The division of rights between the contractor and Government in commercial computer software (CS) and technical data (TD) relating to commercial ICP (items, components, and processes) are controlled by a set of rules that are different from those governing rights allocation in noncommercial CS and TD relating to noncommercial ICP. More information on this was shared in our blog “License to Use: Your Computer Software and Technical Data in Government Contracts.”
So, it is important to distinguish between what is commercial and what is not commercial. The Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS) define a “commercial” service or item as something used by non-governmental entities or the public for reasons other than governmental purposes. These services or items are also leased, licensed, or sold to the public or offered for lease, license, or sale to the public. On the other hand, a service or product developed primarily for a government program or use is defined as noncommercial, regardless of whether its development occurred with private funding, such as IR&D (independent research and development), or with government funding under a government contract.
License rights in noncommercial computer software and in TD relating to noncommercial ICP.
Note: License rights are not the same as ownership rights. Under the DFARS, the following categories of license rights describe what Government can do with the TD and CS. They say nothing about what the rights owner can do with its own TD and CS. However, all rights not licensed to the Government are retained by the contractor/the rights owner.
GPR (Government Purpose Rights) – Without restriction and within the Government, Government has the rights to modify, reproduce, use, display, etc.; and to disclose or release CS or TD to others outside the Government utilizing an NDA (non-disclosure agreement) and authorize these recipients to modify, use, etc. that specific data for U.S. Government purposes. The software or ICP (to which the TD pertains) must have been developed with mixed funding, meaning a combination of private and Government expenses.
Limited Rights –Within the Government, rights to modify, reproduce, use, etc. the TD in whole or in part. The rights owner needs to permit the disclosure of the data to entities outside the Government before Government can make such a disclosure. For these rights, the underlying item must have been developed exclusively at private expense. These rights only apply to TD relating to noncommercial ICP.
Restricted Rights –Within the Government, the Government can use Restricted Rights. However, they can only use the program with one computer at a time. The Government can make a minimum number of copies needed for backup, modification, or safekeeping purposes. The CS can be modified as long as the modified CS is only used on one computer at a time. The rights owner needs to permit the disclosure of the CS to entities outside the Government before the Government makes such a disclosure. These rights are narrow in scope and only apply to noncommercial CS.
Note: Under the current DFARS, there is an exception to the general disclosure prohibition of Limited Rights TD and Restricted Rights CS. The Government may disclose Limited Rights TD and Restricted Rights CS to outside entities who qualify as “Covered Government Support Contractors” and have a non-disclosure agreement with the Government.
SBIR (Small Business Innovation Research) Rights – During the data protection period, SBIR data rights are the same as those for Limited Rights TD and Restricted Rights CS. Once the protection period expires, these rights turn into GPR for the Government.
SNLR (Specially Negotiated License Rights) – When the default categories of rights, described above, are not suitable for the needs of the Government or the contractor wants to avoid a broad grant of rights, CS/TD rights are negotiated. Typically, SNLR falls between GPR and Limited Rights for TD and between GPR and Restricted Rights for CS. Currently, the DoD (Department of Defense) encourages the use of SNLR when possible.
Unlimited Rights – Within and outside the Government, rights to display, disclose, modify, perform, release, reproduce, or use CS/TD in part or whole for any purpose and in any manner. Additionally, to have or authorize others to do so. For these rights, the software or underlying ICP must have been developed by the contractor entirely at the expense of the Government. These license rights are not the same as the ownership rights that are retained by the contractor, but they are close. Regardless of how the development of the underlying ICP was funded, the Government gets unlimited rights to certain types of TD.
Such TD includes FFF (form, fit, and function) data; instructions for operating and/or installation; CSD (computer software documentation) such as user manuals and items explaining the abilities of the software. If the TD relates to commercial ICPs that were developed solely at private expense, the Government is entitled to rights similar to Limited Rights in noncommercial TD with exceptions. This is per the DFARS.
Exceptions include unrestricted rights of the Government to modify, reproduce, use, etc. FFF data and/or data for installation, maintenance, operation, or training (other than detailed process or manufacturing data). Additional rights, if required by the Government, need to be negotiated and put into a license agreement with the contractor who owns the rights.
For commercial CS, the DFARS does not contain a provision on what the Government’s automatic rights are in a DoD contract. Therefore, unless the Government negotiates special license terms, it is subject to the vendor’s commercial license.
If you have questions about your rights in technical data or computer software, one of our Government Contracting and IP attorneys can help. Contact our specialists at Veterans Advocacy Law Group and we will negotiate your CS and TD rights within your government contract.