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Categories of Rights in TD and CS in Department of Defense Contracts

Categories of Rights in TD and CS in Department of Defense Contracts

As discussed in “License Required: Technical Data and Computer Software in Government Contracts,” the allocation of rights between the Government and the contractor in technical data (TD) relating to commercial items, components and processes (ICP), and in commercial computer software (CS) are governed by different rules than those governing rights in TD relating to non-commercial ICP and in non-commercial CS.  

The Federal Acquisition Regulation and, likewise, the DFARS, distinguish “commercial” from “non-commercial” by generally defining a “commercial” item or service as that which is of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, and has been sold, leased, or licensed to the general public or offered for sale, lease, or license to the general public. A product or service that is developed mainly for a government program or use is non-commercial, whether the development occurs under a Government contract or by a contractor’s independent research and development (IR&D) efforts.

So, focusing now on rights in TD pertaining to non-commercial ICP and non-commercial software, and keeping in mind these are license rights, not ownership rights, the following explains the various categories of rights:

Unlimited Rights – Rights to use, modify, reproduce, perform, display, release, or disclose TD/CS in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so. The Government normally gets these rights when the development of the underlying ICP or the software was done by a contractor entirely at the Government’s expense. These license rights are close to but not the same as ownership which is retained by the contractor. However, there are certain types of TD in which the Government gets unlimited rights regardless of the source of funding for the development of the underlying ICP. Examples are form, fit, and function (FFF) data and computer software documentation (CSD) defined as user manuals, installation and operating instructions, and other similar items that explain the capabilities of the software that are required to be delivered under the contract.

Government Purpose Rights (GPR) – Rights to use, modify, reproduce, etc. within the Government without restriction; and to release or disclose TD or CS outside the Government, such as to another Government contractor, under a non-disclosure agreement, and authorize the recipients to use, modify, etc. that data for United States government purposes. These rights are based on the development of the underlying ICP or the software with mixed funding (i.e., a combination of Government expense and private expense).

Limited Rights – These apply only to TD and include the rights to use, modify, reproduce, etc. the TD, in whole or in part, but only within the Government. To disclose the data outside the Government, it would need to obtain permission from the rights owner. These rights are supported by the development of the underlying item exclusively at private expense.

Restricted Rights – These apply only to non-commercial CS and are quite narrow in scope. Among the few rights, the Government can use Restricted Rights CS only within the Government; and even within the Government, its use is limited to using the program with one computer at a time. It can also make the minimum number of copies required for safekeeping, backup, or modification purposes and modify the CS, provided the modified CS is also subject to use-on-one computer at one time. The Government may not disclose the CS to outside entities without the permission of the rights owner.

Note: Under the current DFARS, an exception to the general prohibition against disclosure of Limited Rights TD and Restricted Rights CS by the Government to outside the Government allows such TD/CS to be disclosed to “Covered Government Support Contractors” who have a non-disclosure agreement in place.

Specially Negotiated License Rights (SNLR) – These rights are negotiated when the above-described rights are not suitable for the Government’s needs or the contractor desires to avoid the overly broad grant of rights that sometimes occurs with these default categories of rights. The SNLR usually falls somewhere between Limited Rights and GPR, and between Restricted Rights and GPR for TD and CS, respectively. The current trend in the Department of Defense (DoD) is to encourage the use of SNLR as much as possible.  

Small Business Innovation Research (SBIR) Rights – For TD and CS, SBIR data rights are the same as Limited Rights and Restricted Rights, respectively, during the data protection period; upon expiration of the protection period, these rights become GPR for the Government.

For TD pertaining to commercial ICPs that are presumed to have been developed exclusively at private expense, the rights the Government is entitled to under DFARS are similar to Limited Rights in non-commercial TD with certain exceptions. The exceptions include unrestricted rights to use, modify, reproduce, etc. form, fit and function data and data necessary for operation, maintenance, installation, or training (other than detailed manufacturing or process data). If the Government requires additional rights, then it must negotiate for those and enter into a license agreement with the rights owner, the contractor.

For commercial CS, there is no DFARS provision that sets forth what the Government’s automatic rights are under a DoD contract. The Government is treated just like any other customer and is subject to the vendor’s commercial license unless it negotiates special license terms.

For questions on your technical data and computer software rights, contact one of our specialists at Whitcomb Selinsky, PC. Our IP and Government Contracting attorneys will negotiate your TD and CS rights within your government contract.

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