)(i) and (ii).
    (3) A refusal to grant a waiver under 27.302(g), Preference for 
United States industry.
    (4) A refusal to approve an assignment under 27.304-1(h).
    (b) Each agency may establish and publish procedures under which 
any of these actions may be appealed. These appeal procedures should 
include administrative due process procedures and standards for fact-
finding. The resolution of any appeal shall consider both the factual 
and legal basis for the action and its consistency with the policy and 
objectives of 35 U.S.C. 200-206 and 210.
    (c) To the extent that any of the actions described in paragraph 
(a) of this section are subject to appeal under the Contract Disputes 
Act, the procedures under that Act will satisfy the requirements of 
paragraph (b).


27.305  Administration of patent rights clauses.


27.305-1  Goals.

    (a) Contracts having a patent rights clause should be so 
administered that--
    (1) Inventions are identified, disclosed, and reported as required 
by the contract, and elections are made;
    (2) The rights of the Government in subject inventions are 
established;
    (3) When patent protection is appropriate, patent applications are 
timely filed and prosecuted by contractors or by the Government;
    (4) The rights of the Government in filed patent applications are 
documented by formal instruments such as licenses or assignments; and
    (5) Expeditious commercial utilization of subject inventions is 
achieved.
    (b) If a subject invention is made under a contract funded by more 
than one agency, at the request of the contractor or on their own 
initiative, the agencies shall designate one agency as responsible for 
administration of the rights of the Government in the invention.

[[Page 31800]]

27.305-2  Administration by the Government.

    (a) Agencies should establish and maintain appropriate follow-up 
procedures to protect the Government's interest and to check that 
subject inventions are identified and disclosed, and when appropriate, 
patent applications are filed, and that the Government's rights therein 
are established and protected. Follow-up activities for contracts that 
include a clause referenced in 27.304-2 should be coordinated with the 
appropriate agency.
    (b)(1) The contracting officer administering the contract (or other 
representative specifically designated in the contract for this 
purpose) is responsible for receiving invention disclosures, reports, 
confirmatory instruments, notices, requests, and other documents and 
information submitted by the contractor pursuant to a patent rights 
clause.
    (i) For other than confirmatory instruments, if the contractor 
fails to furnish documents or information as called for by the clause 
within the time required, the contracting officer shall promptly 
request the contractor to supply the required documents or information. 
If the failure persists, the contracting officer shall take appropriate 
action to secure compliance.
    (ii) If the contractor does not furnish confirmatory instruments 
within 6 months after filing each patent application, or within 6 
months after submitting the invention disclosure if the application has 
been previously filed, the contracting officer shall request the 
contractor to supply the required documents.
    (2) The contracting officer shall promptly furnish all invention 
disclosures, reports, confirmatory instruments, notices, requests, and 
other documents and information relating to patent rights clauses to 
legal counsel.
    (c) Contracting activities should establish appropriate procedures 
to detect and correct failures by the contractor to comply with its 
obligations under the patent rights clauses, such as failures to 
disclose and report subject inventions, both during and after contract 
performance. Government effort to review and correct contractor 
compliance with its patent rights obligations should be directed 
primarily toward contracts that are more likely to result in subject 
inventions significant in number or quality. These contracts include 
contracts of a research, developmental, or experimental nature; 
contracts of a large dollar amount; and any other contracts when there 
is reason to believe the contractor may not be complying with its 
contractual obligations. Other contracts may be reviewed using a spot-
check method, as feasible. Appropriate follow-up procedures and 
activities may include the investigation or review of selected 
contracts or contractors by those qualified in patent and technical 
matters to detect failures to comply with contract obligations.
    (d) Follow-up activities should include, where appropriate, use of 
Government patent personnel--
    (1) To interview agency technical personnel to identify novel 
developments made in contracts;
    (2) To review technical reports submitted by contractors with 
cognizant agency technical personnel;
    (3) To check the Official Gazette of the United States Patent and 
Trademark Office and other sources for patents issued to the contractor 
in fields related to its Government contracts; and
    (4) To have cognizant Government personnel interview contractor 
personnel regarding work under the contract involved, observe the work 
on site, and inspect laboratory notebooks and other records of the 
contractor related to work under the contract.
    (e) If a contractor or subcontractor does not have a clear 
understanding of its obligations under the clause, or its procedures 
for complying with the clause are deficient, the contracting officer 
should explain to the contractor its obligations. The withholding of 
payments provision (if any) of the patent rights clause may be invoked 
if the contractor fails to meet the obligations required by the patents 
rights clause. Significant or repeated failures by a contractor to 
comply with the patent rights obligation in its contracts shall be 
documented and made a part of the general file (see 4.801(c)(3)).


27.305-3  Securing invention rights acquired by the Government.

    (a) Agencies are responsible for implementing procedures necessary 
to protect the Government's interest in subject inventions. When the 
Government acquires the entire right, title, and interest in an 
invention by contract, the chain of title from the inventor to the 
Government must be clearly established. This is normally accomplished 
by an assignment either from each inventor to the contractor and from 
the contractor to the Government, or from the inventor to the 
Government with the consent of the contractor. When the Government's 
rights are limited to a license, there should be a confirmatory 
instrument to that effect.
    (b) Agencies may, by supplemental instructions, develop suitable 
assignments, licenses, and other papers evidencing any rights of the 
Government in patents or patents applications. These instruments should 
be recorded in the U.S. Patent and Trademark Office (see Executive 
Order 9424, Establishing in the United States Patent Office a Register 
of Government Interests in Patents and Applications for Patents 
(February 18, 1944)).


27.305-4  Protection of invention disclosures.

    (a) The Government will, to the extent authorized by 35 U.S.C. 205, 
withhold from disclosure to the public any invention disclosures 
reported under the patent rights clauses of 52.227-11 or 52.227-13 for 
a reasonable time in order for patent applications to be filed. The 
Government will follow the policy in 27.302(j) regarding protection of 
confidentiality.
    (b) The Government should also use reasonable efforts to withhold 
from disclosure to the public for a reasonable time other information 
disclosing a subject invention. This information includes any data 
delivered pursuant to contract requirements provided that the 
contractor notifies the agency as to the identity of the data and the 
subject invention to which it relates at the time of delivery of the 
data. This notification shall be provided to both the contracting 
officer and to any patent representative to which the invention is 
reported, if other than the contracting officer.


27.306  Licensing background patent rights to third parties.

    (a) A contract with a small business concern or nonprofit 
organization shall not contain a provision allowing the Government to 
require the licensing to third parties of inventions owned by the 
contractor that are not subject inventions unless the agency head has 
approved and signed a written justification in accordance with 
paragraph (b) of this section. The agency head may not delegate this 
authority and may exercise the authority only if it is determined that 
the--
    (1) Use of the invention by others is necessary for the practice of 
a subject invention or for the use of a work object of the contract; 
and
    (2) Action is necessary to achieve the practical application of the 
subject invention or work object.
    (b) Any determination will be on the record after an opportunity 
for a hearing, and the agency shall notify the contractor of the 
determination by certified or registered mail. The notification shall 
include a statement

[[Page 31801]]

that the contractor must bring any action for judicial review of the 
determination within 60 days after the notification.

Subpart 27.4--Rights in Data and Copyrights


27.400  Scope of subpart.

    This subpart sets forth policies and procedures regarding rights in 
data and copyrights, and acquisition of data. The policy statement in 
27.402 applies to all executive agencies. The remainder of the subpart 
applies to all executive agencies except the Department of Defense.


27.401  Definitions.

    As used in this subpart--
    Computer data base means a collection of data in a form capable of, 
and for the purpose of, being stored in, processed, and operated on by 
a computer. The term does not include computer software.
    Computer software means--
    (1) Computer programs that comprise a series of instructions, 
rules, routines, or statements, regardless of the media in which 
recorded, that allow or cause a computer to perform a specific 
operation or series of operations; and
    (2) Recorded information comprising source code listings, design 
details, algorithms, processes, flow charts, formulas, and related 
material that would enable the computer program to be produced, 
created, or compiled. The term does not include computer data bases or 
computer software documentation.
    Data means recorded information, regardless of form or the media on 
which it may be recorded. The term includes technical data and computer 
software. The term does not include information incidental to contract 
administration, such as financial, administrative, cost or pricing, or 
management information.
    Form, fit, and function data means data relating to items, 
components, or processes that are sufficient to enable physical and 
functional interchangeability, and data identifying source, size, 
configuration, mating and attachment characteristics, functional 
characteristics, and performance requirements. For computer software it 
means data identifying source, functional characteristics, and 
performance requirements, but specifically excludes the source code, 
algorithm, process, formulas, and flow charts of the software.
    Limited rights means the rights of the Government in limited rights 
data as set forth in a Limited Rights Notice.
    Limited rights data means data, other than computer software, that 
embody trade secrets or are commercial or financial and confidential or 
privileged, to the extent that such data pertain to items, components, 
or processes developed at private expense, including minor 
modifications. Agencies may, however, adopt the following alternate 
definition: Limited rights data means data (other than computer 
software) developed at private expense that embody trade secrets or are 
commercial or financial and confidential or privileged (see 27.404-
2(b)).
    Restricted computer software means computer software developed at 
private expense and that is a trade secret, is commercial or financial 
and confidential or privileged, or is copyrighted computer software, 
including minor modifications of the computer software.
    Restricted rights means the rights of the Government in restricted 
computer software as set forth in a Restricted Rights Notice.
    Technical data means recorded information (regardless of the form 
or method of the recording) of a scientific or technical nature 
(including computer data bases and computer software documentation) 
relating to supplies procured by an agency. This term does not include 
computer software or financial, administrative, cost or pricing, or 
management data or other information incidental to contract 
administration. Recorded information of a scientific or technical 
nature that is included in computer data bases is also technical data 
(41 U.S.C. 403(8)).
    Unlimited rights means the rights of the Government to use, 
disclose, reproduce, prepare derivative works, distribute copies to the 
public, and perform publicly and display publicly, in any manner and 
for any purpose, and to have or permit others to do so.


27.402  Policy.

    (a) To carry out their missions and programs, agencies acquire or 
obtain access to many kinds of data produced during or used in the 
performance of their contracts. Agencies require data to--
    (1) Obtain competition among suppliers;
    (2) Fulfill certain responsibilities for disseminating and 
publishing the results of their activities;
    (3) Ensure appropriate utilization of the results of research, 
development, and demonstration activities, including the dissemination 
of technical information to foster subsequent technological 
developments;
    (4) Meet other programmatic and statutory requirements; and
    (5) Meet specialized acquisition needs and ensure logistics 
support.
    (b) Contractors may have proprietary interests in data. In order to 
prevent the compromise of these interests, agencies must protect 
proprietary data from unauthorized use and disclosure. The protection 
of such data is also necessary to encourage qualified contractors to 
participate in and apply innovative concepts to Government programs. In 
light of these considerations, agencies must balance the Government's 
needs and the contractor's legitimate proprietary interests.


27.403  Data rights--General.

    All contracts that require data to be produced, furnished, 
acquired, or used in meeting contract performance requirements must 
contain terms that delineate the respective rights and obligations of 
the Government and the contractor regarding the use, reproduction, and 
disclosure of that data. Data rights clauses do not specify the type, 
quantity or quality of data that is to be delivered, but only the 
respective rights of the Government and the contractor regarding the 
use, disclosure, or reproduction of the data. Accordingly, the contract 
shall specify the data to be delivered.


27.404  Basic rights in data clause.

    This section describes the operation of the clause at 52.227-14, 
Rights in Data--General, and also the use of the provision at 52.227-
15, Representation of Limited Rights Data and Restricted Computer 
software.


27.404-1  Unlimited rights data.

    The Government acquires unlimited rights in the following data 
(except for copyrighted works as provided in 27.404-3):
    (a) Data first produced in the performance of a contract (except to 
the extent the data constitute minor modifications to data that are 
limited rights data or restricted computer software).
    (b) Form, fit, and function data delivered under contract.
    (c) Data (except as may be included with restricted computer 
software) that constitute manuals or instructional and training 
material for installation, operation, or routine maintenance and repair 
of items, components, or processes delivered or furnished for use under 
a contract.
    (d) All other data delivered under the contract other than limited 
rights data or restricted computer software (see 27.404-2).

[[Page 31802]]

27.404-2  Limited rights data and restricted computer software.

    (a) General. The basic clause at 52.227-14, Rights in Data--
General, enables the contractor to protect qualifying limited rights 
data and restricted computer software by withholding the data from the 
Government and instead delivering form, fit, and function data.
    (b) Alternate definition of limited rights data. For contracts that 
do not require the development, use, or delivery of items, components, 
or processes that are intended to be acquired by or for the Government, 
an agency may adopt the alternate definition of limited rights data set 
forth in Alternate I to the clause at 52.227-14. The alternate 
definition does not require that the data pertain to items, components, 
or processes developed at private expense; but rather that the data 
were developed at private expense and embody a trade secret or are 
commercial or financial and confidential or privileged.
    (c) Protection of limited rights data specified for delivery. (1) 
The clause at 52.227-14 with its Alternate II enables the Government to 
require delivery of limited rights data rather than allow the 
contractor to withhold the data. To obtain delivery, the contract may 
identify and specify data to be delivered, or the contracting officer 
may require, by written request during contract performance, the 
delivery of data that has been withheld or identified to be withheld 
under paragraph (g)(1) of the clause. In addition, the contract may 
specifically identify data that are not to be delivered under Alternate 
II or which, if delivered, will be delivered with limited rights. The 
limited rights obtained by the Government are set forth in the Limited 
Rights Notice contained in paragraph (g)(3) of Alternate II of the 
clause. Agencies shall not, without permission of the contractor, use 
limited rights data for purposes of manufacture or disclose the data 
outside the Government except as set forth in the Notice. Any 
disclosure by the Government shall be subject to prohibition against 
further use and disclosure by the recipient. The following are examples 
of specific purposes that may be adopted by an agency in its supplement 
and added to the Limited Rights Notice of paragraph (g)(3) of Alternate 
II of the clause:
    (i) Use (except for manufacture) by support service contractors.
    (ii) Evaluation by nongovernment evaluators.
    (iii) Use (except for manufacture) by other contractors 
participating in the Government's program of which the specific 
contract is a part.
    (iv) Emergency repair or overhaul work.
    (v) Release to a foreign government, or its instrumentalities, if 
required to serve the interests of the U.S. Government, for information 
or evaluation, or for emergency repair or overhaul work by the foreign 
government.
    (2) The provision at 52.227-15, Representation of Limited Rights 
Data and Restricted Computer Software, helps the contracting officer to 
determine whether the clause at 52.227-14 should be used with its 
Alternate II. This provision requests that an offeror state whether 
limited rights data are likely to be delivered. Where limited rights 
data are expected to be delivered, Alternate II shall be used. Where 
negotiations are based on an unsolicited proposal, the need for 
Alternate II of the clause at 52.227-14 should be addressed during 
negotiations or discussions, and if Alternate II was not included 
initially, it may be added by modification, if needed, during contract 
performance.
    (3) If data that would otherwise qualify as limited rights data is 
delivered as a computer data base, the data shall be treated as limited 
rights data, rather than restricted computer software, for the purposes 
of paragraph (g) of the clause at 52.227-14.
    (d) Protection of restricted computer software specified for 
delivery. (1) Alternate III of the clause at 52.227-14 enables the 
Government to require delivery of restricted computer software rather 
than allow the contractor to withhold such restricted computer 
software. To obtain delivery of restricted computer software, the 
contracting officer shall--
    (i) Identify and specify the deliverable computer software in the 
contract; or
    (ii) Require by written request during contract performance, the 
delivery of computer software that has been withheld or identified to 
be withheld under paragraph (g)(1) of the clause.
    (2) In considering whether to use Alternate III, contracting 
officers should note that, unlike other data, computer software is also 
an end item in itself. Thus, the contracting officer shall use 
Alternate III if delivery of restricted computer software is required 
to meet agency needs.
    (3) Unless otherwise agreed (see paragraph (d)(4) of this 
subsection), the restricted rights obtained by the Government are set 
forth in the Restricted Rights Notice contained in paragraph (g)(4) of 
Alternate III of the clause at 52.227-14. Such restricted computer 
software will not be used or reproduced by the Government, or disclosed 
outside the Government, except that the computer software may be--
    (i) Used or copied for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;
    (ii) Used or copied for use in or with a backup computer if any 
computer for which it was acquired becomes inoperative;
    (iii) Reproduced for safekeeping (archives) or backup purposes;
    (iv) Modified, adapted, or combined with other computer software, 
provided that the modified, combined, or adapted portions of any 
derivative software incorporating restricted computer software are made 
subject to the same restricted rights;
    (v) Disclosed to and reproduced for use by support service 
contractors, subject to the same restriction under which the Government 
acquired the software;
    (vi) Used or copied for use in or transferred to a replacement 
computer; and
    (vii) Used in accordance with paragraphs (d)(3)(i) through (v) of 
this subsection, without disclosure prohibitions, if the computer 
software is copyrighted computer software.
    (4) The restricted rights set forth in paragraph (d)(3) of this 
section are the minimum rights the Government normally obtains with 
restricted computer software and will automatically apply when such 
software is acquired under the Restricted Rights Notice of paragraph 
(g)(4) of Alternate III of the clause at 52.227-14. However, the 
contracting officer may specify different rights in the contract, 
consistent with the purposes and needs for which the software is to be 
acquired. For example, the contracting officer should consider any 
networking needs or any requirements for use of the computer software 
from remote terminals. Also, in addressing such needs, the scope of the 
restricted rights may be different for the documentation accompanying 
the computer software than for the programs and data bases. Any 
additions to, or limitations on, the restricted rights set forth in the 
Restricted Rights Notice of paragraph (g)(4) of Alternate III of the 
clause at 52.227-14 shall be expressly stated in the contract or in a 
collateral agreement incorporated in and made part of the contract, and 
the notice modified accordingly.
    (5) The provision at 52.227-15, Representation of Limited Rights 
Data and Restricted Computer Software,

[[Page 31803]]

helps the contracting officer determine whether to use the clause at 
52.227-14 with its Alternate III. This provision requests that an 
offeror state whether restricted computer software is likely to be 
delivered under the contract. In addition, the need for Alternate III 
should be addressed during negotiations or discussions with an offeror, 
particularly where negotiations are based on an unsolicited proposal. 
However, if Alternate III is not used initially, it may be added by 
modification, if needed, during contract performance.


27.404-3  Copyrighted works.

    (a) Data first produced in the performance of a contract. (1) 
Generally, the contractor must obtain permission of the contracting 
officer prior to asserting rights in any copyrighted work containing 
data first produced in the performance of a contract. However, 
contractors are normally authorized, without prior approval of the 
contracting officer, to assert copyright in technical or scientific 
articles based on or containing such data that is published in 
academic, technical or professional journals, symposia proceedings and 
similar works.
    (2) The contractor must make a written request for permission to 
assert its copyright in works containing data first produced under the 
contract. In its request, the contractor should identify the data 
involved or furnish copies of the data for which permission is 
requested, as well as a statement as to the intended publication or 
dissemination media or other purpose for which the permission is 
requested. Generally, a contracting officer should grant the 
contractor's request when copyright protection will enhance the 
appropriate dissemination or use of the data unless the--
    (i) Data consist of a report that represents the official views of 
the agency or that the agency is required by statute to prepare;
    (ii) Data are intended primarily for internal use by the 
Government;
    (iii) Data are of the type that the agency itself distributes to 
the public under an agency program;
    (iv) Government determines that limitation on distribution of the 
data is in the national interest; or
    (v) Government determines that the data should be disseminated 
without restriction.
    (3) Alternate IV of the clause at 52.227-14 provides a substitute 
paragraph (c)(1) granting permission for contractors to assert 
copyright in any data first produced in the performance of the contract 
without the need for any further requests. Except for contracts for 
management or operation of Government facilities and contracts and 
subcontracts in support of programs being conducted at those facilities 
or where international agreements require otherwise, Alternate IV shall 
be used in all contracts for basic or applied research to be performed 
solely by colleges and universities. Alternate IV shall not be used in 
contracts with colleges and universities if a purpose of the contract 
is for development of computer software for distribution to the public 
(including use in solicitations) by or on behalf of the Government. In 
addition, Alternate IV may be used in other contracts if an agency 
determines that it is not necessary for a contractor to request further 
permission to assert copyright in data first produced in performance of 
the contract. The contracting officer may exclude any data, or items or 
categories of data, from the provisions of Alternate IV by expressly so 
providing in the contract or by adding a paragraph (d)(3) to the 
clause, consistent with 27.404-4(b).
    (4) Pursuant to paragraph (c)(1) of the clause at 52.227-14, the 
contractor grants the Government a paid-up, nonexclusive, irrevocable, 
worldwide license to reproduce, prepare derivative works, distribute to 
the public, perform publicly and display publicly by or on behalf of 
the Government, for all data (other than computer software) first 
produced in the performance of a contract. For computer software, the 
scope of the Government's license includes all of the above rights 
except the right to distribute to the public. Agencies may also obtain 
a license of different scope if the contracting officer determines, 
after consulting with legal counsel, such a license will substantially 
enhance the dissemination of any data first produced under the contract 
or if such a license is required to comply with international 
agreements. If an agency obtains a different license, the contractor 
must clearly state the scope of that license in a conspicuous place on 
the medium on which the data is recorded. For example, if the data is 
delivered as a report, the terms of the license shall be stated on the 
cover, or first page, of the report.
    (5) The clause requires the contractor to affix the applicable 
copyright notices of 17 U.S.C. 401 or 402, and acknowledgment of 
Government sponsorship (including the contract number), to data when it 
asserts copyright in data. Failure to do so could result in such data 
being treated as unlimited rights data (see 27.404-5(b)).
    (b) Data not first produced in the performance of a contract. (1) 
Contractors must not deliver any data that is not first produced under 
the contract without either--
    (i) Acquiring for or granting to the Government a copyright license 
for the data; or
    (ii) Obtaining permission from the contracting officer to do 
otherwise.
    (2) The copyright license the Government acquires for such data 
will normally be of the same scope as discussed in paragraph (a)(4) of 
this subsection, and is set forth in paragraph (c)(2) of the clause at 
52.227-14. However, agencies may obtain a license of different scope if 
the agency determines, after consultation with its legal counsel, that 
such different license will not be inconsistent with the purpose of 
acquiring the data. If a license of a different scope is acquired, it 
must be so stated in the contract and clearly set forth in a 
conspicuous place on the data when delivered to the Government. If the 
contractor delivers computer software not first produced under the 
contract, the contractor must grant the Government the license set 
forth in paragraph (g)(4) of Alternate III if included in the clause at 
52.227-14, or a license agreed to in a collateral agreement made part 
of the contract.


27.404-4  Contractor's release, publication, and use of data.

    (a) In contracts for basic or applied research with universities or 
colleges, agencies shall not place any restrictions on the conduct of 
or reporting on the results of unclassified basic or applied research, 
except as provided in applicable U.S. Statutes. However, agencies may 
restrict the release or disclosure of computer software that is or is 
intended to be developed to the point of practical application 
(including for agency distribution under established programs). This is 
not considered a restriction on the reporting of the results of basic 
or applied research. Agencies may also preclude a contractor from 
asserting copyright in any computer software for purposes of 
established agency distribution programs, or where required to 
accomplish the purpose for which the software is acquired.
    (b) Except for the results of basic or applied research under 
contracts with universities or colleges, agencies may, to the extent 
provided in their FAR supplements, place limitations or restrictions on 
the contractor's exercise of its rights in data first produced in the 
performance of the contract, including a requirement to assign 
copyright to the Government or another party. Any of

[[Page 31804]]

these restrictions shall be expressly included in the contract.


27.404-5  Unauthorized, omitted, or incorrect markings.

    (a) Unauthorized marking of data. (1) The Government has, in 
accordance with paragraph (e) of the clause at 52.227-14, the right to 
either return data containing unauthorized markings or to cancel or 
ignore the markings.
    (2) Agencies shall not cancel or ignore markings without making 
written inquiry of the contractor and affording the contractor at least 
30 days to provide a written justification substantiating the propriety 
of the markings.
    (i) If the contractor fails to respond or fails to provide a 
written justification substantiating the propriety of the markings 
within the time afforded, the Government may cancel or ignore the 
markings.
    (ii) If the contractor provides a written justification 
substantiating the propriety of the markings, the contracting officer 
shall consider the justification.
    (A) If the contracting officer determines that the markings are 
authorized, the contractor will be so notified in writing.
    (B) If the contracting officer determines, with concurrence of the 
head of the contracting activity, that the markings are not authorized, 
the contractor will be furnished a written determination which becomes 
the final agency decision regarding the appropriateness of the 
markings, and the markings will be cancelled or ignored and the data 
will no longer be made subject to disclosure prohibitions, unless the 
contractor files suit within 90 days in a court of competent 
jurisdiction. The markings will not be cancelled or ignored until final 
resolution of the matter, either by the contracting officer's 
determination becoming the final agency decision or by final 
disposition of the matter by court decision if suit is filed.
    (3) The foregoing procedures may be modified in accordance with 
agency regulations implementing the Freedom of Information Act (5 
U.S.C. 552) if necessary to respond to a request. In addition, the 
contractor may bring a claim, in accordance with the Disputes clause of 
the contract, that may arise as the result of the Government's action 
to remove or ignore any markings on data, unless the action occurs as 
the result of a final disposition of the matter by a court of competent 
jurisdiction.
    (b) Omitted or incorrect notices. (1) Data delivered under a 
contract containing the clause without a limited rights notice or 
restricted rights notice, and without a copyright notice, will be 
presumed to have been delivered with unlimited rights, and the 
Government assumes no liability for the disclosure, use, or 
reproduction of the data. However, to the extent the data has not been 
disclosed without restriction outside the Government, the contractor 
may, within 6 months (or a longer period approved by the contracting 
officer for good cause shown), request permission of the contracting 
officer to have omitted limited rights or restricted rights notices, as 
applicable, placed on qualifying data at the contractor's expense. The 
contracting officer may permit adding appropriate notices if the 
contractor--
    (i) Identifies the data for which a notice is to be added;
    (ii) Demonstrates that the omission of the proposed notice was 
inadvertent;
    (iii) Establishes that use of the proposed notice is authorized; 
and
    (iv) Acknowledges that the Government has no liability with respect 
to any disclosure or use of any such data made prior to the addition of 
the notice or resulting from the omission of the notice.
    (2) The contracting officer may also--
    (i) Permit correction, at the contractor's expense, of incorrect 
notices if the contractor identifies the data on which correction of 
the notice is to be made, and demonstrates that the correct notice is 
authorized; or
    (ii) Correct any incorrect notices.


27.404-6  Inspection of data at the contractor's facility.

    Contracting officers may obtain the right to inspect data at the 
contractor's facility by use of the clause at 52.227-14 with its 
Alternate V, which adds paragraph (j) to provide that right. Agencies 
may also adopt Alternate V for general use. The data subject to 
inspection may be data withheld or withholdable under paragraph (g)(1) 
of the clause. Inspection may be made by the contracting officer or 
designee (including nongovernmental personnel under the same conditions 
as the contracting officer) for the purpose of verifying a contractor's 
assertion regarding the limited rights or restricted rights status of 
the data, or for evaluating work performance under the contract. This 
right may be exercised up to 3 years after acceptance of all items to 
be delivered under the contract. The contract may specify data items 
that are not subject to inspection under paragraph (j) of Alternate V. 
If the contractor demonstrates to the contracting officer that there 
would be a possible conflict of interest if inspection were made by a 
particular representative, the contracting officer shall designate an 
alternate representative.


27.405  Other data rights provisions.


27.405-1  Special works.

    (a) The clause at 52.227-17, Rights in Data--Special Works, is for 
use in contracts (or may be made applicable to portions thereof) that 
are primarily for the production or compilation of data (other than 
limited rights data or restricted computer software) for the 
Government's own use, or when there is a specific need to limit 
distribution and use of the data or to obtain indemnity for liabilities 
that may arise out of the content, performance, or disclosure of the 
data. Examples are contracts for--
    (1) The production of audiovisual works, including motion pictures 
or television recordings with or without accompanying sound, or for the 
preparation of motion picture scripts, musical compositions, sound 
tracks, translation, adaptation, and the like;
    (2) Histories of the respective agencies, departments, services, or 
units thereof;
    (3) Surveys of Government establishments;
    (4) Works pertaining to the instruction or guidance of Government 
officers and employees in the discharge of their official duties;
    (5) The compilation of reports, books, studies, surveys, or similar 
documents that do not involve research, development, or experimental 
work;
    (6) The collection of data containing personally identifiable 
information such that the disclosure thereof would violate the right of 
privacy or publicity of the individual to whom the information relates;
    (7) Investigatory reports;
    (8) The development, accumulation, or compilation of data (other 
than that resulting from research, development, or experimental work 
performed by the contractor), the early release of which could 
prejudice follow-on acquisition activities or agency regulatory or 
enforcement activities; or
    (9) The development of computer software programs, where the 
program--
    (i) May give a commercial advantage; or
    (ii) Is agency mission sensitive, and release could prejudice 
agency mission, programs, or follow-on acquisitions.
    (b) The contract may specify the purposes and conditions (including 
time limitations) under which the data may be used, released, or 
reproduced other than for contract performance. Contracts for the 
production of audiovisual works, sound recordings, etc., may include 
limitations in

[[Page 31805]]

connection with talent releases, music licenses, and the like that are 
consistent with the purposes for which the works are acquired.
    (c) Paragraph (c)(1)(ii) of the clause, which enables the 
Government to obtain assignment of copyright in any data first produced 
in the performance of the contract, may be deleted if the contracting 
officer determines that such assignment is not needed to further the 
objectives of the contract.
    (d) Paragraph (e) of the clause, which requires the contractor to 
indemnify the Government against any liability incurred as the result 
of any violation of trade secrets, copyrights, right of privacy or 
publicity, or any libelous or other unlawful matter arising out of or 
contained in any production or compilation of data that are subject to 
the clause, may be deleted or limited in scope where the contracting 
officer determines that, because of the nature of the particular data 
involved, such liability will not arise.
    (e) When the audiovisual or other special works are produced to 
accomplish a public purpose other than acquisition for the Government's 
own use (such as for production and distribution to the public of the 
works by other than a Federal agency), agencies are authorized to 
modify the clause for use in contracts, with rights in data provisions 
that meet agency mission needs yet protect free speech and freedom of 
expression, as well as the artistic license of the creator of the work.


27.405-2  Existing works.

    The clause at 52.227-18, Rights in Data--Existing Works, is for use 
in contracts exclusively for the acquisition (without modification) of 
existing works such as motion pictures, television recordings, and 
other audiovisual works; sound recordings; musical, dramatic, and 
literary works; pantomimes and choreographic works; pictorial, graphic, 
and sculptural works; and works of a similar nature. The contract may 
set forth limitations consistent with the purposes for which the works 
covered by the contract are being acquired. Examples of these 
limitations are means of exhibition or transmission, time, type of 
audience, and geographical location. However, if the contract requires 
that works of the type indicated in this paragraph are to be modified 
through editing, translation, or addition of subject matter, etc. 
(rather than purchased in existing form), then see 27.405-1.


27.405-3  Commercial computer software.

    (a)(1) When contracting other than from GSA's Multiple Award 
Schedule contracts for the acquisition of commercial computer software, 
no specific contract clause prescribed in this subpart need be used, 
but the contract shall specifically address the Government's rights to 
use, disclose, modify, distribute, and reproduce the software. Section 
12.212 sets forth the guidance for the acquisition of commercial 
computer software and states that commercial computer software or 
commercial computer software documentation shall be acquired under 
licenses customarily provided to the public to the extent the license 
is consistent with Federal law and otherwise satisfies the Government's 
needs. The clause at 52.227-19 may be used when there is any confusion 
as to whether the Government's needs are satisfied or whether a 
customary commercial license is consistent with Federal law. Additional 
or lesser rights may be negotiated using the guidance concerning 
restricted rights as set forth in 27.404-2(d), or the clause at 52.227-
19, Commercial Computer Software License. If greater rights than the 
minimum rights identified in the clause at 52.227-19 are needed, or 
lesser rights are to be acquired, they must be negotiated and set forth 
in the contract. This includes any additions to, or limitations on, the 
rights set forth in paragraph (b) of the clause at 52.227-19 when used. 
Examples of greater rights may be those necessary for networking 
purposes or use of the software from remote terminals communicating 
with a host computer where the software is located. If the computer 
software is to be acquired with unlimited rights, the contract must 
also so state. In addition, the contract must adequately describe the 
computer programs and/or data bases, the media on which it is recorded, 
and all the necessary documentation.
    (2) If the contract incorporates, makes reference to, or uses a 
vendor's standard commercial lease, license, or purchase agreement, the 
contracting officer shall ensure that the agreement is consistent with 
paragraph (a)(1) of this subsection. The contracting officer should 
exercise caution in accepting a vendor's terms and conditions, since 
they may be directed to commercial sales and may not be appropriate for 
Government contracts. Any inconsistencies in a vendor's standard 
commercial agreement shall be addressed in the contract and the 
contract terms shall take precedence over the vendor's standard 
commercial agreement. If the clause at 52.227-19 is used, 
inconsistencies in the vendor's standard commercial agreement regarding 
the Government's right to use, reproduce or disclose the computer 
software are reconciled by that clause.
    (3) If a prime contractor under a contract containing the clause at 
52.227-14, Rights in Data--General, with paragraph (g)(4) of Alternate 
III in the clause, acquires restricted computer software from a 
subcontractor (at any tier) as a separate acquisition for delivery to 
or for use on behalf of the Government, the contracting officer may 
approve any additions to, or limitations on, the restricted rights in 
the Restricted Rights Notice of paragraph (g)(4) in a collateral 
agreement incorporated in and made part of the contract.
    (b)(1) Except for existing works pursuant to 27.405-2 or commercial 
computer software pursuant to 27.405-3, no clause contained in this 
subpart is required to be included in--
    (i) Contracts solely for the acquisition of books, periodicals, and 
other printed items in the exact form in which these items are to be 
obtained unless reproduction rights are to be acquired; or
    (ii) Other contracts that require only existing data (other than 
limited rights data) to be delivered and the data are available without 
disclosure prohibitions, unless reproduction rights to the data are to 
be obtained.
    (2) If the reproduction rights to the data are to be obtained in 
any contract of the type described in paragraph (b)(1)(i) or (ii) of 
this section, the rights shall be specifically set forth in the 
contract. No clause contained in this subpart is required to be 
included in contracts substantially for on-line database services in 
the same form as they are normally available to the general public.


27.406  Acquisition of data.


27.406-1  General.

    (a) It is the Government's practice to determine, to the extent 
feasible, its data requirements in time for inclusion in solicitations. 
The data requirements may be subject to revision during contract 
negotiations. Since the preparation, reformatting, maintenance and 
updating, cataloging, and storage of data represents an expense to both 
the Government and the contractor, efforts should be made to keep the 
contract data requirements to a minimum, consistent with the purposes 
of the contract.
    (b) The contracting officer shall specify in the contract all known 
data

[[Page 31806]]

requirements, including the time and place for delivery and any 
limitations and restrictions to be imposed on the contractor in the 
handling of the data. Further, and to the extent feasible, in major 
system acquisitions, the contracting officer shall set out data 
requirements as separate contract line items. In establishing the 
contract data requirements and in specifying data items to be delivered 
by a contractor, agencies may, consistent with paragraph (a) of this 
subsection, develop their own contract schedule provisions. Agency 
procedures may, among other things, provide for listing, specifying, 
identifying source, assuring delivery, and handling any data required 
to be delivered, first produced, or specifically used in the 
performance of the contract.
    (c) Data delivery requirements should normally not require that a 
contractor provide the Government, as a condition of the procurement, 
unlimited rights in data that qualify as limited rights data or 
restricted computer software. Rather, form, fit, and function data may 
be furnished with unlimited rights instead of the qualifying data, or 
the qualifying data may be furnished with limited rights or restricted 
rights if needed (see 27.404-2(c) and (d)). If greater rights are 
needed, they should be clearly set forth in the solicitation and the 
contractor fairly compensated for the greater rights.


27.406-2  Additional data requirements.

    (a) In some contracting situations, such as experimental, 
developmental, research, or demonstration contracts, it may not be 
feasible to ascertain all the data requirements at contract award. The 
clause at 52.227-16, Additional Data Requirements, may be used to 
enable the subsequent ordering by the contracting officer of additional 
data first produced or specifically used in the performance of these 
contracts as the actual requirements become known. The clause shall 
normally be used in solicitations and contracts involving experimental, 
developmental, research or demonstration work (other than basic or 
applied research to be performed under a contract solely by a 
university or college when the contract amount will be $500,000 or 
less) unless all the requirements for data are believed to be known at 
the time of contracting and specified in the contract. If the contract 
is for basic or applied research to be performed by a university or 
college, and the contracting officer believes the contract effort will 
in the future exceed $500,000, even though the initial award does not, 
the contracting officer may include the clause in the initial award.
    (b) Data may be ordered under the clause at 52.227-16 at any time 
during contract performance or within a period of 3 years after 
acceptance of all items to be delivered under the contract. The 
contractor is to be compensated for converting the data into the 
prescribed form, for reproduction, and for delivery. In order to 
minimize storage costs for the retention of data, the contracting 
officer may relieve the contractor of the retention requirements for 
specified data items at any time during the retention period required 
by the clause. The contracting officer may permit the contractor to 
identify and specify in the contract data not to be ordered for 
delivery under the clause if the data is not necessary to meet the 
Government's requirements for data. Also, the contracting officer may 
alter the clause by deleting the term ``or specifically used'' in 
paragraph (a) of the clause if delivery of the data is not necessary to 
meet the Government's requirements for data. Any data ordered under 
this clause will be subject to the clause at 52.227-14, Rights in 
Data--General (or other equivalent clause setting forth the respective 
rights of the Government and the contractor), in the contract. Data 
authorized to be withheld under such clause will not be required to be 
delivered under the clause at 52.227-16, except as provided in 
Alternate II or Alternate III, if included (see 27.404-2(c) and (d)).
    (c) Absent an established program for dissemination of computer 
software, agencies should not order additional computer software under 
the clause at 52.227-16 for the sole purpose of disseminating or 
marketing the software to the public. In ordering software for internal 
purposes, the contracting officer shall consider, consistent with the 
Government's needs, not ordering particular source codes, algorithms, 
processes, formulas or flow charts of the software if the contractor 
shows that this aids its efforts to disseminate or market the software.


27.406-3  Major system acquisition.

    (a) The clause at 52.227-21, Technical Data Declaration, Revision, 
and Withholding of Payment--Major Systems, implements 41 U.S.C. 
418a(d). When using the clause at 52.227-21, the section of the 
contract specifying data delivery requirements (see 27.406-1(b)) shall 
expressly identify those line items of technical data to which the 
clause applies. Upon delivery of the technical data, the contracting 
officer shall review the technical data and the contractor's 
declaration relating to it to assure that the data are complete, 
accurate, and comply with contract requirements. If the data are not 
complete, accurate, or compliant, the contracting officer should 
request the contractor to correct the deficiencies, and may withhold 
payment. Final payment shall not be made under the contract until it 
has been determined that the delivery requirements of those line items 
of data to which the clause applies have been satisfactorily met.
    (b) In a contract for, or in support of, a major system awarded by 
a civilian agency other than NASA or the U.S. Coast Guard, the 
following applies:
    (1) The contracting officer shall require the delivery of any 
technical data relating to the major system, or supplies for the major 
system, that are to be developed exclusively with Federal funds if the 
delivery of the technical data is needed to ensure the competitive 
acquisition of supplies or services that will be required in 
substantial quantities in the future. The clause at 52.227-22, Major 
System--Minimum Rights, is used in addition to the clause at 52.227-14, 
Rights in Data--General, and other required clauses, to ensure that the 
Government acquires at least those rights required by Public Law 98-577 
in technical data developed exclusively with Federal funds.
    (2) Technical data, relating to a major system or supplies for a 
major system, procured or to be procured by the Government and also 
relating to the design, development, or manufacture of products or 
processes offered or to be offered for sale to the public (except for 
such data as may be necessary for the Government to operate or maintain 
the product, or use the process if obtained by the Government as an 
element of performance under the contract), shall not be required to be 
provided to the Government from persons who have developed such 
products or processes as a condition for the procurement of such 
products or processes by the Government.


27.407  Rights to technical data in successful proposals.

    The clause at 52.227-23, Rights to Proposal Data (Technical), 
allows the Government to acquire unlimited rights to technical data in 
successful proposals. Pursuant to the clause, the prospective 
contractor is afforded the opportunity to specifically identify pages 
containing technical data to be excluded from the grant of unlimited 
rights. This exclusion is not dispositive of the protective status of 
the data, but any excluded technical data, as well as any commercial 
and financial information contained in the proposal, will remain 
subject to the policies in Subpart 15.2 or 15.6 (or agency supplements) 
relating to proposal

[[Page 31807]]

information (e.g., will be used for evaluation purposes only). If there 
is a need to have access to any of the excluded technical data during 
contract performance, consideration should be given to acquiring the 
data with limited rights, if they so qualify, in accordance with 
27.404-2(c).


27.408  Cosponsored research and development activities.

    (a) In contracts involving cosponsored research and development 
that require the contractor to make substantial contributions of funds 
or resources (e.g., by cost-sharing or by repayment of nonrecurring 
costs), and the contractor's and the Government's respective 
contributions to any item, component, process, or computer software, 
developed or produced under the contract are not readily segregable, 
the contracting officer may limit the acquisition of, or acquire less 
than unlimited rights to, any data developed and delivered under the 
contract. Agencies may regulate the use of this authority in their 
supplements. Lesser rights shall, at a minimum, assure use of the data 
for agreed-to Governmental purposes (including reprocurement rights as 
appropriate), and address any disclosure limitations or restrictions to 
be imposed on the data. Also, consideration may be given to requiring 
the contractor to directly license others if needed to carry out the 
objectives of the contract. Since the purpose of the cosponsored 
research and development, the legitimate proprietary interests of the 
contractor, the needs of the Government, and the respective 
contributions of both parties may vary, no specific clauses are 
prescribed, but a clause providing less than unlimited rights in the 
Government for data developed and delivered under the contract (such as 
license rights) may be tailored to the circumstances consistent with 
the foregoing and the policy set forth in 27.402. As a guide, a clause 
may be appropriate when the contractor contributes money or resources, 
or agrees to make repayment of nonrecurring costs, of a value of 
approximately 50 percent of the total cost of the contract (i.e., 
Government, contractor, and/or third party paid costs), and the 
respective contributions are not readily segregable for any work 
element to be performed under the contract. A clause may be used for 
all or for only specifically identified tasks or work elements under 
the contract. In the latter instance, its use will be in addition to 
whatever other data rights clause is prescribed under this subpart, 
with the contract specifically identifying which clause is to apply to 
which tasks or work elements. Further, this type of clause may not be 
appropriate where the purpose of the contract is to produce data for 
dissemination to the public, or to develop or demonstrate technologies 
that will be available, in any event, to the public for their direct 
use.
    (b) Where the contractor's contributions are readily segregable (by 
performance requirements and the funding for the contract) and so 
identified in the contract, any resulting data may be treated under 
this clause as limited rights data or restricted computer software in 
accordance with 27.404-2(c) or (d), as applicable; or if this treatment 
is inconsistent with the purpose of the contract, rights to the data 
may, if so negotiated and stated in the contract, be treated in a 
manner consistent with paragraph (a) of this section.


27.409  Solicitation provisions and contract clauses.

    (a) Generally, a contract should contain only one data rights 
clause. However, where more than one is needed, the contract should 
distinguish the portion of contract performance to which each pertains.
    (b)(1) Insert the clause at 52.227-14, Rights in Data-- General, in 
solicitations and contracts if it is contemplated that data will be 
produced, furnished, or acquired under the contract, unless the 
contract is--
    (i) For the production of special works of the type set forth in 
27.405-1, although in these cases insert the clause at 52.227-14, 
Rights in Data--General, and make it applicable to data other than 
special works, as appropriate (see paragraph (e) of this section);
    (ii) For the acquisition of existing data works, as described in 
27.405-2 (see paragraphs (f) and (g) of this section);
    (iii) A small business innovation research contract (see paragraph 
(h) of this section);
    (iv) To be performed outside the United States (see paragraph 
(i)(1) of this section);
    (v) For architect-engineer services or construction work (see 
paragraph (i)(2) of this section);
    (vi) For the management, operation, design, or construction of a 
Government-owned facility to perform research, development, or 
production work (see paragraph (i)(3) of this section); or
    (vii) A contract involving cosponsored research and development in 
which a clause providing for less than unlimited right has been 
authorized (see 27.408).
    (2) If an agency determines, in accordance with 27.404-2(b), to 
adopt the alternate definition of ``Limited Rights Data'' in paragraph 
(a) of the clause, use the clause with its Alternate I.
    (3) If a contracting officer determines, in accordance with 27.404-
2(c), that it is necessary to obtain limited rights data, use the 
clause with its Alternate II. The contracting officer shall complete 
paragraph (g)(3) to include the purposes, if any, for which limited 
rights data are to be disclosed outside the Government.
    (4) In accordance with 27.404-2(d), if a contracting officer 
determines it is necessary to obtain restricted computer software, use 
the clause with its Alternate III. Any greater or lesser rights 
regarding the use, reproduction, or disclosure of restricted computer 
software than those set forth in the Restricted Rights Notice of 
paragraph (g)(4) of Alternate III of the clause shall be specified in 
the contract and the notice modified accordingly.
    (5) Use the clause with its Alternate IV in contracts for basic or 
applied research (other than those for the management or operation of 
Government facilities or where international agreements require 
otherwise) to be performed solely by universities and colleges. The 
clause may be used with its Alternate IV in other contracts if, in 
accordance with 27.404-3(a), an agency determines to grant permission 
for the contractor to establish claim to copyright subsisting in all 
data first produced without further request being made by the 
contractor. When Alternate IV is used, the contract may exclude items 
or categories of data from the permission granted, either by express 
provisions in the contract or by the addition of a paragraph (d)(3) to 
the clause (see 27.404-4).
    (6) In accordance with 27.404-6, if the Government needs the right 
to inspect certain data at a contractor's facility, use the clause with 
its Alternate V.
    (c) In accordance with 27.404-2(c)(2) and 27.404-2(d)(5), if the 
contracting officer desires to have an offeror state in response to a 
solicitation whether limited rights data or restricted computer 
software are likely to be used in meeting the data delivery 
requirements set forth in the solicitation, insert the provision at 
52.227-15, Representation of Limited Rights Data and Restricted 
Computer Software, in any solicitation containing the clause at 52.227-
14, Rights in Data--General. The contractor's response may provide an 
aid in determining whether the clause should be used with Alternate II 
and/or Alternate III.

[[Page 31808]]

    (d) Insert the clause at 52.227-16, Additional Data Requirements, 
in solicitations and contracts involving experimental, developmental, 
research, or demonstration work (other than basic or applied research 
to be performed solely by a university or college where the contract 
amount will be $500,000 or less) unless all the requirements for data 
are believed to be known at the time of contracting and specified in 
the contract (see 27.406-2). This clause may also be used in other 
contracts when considered appropriate. For example, if the contract is 
for basic or applied research to be performed by a university or 
college, and the contracting officer believes the contract effort will 
in the future exceed $500,000, even though the initial award does not, 
the contracting officer may include the clause in the initial award.
    (e) In accordance with 27.405-1, insert the clause at 52.227-17, 
Rights in Data--Special Works, in solicitations and contracts primarily 
for the production or compilation of data (other than limited rights 
data or restricted computer software) for the Government's internal 
use, or when there is a specific need to limit distribution and use of 
the data or to obtain indemnity for liabilities that may arise out of 
the content, performance, or disclosure of the data. Examples of such 
contracts are set forth in 27.405-1.
    (1) Insert the clause if existing works are to be modified, as by 
editing, translation, addition of subject matter, etc.
    (2) The contract may specify the purposes and conditions (including 
time limitations) under which the data may be used, released, or 
reproduced by the contractor for other than contract performance.
    (3) Contracts for the production of audiovisual works, sound 
recordings, etc., may include limitations in connection with talent 
releases, music licenses, and the like that are consistent with the 
purposes for which the data is acquired.
    (4) The clause may be modified in accordance with paragraphs (c) 
through (e) of 27.405-1.
    (f) Insert the clause at 52.227-18, Rights in Data-- Existing 
Works, in solicitations and contracts exclusively for the acquisition, 
without modification, of existing audiovisual and similar works of the 
type set forth in 27.405-2. The contract may set forth limitations 
consistent with the purposes for which the work is being acquired. 
While no specific clause of this subpart is required to be included in 
contracts solely for the acquisition, without disclosure prohibitions, 
of books, publications, and similar items in the exact form in which 
the items exist prior to the request for purchase (i.e., the off-the-
shelf purchase of such items), or in other contracts where only 
existing data available without disclosure prohibitions is to be 
furnished, if reproduction rights are to be acquired, the contract 
shall include terms addressing such rights. (See 27.405-3(b).)
    (g) In accordance with 27.405-3(a), when contracting (other than 
from GSA's Multiple Award Schedule contracts) for the acquisition of 
commercial computer software, the contracting officer may insert the 
clause at 52.227-19, Commercial Computer Software License, in the 
solicitation and contract. In any event, the contracting officer shall 
assure that the contract contains terms to obtain sufficient rights for 
the Government to fulfill the need for which the software is being 
acquired and is otherwise consistent with 27.405-3(a).
    (h) If the contract is a Small Business Innovation Research (SBIR) 
contract, insert the clause at 52.227-20, Rights in Data--SBIR Program, 
in all Phase I and Phase II contracts awarded under the Small Business 
Innovation Research Program established pursuant to 15 U.S.C. 638.
    (i) Agencies may prescribe in their procedures, as appropriate, a 
clause consistent with the policy of 27.402 in contracts--
    (1) To be performed outside the United States;
    (2) For architect-engineer services and construction work (may 
prescribe the clause at 52.227-17, Rights in Data-- Special Works); or
    (3) For management, operation, design, or construction of 
Government-owned research, development, or production facilities, and 
in contracts and subcontracts in support of programs being conducted at 
such facilities.
    (j) In accordance with 27.406-3(a), insert the clause at 52.227-21, 
Technical Data Declaration, Revision, and Withholding of Payment--Major 
Systems, in contracts for major systems acquisitions or for support of 
major systems acquisitions. This requirement includes contracts for 
detailed design, development, or production of a major system and 
contracts for any individual part, component, subassembly, assembly, or 
subsystem integral to the major system, and other property that may be 
replaced during the service life of the system, including spare parts. 
When used, this clause requires that the technical data to which it 
applies be specified in the contract (see 27.406-3(a)).
    (k) In accordance with 27.406-3(b), in the case of civilian 
agencies other than NASA and the U.S. Coast Guard, insert the clause at 
52.227-22, Major System--Minimum Rights, in contracts for major systems 
or contracts in support of major systems.
    (l) In accordance with 27.407, if a contracting officer desires to 
acquire unlimited rights in technical data contained in a successful 
proposal upon which a contract award is based, insert the clause at 
52.227-23, Rights to Proposed Data (Technical). Rights to technical 
data in a proposal are not acquired by mere incorporation by reference 
of the proposal in the contract, and if a proposal is incorporated by 
reference, the contracting officer shall follow section 27.404 to 
assure that the rights are appropriately addressed.

Subpart 27.5--Foreign License and Technical Assistance Agreements


27.501  General.

    Agencies shall provide necessary policy and procedures regarding 
foreign technical assistance agreements and license agreements 
involving intellectual property, including avoiding unnecessary royalty 
charges.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES.

    5. Amend section 52.227-1 by revising the introductory text of the 
clause and the introductory text of Alternates I and II to read as 
follows:


52.227-1  Authorization and Consent.

    As prescribed in 27.201-2(a)(1), insert the following clause:
* * * * *

    Alternate I (Apr 1984). As prescribed in 27.201-2(a)(2), 
substitute the following paragraph (a) for paragraph (a) of the 
basic clause:
* * * * *
    Alternate II (Apr 1984). As prescribed in 27.201-2(a)(3), 
substitute the following paragraph (a) for paragraph (a) of the 
basic clause:

* * * * *


52.227-2  [Amended]

    6. In section 52.227-2, amend the introductory text of the clause 
by removing ``at 27.202-2'' and adding ``in 27.201-2(b)'' in its place.
    7. Amend section 52.227-3 by revising the introductory text of the 
clause and the introductory text of Alternates I, II, and III to read 
as follows:

[[Page 31809]]

52.227-3  Patent Indemnity.

    As prescribed in 27.201-2(c)(1), insert the following clause:
* * * * *

    Alternate I (Apr 1984). As prescribed in 27.201-2(c)(2), add the 
following paragraph (c) to the basic clause:
* * * * *
    Alternate II (Apr 1984). As prescribed in 27.201-2(c)(2), add 
the following paragraph (c) to the basic clause:
* * * * *
    Alternate III (July 1995). As prescribed in 27.201-2(c)(3), add 
the following paragraph to the basic clause:

* * * * *
    8. Amend section 52.227-4 by revising the introductory paragraph of 
the clause; and Alternate I to read as follows:


52.227-4  Patent Indemnity--Construction Contracts.

    As prescribed in 27.201-2(d)(1), insert the following clause:
* * * * *

    Alternate I (Date). As prescribed in 27.201-2(d)(2), designate 
the first paragraph of the basic clause as paragraph (a) and add the 
following paragraph (b) to the basic clause:
    (b) This patent indemnification shall not apply to the following 
items:
    [Contracting Officer list the items to be excluded.]

52.227-5  [Amended]

    9. In section 52.227-5, amend the introductory paragraph of the 
clause by removing `` at 27.203-6'' and adding ``in 27.201-2(e)'' in 
its place.
    10. Amend section 52.227-6 by revising the introductory paragraphs 
of the provision and Alternate I to read as follows:


52.227-6  Royalty Information.

    As prescribed in 27.202-5(a)(1), insert the following provision:
* * * * *

    Alternate I (Apr 1984). As prescribed in 27.202-5(a)(2), 
substitute the following for the introductory portion of paragraph 
(a) of the basic provision:

* * * * *


52.227-7  [Amended]

    11. In section 52.227-7, amend the introductory paragraph of the 
provision by removing ``at 27.204-3(c)'' and adding ``in 27.202-5(b)'' 
in its place.
    12. Amend section 52.227-9 by revising the introductory paragraph 
of the clause to read as follows:


52.227-9  Refund of Royalties.

    As prescribed in 27.202-5(c), insert the following clause:
* * * * *


52.227-10  [Amended]

    13. In section 52.227-10, amend the introductory paragraph of the 
clause by removing ``at 27.207-2'' and adding ``in 27.203-2'' in its 
place.
    14. Revise section 52.227-11 and its section heading to read as 
follows:


52.227-11  Patent Rights--Ownership by the Contractor.

    As prescribed in 27.303(b)(1), insert the following clause:

Patent Rights--Ownership by the Contractor (Date)

    (a) As used in this clause--
    Invention means any invention or discovery that is or may be 
patentable or otherwise protectable under title 35 of the United 
States Code, or any novel variety of plant that is or may be 
protected under the Plant Variety Protection Act (7 U.S.C. 2321, et 
seq.).
    Made, when used in relation to any invention, means the 
conception or first actual reduction to practice of the invention.
    Nonprofit organization means a university or other institution 
of higher education, or an organization of the type described in 
section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 
501(c)) and exempt from taxation under section 501(a) of the 
Internal Revenue Code (26 U.S.C. 501(a)), or any nonprofit 
scientific or educational organization qualified under a state 
nonprofit organization statute.
    Practical application means to manufacture, in the case of a 
composition of product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in 
each case, under such conditions as to establish that the invention 
is being utilized and that its benefits are, to the extent permitted 
by law or Government regulations, available to the public on 
reasonable terms.
    Subject invention means any invention of the contractor made in 
the performance of work under this contract; provided that in the 
case of a variety of plant, the date of determination defined in 7 
U.S.C. 2401(d), must also occur during the period of contract 
performance.
    (b) Contractor's Rights--(1) Ownership. The Contractor may elect 
to retain ownership throughout the world of each subject invention 
in accordance with the provisions of this clause.
    (2) License. (i) The Contractor shall retain a nonexclusive 
paid-up license throughout the world in each subject invention to 
which the Government obtains title, except if the Contractor fails 
to disclose the invention within the times specified in paragraph 
(c) of this clause. The Contractor's license extends to any domestic 
subsidiaries and affiliates within the corporate structure of which 
the Contractor is a part, and includes the right to grant 
sublicenses to the extent the Contractor was legally obligated to do 
so at contract award. The license is transferable only with the 
approval of the agency, except when transferred to the successor of 
that part of the Contractor's business to which the invention 
pertains.
    (ii) The Contractor's domestic license may be revoked or 
modified by the agency to the extent necessary to achieve 
expeditious practical application of the subject invention pursuant 
to an application for an exclusive license submitted in accordance 
with 37 CFR part 404 and agency licensing regulations. This license 
will not be revoked in that field of use or the geographical areas 
in which the Contractor has achieved practical application and 
continues to make the benefits of the invention reasonably 
accessible to the public. The license in any foreign country may be 
revoked or modified at the discretion of the agency to the extent 
the Contractor, its licensees, or the domestic subsidiaries or 
affiliates have failed to achieve practical application in that 
foreign country.
    (iii) Before revoking or modifying the license, the agency will 
furnish the Contractor a written notice of its intention to revoke 
or modify the license, and the Contractor will be allowed 30 days 
(or such other time as may be authorized by the funding agency for 
good cause shown by the Contractor) after the notice to show cause 
why the license should not be revoked or modified. The Contractor 
has the right to appeal, in accordance with 37 CFR part 404 and 
agency regulations, concerning the licensing of Government-owned 
inventions, any decision concerning the revocation or modification 
of the license.
    (c) Contractor's obligations. (1) The Contractor shall disclose 
in writing each subject invention to the contracting officer within 
2 months after the inventor discloses it in writing to Contractor 
personnel responsible for patent matters. The disclosure shall 
identify the inventor(s) and this contract under which the subject 
invention was made. It shall be sufficiently complete in technical 
detail to convey a clear understanding of the subject invention. The 
disclosure shall also identify any publication, on sale (i.e., sale 
or offer for sale), or public use of the subject invention, or 
whether a manuscript describing the subject invention has been 
submitted for publication and, if so, whether it has been accepted 
for publication. In addition, after disclosure to the agency, the 
Contractor shall promptly notify the agency of the acceptance of any 
manuscript describing the subject invention for publication and any 
on sale or public use.
    (2) The Contractor shall elect in writing whether or not to 
retain ownership of any subject invention by notifying the agency 
within 2 years of disclosure to the agency. However, in any case 
where publication, on sale, or public use has initiated the 1-year 
statutory period during which valid patent protection can be 
obtained in the United States, the period for election of title may 
be shortened by the agency to a date that is no more than 60 days 
prior to the end of the statutory period.
    (3) The Contractor shall file either a provisional or a 
nonprovisional patent application on an elected subject invention 
within 1 year after election. However, in any case where a 
publication, on sale, or public use has initiated the 1-year 
statutory period during which valid patent protection can be 
obtained in the United States, the Contractor shall file the 
application prior to the end of

[[Page 31810]]

that statutory period. If the Contractor files a provisional 
application, it shall file a nonprovisional application within 10 
months of the filing of the provisional application. The Contractor 
shall file patent applications in additional countries or 
international patent offices within either 10 months of the filing 
of the patent application (whether provisional or nonprovisional) or 
6 months from the date permission is granted by the Commissioner of 
Patents to file foreign patent applications where such filing has 
been prohibited by a Secrecy Order.
    (4) The Contractor may request extensions of time for 
disclosure, election, or filing under paragraphs (c)(1), (c)(2), and 
(c)(3) of this clause.
    (d) Government's rights--(1) Ownership. The Contractor shall 
convey to the agency, on written request, title to any subject 
invention--
    (i) If the Contractor fails to disclose or elect ownership to 
the subject invention within the times specified in paragraph (c) of 
this clause, or elects not to retain ownership; provided, that the 
agency may request title only within 60 days after learning of the 
failure of the Contractor to disclose or elect within the specified 
times.
    (ii) In those countries in which the Contractor fails to file 
patent applications within the times specified in paragraph (c) of 
this clause; provided, however, that if the Contractor has filed a 
patent application in a country after the times specified in 
paragraph (c) of this clause, but prior to its receipt of the 
written request of the agency, the Contractor shall continue to 
retain ownership in that country.
    (iii) In any country in which the Contractor decides not to 
continue the prosecution of any application for, to pay the 
maintenance fees on, or defend in reexamination or opposition 
proceeding on, a patent on a subject invention.
    (2) License. If the Contractor retains ownership of any subject 
invention, the Government shall have a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice, or have 
practiced for or on its behalf, the subject invention throughout the 
world.
    (e) Contractor action to protect the Government's interest. (1) 
The Contractor shall execute or have executed and promptly deliver 
to the agency all instruments necessary to--
    (i) Establish or confirm the rights the Government has 
throughout the world in those subject inventions in which the 
Contractor elects to retain ownership; and
    (ii) Convey title to the agency when requested under paragraph 
(d) of this clause and to enable the Government to obtain patent 
protection for that subject invention in any country.
    (2) The Contractor shall require, by written agreement, its 
employees, other than clerical and nontechnical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in the Contractor's 
format, each subject invention in order that the Contractor can 
comply with the disclosure provisions of paragraph (c) of this 
clause, and to execute all papers necessary to file patent 
applications on subject inventions and to establish the Government's 
rights in the subject inventions. The disclosure format should 
require, as a minimum, the information required by paragraph (c)(1) 
of this clause. The Contractor shall instruct such employees, 
through employee agreements or other suitable educational programs, 
as to the importance of reporting inventions in sufficient time to 
permit the filing of patent applications prior to U.S. or foreign 
statutory bars.
    (3) The Contractor shall notify the agency of any decisions not 
to file a nonprovisional patent application, continue the 
prosecution of a patent application, pay maintenance fees, or defend 
in a reexamination or opposition proceeding on a patent, in any 
country, not less than 30 days before the expiration of the response 
or filing period required by the relevant patent office.
    (4) The Contractor shall include, within the specification of 
any United States nonprovisional patent application and any patent 
issuing thereon covering a subject invention, the following 
statement: ``This invention was made with Government support under 
(identify the contract) awarded by (identify the agency). The 
Government has certain rights in the invention.''
    (f) Subcontracts. (1) The Contractor shall include this clause, 
suitably modified to identify the parties, in all subcontracts, 
regardless of tier, for experimental, developmental, or research 
work to be performed by a small business concern or nonprofit 
organization. The subcontractor retains all rights provided for the 
Contractor in this clause, and the Contractor shall not, as part of 
the consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.
    (2) The Contractor shall include in all other subcontracts, 
regardless of tier, for experimental, developmental, or research 
work the patent rights clause required by FAR Subpart 27.3.
    (3) In the case of subcontracts, at any tier, the agency, 
subcontractor, and the Contractor agree that the mutual obligations 
of the parties created by this clause constitute a contract between 
the subcontractor and the agency with respect to the matters covered 
by the clause; provided, however, that nothing in this paragraph is 
intended to confer any jurisdiction under the Contract Disputes Act 
in connection with proceedings under paragraph (i) of this clause.
    (g) Reporting on utilization of subject inventions. The 
Contractor shall submit, on request, periodic reports no more 
frequently than annually on the utilization of a subject invention 
or on efforts at obtaining utilization of the subject invention that 
are being made by the Contractor or its licensees or assignees. The 
reports shall include information regarding the status of 
development, date of first commercial sale or use, gross royalties 
received by the Contractor, and other data and information as the 
agency may reasonably specify. The Contractor also shall provide 
additional reports as may be requested by the agency in connection 
with any march-in proceeding undertaken by the agency in accordance 
with paragraph (i) of this clause. As required by 35 U.S.C. 
202(c)(5), the agency will not disclose that information to persons 
outside the Government without permission of the Contractor.
    (h) Preference for United States industry. Notwithstanding any 
other provision of this clause, neither the Contractor nor any 
assignee shall grant to any person the exclusive right to use or 
sell any subject invention in the United States unless such person 
agrees that any product embodying the subject invention or produced 
through the use of the subject invention will be manufactured 
substantially in the United States. However, in individual cases, 
the requirement for an agreement may be waived by the agency upon a 
showing by the Contractor or its assignee that reasonable but 
unsuccessful efforts have been made to grant licenses on similar 
terms to potential licensees that would be likely to manufacture 
substantially in the United States or that under the circumstances 
domestic manufacture is not commercially feasible.
    (i) March-in rights. The Contractor acknowledges that, with 
respect to any subject invention in which it has retained ownership, 
the agency has the right to require licensing pursuant to 35 U.S.C. 
203 and in accordance with the procedures in 37 CFR 401.6 and any 
supplemental regulations of the agency in effect on the date of 
contract award.
    (j) Special provisions for contracts with nonprofit 
organizations. If the Contractor is a nonprofit organization, it 
shall--
    (1) Not assign rights to a subject invention in the United 
States without the approval of the agency, except where an 
assignment is made to an organization which has as one of its 
primary functions the management of inventions, provided that the 
assignee shall be subject to the same provisions as the Contractor;
    (2) Share royalties collected on a subject invention with the 
inventor, including Federal employee co-inventors (but through their 
agency if the agency deems it appropriate) when the subject 
invention is assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 
401.10;
    (3) Use the balance of any royalties or income earned by the 
Contractor with respect to subject inventions, after payment of 
expenses (including payments to inventors) incidental to the 
administration of subject inventions for the support of scientific 
research or education; and
    (4) Make efforts that are reasonable under the circumstances to 
attract licensees of subject inventions that are small business 
concerns, and give a preference to a small business concern when 
licensing a subject invention if the Contractor determines that the 
small business concern has a plan or proposal for marketing the 
invention which, if executed, is equally as likely to bring the 
invention to practical application as any plans or proposals from 
applicants that are not small business concerns; provided, that the 
Contractor is also satisfied that the small business concern has the 
capability and resources to carry out its plan or proposal. The 
decision whether to give a preference in any specific case will be 
at the discretion of the contractor.

[[Page 31811]]

    (5) Allow the Secretary of Commerce to review the Contractor's 
licensing program and decisions regarding small business applicants, 
and negotiate changes to its licensing policies, procedures, or 
practices with the Secretary of Commerce when the Secretary's review 
discloses that the Contractor could take reasonable steps to more 
effectively implement the requirements of paragraph (j)(4) of this 
clause.
    (k) Communications. [Complete according to agency instructions.]
(End of clause)
    Alternate I (Date). As prescribed in 27.303(b)(3), add the 
following sentence at the end of paragraph (d)(2) of the basic 
clause:
    The license shall include the right of the Government to 
sublicense foreign governments, their nationals and international 
organizations pursuant to the following treaties or international 
agreements: ----------*
[* Contracting Officer complete with the names of applicable 
existing treaties or international agreements. The above language is 
not intended to apply to treaties or agreements that are in effect 
on the date of the award but are not listed.]
    Alternate II (Date). As prescribed in 27.303(b)(4), add the 
following sentence at the end of paragraph (d)(2) of the basic 
clause:
    The agency reserves the right to unilaterally amend this 
contract to identify specific treaties or international agreements 
entered into by the Government before or after the effective date of 
the contract and effectuate those license or other rights that are 
necessary for the Government to meet its obligations to foreign 
governments, their nationals and international organizations under 
such treaties or international agreements with respect to subject 
inventions made after the date of the amendment.
    Alternate III (Date). As prescribed in 27.303(b)(5), substitute 
the following paragraph (j)(3) in place of paragraph (j)(3) of the 
basic clause:
    (3) After payment of patenting costs, licensing costs, payments 
to inventors, and other expenses incidental to the administration of 
subject inventions, the balance of any royalties or income earned 
and retained by the Contractor during any fiscal year on subject 
inventions under this or any successor contract containing the same 
requirement, up to any amount equal to 5 percent of the budget of 
the facility for that fiscal year, shall be used by the Contractor 
for the scientific research, development, and education consistent 
with the research and development mission and objectives of the 
facility, including activities that increase the licensing potential 
of other inventions of the facility. If the balance exceeds 5 
percent, 75 percent of the excess above 5 percent shall be paid by 
the Contractor to the Treasury of the United States and the 
remaining 25 percent shall be used by the Contractor only for the 
same purposes as described above. To the extent it provides the most 
effective technology transfer, the licensing of subject inventions 
shall be administered by Contractor employees on location at the 
facility.
    Alternate IV (Date). As prescribed in 27.303(b)(6), include the 
following paragraph (e)(5) in paragraph (e) of the basic clause:
    (5) The Contractor shall establish and maintain active and 
effective procedures to ensure that subject inventions are promptly 
identified and timely disclosed, and shall submit a description of 
the procedures to the Contracting Officer so that the Contracting 
Officer may evaluate and determine their effectiveness.

52.227-12  [Reserved]

    15. Remove and reserve section 52.227-12.
    16. Revise sections 52.227-13 through 52.227-17 to read as follows:


52.227-13  Patent Rights--Ownership by the Government.

    As prescribed in 27.303(e), insert the following clause:

Patent Rights--Ownership by the Government (Date)

    (a) Definitions. As used in this clause--
    Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United 
States Code or any novel variety of plant that is or may be 
protectable under the Plant Variety Protection Act (7 U.S.C. 2321, 
et seq.).
    Made, when used in relation to any invention, means the 
conception or first actual reduction to practice of the invention.
    Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in 
each case, under such conditions as to establish that the invention 
is being utilized and that its benefits are, to the extent permitted 
by law or Government regulations, available to the public on 
reasonable terms.
    Subject invention means any invention of the Contractor made in 
the performance of work under this contract; provided, that in the 
case of a variety of plant, the date of determination defined in 7 
U.S.C. 2401(d) must also occur during the period of contract 
performance.
    (b) Ownership--(1) Assignment to the Government. The Contractor 
shall assign to the Government title throughout the world to each 
subject invention, except to the extent that rights are retained 
under paragraphs (b)(2) and (d) of this clause.
    (2) Greater rights determinations. (i) The Contractor, or an 
employee-inventor after consultation with the Contractor, may 
request greater rights than the nonexclusive license provided in 
paragraph (d) of this clause. The request for greater rights must be 
submitted to the Contracting Officer at the time of the first 
disclosure of the subject invention pursuant to paragraph (e)(2) of 
this clause, or not later than 8 months thereafter, unless a longer 
period is authorized in writing by the Contracting Officer for good 
cause shown in writing by the Contractor. Each determination of 
greater rights under this contract normally shall be subject to 
paragraph (c) of this clause, and to the reservations and conditions 
deemed to be appropriate by the agency.
    (ii) Upon request, the Contractor shall provide the filing date, 
serial number and title, a copy of the patent application (including 
an English-language version if filed in a language other than 
English), and patent number and issue date for any subject invention 
in any country for which the Contractor has retained title.
    (iii) Upon request, the Contractor shall furnish the agency an 
irrevocable power to inspect and make copies of the patent 
application file.
    (c) Minimum rights acquired by the Government. (1) Regarding 
each subject invention to which the Contractor retains ownership, 
the Contractor agrees as follows:
    (i) The Federal Government will have a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced for or on behalf of the United States the subject 
invention throughout the world.
    (ii) The agency has the right, pursuant to 35 U.S.C. 203 and 
210(c) and in accordance with the procedures set forth in 37 CFR 
401.6, to require the Contractor, an assignee, or exclusive licensee 
of a subject invention to grant a nonexclusive, partially exclusive, 
or exclusive license in any field of use to a responsible applicant 
or applicants, upon terms that are reasonable under the 
circumstances. If the Contractor, assignee, or exclusive licensee 
refuses the request, the agency has the right to grant the license 
itself if the agency determines that this action is necessary--
    (A) Because the Contractor or assignee has not taken, or is not 
expected to take within a reasonable time, effective steps to 
achieve practical application of the subject invention in the field 
of use;
    (B) To alleviate health or safety needs which are not reasonably 
satisfied by the Contractor, assignee, or their licensees;
    (C) To meet requirements for public use specified by Federal 
regulations and these requirements are not reasonably satisfied by 
the Contractor, assignee, or licensee; or
    (D) Because the agreement required by paragraph (i)--Preference 
for United States industry--of this clause has neither been obtained 
nor waived or because a licensee of the exclusive right to use or 
sell any subject invention in the United States is in breach of this 
agreement.
    (iii) Upon request, the Contractor shall submit periodic reports 
no more frequently than annually on the utilization, or efforts to 
obtain utilization, of a subject invention by the Contractor or its 
licensees or assignees. These reports shall include information 
regarding the status of development, date of first commercial sale 
or use, gross royalties received by the Contractor, and such other 
data and information as the agency may reasonably specify. The 
Contractor also shall provide additional reports as may be requested 
by the agency in connection with any march-in proceedings undertaken 
by the agency in accordance with paragraph (c)(1)(ii) of this 
clause. To the extent data or information supplied under this 
section is considered by the Contractor, or its licensees, or 
assignees to be privileged and confidential and is so marked, the 
agency, to the extent

[[Page 31812]]

permitted by law, will not disclose such information to persons 
outside the Government.
    (iv) When licensing a subject invention, the Contractor shall--
    (A) Ensure that no royalties are charged on acquisitions 
involving Government funds, including funds derived through a 
Military Assistance Program of the Government or otherwise derived 
through the Government;
    (B) Refund any amounts received as royalty charges on a subject 
invention in acquisitions for, or on behalf of, the Government;
    (C) Provide for this refund in any instrument transferring 
rights in the subject invention to any party.
    (v) When transferring rights in a subject invention, the 
Contractor shall provide for the Government's rights set forth in 
paragraphs (c)(1)(i) through (c)(1)(iv) of this clause.
    (2) Nothing contained in paragraph (c) of this clause shall be 
deemed to grant to the Government rights in any invention other than 
a subject invention.
    (d) Minimum rights to the Contractor. (1) The Contractor is 
hereby granted a revocable, nonexclusive, paid-up license in each 
patent application filed in any country on a subject invention and 
any resulting patent in which the Government obtains title, unless 
the Contractor fails to disclose the subject invention within the 
times specified in paragraph (e)(2) of this clause. The Contractor's 
license extends to any of its domestic subsidiaries and affiliates 
within the corporate structure of which the Contractor is a part, 
and includes the right to grant sublicenses to the extent the 
Contractor was legally obligated to do so at contract award. The 
license is transferable only with the approval of the agency, except 
when transferred to the successor of that part of the Contractor's 
business to which the subject invention pertains.
    (2) The Contractor's domestic license may be revoked or modified 
by the agency to the extent necessary to achieve expeditious 
practical application of the subject invention in accordance with 
the procedures in FAR 27.302(i)(2) and 27.304-1(f).
    (3) When the Government elects not to apply for a patent in any 
foreign country, the Contractor retains rights in that foreign 
country to apply for a patent, subject to the Government's rights in 
paragraph (c)(1) of this clause.
    (e) Invention identification, disclosures, and reports. (1) The 
Contractor shall establish and maintain active and effective 
procedures to educate its employees in order to assure that subject 
inventions are promptly identified and disclosed to Contractor 
personnel responsible for patent matters. These procedures shall 
include the maintenance of laboratory notebooks for equivalent 
records and other records as are reasonably necessary to document 
the conception and/or the first actual reduction to practice of 
subject inventions, and records that show the procedures for 
identifying and disclosing subject inventions are followed. Upon 
request, the Contractor shall furnish the Contracting Officer a 
description of these procedures for evaluation and for a 
determination as to their effectiveness.
    (2) The Contractor shall disclose each subject invention to the 
Contracting Officer within 2 months after the inventor discloses it 
in writing to Contractor personnel responsible for patent matters 
or, if earlier, within 6 months after the Contractor becomes aware 
that a subject invention has been made, but in any event before any 
on sale (i.e., sale or offer for sale), public use, or publication 
of the subject invention known to the Contractor. The disclosure 
shall identify the contract under which the subject invention was 
made and the inventor(s). It shall be sufficiently complete in 
technical detail to convey a clear understanding of the subject 
invention. The disclosure shall also identify any publication, on 
sale, or public use of the subject invention and whether a 
manuscript describing the subject invention has been submitted for 
publication and, if so, whether it has been accepted for publication 
at the time of disclosure. In addition, after disclosure to the 
agency, the Contractor shall promptly notify the Contracting Officer 
of the acceptance of any manuscript describing the subject invention 
for publication or of any on sale or public use planned by the 
Contractor.
    (3) The Contractor shall furnish the Contracting Officer the 
following:
    (i) Interim reports every 12 months (or a longer period as may 
be specified by the Contracting Officer) from the date of the 
contract, listing subject inventions during that period, and stating 
that all subject inventions have been disclosed (or that there are 
none) and that the procedures required by paragraph (e)(1) of this 
clause have been followed.
    (ii) A final report, within 3 months after completion of the 
contracted work, listing all subject inventions or stating that 
there were none, and listing all subcontracts at any tier containing 
a patent rights clause or stating that there were none.
    (4) The Contractor shall require, by written agreement, its 
employees, other than clerical and nontechnical employees, to 
disclose promptly in writing to personnel identified as responsible 
for the administration of patent matters and in the Contractor's 
format each subject invention in order that the Contractor can 
comply with the disclosure provisions of paragraph (c) of this 
clause, and to execute all papers necessary to file patent 
applications on subject inventions and to establish the Government's 
rights in the subject inventions. This disclosure format should 
require, as a minimum, the information required by paragraph (e)(2) 
of this clause. The Contractor shall instruct such employees, 
through employee agreements or other suitable educational programs, 
as to the importance of reporting inventions in sufficient time to 
permit the filing of patent applications prior to U.S. or foreign 
statutory bars.
    (5) Subject to FAR 27.302(i), the Contractor agrees that the 
Government may duplicate and disclose subject invention disclosures 
and all other reports and papers furnished or required to be 
furnished pursuant to this clause.
    (f) Examination of records relating to inventions. (1) The 
Contracting Officer or any authorized representative shall, until 3 
years after final payment under this contract, have the right to 
examine any books (including laboratory notebooks), records, and 
documents of the Contractor relating to the conception or first 
actual reduction to practice of inventions in the same field of 
technology as the work under this contract to determine whether--
    (i) Any inventions are subject inventions;
    (ii) The Contractor has established and maintains the procedures 
required by paragraphs (e)(1) and (e)(4) of this clause; and
    (iii) The Contractor and its inventors have complied with the 
procedures.
    (2) The Contractor shall disclose to the agency, for the 
determination of ownership rights, any unreported invention that the 
Contracting Officer believes may be a subject invention.
    (3) Any examination of records under paragraph (f) of this 
clause will be subject to appropriate conditions to protect the 
confidentiality of the information involved.
    (g) Withholding of payment. (This paragraph does not apply to 
subcontracts.) (1) Any time before final payment under this 
contract, the Contracting Officer may, in the Government's interest, 
withhold payment until a reserve not exceeding $50,000 or 5 percent 
of the amount of this contract, whichever is less, shall have been 
set aside if, in the Contracting Officer's opinion, the Contractor 
fails to--
    (i) Establish, maintain, and follow effective procedures for 
identifying and disclosing subject inventions pursuant to paragraph 
(e)(1) of this clause;
    (ii) Disclose any subject invention pursuant to paragraph (e)(2) 
of this clause;
    (iii) Deliver acceptable interim reports pursuant to paragraph 
(e)(3)(i) of this clause; or
    (iv) Provide the information regarding subcontracts pursuant to 
paragraph (h)(4) of this clause.
    (2) The Contracting Officer will withhold the reserve or balance 
until the Contracting Officer has determined that the Contractor has 
rectified whatever deficiencies exist and has delivered all reports, 
disclosures, and other information required by this clause.
    (3) The Contracting Officer will not make final payment under 
this contract before the Contractor delivers to the Contracting 
Officer, as required by this clause, all disclosures of subject 
inventions, an acceptable final report, and all due confirmatory 
instruments.
    (4) The Contracting Officer may decrease or increase the sums 
withheld up to the maximum authorized. The Contracting Officer will 
not withhold any amount under this paragraph while the amount 
specified by this paragraph is being withheld under other provisions 
of the contract. The withholding of any amount or the subsequent 
payment shall not be construed as a waiver of any Government rights.
    (h) Subcontracts. (1) The Contractor shall include this clause 
(suitably modified to identify the parties) in all subcontracts, 
regardless of tier, for experimental, developmental, or research 
work. The subcontractor shall retain all rights provided for the 
Contractor in this clause, and the Contractor shall not, as part of 
the consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.

[[Page 31813]]

    (2) In the event of a refusal by a prospective subcontractor to 
accept this clause, the Contractor--
    (i) Shall promptly submit a written notice to the Contracting 
Officer setting forth the subcontractor's reasons for such refusal 
and other pertinent information that may expedite disposition of the 
matter; and
    (ii) Shall not proceed with such subcontract without the written 
authorization of the Contracting Officer.
    (3) In the case of subcontracts at any tier, the agency, 
subcontractor, and Contractor agree that the mutual obligations of 
the parties created by this clause constitute a contract between the 
subcontractor and the agency with respect to those matters covered 
by this clause.
    (4) The Contractor shall promptly notify the Contracting Officer 
in writing upon the award of any subcontract at any tier containing 
a patent rights clause by identifying the subcontractor, the 
applicable patent rights clause, the work to be performed under the 
subcontract, and the dates of award and estimated completion. Upon 
request of the Contracting Officer, the Contractor shall furnish a 
copy of such subcontract, and, no more frequently than annually, a 
listing of the subcontracts that have been awarded.
    (i) Preference for United States industry. Unless provided 
otherwise, no Contractor that receives title to any subject 
invention and no assignee of any Contractor shall grant to any 
person the exclusive right to use or sell any subject invention in 
the United States unless the person agrees that any products 
embodying the subject invention will be manufactured substantially 
in the United States. However, in individual cases, the requirement 
may be waived by the agency upon a showing by the Contractor or 
assignee that reasonable but unsuccessful efforts have been made to 
grant licenses on similar terms to potential licensees that would be 
likely to manufacture substantially in the United States or that, 
under the circumstances, domestic manufacture is not commercially 
feasible.
(End of clause)
    Alternate I (Date). As prescribed in 27.304-1(e)(4), add the 
following sentence at the end of paragraph (c)(1)(i) of the basic 
clause:
    The license will include the right of the Government to 
sublicense foreign governments, their nationals, and international 
organizations pursuant to the following treaties or international 
agreements: ------------

[*Contracting Officer complete with the names of applicable existing 
treaties or international agreements. The above language is not 
intended to apply to treaties or agreements that are in effect on 
the date of the award but are not listed.]

    Alternate II (Date). As prescribed in 27.304-1(e)(5), add the 
following sentence at the end of paragraph (c)(1)(i) of the basic 
clause:
    The agency reserves the right to unilaterally amend this 
contract to identify specific treaties or international agreements 
entered into by the Government before or after the effective date of 
this contract, and effectuate those license or other rights which 
are necessary for the Government to meet its obligations to foreign 
governments, their nationals, and international organizations under 
treaties or international agreements with respect to subject 
inventions made after the date of the amendment.

52.227-14  Rights in Data--General.

    As prescribed in 27.409(b)(1), insert the following clause with any 
appropriate alternates:

Rights in Data--General (Date)

    (a) Definitions. As used in this clause--
    Computer data base means a collection of data in a form capable 
of, and for the purpose of, being stored in, processed, and operated 
on by a computer. The term does not include computer software.
    Computer software means--
    (1) Computer programs that comprise a series of instructions, 
rules, routines, or statements, regardless of the media in which 
recorded, that allow or cause a computer to perform a specific 
operation or series of operations; and
    (2) Recorded information comprising source code listings, design 
details, algorithms, processes, flow charts, formulas, and related 
material that would enable the computer program to be produced, 
created, or compiled. The term does not include computer data bases 
or computer software documentation.
    Data means recorded information, regardless of form or the media 
on which it may be recorded. The term includes technical data and 
computer software. The term does not include information incidental 
to contract administration, such as financial, administrative, cost 
or pricing, or management information.
    Form, fit, and function data means data relating to items, 
components, or processes that are sufficient to enable physical and 
functional interchangeability, and data identifying source, size, 
configuration, mating and attachment characteristics, functional 
characteristics, and performance requirements. For computer 
software, it means data identifying source, functional 
characteristics, and performance requirements, but specifically 
excludes the source code, algorithm, process, formulas, and flow 
charts of the software.
    Limited rights means the rights of the Government in limited 
rights data as set forth in the Limited Rights Notice of paragraph 
(g)(3) of Alternate II if included in this clause.
    Limited rights data means data, other than computer software, 
that embody trade secrets or are commercial or financial and 
confidential or privileged, to the extent that such data pertain to 
items, components, or processes developed at private expense, 
including minor modifications.
    Restricted computer software means computer software developed 
at private expense and that is a trade secret, is commercial or 
financial and is confidential or privileged, or is copyrighted 
computer software, including minor modifications of such computer 
software.
    Restricted rights means the rights of the Government in 
restricted computer software, as set forth in a Restricted Rights 
Notice of paragraph (g)(4) if included in this clause, or as 
otherwise may be provided in a collateral agreement incorporated in 
and made part of this contract, including minor modifications of 
computer software.
    Technical data means recorded information (regardless of the 
form or method of the recording) of a scientific or technical nature 
(including computer data bases and computer software documentation) 
relating to supplies procured by an agency. This term does not 
include computer software or financial, administrative, cost or 
pricing, or management data or other information incidental to 
contract administration. Recorded information of a scientific or 
technical nature that is included in computer data bases is also 
technical data.
    Unlimited rights means the rights of the Government to use, 
disclose, reproduce, prepare derivative works, distribute copies to 
the public, and perform publicly and display publicly, in any manner 
and for any purpose, and to have or permit others to do so.
    (b) Allocation of rights. (1) Except as provided in paragraph 
(c) of this clause, the Government shall have unlimited rights in--
    (i) Data first produced in the performance of this contract;
    (ii) Form, fit, and function data delivered under this contract;
    (iii) Data delivered under this contract (except for restricted 
computer software) that constitute manuals or instructional and 
training material for installation, operation, or routine 
maintenance and repair of items, components, or processes delivered 
or furnished for use under this contract; and
    (iv) All other data delivered under this contract unless 
provided otherwise for limited rights data or restricted computer 
software in accordance with paragraph (g) of this clause.
    (2) The Contractor shall have the right to--
    (i) Assert copyright in data first produced in the performance 
of this contract to the extent provided in paragraph (c)(1) of this 
clause;
    (ii) Use, release to others, reproduce, distribute, or publish 
any data first produced or specifically used by the Contractor in 
the performance of this contract, unless provided otherwise in 
paragraph (d) of this clause;
    (iii) Substantiate the use of, add or correct limited rights, 
restricted rights, or copyright notices and to take other 
appropriate action, in accordance with paragraphs (e) and (f) of 
this clause; and
    (iv) Protect from unauthorized disclosure and use those data 
which are limited rights data or restricted computer software to the 
extent provided in paragraph (g) of this clause.
    (c) Copyright--(1) Data first produced in the performance of 
this contract. (i) Unless provided otherwise in paragraph (d) of 
this clause, the Contractor may, without prior approval of the 
Contracting Officer, assert copyright in scientific and technical 
articles based on or containing data first produced in the 
performance of this contract and published in academic, technical or 
professional journals, symposia proceedings, or similar works. The 
prior, express written permission of the Contracting Officer is

[[Page 31814]]

required to assert copyright in all other data first produced in the 
performance of this contract.
    (ii) When authorized to assert copyright to the data, the 
Contractor shall affix the applicable copyright notices of 17 U.S.C. 
401 or 402, and an acknowledgment of Government sponsorship 
(including contract number).
    (iii) For data other than computer software, the Contractor 
grants to the Government, and others acting on its behalf, a paid-
up, nonexclusive, irrevocable worldwide license in such copyrighted 
data to reproduce, prepare derivative works, distribute copies to 
the public, and perform publicly and display publicly by or on 
behalf of the Government. For computer software, the Contractor 
grants to the Government, and others acting in its behalf, a paid-up 
nonexclusive, irrevocable worldwide license in such copyrighted 
computer software to reproduce, prepare derivative works, and 
perform publicly and display publicly (but not to distribute copies 
to the public) by or on behalf of the Government.
    (2) Data not first produced in the performance of this contract. 
The Contractor shall not, without the prior written permission of 
the Contracting Officer, incorporate in data delivered under this 
contract any data not first produced in the performance of this 
contract unless the Contractor--
    (i) Identifies the data; and
    (ii) Grants to the Government, or acquires on its behalf, a 
license of the same scope as set forth in paragraph (c)(1) of this 
clause or, if such data are restricted computer software, the 
Government shall acquire a copyright license as set forth in 
paragraph (g)(3) of this clause (if included in this contract) or as 
otherwise provided in a collateral agreement incorporated in or made 
part of this contract.
    (3) Removal of copyright notices. The Government will not remove 
any authorized copyright notices placed on data pursuant to this 
paragraph (c), and will include such notices on all reproductions of 
the data.
    (d) Release, publication, and use of data. The Contractor shall 
have the right to use, release to others, reproduce, distribute, or 
publish any data first produced or specifically used by the 
Contractor in the performance of this contract, except--
    (1) As prohibited by Federal export control or national security 
laws or regulations;
    (2) As expressly set forth in this contract; or
    (3) If the Contractor receives or is given access to data 
necessary for the performance of this contract that contain 
restrictive markings, the Contractor shall treat the data in 
accordance with such markings unless specifically authorized 
otherwise in writing by the Contracting Officer.
    (e) Unauthorized marking of data. (1) Notwithstanding any other 
provisions of this contract concerning inspection or acceptance, if 
any data delivered under this contract are marked with the notices 
specified in paragraph (g)(3) or (g)(4) if included in this clause, 
and use of the notices is not authorized by this clause, or if the 
data bears any other restrictive or limiting markings not authorized 
by this contract, the Contracting Officer may at any time either 
return the data to the Contractor, or cancel or ignore the markings. 
However, pursuant to 41 U.S.C. 253d, the following procedures shall 
apply prior to canceling or ignoring the markings:
    (i) The Contracting Officer will make written inquiry to the 
Contractor affording the Contractor 30 days from receipt of the 
inquiry to provide written justification to substantiate the 
propriety of the markings;
    (ii) If the Contractor fails to respond or fails to provide 
written justification to substantiate the propriety of the markings 
within the 30-day period (or a longer time not exceeding 90 days 
approved in writing by the Contracting Officer for good cause 
shown), the Government shall have the right to cancel or ignore the 
markings at any time after said period and the data will no longer 
be made subject to any disclosure prohibitions.
    (iii) If the Contractor provides written justification to 
substantiate the propriety of the markings within the period set in 
paragraph (e)(1)(i) of this clause, the Contracting Officer will 
consider such written justification and determine whether or not the 
markings are to be cancelled or ignored. If the Contracting Officer 
determines that the markings are authorized, the Contractor will be 
so notified in writing. If the Contracting Officer determines, with 
concurrence of the head of the contracting activity, that the 
markings are not authorized, the Contracting Officer will furnish 
the Contractor a written determination, which determination will 
become the final agency decision regarding the appropriateness of 
the markings unless the Contractor files suit in a court of 
competent jurisdiction within 90 days of receipt of the Contracting 
Officer's decision. The Government will continue to abide by the 
markings under this paragraph (e)(1)(iii) until final resolution of 
the matter either by the Contracting Officer's determination 
becoming final (in which instance the Government will thereafter 
have the right to cancel or ignore the markings at any time and the 
data will no longer be made subject to any disclosure prohibitions), 
or by final disposition of the matter by court decision if suit is 
filed.
    (2) The time limits in the procedures set forth in paragraph 
(e)(1) of this clause may be modified in accordance with agency 
regulations implementing the Freedom of Information Act (5 U.S.C. 
552) if necessary to respond to a request thereunder.
    (3) Except to the extent the Government's action occurs as the 
result of final disposition of the matter by a court of competent 
jurisdiction, the Contractor is not precluded by paragraph (e) of 
the clause from bringing a claim, in accordance with the Disputes 
clause of this contract, that may arise as the result of the 
Government removing or ignoring authorized markings on data 
delivered under this contract.
    (f) Omitted or incorrect markings. (1) Data delivered to the 
Government without any restrictive markings shall be deemed to have 
been furnished with unlimited rights. The Government is not liable 
for the disclosure, use, or reproduction of such data.
    (2) If the unmarked data has not been disclosed without 
restriction outside the Government, the Contractor may request, 
within 6 months (or a longer time approved by the Contracting 
Officer in writing for good cause shown) after delivery of the data, 
permission to have authorized notices placed on the data at the 
Contractor's expense. The Contracting Officer may agree to do so if 
the Contractor--
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was 
inadvertent;
    (iii) Establishes that the proposed notice is authorized; and
    (iv) Acknowledges that the Government has no liability for the 
disclosure, use, or reproduction of any data made prior to the 
addition of the notice or resulting from the omission of the notice.
    (3) If data has been marked with an incorrect notice, the 
Contracting Officer may--
    (i) Permit correction of the notice at the Contractor's expense 
if the Contractor identifies the data and demonstrates that the 
correct notice is authorized; or
    (ii) Correct any incorrect notices.
    (g) Protection of limited rights data and restricted computer 
software. (1) The Contractor may withhold from delivery qualifying 
limited rights data or restricted computer software that are not 
data identified in paragraphs (b)(1)(i), (ii), and (iii) of this 
clause. As a condition to this withholding, the Contractor shall--
    (i) Identify the data being withheld; and
    (ii) Furnish form, fit, and function data instead.
    (2) Limited rights data that are formatted as a computer data 
base for delivery to the Government shall be treated as limited 
rights data and not restricted computer software.
    (3)-(4) [Reserved]
    (h) Subcontracting. The Contractor shall obtain from its 
subcontractors all data and rights therein necessary to fulfill the 
Contractor's obligations to the Government under this contract. If a 
subcontractor refuses to accept terms affording the Government those 
rights, the Contractor shall promptly notify the Contracting Officer 
of the refusal and shall not proceed with the subcontract award 
without authorization in writing from the Contracting Officer.
    (i) Relationship to patents or other rights. Nothing contained 
in this clause shall imply a license to the Government under any 
patent or be construed as affecting the scope of any license or 
other right otherwise granted to the Government.

(End of clause)

    Alternate I (Date). As prescribed in 27.409(b)(2), substitute 
the following definition for Limited rights data in paragraph (a) of 
the basic clause:
    Limited rights data means data (other than computer software) 
developed at private expense that embody trade secrets or are 
commercial or financial and confidential or privileged.
    Alternate II (Date). As prescribed in 27.409(b)(3), insert the 
following paragraph (g)(3) in the basic clause:
    (g)(3) Notwithstanding paragraph (g)(1) of this clause, the 
contract may identify and specify the delivery of limited rights 
data, or

[[Page 31815]]

the Contracting Officer may require by written request the delivery 
of limited rights data that has been withheld or would otherwise be 
entitled to be withheld. If delivery of that data is required, the 
Contractor shall affix the following ``Limited Rights Notice'' to 
the data and the Government will treat the data, subject to the 
provisions of paragraphs (e) and (f) of this clause, in accordance 
with the notice:

Limited Rights Notice (Date)

    (a) These data are submitted with limited rights under 
Government Contract No. ---- (and subcontract ----, if appropriate). 
These data may be reproduced and used by the Government with the 
express limitation that they will not, without written permission of 
the Contractor, be used for purposes of manufacture nor disclosed 
outside the Government; except that the Government may disclose 
these data outside the Government for the following purposes, if 
any; provided that the Government makes such disclosure subject to 
prohibition against further use and disclosure: [Agencies may list 
additional purposes as set forth in 27.40-2(c)(1) or if none, so 
state.]
    (b) This Notice shall be marked on any reproduction of these 
data, in whole or in part.

(End of notice)

    Alternate III (Date). As prescribed in 27.409(b)(4), insert the 
following paragraph (g)(4) in the basic clause:
    (g)(4)(i) Notwithstanding paragraph (g)(1) of this clause, the 
contract may identify and specify the delivery of restricted 
computer software, or the Contracting Officer may require by written 
request the delivery of restricted computer software that has been 
withheld or would otherwise be entitled to be withheld. If delivery 
of that computer software is required, the Contractor shall affix 
the following ``Restricted Rights Notice'' to the computer software 
and the Government will treat the computer software, subject to 
paragraphs (e) and (f) of this clause, in accordance with the 
notice:

Restricted Rights Notice (Date)

    (a) This computer software is submitted with restricted rights 
under Government Contract No. ---- (and subcontract ----, if 
appropriate). It may not be used, reproduced, or disclosed by the 
Government except as provided in paragraph (b) of this Notice or as 
otherwise expressly stated in the contract.
    (b) This computer software may be--
    (1) Used or copied for use with the computer(s) for which it was 
acquired, including use at any Government installation to which such 
computers may be transferred;
    (2) Used or copied for use with a backup computer if any 
computer for which it was acquired is inoperative;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that the modified, adapted, or combined portions of the 
derivative software incorporating any of the delivered, restricted 
computer software shall be subject to the same restricted rights;
    (5) Disclosed to and reproduced for use by support service 
Contractors or their subcontractors in accordance with paragraphs 
(b)(1) through (b)(4) of this notice; and
    (6) Used or copied for use with a replacement computer.
    (c) Notwithstanding the foregoing, if this computer software is 
copyrighted computer software, it is licensed to the Government with 
the minimum rights set forth in paragraph (b) of this notice.
    (d) Any other rights or limitations regarding the use, 
duplication, or disclosure of this computer software are to be 
expressly stated in, or incorporated in, the contract.
    (e) This notice shall be marked on any reproduction of this 
computer software, in whole or in part.

(End of notice)

    (ii) Where it is impractical to include the Restricted Rights 
Notice on restricted computer software, the following short-form 
notice may be used in lieu thereof:

Restricted Rights Notice Short Form (Date)

    Use, reproduction, or disclosure is subject to restrictions set 
forth in Contract No. ------ (and subcontract, if appropriate) with 
------ (name of Contractor and subcontractor).

(End of notice)

    (iii) If restricted computer software is delivered with the 
copyright notice of 17 U.S.C. 401, it will be presumed to be 
licensed to the Government without disclosure prohibitions, with the 
minimum rights set forth in paragraph (b) of this clause.
    Alternate IV (Date). As prescribed in 27.409(b)(5), substitute 
the following paragraph (c)(1) for paragraph (c)(1) of the basic 
clause:
    (c) Copyright--(1) Data first produced in the performance of the 
contract. Except as otherwise specifically provided in this 
contract, the Contractor may assert copyright in any data first 
produced in the performance of this contract. When asserting 
copyright, the Contractor shall affix the applicable copyright 
notice of 17 U.S.C. 401 or 402, and an acknowledgment of Government 
sponsorship (including contract number), to the data when such data 
are delivered to the Government, as well as when the data are 
published or deposited for registration as a published work in the 
U.S. Copyright Office. For data other than computer software, the 
Contractor grants to the Government, and others acting on its 
behalf, a paid-up, nonexclusive, irrevocable, worldwide license for 
all such data to reproduce, prepare derivative works, distribute 
copies to the public, and perform publicly and display publicly, by 
or on behalf of the Government. For computer software, the 
Contractor grants to the Government and others acting on its behalf, 
a paid-up, nonexclusive, irrevocable worldwide license for all such 
computer software to reproduce, prepare derivative works, and 
perform publicly and display publicly (but not to distribute copies 
to the public), by or on behalf of the Government.
    Alternate V (Date). As prescribed in 27.409(b)(6), add the 
following paragraph (j) to the basic clause:
    (j) The Contractor agrees, except as may be otherwise specified 
in this contract for specific data deliverables listed as not 
subject to this paragraph, that the Contracting Officer may, up to 
three years after acceptance of all deliverables under this 
contract, inspect at the Contractor's facility any data withheld 
pursuant to paragraph (g)(1) of this clause, for purposes of 
verifying the Contractor's assertion of limited rights or restricted 
rights status of the data or for evaluating work performance. When 
the Contractor whose data are to be inspected demonstrates to the 
Contracting Officer that there would be a possible conflict of 
interest if a particular representative made the inspection, the 
Contracting Officer shall designate an alternate inspector.

52.227-15  Representation of Limited Rights Data and Restricted 
Computer Software.

    As prescribed in 27.409(c), insert the following provision:

Representation of Limited Rights Data and Restricted Computer Software 
(Date)

    (a) This solicitation sets forth the Government's known delivery 
requirements for data (as defined in the clause at 52.227-14, Rights 
in Data--General). Any resulting contract may also provide the 
Government the option to order additional data under the Additional 
Data Requirements clause at 52.227-16, if included in the contract. 
Any data delivered under the resulting contract will be subject to 
the Rights in Data--General clause at 52.227-14 included in this 
contract. Under the latter clause, a Contractor may withhold from 
delivery data that qualify as limited rights data or restricted 
computer software, and deliver form, fit, and function data instead. 
The latter clause also may be used with its Alternates II and/or III 
to obtain delivery of limited rights data or restricted computer 
software, marked with limited rights or restricted rights notices, 
as appropriate. In addition, use of Alternate V with this latter 
clause provides the Government the right to inspect such data at the 
Contractor's facility.
    (b) By completing the remainder of this paragraph, the offeror 
represents that it has reviewed the requirements for the delivery of 
technical data or computer software and states [offeror check 
appropriate block]--
    ( ) None of the data proposed for fulfilling the data delivery 
requirements qualifies as limited rights data or restricted computer 
software; or
    ( ) Data proposed for fulfilling the data delivery requirements 
qualify as limited rights data or restricted computer software and 
are identified as follows:
-----------------------------------------------------------------------
    (c) Any identification of limited rights data or restricted 
computer software in the offeror's response is not determinative of 
the status of the data should a contract be awarded to the offeror.

(End of provision)

52.227-16  Additional Data Requirements.

    As prescribed in 27.409(d), insert the following clause:

[[Page 31816]]

Additional Data Requirements (Date)

    (a) In addition to the data (as defined in the clause at 52.227-
14, Rights in Data--General, or other equivalent included in this 
contract) specified elsewhere in this contract to be delivered, the 
Contracting Officer may, at any time during contract performance or 
within a period of 3 years after acceptance of all items to be 
delivered under this contract, order any data first produced or 
specifically used in the performance of this contract.
    (b) The Rights in Data--General clause or other equivalent 
included in this contract is applicable to all data ordered under 
this Additional Data Requirements clause. Nothing contained in this 
clause shall require the Contractor to deliver any data the 
withholding of which is authorized by the Rights in Data--General or 
other equivalent clause of this contract, or data which are 
specifically identified in this contract as not subject to this 
clause.
    (c) When data are to be delivered under this clause, the 
Contractor will be compensated for converting the data into the 
prescribed form, for reproduction, and for delivery.
    (d) The Contracting Officer may release the Contractor from the 
requirements of this clause for specifically identified data items 
at any time during the 3-year period set forth in paragraph (a) of 
this clause.
(End of clause)

52.227-17  Rights in Data--Special Works.

    As prescribed in 27.409(e), insert the following clause:

Rights in Data--Special Works (DATE)

    (a) Definitions. As used in this clause--
    Data means recorded information, regardless of form or the media 
on which it may be recorded. The term includes technical data and 
computer software. The term does not include information incidental 
to contract administration, such as financial, administrative, cost 
or pricing, or management information.
    Unlimited rights means the rights of the Government to use, 
disclose, reproduce, prepare derivative works, distribute copies to 
the public, and perform publicly and display publicly, in any manner 
and for any purpose, and to have or permit others to do so.
    (b) Allocation of Rights. (1) The Government shall have--
    (i) Unlimited rights in all data delivered under this contract, 
and in all data first produced in the performance of this contract, 
except as provided in paragraph (c) of this clause.
    (ii) The right to limit assertion of copyright in data first 
produced in the performance of this contract, and to obtain 
assignment of copyright in that data, in accordance with paragraph 
(c)(1) of this clause.
    (iii) The right to limit the release and use of certain data in 
accordance with paragraph (d) of this clause.
    (2) The Contractor shall have, to the extent permission is 
granted in accordance with paragraph (c)(1) of this clause, the 
right to assert claim to copyright subsisting in data first produced 
in the performance of this contract.
    (c) Copyright--(1) Data first produced in the performance of 
this contract. (i) The Contractor shall not assert or authorize 
others to assert any claim to copyright subsisting in any data first 
produced in the performance of this contract without prior written 
permission of the Contracting Officer. When copyright is asserted, 
the Contractor shall affix the appropriate copyright notice of 17 
U.S.C. 401 or 402 and acknowledgment of Government sponsorship 
(including contract number) to the data when delivered to the 
Government, as well as when the data are published or deposited for 
registration as a published work in the U.S. Copyright Office. The 
Contractor grants to the Government, and others acting on its 
behalf, a paid-up, nonexclusive, irrevocable, worldwide license for 
all delivered data to reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, by or on behalf of the Government.
    (ii) If the Government desires to obtain copyright in data first 
produced in the performance of this contract and permission has not 
been granted as set forth in paragraph (c)(1)(i) of this clause, the 
Contracting Officer shall direct the Contractor to assign (with or 
without registration), or obtain the assignment of, the copyright to 
the Government or its designated assignee.
    (2) Data not first produced in the performance of this contract. 
The Contractor shall not, without prior written permission of the 
Contracting Officer, incorporate in data delivered under this 
contract any data not first produced in the performance of this 
contract and which contain the copyright notice of 17 U.S.C. 401 or 
402, unless the Contractor identifies such data and grants to the 
Government, or acquires on its behalf, a license of the same scope 
as set forth in paragraph (c)(1) of this clause.
    (d) Release and use restrictions. Except as otherwise 
specifically provided for in this contract, the Contractor shall not 
use, release, reproduce, distribute, or publish any data first 
produced in the performance of this contract, nor authorize others 
to do so, without written permission of the Contracting Officer.
    (e) Indemnity. The Contractor shall indemnify the Government and 
its officers, agents, and employees acting for the Government 
against any liability, including costs and expenses, incurred as the 
result of the violation of trade secrets, copyrights, or right of 
privacy or publicity, arising out of the creation, delivery, 
publication, or use of any data furnished under this contract; or 
any libelous or other unlawful matter contained in such data. The 
provisions of this paragraph do not apply unless the Government 
provides notice to the Contractor as soon as practicable of any 
claim or suit, affords the Contractor an opportunity under 
applicable laws, rules, or regulations to participate in the defense 
of the claim or suit, and obtains the Contractor's consent to the 
settlement of any suit or claim other than as required by final 
decree of a court of competent jurisdiction; nor do these provisions 
apply to material furnished to the Contractor by the Government and 
incorporated in data to which this clause applies.
(End of clause)

52.227-18  [Amended]

    17. Amend section 52.227-18 by removing from the introductory 
paragraph of the clause ``27.409(j)'' and adding ``27.409(f)'' in its 
place.
    18. Revise section 52.227-19 and the section heading to read as 
follows:


52.227-19  Commercial Computer Software License.

    As prescribed in 27.409(g), insert the following clause:

Commercial Computer Software License (Date)

    (a) Notwithstanding any contrary provisions contained in the 
Contractor's standard commercial license or lease agreement, the 
contractor agrees that the Government will have the rights that are 
set forth in paragraph (c) of this clause to use, duplicate or 
disclose any commercial computer software delivered under this 
contract. The terms and provisions of this contract shall comply 
with Federal laws and the Federal Acquisition Regulation.
    (b)(1) The commercial computer software delivered under this 
contract may not be used, reproduced or disclosed by the Government 
except as provided in paragraph (c)(2) of this clause or as 
expressly stated otherwise in this contract.
    (2) The commercial computer software may be--
    (i) Used or copied for use with the computer or computers for 
which it was acquired, including use at any Government installation 
to which such computer or computers may be transferred;
    (ii) Used or copied for use with a backup computer if any 
computer for which it was acquired is inoperative;
    (iii) Reproduced for safekeeping (archives) or backup purposes;
    (iv) Modified, adapted, or combined with other computer 
software, provided that the modified, adapted, or combined portions 
of the derivative software incorporating any of the delivered, 
commercial computer software shall be subject to same restrictions 
set forth in this contract;
    (v) Disclosed to and reproduced for use by support service 
Contractors or their subcontractors, subject to the same 
restrictions set forth in this contract; and
    (vi) Used or copied for use with a replacement computer.
    (3) If the commercial computer software is otherwise available 
without disclosure restrictions, the Contractor licenses it to the 
Government without disclosure restrictions. The Contractor shall 
affix a notice substantially as follows to any commercial computer 
software delivered under this contract:
    Notice--Notwithstanding any other lease or license agreement 
that may pertain to, or accompany the delivery of, this computer 
software, the rights of the Government regarding its use, 
reproduction and disclosure are as set forth in Government Contract 
No. ------:
(End of clause)


[[Page 31817]]


    19. Amend section 52.227-20 as follows:
    a. Revise the introductory paragraph and the date of the clause;
    b. In paragraph (a), revise the introductory text and the 
definitions ``Computer software'' and ``Technical data''; remove ``, as 
used in this clause,'' from the following definitions: ``Data'', 
``Form, fit, and function data'', ``Limited rights data'', ``Restricted 
computer software'', ``SBIR data'', ``SBIR rights'', and ``Unlimited 
rights''; and remove the word ``formulae'' from the definition ``Form, 
fit, and function data'' and add ``formulas'' in its place; and
    c. In paragraphs (b)(2)(iv) and (c)(2), remove the word 
``subparagraph'' and add ``paragraph'' in its place.
    The revised text reads as follows:


52.227-20  Rights in Data--SBIR Program.

    As prescribed in 27.409(h), insert the following clause:

Rights in Data--SBIR Program (Date)

    (a) Definitions. As used in this clause--
    Computer software means--
    (1) Computer programs that comprise a series of instructions, 
rules, routines, or statements, regardless of the media in which 
recorded, that allow or cause a computer to perform a specific 
operation or series of operations; and
    (2) Recorded information comprising source code listings, design 
details, algorithms, processes, flow charts, formulas, and related 
material that would enable the computer program to be produced, 
created, or compiled. The term does not include computer data bases 
or computer software documentation.
* * * * *
    Technical data means recorded information (regardless of the 
form or method of the recording) of a scientific or technical nature 
(including computer data bases and computer software documentation) 
relating to supplies procured by an agency. This term does not 
include computer software or financial, administrative, cost or 
pricing, or management data or other information incidental to 
contract administration. Recorded information of a scientific or 
technical nature that is included in computer data bases is also 
technical data.
* * * * *
    20. Revise section 52.227-21 to read as follows:


52.227-21  Technical Data Declaration, Revision, and Withholding of 
Payment--Major Systems.

    As prescribed in 27.409(j), insert the following clause:
    Technical Data Declaration, Revision, and Withholding of 
Payment--Major Systems (Date)
    (a) Scope of declaration. The Contractor shall provide, in 
accordance with 41 U.S.C. 418a (d)(7), the following declaration 
with respect to all technical data that relate to a major system and 
that are delivered or required to be delivered under this contract 
or that are delivered within 3 years after acceptance of all items 
(other than technical data) delivered under this contract unless a 
different period is set forth in the contract. The Contracting 
Officer may release the Contractor from all or part of the 
requirements of this clause for specifically identified technical 
data items at any time during the period covered by this clause.
    (b) Technical data declaration. (1) All technical data that are 
subject to this clause shall be accompanied by the following 
declaration upon delivery:

TECHNICAL DATA DECLARATION (DATE)

The Contractor, ----------------, hereby declares that, to the best 
of its knowledge and belief, the technical data delivered herewith 
under Government contract No. ------ (and subcontract ------------, 
if appropriate) are complete, accurate, and comply with the 
requirements of the contract concerning such technical data.

(End of declaration)
    (2) The Government may, at any time during the period covered by 
this clause, direct correction of any deficiencies that are not in 
compliance with contract requirements. The corrections shall be made 
at the expense of the Contractor. Unauthorized markings on data 
shall not be considered a deficiency for the purpose of this clause, 
but will be treated in accordance with paragraph (e) of the Rights 
in Data--General clause included in this contract.
    (c) Technical data revision. The Contractor also shall, at the 
request of the Contracting Officer, revise technical data that are 
subject to this clause to reflect engineering design changes made 
during the performance of this contract and affecting the form, fit, 
and function of any item (other than technical data) delivered under 
this contract. The Contractor may submit a request for an equitable 
adjustment to the terms and conditions of this contract for any 
revisions to technical data made pursuant to this paragraph.
    (d) Withholding of payment. (1) At any time before final payment 
under this contract the Contracting Officer may withhold payment as 
a reserve up to an amount not exceeding $100,000 or 5 percent of the 
amount of this contract, whichever is less, if the Contractor fails 
to--
    (i) Make timely delivery of the technical data;
    (ii) Provide the declaration required by paragraph (b)(1) of 
this clause;
    (iii) Make the corrections required by paragraph (b)(2) of this 
clause; or
    (iv) Make revisions requested under paragraph (c) of this 
clause.
    (2) The Contracting Officer may withhold the reserve until the 
Contractor has complied with the direction or requests of the 
Contracting Officer or determines that the deficiencies relating to 
delivered data arose out of causes beyond the control of the 
Contractor and without the fault or negligence of the Contractor.
    (3) The withholding of any reserve under this clause, or the 
subsequent payment of the reserve, shall not be construed as a 
waiver of any Government rights.

(End of clause)


52.227-22  [Amended]

    21. In section 52.227-22, amend the introductory paragraph by 
removing ``27.409(r)'' and adding ``27.409(k)'' in its place.


52.227-23  [Amended]

    22. In section 52.227-23, amend the introductory paragraph by 
removing ``27.409(s)'' and adding ``27.409(l)'' in its place.
[FR Doc. 03-12891 Filed 5-27-03; 8:45 am]
BILLING CODE 6820-EP-P