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1 1 (April 22, 2022)

handle is hein.crs/govefpp0001 and id is 1 raw text is: S Congressional Research Sence Inforrning the legislative debate since 1914 0 April 22, 2022 Intellectual Property and Technical Data in DOD Acquisitions The Department of Defense (DOD) relies extensively on the organizations that comprise the defense industrial base (DIB). These entities provide the products and services that enable DOD's business operations and warfighting capabilities. In some situations, DOD must also consider the need to obtain intellectual property (IP) and technical data rights in order to operate and maintain the capabilities it acquires. IP rights have grown in importance to DOD as U.S. defense research and development (R&D) spending as a share of global R&D spending has declined-and IP rights are also increasingly important to DIB entities who rely on their portfolios of developed IP to generate profits from their R&D investments. Observers such as the Government Accountability Office (GAO) have said that DOD has not always been consistent in its acquisition and licensing of IP developed at private expense in the past, resulting in reduced mission readiness and surging sustainment costs in some instances. In recognition of these trends, Congress has directed DOD to take a number of actions to improve policies and processes for how DOD acquires IP. Intellectual Property IP is described broadly as a work or invention that (1) is the product of the human intellect and (2) is protected from certain unauthorized use. Four types of IP protected by federal law are patents, copyrights, trademarks, and trade secrets. These federal laws (and, in some cases, state laws) seek to encourage innovation by providing legal protections for the creation or invention of unique ideas or products. A patent, for example, is a written instrument issued by the U.S. Patent and Trademark Office (see Title 35 of the U.S. Code) that describes an invention and grants the inventor(s) the exclusive right to make, use, import, and sell the invention within the United States for a period of up to 20 years. Within the context of defense acquisitions, the Bayh-Dole Act of 1980 (P.L. 96-517) governs patent rights for inventions made with federal support. Congress passed the Bayh-Dole Act in part to address concerns about the commercialization of technology developed with public funds. Under Bayh-Dole, a federal contractor may elect to retain the patent rights for a federally funded invention, giving the contractor exclusive rights in the invention during the patent's term. In exchange, the contractor must provide the federal agency with a free government-use license. Although the Bayh-Dole Act only applies to federal contractors that are nonprofit organizations or small businesses, procurement regulations have applied Bayh- Dole's allocation of patent rights to all federal contractors, regardless of size. IP and Technical Data A subset of IP issues with particular importance for DOD are data rights, an umbrella term for DOD's rights to the technical data, computer software, and computer software documentation developed under DOD contract. Technical data, as defined by 10 U.S.C. §3013, includes information ... of a scientific or technical nature (including computer software documentation) relating to supplies procured by an agency ... and does not include computer software or financial, administrative, cost or pricing, or management data or other information incidental to contract administration. For DOD applications, technical data is considered to be information describing or related to a contractor-built item needed in order to be able to install, operate, maintain, repair, or replace that item at a later date. A right to use information is separate from ownership of that information. In federal contracting, companies generally retain ownership, or title, to technical data and convey a license to use that data to the federal government. IP rights with respect to technical data generally refers to authorization granted by the contractor for DOD to engage in activities that require accessing or modifying the underlying IP. During the contracting process, DOD program managers must assess a program's future IP- related activities. If IP such as technical data is deemed necessary for the future acquisition, modification, upgrade, or sustainment of the program, DOD must often make trade-offs amongst factors such as negotiating for access to those deliverables and associated licenses, or contracting with the IP holder to perform required work at a later date. 10 U.S.C. §3771 specifies how technical data license rights are established in the DOD contracting process. With some exceptions, those rights depend on who paid for the development of the item in question - the federal government or private entities: * Where an item or process was developed by a contractor or subcontractor exclusively through federal funding, the United States is granted unlimited rights to use technical data pertaining to the item or process or release or disclose the technical data to persons outside the government or permit the use of the technical data by such persons. Under the Small Business Act (P.L. 85-536), small businesses retain technical data rights for contracts awarded under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) programs for a period of not less than 4 years. * Where an item or process was developed by a contractor exclusively through private funding, the contractor may restrict DOD from releasing or disclosing associated technical data. Exceptions to this rule are set forth in 10 U.S.C. §3771, and include technical data related to form, ittps://Crsreports.congress.gov

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