Under the Defense Federal Acquisition Regulation Supplement (DFARS), there are certain procedural steps the contractor must take, and in a timely manner, to protect its intellectual property rights in technical data (TD) and computer software (CS) when participating in Government contracts. These steps are asserting restrictions, marking the TD/CS with appropriately authorized legends, and justifying the marking. Some of these steps occur prior to delivery of the TD/CS to the Government and others occur after delivery. Asserting restrictions is discussed in length in “Contractor’s Assertions of Rights Restrictions in Government Contracts”. Marking and delivering the TD/CS with appropriately authorized legends is further discussed in “Non-Conforming Restriction Markings Can Result in Unlimited Rights for the Government Under DoD Contracts”. For more information on justifying the marking, read “Contractors Responsible for Burden of Proof on Asserted Rights Restrictions in Technical Data and Computer Software Delivered under Government Contracts”.
For now, we will discuss the requirement for the delivery of TD/CS under the Government contract because asserting, marking, and justifying requirements under the DFARS apply to TD/CS that are contractually required to be delivered to Government. TD/CS that may be voluntarily shared by the contractor (i.e., not required to be delivered as part of the contract performance) are not subject to these procedural steps or to the specific marking requirements set forth in DFARS. Such informal, voluntary TD/CS exchanges happen more frequently than people may suspect. For example, contract engineers who often work alongside Government engineers, sometimes even at neighboring desks with their Government counterparts, may provide TD/CS they find useful even though it is not required to be delivered to the Government under any contract. The engineers are more intent on what they consider to be efficient accomplishments of a project than necessarily worrying about the terms of any contract. Such TD/CS may not have any marking, resulting in the loss of the contractor’s rights to restrict the Government’s rights in them since such unmarked TD/CS provided to the Government is presumed to be unlimited rights for the Government under DFARS.
Therefore, it is important to determine whether a particular TD/CS is required to be delivered under the contract and place the appropriate restrictive marking on the TD/CS, if any, prior to delivering the TD/CS to the Government. Contractors must also train their employees to be vigilant on these matters.
Data delivery requirement is set forth by the Government as a part of the solicitation and later becomes a part of the awarded contract. Usually, Contract Data Requirements List (CDRL - DD Form 1423) is used by the DoD acquiring activity to indicate what TD and/or CS is required to be delivered to the Government as a part of the contract performance. However, sometimes the delivery requirement may be stated in the scope/statement of work. This gives notice to the contractor what TD/CS it would need to deliver if it won the contract. Then the contractor must decide which TD/CS it would need to place any restrictive markings on prior to delivery to the Government and accordingly create a list of assertions of restrictions to be submitted as a part of its offer. This list identifies the TD/CS, among the required deliverables, that would be delivered with any sort of restrictions on the Government’s rights. If the offeror/contractor makes no assertions of restrictions on a required deliverable TD/CS, then that TD/CS is to be delivered with unlimited rights for the Government. This holds true even if the failure to make assertions was inadvertent because the responsibility to make any assertions is entirely on the contractor. Sometimes, a contractor simply refuses to deliver certain required TD/CS after accepting the contract, perhaps because the contractor is worried or does not believe the Government would really protect the contractor’s intellectual property rights in accordance with the markings or because the contractor realizes that it should have, but did not, make assertions. Such refusal or inability to deliver at all would likely constitute a failure to perform the contract and may result in default termination. Depending on how the evaluation factors are set up for a particular contract action, the assertions of data/software rights restrictions may be evaluated by the Government in its selection process.
Under the DFARS, any given piece of TD/CS required to be delivered under the contract, if not unlimited rights for the Government, should be asserted as either Limited Rights (for TD), Restricted Rights (for CS), Government Purpose Rights (for TD and CS), or Specifically Negotiated License Rights (for TD and CS). TD/CS not contractually required to be delivered but provided to the Government nonetheless is not subject to DFARS and may be marked in any manner the contractor chooses. The Government may also add, after the contract award, the requirement for delivery of additional TD/CS, thus bringing them under DFARS. In any case, whether the TD/CS is required to be delivered or voluntarily provided, any TD/CS that does not bear a restrictive marking is considered unlimited rights for the Government. Fixing inadvertent omission of marking after having provided the TD/CS to the Government can be difficult as certain additional conditions must be met by the contractor.
If you intend to submit a proposal in response to an RFP or have a government contract where TD or CS is required to be delivered, contact us at Whitcomb Selinsky, PC. Our Government Contracting attorneys will review your contract or proposal to ensure your TD/CS rights are protected.