[Federal Register Volume 72, Number 215 (Wednesday, November 7, 2007)]
[Rules and Regulations]
[Pages 63045-63075]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-5475]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 3, 12, 15, 18, 19, 27, 33, and 52

[FAC 2005-21; FAR Case 1999-402; Item III; Docket 2007-0001; Sequence 
7]
RIN 9000-AJ64


Federal Acquisition Regulation; FAR Case 1999-402, FAR Part 27 
Rewrite in Plain Language

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

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to clarify, 
streamline, and update text and clauses on Patents, Data, and 
Copyrights (FAR Part 27).

DATES: Effective Date: December 7, 2007.

FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement 
Analyst, at (202) 501-3775 for clarification of content. For 
information pertaining to status or publication schedules, contact the 
FAR Secretariat at (202) 501-4755. Please cite FAC 2005-21, FAR case 
1999-402.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule is a ``plain language'' 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. This effort focused on clarifying, streamlining, and 
updating the text, with the ultimate goal of making the policies and 
procedures

[[Page 63046]]

more understandable to the reader. For example, the materials have been 
edited to conform to the FAR Drafting Guide (available at http://www.arnet.gov/far/draftingguide.htm). This rewrite was not intended to 
include substantive changes to Part 27 policies or procedures, except 
where necessary to comply with current statutory or regulatory 
requirements, or to resolve internal inconsistencies within FAR Part 27 
and its associated clauses.
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 68 FR 31790, May 28, 2003 with public comments due by July 
28, 2003. The background information published with the proposed rule 
provided an overview of the rewrite effort, and highlighted examples of 
both plain language edits and additional substantive changes deemed 
within the scope of the revision. Accordingly, the remainder of the 
discussion below focuses on analysis of the public responses to the 
proposed rule, and the subsequent revisions to the proposed rule in 
response to those comments. Several of the public comments indicated 
general support for the plain language rewrite effort, or for specific 
revisions in the proposed rule, but these comments will not be 
discussed individually. The remainder of the comments was organized 
into three categories:
    Category 1: Revisions Based on Plain Language Rules.
    The first category included comments directed to the application of 
plain language rules, and thus fell clearly within the scope of the 
rewrite effort. These suggested edits or changes were evaluated based 
on the application of plain language rules (e.g., the FAR Drafting 
Guide), as follows:
    The definitions of ``computer database'' and ``technical data'' 
were moved from 27.401 to 2.101 because these terms appear in multiple 
FAR Parts. The definition of ``computer database'' was further revised 
to replace the term ``data'' with the term ``recorded information'' to 
avoid any confusion regarding the specialized use of the term ``data'' 
as it is defined at 27.401.
    The definition of ``computer software'' at 2.101 was conformed to 
the definition of that term as included in 27.401 of the proposed rule 
(and the definition at 27.401 was removed) to ensure consistent use of 
the term throughout the FAR.
    A definition of ``computer software documentation'' has been added 
at FAR 2.101.
    The heading for Subpart 27.2 was revised to refer to copyrights as 
well as patents.
    In 27.201-1(a), the phrase ``on behalf of the Government'' was 
clarified to specify that this determination depends on whether the 
Government has provided its ``authorization or consent.''
    In 27.201-2(c)(2)(i), the undefined term ``noncommercial item'' was 
clarified as ``items that are not commercial items.''
    In 27.302(i), the revisions clarify the guidance for contracting 
officers' review and approval of a contractor's request to transfer 
that contractor's license rights.
    In 27.304-1(h), redundant language that repeated (with only minor 
paraphrasing) the text from the associated clause was replaced with a 
cross-reference to the appropriate clause paragraph.
    In 52.227-1(b), 52.227-2(c), and 52.227-10(e), clause flow down 
language was conformed to FAR drafting conventions.
    In 52.227-13(c)(1)(ii) and 52.227-13(h), the language was conformed 
to the plain language describing the same requirements at 52.227-11(h), 
and 52.227-11(g), respectively.
    In 52.227-11(k) and 52.227-13(i), the guidance regarding flow down 
of the clauses to subcontractors was relocated to be the final 
paragraph in each clause, conformed to FAR drafting conventions, and 
clarified regarding the modification of clauses to identify the parties 
when flowed down to lower tiers.
    In 52.227-14(d)(1), the language was clarified to reference 
prohibitions by any Federal law or regulation, with export control and 
national security being examples rather than an all-inclusive listing.
    In 52.227-19, the requirement to place a notice on delivered 
software was highlighted by relocation from the end of paragraph (b)(3) 
to its own new paragraph (c).
    One respondent argued against the use of the defined term ``made'' 
instead of the phrase ``conceived or first actually reduced to 
practice'' within the definition of ``subject invention'' at 27.301 and 
associated clauses. This suggestion is not adopted. The combined 
revisions to the definitions ``made'' and ``subject invention'' are 
more consistent with the plain language guidelines.
    One respondent recommended that the phrase ``to the Government'' 
should be added to the end of the FAR 27.102(e) to clarify where the 
data is to be delivered. This suggestion is adopted.
    The final rule also incorporates a number of minor editorial, 
typographical, or grammatical corrections noted in the public comments.
    Category 2: Additional Revisions Within the Scope of This Case.
    The second category of comments raised issues or suggested changes 
that go beyond mere ``plain language'' conversions, but which the 
Councils determined were necessary for compliance with clear statutory 
or regulatory requirements, or otherwise mandated to resolve internal 
inconsistencies in the FAR Part 27 coverage. These suggestions are 
discussed below.
    A number of comments stated that the proposed definition of 
``commercial computer software'' at FAR 2.101 restricts the scope of 
software that is to be treated as a commercial item under FAR 12.212, 
and is therefore inconsistent with the requirements of the Federal 
Acquisition Streamlining Act (``FASA''), Pub. L. No. 103-355, 108 Stat. 
3243 (1994). The comments recommended either the elimination or 
redrafting of the proposed definition. The final rule resolves this 
issue by redefining commercial computer software as the intersection of 
two defined categories of items: ``computer software'' and ``commercial 
item.''
    Two respondents recommended that the term ``computer software 
documentation'' be defined in a manner generally consistent with the 
definition of that term in the Defense Federal Acquisition Regulation 
Supplement (DFARS) at 252.227-7014(a)(5). The term has been defined at 
2.101 using the DFARS definition.
    One respondent noted that the time periods associated with the 
restrictive markings challenge procedures in the clause at 52.227-14(e) 
are inconsistent with the time periods specified in 41 U.S.C. 253d. The 
commenter recommended changing the 30-day contractor response period to 
60 days, and eliminating the 90-day limit. These corrections are 
implemented at 52.227-14(e)(1)(i) and (ii), respectively.
    The phrase ``without unduly encumbering future research and 
discovery'' has been added to 27.302(a)(3) and 27.304-1(c)(2) to 
reflect changes to 35 U.S.C. 200 made in 2000.
    Two respondents stated that the revision of the definition of 
``computer software'' to exclude ``computer databases'' and the 
revision of the definition of ``technical data'' to include ``computer 
databases'' were substantive changes and beyond the scope of this 
rulemaking. They recommended that databases be treated as computer 
software. These recommendations are not adopted. The definition of 
``computer database'' is consistent with the policy and intent of 
27.404-2(c)(3) (formerly 27.404(d)(3)), and 52.227-

[[Page 63047]]

14(g)(2) (formerly (g)(1)). Similarly, this approach is consistent with 
the treatment of computer databases under the Defense Federal 
Acquisition Regulation Supplement (DFARS) (see DFARS 252.227-
7014(a)(2)). The individual elements of recorded information that are 
stored or formatted for delivery as a database must be distinguished 
from the computer software that may be required to view or manipulate 
the content of the database using a computer.
    One respondent suggested that the term ``commercial computer 
software'' had been substituted for ``restricted computer software'' in 
FAR 27.405-3 and 52.227-19, and that these revised sections change 
acquisition policy by discouraging use of commercial terms and 
conditions for the acquisition of computer software, which is 
inconsistent with FAR 12.212. There has been no change in policy from 
that expressed in FAR 12.212. Under the preexisting Part 27 scheme, the 
clause at 52.227-19 was prescribed for use with ``existing computer 
software,'' which was defined at former 27.405(b)(2) as software that 
was normally vended commercially. Thus, the term ``restricted computer 
software'' in that clause was applied only to ``existing computer 
software'' which was intended to mean commercial computer software. 
Furthermore, the revised 27.405-3 expressly states that commercial 
computer software 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, and refers to 12.212 
for further guidance in acquiring commercial computer software. 
Similarly, 12.212(b) has been revised to reference 27.405-3 for 
guidance when negotiating licenses for commercial computer software 
(e.g., when the standard commercial license is inconsistent with 
federal law or does not meet the Government's needs). The use of the 
clause 52.227-19 is discussed further in the Category 3 comments below.
    One respondent noted that the reference to the ``date of 
determination defined at 7 U.S.C. 2401(d'') within the definition of 
``subject invention'' at 27.301 and the associated clauses is improper 
because the cited section of the Plant Variety Protection Act (PVPA) 
has been deleted, and recommended that the citation be deleted. This 
suggestion is partially adopted. Although the statutory citation is 
outdated, the concept of a ``date of determination'' is still relevant 
and required under the statutory scheme (see 35 U.S.C. 201) to define 
the inventive event that connects the invention of a plant variety to a 
particular Federal contract. Accordingly, the substance of the 
previously codified definition of ``date of determination'' has been 
incorporated into the definition of the term ``made,'' at 27.301 and 
the associated clauses, as it applies to plant varieties. Additionally, 
further changes were made to the clause language to remove ambiguities 
regarding the contractor's ability to pursue PVPA protection as an 
alternative to patent protection (e.g., where the nomenclature that is 
used to reference patent requirements could have been mistakenly 
interpreted to exclude the equivalent under PVPA).
    One commenter argued that the flowdown provisions at 52.227-13(i) 
are potentially inconsistent with the Bayh-Dole Act (BDA) when that 
clause is used in a subcontract with a small business or nonprofit 
organization that is otherwise entitled to the standard BDA terms and 
conditions. These flowdown provisions are revised to conform to the BDA 
requirements.
    After the publication of the proposed rule, and the expiration of 
the public comment period, the BDA implementing regulations at 37 CFR 
Part 401 were revised (69 FR 17299) to provide an alternate version of 
the patent rights clause for contractors supporting works under 
cooperative research and development agreements. Thus, a change is 
necessary to implement this modification in the regulatory 
implementation of the BDA. The alternate language from 37 CFR 401.14(c) 
as prescribed by 37 CFR 401.3(c) is incorporated as a new Alternate V 
to the basic clause at FAR 52.227-11, with appropriate prescriptive 
language at 27.303(b)(7).
    Additional revisions were made to the coverage for Small Business 
Innovation Research (SBIR), to accommodate changes in the relevant SBIR 
statute (Pub. L. 106-554) and the Small Business Administration's SBIR 
Program Policy Directive (67 FR 60071). It was clarified that SBIR data 
rights also apply to phase three awards, and that the minimum four-year 
protection period can be extended in appropriate circumstances. See 
27.409(h), and 52.227-20(d).
    Category 3: Recommendations for Substantive Changes Beyond the 
Scope of This Case.
    The third category included comments suggesting edits that were 
substantive in nature, but which the Councils determined were not 
required to implement statutory or regulatory requirements. 
Accordingly, regardless of the merits of any individual recommendation, 
none of these comments were eligible for inclusion in the final rule 
because they exceeded the scope of the rulemaking effort. However, the 
Councils recognize that several of these comments raising substantive 
issues may be appropriate for further rulemaking efforts in the future. 
The following is an overview of the comments in this category:
    Two respondents suggested that 27.404 and its clauses be modified 
to state more clearly that the Government's unlimited rights license in 
technical data that is funded exclusively at Government expense is 
applicable only when delivery of that data is required as an element of 
performance and is necessary to ensure the competitive acquisition of 
supplies or services in substantial quantities in the future, citing 41 
U.S.C. 418a(b)(1). One responder suggested further that the Part 27 
materials should implement the concept of ``government purpose rights 
for mixed funding,'' citing 41 U.S.C. 418a(b)(2). Neither comment 
recommends specific language. The Councils note that Part 27 addresses 
delivery requirements independently of the license rights in those 
deliverables, and that there is no mention of a ``mixed funding'' 
criteria in the cited statute. In any case, the Part 27 implementation 
of the cited statutory requirements is well established, and any 
significant change in the overall scheme for specifying delivery 
requirements or license rights is beyond the scope of this plain 
language rewrite.
    Several respondents suggested that the clause at 52.227-19 be 
eliminated in favor of using the vendor's standard commercial computer 
software license, arguing that this is the policy stated at FAR 12.212. 
Elimination of the clause is unnecessary; the policies and procedures 
at 12.212 and 27.405-3 are entirely consistent and have been revised to 
cross-reference one another. As stated at 27.405-3, the clause at 
52.227-19 is provided as one optional solution when the standard 
commercial computer software license is inadequate under the criteria 
specified at 12.212 (e.g., when the standard commercial license is 
inconsistent with federal law or otherwise does not satisfy agency 
needs).
    One respondent recommended that the final rule further limit an 
agency's ability to restrict the publication or release of data first 
produced in the performance of the contract.
    One respondent recommended revising the policies and procedures 
regarding the delivery of data without restrictive markings at 52.227-
14(f).

[[Page 63048]]

    One respondent recommended using the term ``may'' rather than 
``should'' at 27.102(c). These terms are not equivalent, and thus the 
change is more than a plain language edit.
    Two respondents recommended eliminating the requirement to obtain 
the contracting officer's permission before asserting copyright in data 
first produced in the performance of the contract.
    One respondent suggested further broadening the government's 
acceptance of standard commercial terms and conditions.
    Two respondents recommended modification of the government's 
license rights in restricted computer software to more closely resemble 
commercial licenses.
    One respondent recommended the elimination of portions of the 
Rights in Data--General clause at FAR 52.227-14.
    One respondent recommended harmonizing the patent, data, and 
copyright sections of the FAR and DFARS.
    One respondent recommended adding coverage to specifically address 
the use or delivery of ``open source'' software.
    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 Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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 most changes in the 
rule are plain language changes and the other changes have minimal 
economic impact.
    * The changes to the policies, procedures, and contract clauses 
pertaining to patents that were necessary to reflect current patent law 
and the current practices at the U.S. Patent and Trademark Office, do 
not impose any significant economic burden on small businesses.
    * The changes to implement the ``Small Business Innovation Research 
Program Policy Directive'' of the Small Business Administration allow 
the small business contractor to extend the period during which it is 
allowed to treat data and software as proprietary. Small business 
entities are entirely free to choose whether to utilize this new and 
enhanced capability. The procedures for extension of the protection 
period are set forth in the Small Business Innovation Research Program 
Policy Directive, not this FAR rule, which just references the policy 
directive.
    There were no public comments from small entities in response to 
the statement in the Federal Register notice for the proposed rule that 
the Councils did not expect the proposed rule to have a significant 
economic impact on a substantial number of small entities.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies because, as discussed in the 
preamble to the proposed rule, the clause 52.227-12 is being removed 
from the FAR and will be incorporated into the Defense Federal 
Acquisition Regulation Supplement (DFARS). The current paperwork burden 
associated with Part 27 of the FAR has already been cleared under OMB 
Control Numbers 9000-0090 and 9000-0095. OMB clearance 9000-0095 covers 
the burdens associated with FAR patent rights clauses 52.227-11, 
52.227-12, and 52.227-13. We estimate that removal of the clause at 
52.227-12 will reduce the approved FAR burden by 21,528 hours (from 
45,630 hours to 24,102 hours), but there will be a corresponding 
increase under another case in the estimated burden hours under OMB 
clearance 0704-0369. There will be no change to OMB clearance 9000-
0090, which covers FAR data rights clauses (52.227-14 through 52.227-
23), and is currently approved at 2,970 hours. As a result, these 
changes to the FAR do not impose additional information collection 
requirements to the previously approved paperwork burden.

List of Subjects in 48 CFR Parts 2, 3, 12, 15, 18, 19, 27, 33, and 
52

    Government procurement.

    Dated: October 31, 2007.
Al Matera,
Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 3, 12, 15, 18, 19, 
27, 33, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 3, 12, 15, 18, 19, 27, 
33, and 52 continues 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

0
2. Amend section 2.101 in paragraph (b)(2) by--
0
a. Adding the definitions ``Commercial computer software'' and 
``Computer database'';
0
b. Revising the definition ``Computer software'';
0
c. Adding the definitions ``Computer software documentation'', ``Small 
business concern'', and ``Technical data'', and
0
d. Amending the definition ``United States'', by redesignating 
paragraph (6) as paragraph (7), and adding a new paragraph (6).
0
The added and revised text reads as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    Commercial computer software means any computer software that is a 
commercial item.
* * * * *
    Computer database or database means a collection of recorded 
information 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--(1) Means (i) 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
    (ii) 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.
    (2) Does not include computer databases or computer software 
documentation.
    Computer software documentation means owner's manuals, user's 
manuals, installation instructions, operating instructions, and other 
similar items, regardless of storage medium, that explain the 
capabilities of the computer software or provide instructions for using 
the software.
* * * * *
    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

[[Page 63049]]

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. (See 15 
U.S.C. 632.)
* * * * *
    Technical data means recorded information (regardless of the form 
or method of the recording) of a scientific or technical nature 
(including computer databases and computer software documentation). 
This term does not include computer software or financial, 
administrative, cost or pricing, or management data or other 
information incidental to contract administration. The term includes 
recorded information of a scientific or technical nature that is 
included in computer databases (See 41 U.S.C. 403(8)).
* * * * *
    United States * * *
    (6) For use in Part 27, see the definition at 27.001.
* * * * *

PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST


3.104-4  [Amended]

0
3. Amend section 3.104-4 in paragraph (d)(3) by removing ``27.404(h)'' 
and adding ``27.404-5'' in its place.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

0
4. Amend section 12.212 by adding a sentence to the end of paragraph 
(b) to read as follows:


12.212  Computer software.

* * * * *
    (b) * * * For additional guidance regarding the use and negotiation 
of license agreements for commercial computer software, see 27.405-3.

PART 15--CONTRACTING BY NEGOTIATION


15.408  [Amended]

0
5. Amend section 15.408 in Table 15-2, ``II. Cost Elements'' which 
follows paragraph (m)(4), by removing from paragraph ``E(10)'' ``FAR 
27.204'' and adding ``FAR 27.202'' in its place.

PART 18--EMERGENCY ACQUISITIONS


18.119  [Amended]

0
6. Amend section 18.119 by removing ``See 27.208'' and adding ``See 
27.204-1'' in its place.

PART 19--SMALL BUSINESS PROGRAMS


19.001  [Amended]

0
7. Amend section 19.001 by removing the definition ``Small business 
concern''.

0
8. 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 and Copyrights
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).
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.
27.405-4 Other existing data.
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.


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.

Subpart 27.1--General


27.101  Applicability.

    This part applies to all agencies. However, agencies are authorized 
to adopt alternative 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 alternative 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

[[Page 63050]]

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 to the Government.

Subpart 27.2--Patents and Copyrights


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 
with the authorization or consent 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 the 
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) Part 12 procedures are used;
    (ii) The simplified acquisition procedures of Part 13 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 items) or II (identification of included items) if--
    (i) The contract also requires delivery of items that are not 
commercial 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 indemnify 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.

[[Page 63051]]

    (c) The contracting officer, when considering the approval of a 
subcontract, shall 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 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. (Chapter 37--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).

[[Page 63052]]

    (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 shall 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, 
including 37 CFR 401.1.


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 variety of plant that is or may be protectable under the Plant 
Variety Protection Act (7 U.S.C. 2321, et seq.)
    Made means--
    (1) When used in relation to any invention other than a plant 
variety, means the conception or first actual reduction to practice of 
the invention; or
    (2) When used in relation to a plant variety, means that the 
contractor has at least tentatively determined that the variety has 
been reproduced with recognized characteristics.
    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, 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.


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 without unduly encumbering future 
research and discovery;
    (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(e)(1)(i));
    (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,

[[Page 63053]]

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) or (iii) 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 structure the contract to 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 rights in order to comply with treaties or other 
international agreements. In such case, these rights shall 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 paragraph (b)(2)(i) 
through (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 or plant variety protection application 
within the time specified in the clause;
    (C) Decides not to continue prosecution of a patent or plant 
variety protection 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 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. In accordance with 35 
U.S.C. 204, 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. 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 (i)(4) of the clause at 52.227-11, Patent Rights--
Ownership 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

[[Page 63054]]

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 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 the time of contract award. The contracting officer shall approve or 
disapprove, in writing, any contractor request to transfer its 
licenses. No approval is necessary 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 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. (See also 27.305-4.)


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.
    (iv) Furnish the Government an irrevocable power to inspect and 
make copies of the patent application file when a 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.
    (7) If the contract is for the performance of services at a 
Government owned and operated laboratory or at a Government owned and 
contractor operated laboratory directed by the Government to fulfill 
the Government's obligations under a Cooperative Research and 
Development Agreement (CRADA) authorized by 15 U.S.C. 3710a, the 
contracting officer may use the clause with its Alternate V. Since this 
provision is considered an exercise of an agency's ``exceptional 
circumstances'' authority, the contracting officer must comply with 37 
CFR 401.3(e) and 401.4.
    (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

[[Page 63055]]

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 DOE 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 nonprofit status or may file a 
size protest in accordance with FAR 19.302.
    (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 
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) in accordance with 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 (see 37 CFR 401.3(b) and 401.15):
    (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 without unduly encumbering 
future research and discovery.
    (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), (f), (g), and (h) 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 
license 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 shall 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, paragraph 
(i) of the clause at 52.227-11 provides that certain contractor actions 
require agency approval.


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,

[[Page 63056]]

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; or
    (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.


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

[[Page 63057]]

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 shall 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.
    (c) For more information on protection of invention disclosures, 
also see 37 CFR 401.13.


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 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--
    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, 
algorithms, processes, 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

[[Page 63058]]

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.
    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 shall 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 shall 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).


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. 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, use Alternate II. 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 database, 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.

[[Page 63059]]

    (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) 
(Alternate III). 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 with the computers for which it was 
acquired, including use at any Government installation to which the 
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, restricted 
computer software shall be subject to the same restricted rights;
    (v) Disclosed to and reproduced for use by support service 
contractors or their subcontractors, in accordance with paragraphs 
(3)(i) through (iv) of this section; and
    (vi) Used or copied for use with a replacement computer.
    (4) The restricted rights set forth in paragraph (d)(3) of this 
subsection 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 databases. 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, 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)(4) 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

[[Page 63060]]

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 shall 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 shall 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 shall 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 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 
60 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 the 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

[[Page 63061]]

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 the Alternate. 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 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) 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, Commercial Computer Software License, 
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. 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 shall 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

[[Page 63062]]

computer where the software is located. If the computer software is to 
be acquired with unlimited rights, the contract shall also so state. In 
addition, the contract shall adequately describe the computer programs 
and/or databases, the media on which it is recorded, and all the 
necessary documentation.
    (b) 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.
    (c) If a prime contractor under a contract containing the clause at 
52.227-14, Rights in Data--General, with paragraph (g)(4) (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.


27.405-4  Other existing data.

    (a) 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--
    (1) 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
    (2) 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.
    (b) 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 data base 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 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

[[Page 63063]]

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 Pub. L. 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 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 its 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

[[Page 63064]]

than special works, as appropriate (see paragraph (e) of this section);
    (ii) For the acquisition of existing data, commercial computer 
software, or other existing data, as described in 27.405-2 through 
27.405-4 (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 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, and contracts and subcontracts in support of 
programs being conducted at those 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 assert 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)(4) 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.
    (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 27.405-4.)
    (g) In accordance with 27.405-3, 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).
    (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, Phase II, and Phase III contracts awarded under the 
Small Business Innovation Research Program established pursuant to 15 
U.S.C. 638. The SBIR protection period may be extended in accordance 
with the Small Business Administration's ``Small Business Innovation 
Research Program Policy Directive'' (September 24, 2002).
    (i) Agencies may prescribe in their procedures, as appropriate, a 
clause

[[Page 63065]]

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, e.g., 
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 Proposal 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 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 33--PROTESTS, DISPUTES, AND APPEALS


33.104  [Amended]

0
9. Amend section 33.104 in paragraph (h)(5) introductory text by 
removing ``19.001'' and adding ``2.101'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. Amend section 52.227-1 by revising the introductory paragraph, date 
of the clause, and paragraphs (a) and (b) of the clause; and revising 
the introductory paragraphs of Alternate 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:
    AUTHORIZATION AND CONSENT (DEC 2007)
    (a) The Government authorizes and consents to all use and 
manufacture, in performing this contract or any subcontract at any 
tier, of any invention described in and covered by a United States 
patent--
    (1) Embodied in the structure or composition of any article the 
delivery of which is accepted by the Government under this contract; 
or
    (2) Used in machinery, tools, or methods whose use necessarily 
results from compliance by the Contractor or a subcontractor with 
(i) specifications or written provisions forming a part of this 
contract or (ii) specific written instructions given by the 
Contracting Officer directing the manner of performance. The entire 
liability to the Government for infringement of a United States 
patent shall be determined solely by the provisions of the indemnity 
clause, if any, included in this contract or any subcontract 
hereunder (including any lower-tier subcontract), and the Government 
assumes liability for all other infringement to the extent of the 
authorization and consent hereinabove granted.
    (b) The Contractor shall include the substance of this clause, 
including this paragraph (b), in all subcontracts that are expected 
to exceed the simplified acquisition threshold. However, omission of 
this clause from any subcontract, including those at or below the 
simplified acquisition threshold, does not affect this authorization 
and consent.
    (End of 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:
* * * * *

0
11. Amend section 52.227-2 by revising the introductory paragraph, date 
of the clause, and paragraphs (b) and (c) to read as follows:


52.227-2  Notice and Assistance Regarding Patent and Copyright 
Infringement.

    As prescribed in 27.201-2(b), insert the following clause:
    NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT 
INFRINGEMENT (DEC 2007)
* * * * *
    (b) In the event of any claim or suit against the Government on 
account of any alleged patent or copyright infringement arising out 
of the performance of this contract or out of the use of any 
supplies furnished or work or services performed under this 
contract, the Contractor shall furnish to the Government, when 
requested by the Contracting Officer, all evidence and information 
in the Contractor's possession pertaining to such claim or suit. 
Such evidence and information shall be furnished at the expense of 
the Government except where the Contractor has agreed to indemnify 
the Government.
    (c) The Contractor shall include the substance of this clause, 
including this paragraph (c), in all subcontracts that are expected 
to exceed the simplified acquisition threshold.
    (End of clause)

0
12. Amend section 52.227-3 by revising the introductory paragraph and 
the introductory paragraphs of Alternate I, II, and III to read as 
follows:


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 (Jul 1995). As prescribed in 27.201-2(c)(3), add 
the following paragraph to the basic clause:
* * * * *

0
13. Revise section 52.227-4 to read as follows:


52.227-4  Patent Indemnity--Construction Contracts.

    As prescribed in 27.201-2(d)(1), insert the following clause:
    PATENT INDEMNITY--CONSTRUCTION CONTRACTS (DEC 2007)
    Except as otherwise provided, the Contractor shall indemnify the 
Government and its officers, agents, and employees against 
liability, including costs and expenses, for infringement of any 
United States patent (except a patent issued upon an application 
that is now or may hereafter be withheld from issue pursuant to a 
Secrecy Order under 35 U.S.C. 181) arising out of performing this 
contract or out of the use or disposal by or for the account of the 
Government of supplies furnished or work performed under this 
contract.
    (End of clause)

[[Page 63066]]

    Alternate I (DEC 2007). 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]

0
14. Amend the introductory paragraph of section 52.227-5 by removing 
``at 27.203-6'' and adding ``in 27.201-2(e)'' in its place.

0
15. Amend section 52.227-6 by revising the introductory paragraph and 
the introductory paragraph of 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]

0
16. Amend the introductory paragraph of section 52.227-7 by removing 
``27.204-3(c)'' and adding ``27.202-5(b)'' in its place.

0
17. Amend section 52.227-9 by revising the introductory paragraph to 
read as follows:


52.227-9  Refund of Royalties.

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

0
18. Amend section 52.227-10 by revising the introductory paragraph, the 
date of the clause, and paragraph (e) to read as follows:


52.227-10  Filing of Patent Applications--Classified Subject Matter.

    As prescribed at 27.203-2, insert the following clause:
    FILING OF PATENT APPLICATIONS--CLASSIFIED SUBJECT MATTER (DEC 
2007)
* * * * *
    (e) The Contractor shall include the substance of this clause, 
including this paragraph (e), in all subcontracts that cover or are 
likely to cover classified subject matter.
    (End of clause)

0
19. Revise section 52.227-11 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 (DEC 2007)
    (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 U.S. Code, 
or any variety of plant that is or may be protectable under the 
Plant Variety Protection Act (7 U.S.C. 2321, et seq.)
    Made means--
    (1) When used in relation to any invention other than a plant 
variety, the conception or first actual reduction to practice of the 
invention; or
    (2) When used in relation to a plant variety, that the 
Contractor has at least tentatively determined that the variety has 
been reproduced with recognized characteristics.
    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.
    (b) Contractor's rights. (1) Ownership. The Contractor may 
retain ownership of each subject invention throughout the world in 
accordance with the provisions of this clause.
    (2) License. (i) The Contractor shall retain a nonexclusive 
royalty-free license throughout the world in each subject invention 
to which the Government obtains title, unless 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 
written 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 license may be revoked or modified by the 
agency to the extent necessary to achieve expeditious practical 
application of the subject invention in a particular country in 
accordance with the procedures in FAR 27.302(i)(2) and 27.304-1(f).
    (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 Contracting Officer 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 
Contracting Officer 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 or a Plant Variety Protection 
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 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 first filed 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 
assign 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 
Contractor's failure 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

[[Page 63067]]

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) Assign title to the agency when requested under paragraph 
(d) of this clause and to enable the Government to obtain patent 
protection and plant variety 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 Contracting Officer 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 or plant variety protection 
application and any patent or plant variety protection certificate 
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) 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 (h) of this clause. The Contractor also shall mark 
any utilization report as confidential/proprietary to help prevent 
inadvertent release outside the Government. As required by 35 U.S.C. 
202(c)(5), the agency will not disclose that information to persons 
outside the Government without the Contractor's permission.
    (g) 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 the 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. 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.
    (h) 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 210(c), 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.
    (i) 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 written approval of the agency, except where an 
assignment is made to an organization that 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.
    (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 (i)(4) of this 
clause.
    (j) Communications. [Complete according to agency instructions.]
    (k) Subcontracts. (1) The Contractor shall include the substance 
of this clause, including this paragraph (k), in all subcontracts 
for experimental, developmental, or research work to be performed by 
a small business concern or nonprofit organization.
    (2) The Contractor shall include in all other subcontracts for 
experimental, developmental, or research work the substance of the 
patent rights clause required by FAR Subpart 27.3.
    (3) At all tiers, the patent rights clause must be modified to 
identify the parties as follows: references to the Government are 
not changed, and the subcontractor has all rights and obligations of 
the Contractor in the clause. The Contractor shall not, as part of 
the consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.
    (4) In subcontracts, at any tier, the agency, the 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 (h) of this clause.
    (End of clause)
    Alternate I (Jun 1989). 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 (DEC 2007). As prescribed in 27.303(b)(4), add the 
following sentence at

[[Page 63068]]

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 
the treaties or international agreements with respect to subject 
inventions made after the date of the amendment.
    Alternate III (Jun 1989). As prescribed in 27.303(b)(5), 
substitute the following paragraph (i)(3) in place of paragraph 
(i)(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 (Jun 1989). 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.
    Alternate V (DEC 2007). As prescribed in 27.303(b)(7), include 
the following paragraph (d)(3) in paragraph (d) of the basic clause:
    (d)(3) CRADA licensing. If the Contractor performs services at a 
Government owned and operated laboratory or at a Government owned 
and Contractor operated laboratory directed by the Government to 
fulfill the Government's obligations under a Cooperative Research 
and Development Agreement (CRADA) authorized by 15 U.S.C. 3710a, the 
Government may require the Contractor to negotiate an agreement with 
the CRADA collaborating party or parties regarding the allocation of 
rights to any subject invention the Contractor makes, solely or 
jointly, under the CRADA. The agreement shall be negotiated prior to 
the Contractor undertaking the CRADA work or, with the permission of 
the Government, upon the identification of a subject invention. In 
the absence of such an agreement, the Contractor agrees to grant the 
collaborating party or parties an option for a license in its 
inventions of the same scope and terms set forth in the CRADA for 
inventions made by the Government.


52.227-12  [Removed]

0
20. Remove and reserve section 52.227-12.

0
21. Revise sections 52.227-13 through 52.227-15 to read as follows:


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

    As prescribed at 27.303(e), insert the following clause:
    PATENT RIGHTS--OWNERSHIP BY THE GOVERNMENT (DEC 2007)
    (a) Definitions. 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 U.S. Code 
or any variety of plant that is or may be protectable under the 
Plant Variety Protection Act (7 U.S.C. 2321, et seq.)
    Made means--
    (1) When used in relation to any invention other than a plant 
variety, means the conception or first actual reduction to practice 
of the invention; or
    (2) When used in relation to a plant variety, means that the 
Contractor has at least tentatively determined that the variety has 
been reproduced with recognized characteristics.
    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.
    (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 a 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 Government will have a nonexclusive, nontransferable, 
irrevocable, paid-up license to practice, or have practiced for or 
on its behalf, the subject invention throughout the world.
    (ii) The agency has the right to require licensing pursuant to 
35 U.S.C. 203 and 210(c) and in accordance with the procedures set 
forth in 37 CFR 401.6 and any supplemental regulations of the agency 
in effect on the date of the contract award.
    (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. The reports shall include information 
regarding the status of development, date of first commercial sale 
or use, gross royalties received by the Contractor, and any 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 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

[[Page 63069]]

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 written 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 license may be revoked or modified by the 
agency to the extent necessary to achieve expeditious practical 
application of the subject invention in a particular country 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. The procedures shall 
include the maintenance of laboratory notebooks or 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 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 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. 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 and any on sale or public use.
    (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 Contracting Officer, 
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 (i)(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) Preference for United States industry. Unless provided 
otherwise, 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 the 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. 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.
    (i) Subcontracts. (1) The Contractor shall include the substance 
of the patent rights clause required by FAR Subpart 27.3 in all 
subcontracts for experimental, developmental, or research work. The 
prescribed patent rights clause must be modified to identify the 
parties as follows: references to the Government are not changed, 
and the subcontractor has all rights and obligations of the 
Contractor in the clause. The Contractor shall not, as part of the 
consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.
    (2) In the event of a refusal by a prospective subcontractor to 
accept the 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

[[Page 63070]]

    (ii) Shall not proceed with such subcontract without the written 
authorization of the Contracting Officer.
    (3) In subcontracts at any tier, the agency, the subcontractor, 
and the Contractor agree that the mutual obligations of the parties 
created by the patent rights 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.
    (End of clause)
    Alternate I (Jun 1989). As prescribed in 27.303(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 (DEC 2007). As prescribed in 27.303(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 that 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 (DEC 2007)
    (a) Definitions. As used in this clause--
    Computer database or database means a collection of recorded 
information 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--(1) Means (i) 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
    (ii) 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.
    (2) Does not include computer databases or computer software 
documentation.
    Computer software documentation means owner's manuals, user's 
manuals, installation instructions, operating instructions, and 
other similar items, regardless of storage medium, that explain the 
capabilities of the computer software or provide instructions for 
using the software.
    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, 
algorithms, processes, 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) 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 confidential or privileged, or is copyrighted computer 
software, including minor modifications of the computer software.
    Restricted rights, as used in this clause, means the rights of 
the Government in restricted computer software, as set forth in a 
Restricted Rights Notice of paragraph (g) 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 such computer software.
    Technical data, means recorded information (regardless of the 
form or method of the recording) of a scientific or technical nature 
(including computer databases and computer software documentation). 
This term does not include computer software or financial, 
administrative, cost or pricing, or management data or other 
information incidental to contract administration. The term includes 
recorded information of a scientific or technical nature that is 
included in computer databases (See 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.
    (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 
that 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 
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 on its behalf, a paid-
up, nonexclusive, irrevocable, worldwide license in such copyrighted 
computer software to reproduce, prepare derivative works, and 
perform publicly and

[[Page 63071]]

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)(4) 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 law or regulation (e.g., 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 60 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 60-day period (or a longer time 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 
database for delivery to the Government shall be treated as limited 
rights data and not restricted computer software.
    (3) [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 (DEC 2007). 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 (DEC 2007). 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 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 (DEC 2007)
    (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

[[Page 63072]]

such disclosure subject to prohibition against further use and 
disclosure: [Agencies may list additional purposes as set forth in 
27.404-2(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 (DEC 2007). 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 (DEC 2007)
    (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 the 
computer(s) 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 (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 instead:
    RESTRICTED RIGHTS NOTICE SHORT FORM (Jun 1987)
    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 (DEC 2007). 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 (DEC 2007). 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 (DEC 2007)
    (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  [Amended]

0
22. Amend section 52.227-16 by removing from the introductory paragraph 
``27.409(h)'' and adding ``27.409(d)'' in its place.

0
23. Revise section 52.227-17 to read as follows:


52.227-17  Rights in Data--Special Works.

    As prescribed in 27.409(e), insert the following clause:
    RIGHTS IN DATA--SPECIAL WORKS (DEC 2007)
    (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.

[[Page 63073]]

    (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 that 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 claim or suit other than as required by final 
decree of a court of competent jurisdiction; and these provisions do 
not 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]

0
24. Amend section 52.227-18 by--
0
a. Removing from the introductory paragraph ``27.409(j)'' and adding 
``27.409(f)'' in its place;
0
b. Revising the date of the clause to read ``(DEC 2007)''; and
0
c. Removing from paragraph (b) ``thereof'' and adding ``of the claim or 
suit'' in its place, and removing ``suit or claim'' and adding ``claim 
or suit'' in its place.

0
25. Revise sections 52.227-19 thru 52.227-21 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 (DEC 2007)
    (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 (b) 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 (b)(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(s) for which it was 
acquired, including use at any Government installation to which the 
computer(s) 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.
    (c) 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)


52.227-20  Rights in Data--SBIR Program.

    As prescribed in 27.409(h), insert the following clause:
    RIGHTS IN DATA--SBIR PROGRAM (DEC 2007)
    (a) Definitions. As used in this clause--
    Computer database or database means a collection of recorded 
information 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--(1) Means (i) 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
    (ii) 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.
    (2) Does not include computer databases or computer software 
documentation.
    Computer software documentation means owner's manuals, user's 
manuals, installation instructions, operating instructions, and 
other similar items, regardless of storage medium, that explain the 
capabilities of the computer software or provide instructions for 
using the software.
    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

[[Page 63074]]

means data identifying source, functional characteristics, and 
performance requirements but specifically excludes the source code, 
algorithms, processes, formulas, and flow charts of the software.
    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.
    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.
    SBIR data means data first produced by a Contractor that is a 
small business concern in performance of a small business innovation 
research contract issued under the authority of 15 U.S.C. 638, which 
data are not generally known, and which data without obligation as 
to its confidentiality have not been made available to others by the 
Contractor or are not already available to the Government.
    SBIR rights means the rights in SBIR data set forth in the SBIR 
Rights Notice of paragraph (d) of this clause.
    Technical data means recorded information (regardless of the 
form or method of the recording) of a scientific or technical nature 
(including computer databases and computer software documentation). 
This term does not include computer software or financial, 
administrative, cost or pricing, or management data or other 
information incidental to contract administration. The term includes 
recorded information of a scientific or technical nature that is 
included in computer databases. (See 41 U.S.C. 403(8).)
    Unlimited rights means the right 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 whatsoever, and to have or permit others to do 
so.
    (b) Allocation of rights. (1) Except as provided in paragraph 
(c) of this clause regarding copyright, the Government shall have 
unlimited rights in--
    (i) Data specifically identified in this contract as data to be 
delivered without restriction;
    (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 SBIR data in accordance with paragraph (d) of 
this clause or for limited rights data or restricted computer 
software in accordance with paragraph (f) 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) Protect SBIR rights in SBIR data delivered under this 
contract in the manner and to the extent provided in paragraph (d) 
of this clause;
    (iii) Substantiate use of, add, or correct SBIR rights or 
copyright notices and to take other appropriate action, in 
accordance with paragraph (e) of this clause; and
    (iv) Withhold from delivery those data which are limited rights 
data or restricted computer software to the extent provided in 
paragraph (f) of this clause.
    (c) Copyright--(1) Data first produced in the performance of 
this contract. (i) Except as otherwise specifically provided in this 
contract, the Contractor may assert copyright subsisting in any data 
first produced in the performance of this contract.
    (ii) 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).
    (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 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 in such copyrighted computer software to 
reproduce, prepare derivative works, and perform publicly and 
display publicly, by or on behalf of the Government.
    (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 that are not first produced in the performance of 
this contract unless the Contractor (i) identifies such 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.
    (3) Removal of copyright notices. The Government will not remove 
any copyright notices placed on data pursuant to this paragraph (c), 
and will include such notices on all reproductions of the data.
    (d) Rights to SBIR data. (1) The Contractor is authorized to 
affix the following ``SBIR Rights Notice'' to SBIR data delivered 
under this contract and the Government will treat the data, subject 
to the provisions of paragraphs (e) and (f) of this clause, in 
accordance with the notice:
    SBIR RIGHTS NOTICE (DEC 2007)
    These SBIR data are furnished with SBIR rights under Contract 
No.---------------- (and subcontract ----------------, if 
appropriate). For a period of 4 years, unless extended in accordance 
with FAR 27.409(h), after acceptance of all items to be delivered 
under this contract, the Government will use these data for 
Government purposes only, and they shall not be disclosed outside 
the Government (including disclosure for procurement purposes) 
during such period without permission of the Contractor, except 
that, subject to the foregoing use and disclosure prohibitions, 
these data may be disclosed for use by support Contractors. After 
the protection period, the Government has a paid-up license to use, 
and to authorize others to use on its behalf, these data for 
Government purposes, but is relieved of all disclosure prohibitions 
and assumes no liability for unauthorized use of these data by third 
parties. This notice shall be affixed to any reproductions of these 
data, in whole or in part.
    (End of notice)
    (2) The Government's sole obligation with respect to any SBIR 
data shall be as set forth in this paragraph (d).
    (e) Omitted or incorrect markings. (1) Data delivered to the 
Government without any notice authorized by paragraph (d) of this 
clause shall be deemed to have been furnished with unlimited rights. 
The Government assumes no liability 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, and 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 use of the proposed notice is 
authorized; and
    (iv) Acknowledges that the Government has no liability with 
respect to the disclosure or use of any such data made prior to the 
addition of the notice or resulting from the omission of the notice.
    (3) If the 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.
    (f) Protection of limited rights data and restricted computer 
software. The Contractor may withhold from delivery qualifying 
limited rights data and restricted computer software that are not 
identified in paragraphs (b)(1)(i), (ii), and (iii) of this clause. 
As a condition to this withholding, the Contractor shall identify 
the data being withheld, and furnish form, fit, and function data 
instead.
    (g) 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 not proceed with the subcontract award without 
further authorization in writing from the Contracting Officer.
    (h) Relationship to patents. 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.

[[Page 63075]]

    (End of clause)


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 (DEC 2007)
    (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 (Jan 1997)

    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]

0
26. Amend section 52.227-22 by removing from the introductory paragraph 
``27.409(r)'' and adding `` 27.409(k)'' in its place.


52.227-23  [Amended]

0
27. Amend section 52.227-23 by removing from the introductory paragraph 
``27.409(s)'' and adding ``27.409(l)'' in its place.
[FR Doc. 07-5475 Filed 11-6-07; 8:45 am]
BILLING CODE 6820-EP-S