The Secret of Trade Secrets in Government Contracting

Brandon Selinsky, a renowned lawyer specializing in government contracts and intellectual property, takes the stage as the main presenter. With expertise in this rare and enigmatic field, Selinsky delves into the fascinating realm where government contracting intersects with intellectual property. His focus hones in on the intriguing world of trade secrets, exploring how they are intertwined with credits. Selinsky defines trade secrets as invaluable gems known only to a select few, possessing immense commercial value.

In his enlightening discourse, Selinsky offers clarity, distinguishing trade secrets from other forms of intellectual property that can be officially registered with the federal government. He emphasizes the crucial distinction that trade secrets must be safeguarded under lock and key, shielded from the prying eyes of the public or even within a company. Whether it's through password protection or storing them in a secure vault, these trade secrets remain hidden treasures. Selinsky reveals a captivating insight into why some companies opt to keep certain information as trade secrets rather than patenting them – the government simply doesn't have access to these enigmatic entities.

Cooperative Research and Development Agreement (CRADA)

Selinsky places great emphasis on the crucial task of identifying which information should be kept confidential and thoroughly reviewing contracts to secure the desired intellectual property rights. He advises companies to assign someone, whether in-house or external counsel, to carefully examine these contracts. Selinsky delves into the intricacies of the Cooperative Research and Development Agreement (CRADA), which serves as a collaborative research and development partnership between a government laboratory and a private entity.

He highlights a key distinction of CRADAs, which sets them apart from other government contracts - the government does not provide funding for them. Selinsky further explores the three primary reasons why a federal laboratory may enter into a CRADA with a private company: market pull, technology push, and the need for collaboration. "Market pull" refers to situations where the laboratory possesses technology capable of meeting existing market demands. Conversely, "technology push" arises when the laboratory develops innovative technology for which a readily available market does not yet exist. Selinsky also notes that a wide range of entities, including national parks, can qualify as federal laboratories.

different ways the government and private sector can initiate a CRADA

The speakers delve into the various methods by which the government and private sector can initiate a CRADA, highlighting the mutual benefits that can be derived from such collaborations. They illustrate this with a real-life example, the case of Spectrum Science vs. the US, where the Air Force sought assistance from Spectrum Science to develop a new assembly line for advanced and heavier bombs. As a result of their collaboration through a CRADA, the government received a highly valuable product. Unfortunately, the government's failure to protect the trade secrets involved led to a competitor winning a contract that should have rightfully belonged to Spectrum Science. The subsequent lawsuit resulted in Spectrum Science being awarded a $1.2 million judgement.

Additionally, the speakers explore the question of whether competition is a requirement for a CRADA, indicating that it varies depending on the federal agency involved. They proceed to outline the step-by-step process of creating a CRADA, starting with identifying the need for collaboration. They emphasize the significance of crafting a joint work statement and negotiating terms, all while highlighting the fact that CRADAs are governed by 10 USC 37 rather than the FAR. The speakers conclude by stressing the importance of negotiating intellectual property (IP) rights to ensure they are allocated appropriately.

importance of protecting trade secrets during and after the contract

The video also delves into the critical aspect of safeguarding trade secrets throughout the duration of the contract and beyond. It provides insights into the process of creating a work statement, negotiating terms, and undergoing a formal review to ensure that the intellectual property (IP) rights are properly negotiated. The post highlights the various options available for sharing or retaining these rights, while noting that the government will always hold a worldwide, non-exclusive, non-transferable, irrevocable, paid-up license for any patent that arises from the Cooperative Research and Development Agreement (CRADA).

government's "march in rights"

The speakers also touch upon the government's ability to exercise "march in rights" to reclaim ownership of an invention. They explore the potential scenario of the government supplying commodity products to support flight testing and highlight the importance of understanding the concept of "background IP" when utilizing a non-federal partner's aircraft. The speakers clarify that the government will hold rights to any fuel developed for the aircraft, but the specific extent of these rights can be subject to negotiation. They underscore the government's flexibility in licensing technology, and there is a possibility for the partnering party to receive a fair licensing fee.

government's ability to issue a license in exchange for an assignment of ownership.

The government's ability to grant licenses in exchange for ownership assignments is a key topic discussed by the speakers. They highlight that the government will retain a worldwide, non-exclusive, non-transferable, irrevocable license. The speakers also emphasize the government's "marching rights," which allow them to grant licenses to third parties. They explain that these rights can be exercised in certain circumstances, such as when the partnering party fails to manufacture the product in the United States.

Another aspect discussed is the implications of joint inventions, with the default assumption being that they are treated as if made by a government employee. The speakers mention that the partnering party may have the option to license the invention to someone else, but this is subject to negotiation. They stress the importance of carefully reading and understanding the contract and the associated intellectual property (IP) rights before signing. They also highlight that trade secrets and proprietary information are protected from disclosure for up to five years, even from requests made under the Freedom of Information Act (FOIA).

When multiple partners are involved, the speaker emphasizes the significance of negotiating favorable treatment of IP. This includes ensuring that the government has required its support contractors to waive rights to inventions. The speaker suggests seeking exclusive rights to IP to exclude other non-federal partners and emphasizes the importance of assertively asking for desired terms to increase the likelihood of obtaining them.

To prevent outside contractors from claiming rights to IP, the speaker advises obtaining waivers. They clarify that if a technology is patented, it cannot be considered a trade secret. The importance of keeping technology confidential until it is ready for launch is also discussed. The speaker recommends marking trade secrets and proprietary information to clearly indicate their protected status to the government. Finally, the speaker notes that the government is prohibited from disclosing trade secrets or information that is exempt from the FOIA.

government's right to practice a patent versus the right to disclose data

The presenter carefully distinguishes between the government's ability to utilize a patent and their right to disclose data. They mention that data rights will be explored in a future webinar, acknowledging its significance as a separate topic. The presenter emphasizes the importance of including data rights clauses in procurement contracts and ensuring that the contract accurately reflects the desired terms. They draw attention to a notable case, Spectrum Sciences, where the government faced consequences for unintentionally revealing trade secrets. The presenter offers to address any questions and provides contact information for further discussions. They express gratitude to the audience for attending and encourage them to stay tuned for upcoming webinars. The presenter also provides contact information for Colorado PTAC, including an email address and phone number.