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Intellectual Property (IP) Considerations

Intellectual Property (IP) Considerations

Negotiation

In negotiating IP under an OT, it is a best practice for the Government and solution provider to identify business plans for the subject technology at 1-year, 3-years, 5-years, and beyond. By establishing the short-term and long-term needs of the parties, a tailored IP scheme can more easily be determined and factored into the Government’s IP negotiation strategy.

Tailored IP terms may include, but are not limited to: royalty provisions, limited licenses (scope, duration, manner), options, conditions, right-of-first refusal, and exclusive dealing terms, amongst others.

The negotiated IP terms and conditions should facilitate all parties’ business plans and project goals, including any likely production and follow-on support of the prototype developed, and balance the relative investments and risks borne by the parties both in past development of the technology and in future development and maintenance of the technology. The Government team should consider the effect of other forms of IP (e.g. trademarks, registered vessel hulls, etc.), that may impact the acquisition strategy for the technology.

Where the project goals call for reliance on the commercial marketplace to produce, maintain, modify, or upgrade the technology, there may be a reduced need for rights in IP for those purposes. However, since the Government tends to use technology well past the norm in the commercial marketplace, the Government team should plan for maintenance and support of fielded prototype technology when the technology is no longer supported by the commercial market and consider obtaining at no additional cost a license sufficient to address the Government’s long-term needs to the technology.

Agreements Officer Responsibilities

It is important that the AOA warranted individual with authority to enter into, administer, or terminate OTs. To be appointed as an AO, the individual must possess a level of responsibility, business acumen, and judgment that enables them to operate in the relatively unstructured environment of OTs. AOs need not be Contracting Officers, unless required by the Component’s appointment process. be familiar with IP rights under the Bayh-Dole Act (35 U.S.C. §201-204) for patents and 10 U.S.C. §2320-21 for technical data Technical data means recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information.; however, these statutes do not apply to OTs and negotiation of rights of a different scope is permissible and encouraged. At a minimum, the AOA warranted individual with authority to enter into, administer, or terminate OTs. To be appointed as an AO, the individual must possess a level of responsibility, business acumen, and judgment that enables them to operate in the relatively unstructured environment of OTs. AOs need not be Contracting Officers, unless required by the Component’s appointment process. should ensure that the agreement addresses the following:

Disputes: Disputes clauses included in the agreement can accommodate specialized disputes arising under the IP clauses, such as the exercise of IP march-in rights or the validation of restrictions on technical data Technical data means recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information. or computer softwareComputer programs, source code, source code listings, object code listings, design details, algorithms, processes, flow charts, formulae and related material that would enable the software to be reproduced, recreated, or recompiled. Computer software does not include computer data bases or computer software documentation..

Flow-down: Determine whether it is necessary that the IP clauses applicable to the awardee flow down to sub-awardees, including whether to allow other sub-awardees to submit any applicable IP licenses directly to the Government.

Licensing: Consider restricting awardees Any responsible entity that is a signatory to an OT agreement. A sub-awardee is any responsible entity performing effort under the OT agreement, other than the awardee. from licensing technology developed under the OT to domestic or foreign firms under circumstances that would hinder potential domestic manufacture or use of the technology.

Export: Be aware that export restrictions prohibit awardees from disclosing or licensing certain technology to foreign firms.

Additional rights: Consider including in the IP clauses any additional rights available to the Government in the case of inability or refusal of the private party or team to continue to perform.

Time based: It may also be appropriate to consider negotiating time periods after which the Government will automatically obtain greater rights (for example, if the original negotiated rights limited Government’s rights for a specified period of time to permit commercialization of the technology).

Patents: Negotiate a patents rights clause necessary to accomplish program objectives and foster the Government’s interest while balancing the needs of the performer. In determining what represents a reasonable arrangement under the circumstances, the AOA warranted individual with authority to enter into, administer, or terminate OTs. To be appointed as an AO, the individual must possess a level of responsibility, business acumen, and judgment that enables them to operate in the relatively unstructured environment of OTs. AOs need not be Contracting Officers, unless required by the Component’s appointment process. should consider the Government’s needs for patents and patent rights to use the developed technology, or what other IP rights will be needed should the agreement provide for trade secret protection instead of patent protection.

Trade Secret Protection: Consider allowing subject inventions to remain trade secrets as long as the Government’s interest in the continued use of the technology is protected. In making this evaluation, the AOA warranted individual with authority to enter into, administer, or terminate OTs. To be appointed as an AO, the individual must possess a level of responsibility, business acumen, and judgment that enables them to operate in the relatively unstructured environment of OTs. AOs need not be Contracting Officers, unless required by the Component’s appointment process. should consider whether allowing the technology to remain a trade secret creates an unacceptable risk of a third party patenting the same technology, the Government’s right to utilize this technology with third parties, and whether there are available means to mitigate these risks outside of requiring patent protection.

Software data rights: Refers to a combined copyright, know-how, and/or trade secret license that defines the Government’s ability to use, reproduce, modify, release, and disclose technical data and computer software. The focus of license negotiations often centers on the Government’s ability to release or disclose outside the Government. In addition, computer software licenses require additional consideration because restrictions may impact the Government’s use, maintenance, and upgrade of computer software used as an operational element of the prototype technology. The OT should typically address definitions, allocation of rights, delivery requirements, and restrictive legends. The OT should account for certain emergency or special circumstances in which the Government may need additional rights, such as the need to disclose technical data or computer software for emergency repair or overhaul.

Commercial data: The AOA warranted individual with authority to enter into, administer, or terminate OTs. To be appointed as an AO, the individual must possess a level of responsibility, business acumen, and judgment that enables them to operate in the relatively unstructured environment of OTs. AOs need not be Contracting Officers, unless required by the Component’s appointment process.  should consider commercial technical data and commercial computer software. The government typically does not need extensive rights in commercial technical data and software. However, depending on the project scope and goals, the Government may need to negotiate for greater rights in order to utilize the developed technology.

Cyber Incident Reporting: Ensure the company is properly protecting data and compliant with specific Government reporting procedures in the event Government data is compromised.

Authorization and Consent: Authorization and consent policies provide that work by an awardees Any responsible entity that is a signatory to an OT agreement. A sub-awardee is any responsible entity performing effort under the OT agreement, other than the awardee. under an agreement may not be enjoined by reason of patent infringement and shifts liability for such infringement to the government (see 28 U.S.C. 1498). The Government’s liability for damages in any such suit may, however, ultimately be borne by the awardee in accordance with the terms of a patent indemnity clause. The agreement should not include an authorization and consent clause when both complete performance and delivery are outside the United States, its possessions, and Puerto Rico.

Notice and Assistance: Notice policy requires the awardees Any responsible entity that is a signatory to an OT agreement. A sub-awardee is any responsible entity performing effort under the OT agreement, other than the awardee. to notify the AOA warranted individual with authority to enter into, administer, or terminate OTs. To be appointed as an AO, the individual must possess a level of responsibility, business acumen, and judgment that enables them to operate in the relatively unstructured environment of OTs. AOs need not be Contracting Officers, unless required by the Component’s appointment process.  of all claims of infringement that come to the awardee’s attention in connection with performing the agreement. Assistance policy requires the Awardee, when requested, to assist the Government with any evidence and information in its possession in connection with any suit against the government, or any claims against the Government made before suit has been instituted that alleges patent or copyright infringement arising out of performance under the agreement.

Indemnity: Indemnity clauses mitigate the Government’s risk of cost increases caused by infringement of a third-party owned patent. Such a clause may be appropriate if the supplies or services used in the prototype technology developed under the agreement normally are or have been sold or offered for sale to the public in the commercial open market, either with or without modifications. In addition, where trade secret protection is allowed in lieu of patent protection for patentable subject inventions, a perpetual patent indemnity clause might be considered as a mechanism for mitigating risks. The agreement should not include a clause whereby the Government expressly agrees to indemnify the awardees Any responsible entity that is a signatory to an OT agreement. A sub-awardee is any responsible entity performing effort under the OT agreement, other than the awardee. against liability for infringement.