CFCM Intellectual Property & Data Rights in Federal Contracts — Questions and Answers
Question 1: Under FAR Part 27, 'unlimited rights' in technical data means the government has the right to:
- Use, disclose, reproduce, prepare derivative works, distribute, and display the data in any manner and for any purpose without restriction (Correct answer)
- Use the data only within the specific program office that funded its development
- Share the data with allied foreign governments under international agreements only
- Reproduce and distribute the data but not modify or create derivative works
Correct answer: Use, disclose, reproduce, prepare derivative works, distribute, and display the data in any manner and for any purpose without restriction
Unlimited rights under FAR 27.401 give the government the broadest possible license — it may use, disclose, reproduce, modify, perform, display, release, or distribute the data to anyone for any government or commercial purpose without restriction or additional compensation to the contractor.
Question 2: The Bayh-Dole Act (implemented via FAR Subpart 27.3) primarily grants contractors performing federally funded R&D the right to:
- Charge the government royalties for commercial use of patented inventions
- Elect to retain title to inventions conceived or first reduced to practice under the contract (Correct answer)
- Prevent the government from licensing the invention to any foreign entity
- Transfer all invention rights to a designated small business partner
Correct answer: Elect to retain title to inventions conceived or first reduced to practice under the contract
The Bayh-Dole Act allows contractors (including universities and small businesses) performing government-funded research to elect to retain title to inventions arising from that work, rather than having all rights vest in the government. In return, the government retains a royalty-free license to use the invention for government purposes.
Question 3: 'Limited rights' in technical data, as defined under FAR 27.401, applies to data that was developed:
- Exclusively at private expense and embodies trade secrets or is commercial or financial information that is privileged or confidential (Correct answer)
- Partially with government funds and partially with private funds on a joint venture
- Under a previous government contract but has since been released commercially
- By a subcontractor whose data rights were not flowed down by the prime
Correct answer: Exclusively at private expense and embodies trade secrets or is commercial or financial information that is privileged or confidential
Limited rights apply to technical data that was developed exclusively at private expense and that embodies trade secrets or is commercial/financial information that is privileged or confidential. The government may use such data only within the government and may not release it outside the government or use it for manufacture without the contractor's permission.
Question 4: Under DFARS 252.227-7013, 'government purpose rights' in technical data allow the government to use the data for any government purpose, but with which important restriction?
- The government may not release or disclose the data to third parties for commercial use or manufacture during the protection period (typically 5 years) (Correct answer)
- The government may not use the data outside the continental United States
- The government must pay the contractor a royalty each time the data is used commercially
- The government may not modify the data without written contractor consent
Correct answer: The government may not release or disclose the data to third parties for commercial use or manufacture during the protection period (typically 5 years)
Government purpose rights allow unrestricted government use — including by contractors working for the government — but prohibit the government from releasing the data to third parties for commercial use during the protection period (typically 5 years). After the protection period expires, the government has unlimited rights.
Question 5: When a contractor delivers computer software developed exclusively at private expense under a government contract, the government typically receives:
- Unlimited rights, because the delivery obligation was funded by the contract
- Restricted rights, equivalent to a single-user commercial license (Correct answer)
- Government purpose rights for a 5-year protection period
- No rights, because privately funded software is protected by copyright law
Correct answer: Restricted rights, equivalent to a single-user commercial license
Under DFARS 252.227-7014, commercial computer software developed exclusively at private expense is delivered with restricted rights — essentially a single end-user license. The government may use, modify, and reproduce it only for its own use and may not release it or use it as a basis for a competitive acquisition without permission.
Question 6: A contractor wishing to assert limited rights or restricted rights over data delivered under a government contract must:
- Notify the contracting officer orally at the contract kickoff meeting
- Mark the data with a specific legend identifying the nature and extent of the restrictions at the time of delivery (Correct answer)
- File a patent application within 60 days of delivery to preserve rights
- Obtain SBA certification as a small disadvantaged business before asserting restrictions
Correct answer: Mark the data with a specific legend identifying the nature and extent of the restrictions at the time of delivery
FAR 27.404-3 and DFARS 252.227-7013 require contractors to mark data with the appropriate restrictive legend (e.g., 'Limited Rights' or 'Restricted Rights') at the time of delivery. Failure to properly mark the data may result in the government receiving unlimited rights, even if the contractor later claims the data was privately funded.
CFCM Intellectual Property & Data Rights in Federal Contracts
Under FAR Part 27, 'unlimited rights' in technical data means the government has the right to: