Acceptance of federal funds, whether through a grant, cooperative agreement, or a contract, or as a subrecipient under any of these, may require a university to protect or to disseminate, or to provide the federal government with certain rights to the sponsored project’s technical data and computer software. Federally financed research and development expenditures for science and engineering at colleges and universities exceeded $12.6 billion dollars for fiscal year 1994. For each of these dollars accepted, colleges and universities are responsible to the federal government for data used for, required for, or generated by the institution in the performance of the federally sponsored project.

Many university administrators and technology transfer officers are familiar with the federal rules relating to patents. However, federal rules regarding rights in technical data and computer software are less well understood; they are complex, are not consistent among the agencies, and generally require an institution to take specific steps to retain the maximum rights to a sponsored project’s data and software. Increased university-industry collaboration, future use of the data used or created, and the transfer of software and copyrightable material to licensees for commercialization, require faculty and their staff to correctly assert rights to the data and computer software used or created under a federal grant or contract.

This guide is designed to provide university sponsored research administrators and technology transfer officers with information regarding the protection, management, dissemination, and transfer of technical data and computer software, created or used in the performance of federally sponsored programs. The first part of the guide provides an introduction to the definition of data, technical data, and computer software. Next follows a brief overview over the basics of copyright, because copyright and license rights are important to the government, to the public’s right to use federally funded research, and to universities. The main portion of the guide contains a discussion of university and government data and computer software rights under contracts and under grants and a discussion of the requirements for the protection and management of data.

A shorter, more general paper, has been prepared for the use of faculty, department chairs, deans and other senior university administrators. This companion piece omits the technical detail of the subject matter, and focuses instead on policy implications.

The Federal Acquisition Regulations (FAR) (48 CFR Federal Acquisition Regulation System) are the primary contracting body of regulations for all federal procurement. Part 27, Patents, Data & Copyrights prescribes policies, procedures, and directions for use of various contract clauses pertaining to patents and directs agencies to develop coverage for rights in data and copyrights. Part 52, Solicitation Provisions and Contract Clauses, contains the basic clauses described in Part 27. Under the authority of Part 27 some agencies have modified the clauses in Part 52 for use in their own contracts. These modified clauses appear in agency specific parts of the FAR.

The general definition of "data" is found in FAR 52.227-14(a) (June 1987) as "recorded information, regardless of form or the media on which it may be recorded." This definition of data includes computer software and technical data. The terms "software" and " technical data" are broadly defined and are subsets of the term "data". Instructions to contracting officers regarding the use of Alternate sections contained in Section 52.227-14 are found in Section 27.409.

Provisions regarding rights in data in grants are governed by the individual policies of the granting agencies. For instance, the National Institutes of Health and the National Science Foundation, refer to "data" in terms of the dissemination of the results and accomplishments of the activities of the funded project, but provide no definition. NASA defines "data" as "recorded information, regardless of form, the media on which it may be recorded, or the method of recording, created under the grant. The term includes, but is not limited, to data of a scientific or technical nature, and any copyrightable work in which the recipient asserts copyright, or for which ownership was purchased, under the grant."

In addition to differences in definitions, there are dissimilarities in how various federal agencies treat and manage data rights. Because of these differences, it is imperative that research administrators and technology transfer practitioners be familiar with the application of a federal agency’s rights in data, technical data, computer software, and copyrights created under an award. These rights should be discussed with principal investigators before a response to a federal procurement solicitation or an unsolicited proposal is sent to a federal agency because it is important to identify and protect the rights of the institution and the faculty at the earliest stage.

Data, irrespective of any federal agency’s definition, are generally protectable through the Copyright Act of 1976 and its amendments. Basic knowledge of copyright law will assist the practitioner in understanding the mutual rights and obligations of the government and the university regarding data and computer software created under or used in a federally sponsored program. The Library of Congress document "Copyright Basics" is a very useful primer to the various issues involved in copyrighting works.

It is extremely important that copyright law and the rights granted to the federal government under a grant or contract be read jointly with the university’s copyright policy. Many university policies allow faculty to retain ownership of the copyrightable data and technical material they create. However, federal contracts and grants require the university, as funding recipient, to transfer to the government rights in, or in certain circumstances ownership of, copyrightable data created or used under the award. To cover such situations, university policies should provide that the retention of copyright by an investigator/author is subject to the terms of the applicable sponsorship agreement accepted in the university's name on behalf of the investigator. This will enable the institution to grant rights to the sponsor under the provisions of the award document.

Eight categories of works of authorship can be copyrighted. These are:

(1) literary works;

(2) musical works, including any accompanying words;

(3) dramatic works, including any accompanying music;

(4) pantomimes and choreographic works;

(5) pictorial, graphic, and sculptural works;

(6) motion pictures and other audiovisual works;

(7) sound recordings; and

(8) architectural works.

In dealing with rights in data issues, a university will be concerned primarily with literary works. Literary works, as defined in the Copyright statute, are works that are expressed in "words, numbers, or other verbal or numerical symbols [including computer software]. . .." Copyright protection automatically attaches to a work when it becomes fixed in a tangible (i.e., machine readable or written) form. Copyright protection does not extend to any of the "idea[s], procedure[s], process[s], system[s], method[s] of operation, concept[s], principle[s], or discovery[ies]" that may be contained in the copyrighted work. Patent law, not copyright law, may offer protection for these intangibles.

Copyright protection provides the owner of the work with a certain bundle of rights. Each of the rights in the bundle can be transferred or licensed to a third party. The decision of how and when to use each one of these rights rests solely with the owner of the copyright. Copyright ownership is a complex area of law and is affected by the employment status of the creator and the nature of the work as well as contractual relationships providing for the development or use of the work. Registration of a copyright is not necessary to claim a copyright but is required before an infringement action can be brought in the United States. (17 USC 411)

The bundle of exclusive rights that the copyright statute protects are:

(1) the right to reproduce the copyrighted work;

(2) the right to prepare derivative works of the copyrighted work;

(4) the right to perform the copyrighted work publicly; and

(5) the right to publicly display the copyrighted work.

There are certain statutory exceptions to the copyright owner’s bundle of rights. One of the most significant exceptions for universities is "fair use". Fair use permits use of another's work where the purpose and amount of use pose little likelihood of injury and are justified on policy grounds. (Intellectual Property: The Practical and Legal Fundamentals, Thomas G. Field, Jr., C 1995-96 Franklin Pierce Law Center, www.fplc.edu/tfield/plfip/plfip3.htm#III.B.) Generally, fair use allows others to make limited copies of the copyrighted work for specifically enumerated purposes that are based on four statutory criteria.

There is a common misunderstanding between providing free rights to the government or others and placing a copyrightable work in the public domain. It is possible to allow royalty-free non-exclusive access to copyrighted works without loosing copyright protection through placement in the public domain. Copyrighted works enter the pubic domain after expiration of the time period for copyright protection found in the statute, by judicial action recognizing failure to exercise rights to protect a copyrighted work, or by deliberate action taken by the copyright owner to dedicate the work to the public. Placing data and computer software in the public domain means that no intellectual property rights, including copyright, are asserted by any party having a right to do so and there are no restrictions on how the data or software are used. However, granting data rights to the government is not equivalent to placing the data or computer software in the public domain.

Universities will occasionally be asked to treat the results of their research as "work for hire". This is a legal term which results in the passing of title from the author of the work to another person. Works for hire are defined by statute (17 USC sec. 101) as either a work prepared by an employee within the scope of his or her employment or a certain kind of work specially commissioned or ordered. There are four kinds of these commissioned works: a contribution to a collective work, a part of a motion picture of other audiovisual work, a translation, or a supplementary work. These terms are further defined by statute and their application is the subject of numerous texts on copyright law. In most cases the results of research projects performed by a university will not fall within these commissioned works definitions and therefore will not be assignable to a sponsor as work for hire.

If an institutional or individual copyright owner exclusively licenses or assigns their copyrights to another person, he or she should take care to retain the right to use any rights they will still need. Failure to retain rights after an assignment or exclusive license may result in loss of these rights by the original copyright owner.

Federal Acquisition Regulations (FAR) provide the bedrock procurement practices for all executive agencies; they are augmented by FAR Supplementary language according to individual agency mission. Within the FAR, Rights in Data and Copyrights are addressed in Subpart 27.4. There are some basic differences between the civilian and the defense agencies regarding implementation of provisions for Rights in Technical Data and Copyrights. Since 1987, the agencies have tried but been unable to devise a uniform approach. FAR 27.402, the policy statement, is the only section applicable uniformly to all executive agencies. Other provisions in Part 27 provide a default when agencies have not adopted separate regulations and describe a basic scheme for use by contracting officers in deciding which clause or parts of clauses to apply in particular situations. Section 27.409, Solicitation Provisions and Contract Clauses, provides a summary of situations when the contracting officer is required to include the Alternate provisions of Section 52.227-14 as well as Sections 52.227-15 through 52.227-23 in a contract.

The civilian agencies follow the FAR, Part 52, when contracting. Part 52 describes data according to four categories reflecting the nature of data and restrictions that apply to them. The defense agencies have modified categories of data which are found in the Defense Federal Acquisition Regulations ("DFARS"). This guide describes first the civilian agency clauses; followed by NASA and DOE practice; and finally defense agency clauses.

As consideration for funding research, the government obtains certain rights in the copyright owner’s bundle of rights under all of the acquisition regulations. The government's rights may vary, depending either on the statement of work or the source of funds used to develop the data. Usually the government receives a royalty-free, non-exclusive, irrevocable worldwide license to reproduce, prepare derivative works, distribute copies to the public, and perform and display publicly the copyrighted data. This unlimited license enables the government to act on its own behalf and to authorize others to do the same things that it can do, thus giving the government essentially the same rights as the copyright owner.

1. Rights in Data - General

FAR Section 52.227-14 is the general rights in data clause. It contains an extensive description of the topic, made up of nine sections comprising: Definitions; Allocation of Rights; Copyrights; Unauthorized Marking of Data; Omitted or Incorrect Markings; Protection of Limited Rights Data and Restricted Computer Software; Subcontracting, and Relationship to Patents. In addition, four Alternates follow the clause describing substitutions to the general clause. Contracts may cite 52.227-14 with any appropriate alternates. Since most contracts and subcontracts provide the citations of the applicable clauses without the actual text it is important for contract language reviewers to have access to a source of the actual language so that they can carefully check the citation of this clause and any designated Alternate against their needs and expectations. The internet provides a number of free public sources and private sources requiring a subscription (e.g., Counterpoint, http://www.counterpoint.com). At present the Government Printing Office does not have any CFRs online but expects to add them incrementally at http://www.access.gpo.gov/su_docs/aces/aaces002.html during calendar year 1996. Contract reviewers should be careful to match the dated version of the clause they are reviewing in the agreement to the one they find on the internet since not all internet sources provide the most current version of the clauses. It should be noted that the present formatting of FAR clauses on the internet makes it difficult to distinguish the various section and subsection tiers. Confused reviewers may find it helpful to refer to a version of the FAR that is formatted in standard legislative style, or use the standard Government Printing Office copy.

The FAR at 52.227-14(a) identifies four categories of data. These are: (1) data first produced or delivered under the contract without limitation on government rights; (2) data not first produced under the contract but delivered to the federal government as a requirement of the contract; (3) limited rights data; and (4) restricted rights data and computer software. Section 52.227-14(a) defines "data" as "recorded information, regardless of form or the media on which it may be recorded." The term "data" includes technical data and computer software. Technical data are defined as "data which are of a scientific or technical nature."

According to Section 52.227-14(b), the government receives unlimited rights to: (1) data first produced in the performance of the contract; (2) form, fit and function data delivered under the contract; (3) manuals or instructional and training material for installation, operation or routine maintenance, etc.; and (4) all other data delivered under the contract and not marked with a limited rights or a restricted rights legend. Unlimited rights in data allow the government to "use, disclose, reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly in any manner and for any purpose, and to have or permit others to do so." At the same time, the contractor retains the rights to: (1) use; (2) publish; (3) protect; (4) correct; (5) and claim copyright to some kinds of data first produced in the performance of a contract. Unlimited rights are not exclusive rights and therefore the contractor can license any or all of their rights to third parties as well. Pertinent regulations are discussed below.

Two FAR clauses are important for universities who wish to assert copyright to data first produced, used or delivered under a contract. First, the general FAR clause (FAR 52.227-14(c)) states that the contractor may establish, without prior approval from the federal government, copyright in scientific and technical articles if they contain "data first produced in the performance of the contract and [are] published in academic, technical or professional journals, symposia proceedings or similar works" but require prior express written approval of the contracting officer to establish copyright in all other data. "First produced" means not previously existing in any form, i.e. written text or machine readable software.

Second, using Alternate IV together with the general FAR data clause provides universities and colleges with the right to claim copyright without limitation in any data (including technical data and computer software) first produced in the performance of the contract. When asserting copyright under Alternate IV, universities must acknowledge the government’s sponsorship (including the contract number) on any data for which the university is claiming copyright. Alternate IV also allows the contracting officer to include in the contract specific exceptions to this permission which are not otherwise already contained in the clause.

University administrators should be aware that the basic FAR rights in data clause with Alternate IV is required by Section 27.404(f)(iii) to be used in contracts for basic or applied research to be performed solely by universities and colleges but cannot be used if the purpose of the contract is development of computer software for distribution to the public. When an industrial prime contractor is subcontracting to a university or a university prime contractor is subcontracting to a commercial organization, contracting officer permission is required before the university or corporate subcontractor can utilize Alternate IV since the work will then not be solely performed by the university or college.

Establishing a claim of copyright ownership in data first produced and delivered to the government, still obligates the contractor to provide the federal government with a paid-up, non-exclusive, irrevocable worldwide license to reproduce, prepare derivative works, distribute copies to the public and perform publicly and display publicly, by or on behalf of the government. If a copyright claim to software first produced and delivered to the government is established, the government does not have the right to distribute copies of the software to the public. Hence, using the proper clauses to establish copyright ownership, especially to computer software, should be a priority for any university planning to commercially license its federally funded research results.

No restrictions may be placed on the reporting or results of unclassified research in contracts for basic or applied research with colleges or universities except as otherwise provided in U.S. statutes. [Section 27.404(g)(2)] Such restrictions, however, may be placed on the contractor's' rights to use, distribute, and publish data first produced in performance of the contract in other types of contacts and in contracts with contractors which are not colleges or universities. Universities should be careful to review the full text Section 52.227-14(d)(3). This clause may contain publication restrictions. It is not part of the basic Section 52.227-14 and is not included for reference as an Alternate. This subsection would be drafted for the particular contract by the contracting officer.

The inability to place an explicit provision in the contract restricting publication may not be sufficient to enable publication if the contractor is not able to establish copyright in the data intended for publication. If the university anticipates publication of data which does not consist of scientific and technical articles based on data first produced in performance of the contract or is not intended for publication in sources such as

academic, professional or technical journals, a university should require inclusion of Alternate IV or seek permission to establish copyright at the earliest opportunity.

The second major category of FAR data includes items not first produced under the contract but used in the performance of the contract. Such data could have been created outside of federal sponsorship, (e.g., under an industrial contract), may have been given to the principal investigator by a third party, or may have been created by a project participant who is not an employee of the institutional contractor (e.g., a student as part of his/her course work.) These data may also require attention regarding copyright protection.

When data delivered to the government are not first produced in the performance of the contract, the contractor may not be required to provide the government with the unlimited rights described in FAR 52.227-14(b)(1). The government must either agree in writing to accept less than unlimited rights to these data, or the contractor must not deliver them. When the contractor does not own data not first produced under the contract, the contractor cannot deliver such data to the government unless the contractor obtains from the owner either unlimited license rights for the government or such narrower rights as the government may be willing to accept. This is a critical point for institutions who are using third party data (including software) as a basis or platform for the research they are conducting under the government contract. Unless the contractor owns the data or software and is willing to deliver them with unlimited rights, or develops the data or software in performance of the contract, the contractor and the government must agree in writing on the specific rights the government will receive in the delivered software. This must be done either upon initial signing or by amendment to the contract prior to delivery of the software or data to the government.

Limited rights data means data, that either embody trade secrets or are commercial or financial in nature and are confidential or privileged, to the extent such data pertain to items, components or processes which were developed at private expense. Limited rights data do not include computer software. Under Subsection g(1), limited rights data should not be provided to the government unless Alternate II is cited. If Alternate II is not cited and the contractor wishes to withhold data that would qualify as limited rights data, the contractor must describe the withheld data and deliver form, fit and function data (see definition above) in lieu of the limited rights data. There is a confusing loop created by the interaction of subsections g(1) and b(1) but the principle seems to be if the data qualify as either limited rights data or restricted rights data (see discussion below) the contractor should do something to identify and protect them before delivering them to the government. Failure to identify and protect limited rights data or restricted rights data may result in the government acquiring unlimited rights in such data.

Limited rights under Alternate II allows the government to reproduce and use the data within the government, but not the right to manufacture or disclose the data outside the government, except for the specific purpose stated in FAR 27.404(d)(1) or as may otherwise be agreed upon in the contract. However, Alternative I of the FAR clause provides a different set of criteria for the definition of limited rights data, which may enable the contractor to withhold some of those data, otherwise to be delivered to the government. This Alternate I definition does not require that the data relate to items, processes or components developed at private expense only that the data themselves have been developed at private expense.

At first glance, it may appear that universities will rarely be in a position of using or delivering limited rights data to the government, because of their preference for open and unrestricted publication of research results. However, such situations occur when the university is collaborating with, or has an industrial subcontractor who is required, by the terms of the contract, to provide the government with such limited rights data. Use of confidential data developed at private expense and a contract requirement for its delivery to the federal government will require the data to be protected under the limited rights data clauses of the FAR. University research administrators must remember this requirement in reviewing proposals and negotiating contracts.

Restricted computer software is similar to limited rights data except that it pertains only to software. The software must have been developed at private expense and must be a trade secret, commercial or financial and confidential or privileged. Published computer software is also restricted computer software. Software delivered to the government with a copyright notice will be presumed to be published under Alternate III (g)(3)(iii). Computer data bases are treated as limited rights data rather than restricted computer software.

Prior to delivery of any restricted rights software, the contractor should clearly establish the government’s restricted rights as set forth in the applicable FAR clause or in negotiation with the contracting officer. Proper use of the restricted rights clause becomes very important, if the statement of work requires the delivery of the industrial partner's copyrighted software, or if the university itself is required to deliver copyrighted software it has developed without government funding.

There are several less frequently used FAR clauses that deal with technical data. Four of these clauses may be of particular relevance to university contractors or subcontractors.

Alternates II and III of FAR 52.227-14 enable the government to require delivery of a contractor’s limited rights data rather than allowing the contractor to withhold such data which is permissible under FAR 52.227-14. Alternate II of FAR 52.227-14 applies to data and Alternate III applies to software. The government may justify disclosure of limited rights data outside the government, despite the limitation on government rights, by stating the purposes for such disclosure in Alternate II(g)(2)(a). Examples of such purposes as listed in Section 27.404(d)(1) include: use (other than manufacture) by support service contractors; evaluation by non-governmental evaluators; use (except for manufacture) by other contractors participating in the government’s program of which the specific contract is a part; emergency repair; or release to a foreign government.

Minor modification to limited rights data or restricted computer software will not necessarily subject these modifications to unlimited rights to the government even if they are first developed in performance of a government contract. Minor modifications are included in the definition of limited rights data and restricted computer software and therefore are subject only to the corresponding limited or restricted rights.

Since the basic Section 52.227-14(g)(i) allows the contractor to withhold delivery of limited rights data and restricted computer software, the contracting officer must initiate negotiation to include the appropriate Alternate or modified contract provision to require the contractor to deliver such data or software and to provide necessary rights to the government. Both Alternates II and II specify the minimum rights the government will normally obtain. Greater or lesser rights may be specified by the contracting officer or by agency regulations. Exclusion of Alternate or modified clauses at the initial signing of the contract does not preclude the contracting officer from adding them subsequently during performance by modification should it become necessary to require the delivery of limited rights data or restricted computer software .

On occasion, DOE uses FAR 52.227-14 with Alternates II and III in its research contracts with universities, although DOE has developed its own DEAR clauses for rights in technical data and computer software (see below). When using FAR 52.227-14 Alternate II and III, DOE usually does not include Alternate IV which provides copyright ownership to universities. Universities should be alert to this and are encouraged to negotiate with DOE for inclusion of Alternate IV.

If a university is using proprietary or third-party owned data or computer software, it should ascertain that delivery of such data and computer software has been approved by the owners because DOE with the inclusion of Alternates II and III, will require delivery of such data and computer software.

Inclusion of Section 52.227-15 in a government solicitation may be an indication that the government anticipates the need for delivery of limited rights data or restricted computer software. The clause requests the offeror to identify such data or software in response to the solicitation. Failure to take advantage of this opportunity to protect such data or software at this stage may make it difficult to secure protections during negotiation or performance of the contract.

The Special Works clause at FAR 52.227-17 is required to be inserted in solicitations and contracts primarily intended for the production or compilation of data (other than limited rights data or restricted computer software) for the government's internal use, or when there is a need to limit distribution or obtain indemnification for liabilities arising from the use, performance or disclosure of the data. [Section 27.405] The clause may be used in contracts such as those requiring the production of audiovisual works, development of histories of agencies, and surveys of government establishments. Section 27.405 includes a detailed discussion of the use of the clause in the acquisition of existing audiovisual and similar works, existing computer software, and other existing works.

The government acquires unlimited rights under the Special Works clause to data (including technical data and computer software) which are first produced under the contract but delivered to the government with its prior written permission. Release, distribution and publication of the delivered data is restricted. Contractors may not establish copyright to such data without government permission and must indemnify the government for liability which arises out of its use of the data. These provisions make the clause unacceptable for use in most university contracts.

Despite the detailed instructions to contracting officers as to appropriate uses of this clause, NASA has begun using it in certain industrial contracts where the release of data is viewed by NASA as potentially competitive or economically sensitive. University administrators should be very cautious regarding acceptance of this provision, and try to negotiate a waiver from NASA. If a university is a subcontractor under such a program, it may find that it is required to accept the Special Works clause if it wishes to participate.

Since universities often participate as subcontractors to small businesses in the phases I and II of SBIR programs, faculty and administrators should be familiar with the special section of the FAR that pertains to rights in data under the SBIR programs. FAR 52.227-20 is limited to use in SBIR contracts and is the only data rights clause that can be used in such contracts [Section 27.405 (c)]

The clause specifically permits the SBIR company to assert copyright ownership of data created under the project and to submit data to the government with a marking designating it as SBIR data unless there is specific contact language identifying data which are to be delivered to the government without restriction. If such a special provision appears, it is generally not an outright prohibition against asserting copyright. Rather it appears as a requirement to get permission from the contracting officer to claim copyright. The government’s rights in copyrighted data and computer software developed in performance of an SBIR program are identical to government rights in copyrighted data and computer programs under non-SBIR programs.

The delivery of data with the SBIR Rights Notice limits the government’s use and disclosure rights in such data. The government’s license is limited to a right to use the data for government purposes, but prohibits disclosure outside of the government, except for disclosure for use by support contractors, for a period of four years after government acceptance of all deliverables under the contract. After the four year period, the government is relieved of the non-disclosure requirements, but the data remain subject to the government’s more limited right to use them and authorize others to use them only for government purposes.

The subcontracting provision in 52.227-20 is the same as the one in 52.227-14 and requires the contractor to secure rights from their subcontractors as necessary to provide any required rights to the government.

On April 3, l998, revised regulations on rights in technical data became effective for all Department of Energy (DOE) awards. (63 FR 10499, March 4, l998). The new rules which apply to university procurement are described below. DOE has traditionally taken the position that its rights to intellectual property and to the dissemination of software are greater than those of other federal agencies, because of DOE’s mission under the Atomic Energy Act and later legislation. This broad claim continues to be the basis for the latest revision and also explains why DOE extended its procurement provisions to cover all of its assistance awards.

This analysis is based on the published DOE regulations, referenced above, and on a subsequent letter of clarification issued by DOE upon request by COGR. DOE’s new assistance rules on rights in technical data are analyzed in a separate document.

DOE has replaced its long and short form rights in data clauses with mandatory use of FAR 52.227-14. DOE has modified the FAR clause, by amending the definitions section in (a), and inserting a new subsection (d)(3) mandating DOE Legal Counsel’s prior written permission for contractor claims to establish copyright protection. The revision authorizes the use of Alternate IV, rather than enforcement of subsection (d)(3), in contracts for basic or applied research with educational institutions, except where software is specified for delivery or in other "special circumstances".

The new DOE solicitation provisions and contract clauses must be used in conjunction with Alt. V, which authorizes federal inspection of grantee data, to assure that the Government obtains its proper rights. Two clauses, optional in other FAR contracts, are now required in all DOE awards. They are FAR Rights to Proposal Data, (Technical) (52.227-23) and FAR Additional Data Requirements (FAR 52.227-16). All the above described solicitation provisions and contract clauses are stated at 927.409, which is a new section.

Another new section at 927.404 reflects DOE’s intent to apply the new provisions down to the subcontracting tier. The general policy section at 927.402 –1(b) is amended, to inform contractors of the distinction between DOE’s legal rights in technical data, and the delivery of those data to the agency, upon which DOE will insist.

A more detailed analysis of the procurement changes is provided in the following pages.

a) Definitions:

Several definitions unique to DOE expand its rights in data produced under DOE awards. At 927.409(a)(1)(a) DOE has added the term "Computer Data Bases" and defines it as "a collection of data in a form capable of…being operated on (or) by a computer". DOE has also enhanced the definition of "Computer Software". New definitions of "Limited Rights Data" and "Restricted Computer Software" have been borrowed from DOD regulations. These terms define the rights DOE claims in data or software developed at private expense, that embody trade secrets and are commercial or financial, or confidential and privileged. DOE’s definition of "Unlimited Rights" has been expanded. It formerly included the following activities: the right to use, disclose, reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly in any manner. Now, DOE has gained additional unlimited rights to distribute, display and perform by electronic means.

b) Securing copyright:

With a new subparagraph (d)(3), DOE amends the FAR to require the contractor to agree not to assert copyright in computer software first produced in the performance of the contract without the prior written permission of the DOE Patent Counsel (not the DOE’s contracting officer). If such permission is granted, the Patent Counsel will specify appropriate terms for the contractor’s utilization dissemination and commercialization of the data. The contractor is then required to deliver to the DOE Patent Counsel a fully executed document, which fully confirms all rights to which the government is entitled.

Use of (d)(3) is mutually exclusive with the use of Alt. IV, which is preferred by educational institutions. Alt. IV grants to the government the same license rights as the standard FAR clause. However, with respect to copyright provisions, Alt. IV differs from FAR 52.227-14(c) by not requiring the contractor to obtain written permission before establishing claims to copyright in data first produced under the contract. It is therefore and important option for university contractors.

The new regulation "authorizes" DOE contracting officers to use Alt. IV at their discretion. In its letter to COGR, DOE is more definitive. The letter states:

By conceding a class deviation, DOE has made an important concession to university contractors that perform R and D. research. The test for success however depends on how broadly or conservatively DOE contracting officers interpret their authorization.

There are other "special circumstances", under which DOE reserves the right not to use Alt. IV. In the final rule, DOE does not define this exception with a quantifiable standard or even with illustrations. DOE is no clearer in its explanatory letter to COGR:

c) Other required clauses

DOE has indicated that it will routinely use its new Data Rights clause in conjunction with Alt. V. This clause gives DOE the right to inspect contractors’ records for a period of up to three years after the end of the project. DOE will ascertain primarily the contractor’s assertion of limited or restricted rights to the Government.

The required Rights in Proposal Data (Technical) provision ( 52.227-23) provides DOE unlimited rights in and to all technical data contained in the proposal on which the award is based. It will be important for universities to be aware of this at the proposal stage. The applicant may identify specific pages or paragraphs of data it wished to exclude. However, DOE would have to agree to such exclusions prior to making the award.

Additional Data Requirements (52.227-16) will now also be required in all solicitations and contracts involving experimental, developmental, research or demonstration contracts. This applies unless all data requirements are believed to be known at the time of contracting. FAR excepts contracts at $ 500,000 or less performed solely by a university or college. However, DOE reserves the right to add the clause in other contracts which it considers appropriate. This clause gives DOE a period of three years after the close of the contract, to require the contractor to deliver to DOE any data first produced or specifically used under the contracts.

DOE stated that it introduced the revision of its data rights clauses as an effort to streamline its procedures to be consistent with those of other federal agencies and the existing FAR clauses. DOE did indeed relinquish the long and short form data rights clauses, and has returned to the standard FAR clause. However, due to DOE’s insistence on greater rights under the Atomic Energy Act and later legislation, its contractors face more restrictive provisions than under other agency contracts. DOE’s repeated reference to FAR 52.227-14 masks the fact that DOE’s clause is quite different in substantial aspects.

It is important to university contractors to secure copyright. If approval to establish copyright is not granted, the work is in fact dedicated to the public by being placed into the public domain. Since DOE’s authorization to use Alt. IV remains subject to somewhat unpredictable factors, university negotiators will have to be vigilant to assure that Alt. IV will be used whenever possible. A strong argument could be made that only those contracts should be governed by (d)(3) where development and delivery of software is the central purpose of the award, comparable to work for hire contracts. All other awards, where software is merely an incidental product, should be governed by Alt. IV. COGR is waiting for DOE to endorse this interpretation.

Unless they are able to secure copyright, universities may encounter problems. There are many cases where universities deliver to DOE a derivative of software to which the school itself, or others have claimed copyright. Or the university may deliver to DOE software that has multiple purposes or uses, which require that it be protected and not deposited entirely into the public domain. In those cases the university is now under the obligation to identify the software to DOE at the contracting stage and to provide the government either with limited or restricted rights. It is also not unusual for universities to share software and to provide each other the right to use the software in government contracts. When working with DOE, the university contractor may find that the rights it has obtained from third parties are not sufficient to meet the broad rights upon which DOE will insist. DOE now enforces liability provisions, requiring the contractor to agree it will not knowingly include any material copyrighted by others in any material furnished or delivered under the contract without appropriate licenses or consent.

It is in this context also that the revised definitions and the additional mandatory DOE clauses for Rights in Proposal Data and Additional Data Rights become significant. They broaden the scope of DOE claims significantly. At the same time, DOE strengthens its options to review and possibly challenge the contractor’s claims about its rights with the inspection clause Alt. V.

After years of negotiations with its prime contractors, the Department of Defense (DOD) recently modified its rights in technical data and computer software regulations. These regulations went into effect on June 28, 1995 and represent a major change for DOD. Differences between regulations for computer software and other types of technical data are recognized by creation of two separate sections in the procurement supplement, i.e., DFARS 252.227-7014 and DFARS 252.227-7013. The DFARS makes no distinction between a commercial organization and a nonprofit educational institution: all DOD contractors acquire the same data rights and responsibilities. Unlike the FAR, which determines the rights and responsibilities in contract data by the statement of work and contract deliverables, the DOD regulations now allocate the rights and responsibilities for use and protection of the data by recognizing the source of funds for data development. In addition, the DFARS now provides that the standard license rights granted to the government may be modified through negotiations with DOD. In such negotiations, however, the government cannot receive lesser rights than it would under Limited Rights which is discussed below. Finally, unlike the FAR, the DFARS now specify that there is no implied license to the government under any patent.

Research administrators must be familiar with DFARS regulations for reason of compliance. In addition, the recent changes open new opportunities for university faculty. For example, the expanded definition of computer software affords comparable rights to object code and source code. As a result, more software will qualify as commercial computer software and fewer restrictive clauses will apply. Secondly, the criterion of whether data are required in the performance of a government contract is no longer a test for determining whether an item was developed exclusively with government funds. Another beneficial change is the new concept of Government Purpose Rights which are more narrowly defined than unlimited rights. Previously, the Government Purpose License rights had to be negotiated; now, they only need to be marked in the proposal.

DOD procurement regulations, unlike the FAR data rights clauses, do not use the word "data." The DOD regulations use the term "technical data", which is defined as follows: "Technical data means recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information."

The allocation of rights follows the "source of funds" test. The separate categories are described below. Any rights that have not been given specifically to DOD in accordance with the regulations are retained by the contractor. Like the FAR, the DFARS also states that the contractor cannot, without written approval, incorporate any third party-owned material among the data to be delivered to the government unless the government receives a license to use the technical data.

Technical data developed exclusively with government funds means that, in connection with an item, component, or process, the cost of development was paid for in whole by the government or that the development was required for the performance of a government contract or subcontract. When data were developed exclusively with government funds, the government is entitled to unlimited rights. The contractor grants or obtains for the government a royalty-free, world-wide, non-exclusive, irrevocable license right in eight specifically defined areas. Generally, the government's license extends beyond technical data which have been or will be developed exclusively with government funds; it also covers studies, analyses, test data, or similar data produced for the contract as an element of specific performance; corrections or changes to technical data furnished to the contractor by the government; and publicly available data created by the contractor which contain no restrictions on their further use, release or disclosure.

When DOD determines that it is in the best interest of the government to relinquish its right to publish the technical data in order to permit public dissemination by the contractor, Alternate I of DFARS 252.227-7013 can be used. Under this clause the contractor can obtain from the government the exclusive right to publish and sell the technical data.

When technical data have been developed partially with costs not allocated to a government contract, the technical data are considered developed with mixed funding. Technical data developed or created in part from indirect cost pools and part from the direct costs of a government contract are also considered to be developed with mixed funding. In this type of funding, the government obtains the rights to "use, modify, reproduce, release, perform, display, or disclose technical data within the government without restriction" and outside the federal government for "Government Purpose Rights".

It is important to note that Government Purpose Rights are limited to a five year period or such longer period as negotiated between the government and the contractor. Government Purpose Rights begin at the execution of the contract or subcontract that required the development of the technical data. After the prescribed period, the government receives unlimited rights in the technical data. The government will not release the technical data during the five year time period unless the recipient is a government contractor who requires the use of the data and has executed a non-disclosure agreement with the government. In such a case, the contractor owning the technical data agrees to release the government from liability and agrees to seek relief solely from the party who has improperly used the contractor's data which were marked with restrictive legends.

Five years is not a very long time, considering it begins at the start of the contract rather than at the time the technical data are created or disclosed to the government. Although the contractor has an exclusive right to use and license others for any commercial purposes during this initial five year period, first commercialization of technical data may well occur after this period has ended. Therefore, it is important that administrators discuss this provision with faculty. They might also try to extend the Government Purpose Rights period when negotiating a prime federal contract or subcontract if they expect that a longer period may be necessary for the transfer and commercialization of the data.

According to the definition provided at 252.227-7013(a)(7), development of technical data in this category had to be accomplished entirely with private support. Costs charged to indirect cost pools are considered private support. The government is entitled to a Limited Right License when technical data developed exclusively at private expense are delivered to it. The technical data must be marked with the Limited Rights Legend (see Protection and Management of Technical Data below).

The Limited Rights License is narrower than the unlimited rights provided to the government when government support was used to create the data. Under unlimited rights, the government may use contract data in any manner and for any purpose whatsoever. The Limited Rights License to the government under DFARS 252.227-7013(a)(7) allows the government to "use, modify, reproduce, release, perform, display, or disclose these limited rights data within the government." The government cannot disclose the technical data outside the government or use the technical data for manufacture except in limited situations, for example emergency repairs.

It is sometimes required, as part of the contract deliverables, that a contractor provide the government with commercially available items, components, or processes. This section sets forth mutual rights and responsibilities, when the government requires and receives delivery of such commercially available data. Delivery of commercial data will occur, for example, when a contractor is modifying or enhancing commercial data, i.e., the specifications of a machine. It is important to note that this section does not pertain to computer software.

The term "commercially available" means that the item, component or process, has either been sold, leased, or licensed or has been offered for sale, lease, or license to the public. In such cases, the government obtains the rights to use, modify, reproduce, release, perform, display, or disclose such data only within the government. The government does not obtain the rights to manufacture additional quantities of the commercially available items, nor can the government, without the prior written permission of the contractor, disclose or permit use of the data outside the government except for emergency repairs or overhaul of the commercial items furnished under the contract.

For universities, these provisions are important when they negotiate DOD contracts or when they license to a third party data that were not previously developed with government funds but will be considered commercially available contract data. When these data have either been licensed to a third party or if an offer has been made to license the data, and the data are a deliverable under a DOD contract, both the subsequent license agreement with the third party and the DOD contract need to identify DOD's rights to the commercially available contract data.

The contractor, subcontractor or suppliers are not required to provide the government with any additional rights beyond those identified above for commercially available contract data. However, if DOD desires enhanced rights, it may request that the contractor enter promptly into negotiation with the government to determine the transfer of such additional rights. After agreement between the parties, a license agreement, enumerating the additional rights, will be made a part of the DOD research contract.

In submitting a proposal to the government, a contractor may disclose private expense data that are commercially important to it or one of its subcontractors. If this information is sensitive, steps need to be taken to limit the government’s rights to use and disclose the proposal data. Proper protection of these data is essential if the proposal data are likely to be included in a future patent application. Unless the contractor takes affirmative steps to mark its proposal data, submission of the proposal or bid offer to the government could be considered a publication under U.S. and foreign patent laws.

When a contractor submits its proposal or bid offer to DOD, the contractor agrees that the government may reproduce the proposal to the extent necessary for evaluation. However, evaluation of a proposal or offer does not include the right of the government to disclose the proposal, directly or indirectly, to any person who has not been authorized by DOD to evaluate it. After the government makes an award to the contractor, the government obtains the rights to "use, modify, reproduce, release, perform, display, or disclose information contained in the contractor’s bid or proposal within the

government" but does not, without written permission from the contractor, have the right to disclose it outside the government.

If the contractor fails to correctly mark the proposal restricted data or software or if the contractor has previously provided the government with the same data or has provided it to any other third party with no restrictions, the government receives unlimited rights in the proposal data and can disclose the data outside of the government without the contractor’s approval. The government's internal use or its external transfer of the proposal data without restrictive markings also qualify as a publication and would limit U.S. and foreign patent protection. Proper marking of proposal data is extremely important for future faculty use and transfer of the data for commercialization. Proper procedures for protection, marking, and management of data are discussed below.

252.227-7014 is a new section in the DFARS. During the revision of its regulations, DOD decided it would be helpful to have computer software provisions presented separately from those pertaining to data rights. The DFARS now defines computer software as computer programs, source code, source code listings, object code listings design details, algorithms, processes, flow charts, formulae and related material that would enable the software to be reproduced, recreated, or recompiled.

Computer software does not include computer data bases or computer software documentation. A new definition for computer software documentation has been added which covers owner’s manuals, user’s manuals, installation instructions, operating instructions and other similar items, regardless of storage medium, that explain the capabilities of the computer software or provide instructions for using the software.

It should also be noted that the software provisions have been relaxed to alleviate the concerns of commercial software developers. Previously, if any DOD funds were used in developing software, the broad government rights which automatically attach to the product made the software unsuitable for future commercialization. Under its revised policy, DOD acquires only those rights in computer software and computer software documentation necessary to satisfy its needs. Accordingly, DOD has distinguished commercially available computer software and computer software documentation from that which is not commercially available. The DFARS generally defines commercial computer software and commercial software documentation as that which has been developed at private expense, or which is regularly used for nongovernmental purposes or which has been sold, leased, or licensed to the public. Software and software documentation that was developed solely at private expense, and that is or will be used in the commercial market place is also considered commercially available. The government is expected to use and license commercially available software and documentation on the same terms and conditions as the general public.

Noncommercial software and software documentation includes virtually all of the software and documentation which university contractors deliver to DOD. The rights and obligations of the government and the contractor in noncommercial computer software and documentation are defined in exactly the same manner, with exactly the same rights and obligations, which the parties have in Rights in Technical Data-Noncommercial Items (See at DFARS 252.227-7013 above). Universities need to be mindful of DOD’s distinction between commercially and noncommercially available software and software documentation, when negotiating their contracts and identifying restricted data and software to be delivered to DOD under contracts. This distinction is especially important when universities license software and software documentation funded in part by federal support.

Most grant regulations and policies on rights in technical data are like a breath of fresh air when compared with procurement regulations. Absent, for the most part, are the detailed definitions of technical data and provisions regarding rights and deliverables. Most grant regulations require that an institution disseminate the sponsored program’s results and materials as widely as possible. This goal fits in well with the universities' primary academic purposes. Even so, research administrators need to be familiar with some of the peculiarities in federal agency definitions of data and should remember that some agencies incorporate FAR language into the grant or cooperative agreement. In essence, all federal agencies adhere to the policy stated in OMB Circular A-110 regarding intellectual property.

NSF’s policy is to encourage open scientific and engineering communication. The July 1995 Grant Policy Manual states that the Foundation allows grantees to retain principal legal rights to intellectual property [including copyright in data and software] developed under NSF grants to provide incentives for development and dissemination of inventions, software and publications that can enhance their usefulness, accessibility and upkeep. Such incentives do not, however, reduce the responsibility that investigators and organizations have as members of the scientific and engineering community to make results, data and collections available to other researchers.

The NSF grantee owns or can transfer to another party, the copyright in such items as reports, books, journal articles, software, sound recordings, video tapes and video discs. However, the grantee must provide the government with a non-exclusive, nontransferable, irrevocable, royalty-fee license to exercise or have exercised for or on behalf of the U.S. throughout the world all the exclusive rights provided by copyright. This license does not provide the government with rights to sell copies of phonorecords of the copyrighted work. NSF receives these same rights if a grantee or subgrantee acquires any ownership rights with grant or cooperative agreement support. NSF also expects faculty and universities to share data and research results promptly for no more than incremental cost.

NSF’s guidelines and regulations require that grantees secure either through written agreements or employment contracts, the ability to provide the government with the necessary government rights. Universities may need to review or revise their copyright or intellectual property policies to ensure compliance with this requirement.

PHS strongly encourages its grantees to make available to the public the results [data] and accomplishments of the activities that it funds. PHS does not define "data" by itself. However, it does define "Unique Research Resources". Categories of these resources include, ". . . synthetic compounds, organisms, cell lines, viruses, cell products, and cloned DNA, as well as DNA sequences, mapping information, crystallographic coordinates, . . . and spectroscope data." Among the examples listed are also certain types of animals such as transgenic mice, and intellectual property such as computer programs.

PHS defines data in the context of copyright protection. "For this purpose, `data' means writings, films, sound recordings, pictorial reproductions, drawings, designs, or other graphic representations, procedural manuals, forms, diagrams, work flow charts, equipment descriptions, data files, data processing or computer programs, statistical records, and other research data." Unless otherwise provided in the grant agreement, the grantee can assert its copyright protection of any publication resulting from work supported by PHS. Similar to NSF and the other granting agencies, PHS requires, that for any copyrighted publication, the government shall receive a nonexclusive, irrevocable, royalty-free license to reproduce, translate, publish, and dispose of the material and to authorize others to use the work for government purposes.

The Department of Education General Administrative Regulations (EDGAR) provide guidance for the administration of grants to universities, hospitals and other nonprofit organizations, however they do not define data or technical data. Instead the regulations state that universities are free to assert copyright ownership in material developed under the grant, unless the terms of the grant provide otherwise. The Department of Education receives a royalty-free, nonexclusive, and irrevocable right to reproduce, publish or otherwise use, and to authorize others to use the work for federal government purposes.

The above named four federal agencies all use the same copyright language in their regulations and guidelines for grants and cooperative agreements. Copyright ownership and rights to the federal government are the same as NSF and PHS. Each agency receives a royalty-free, non-exclusive and irrevocable license to reproduce, publish, and to authorize others to use, for federal government purposes the copyright in any work developed under a grant, subgrant or contract.

In July 1996, NASA revised its Grants Handbook and added important restrictions regarding technical data. Although NASA procurement is based on the civilian rather than the defense agency regulations, the NASA policy for grants appears to be modeled on the "source of funds test", typical of DFARS rules. In its new interim effective Grants Handbook, NASA has developed separate procedures for rights in data, depending on whether an award was fully funded (1260.29(a)) or whether there were cost sharing or matching efforts (1260.29(b)). NASA also imposes a five year period during which confidentiality of research results would be mandated for cooperative agreements (1260.29(c)).

The NASA policy set forth in the Handbook is interim effective as of August 22, 1996. This section of the COGR Guide will be updated, once NASA has issued final policy.

The Air Force Grant Terms and Conditions in Article 8 state that grantees retain all rights and title to data and technical data generated under the grant. In exchange for such ownership right, the grantee provides to the U.S. government a non-exclusive, non-transferable, royalty-free, fully paid-up license to use, duplicate, or disclose any data and technical data for governmental purposes. Grantees may also retain the ownership rights to any original copyrighted works created under the grant.

The rights which grantees provide to the government for copyrighted works are slightly different. The government receives a non-exclusive, non-transferable, royalty-free, fully paid-up license to reproduce, prepare derivative works, distribute copies to the public and perform publicly and display publicly, for governmental purposes, any copyrighted materials developed under the grant and to authorize others to do so. It is important to note that the grantee is responsible for placing appropriate markings on all data and technical data delivered under the grant. Otherwise, the government will determine that it has unlimited rights in all the data and technical data delivered under the grant.

Anyone dealing with a DOE grant award should not rely on OMB Circular A-110 alone. Although DOE’s original implementation of OMB Circular A-110 as published in l994, indicated no deviations in the intellectual property section at –33, DOE amended its assistance rules again in l996. Significant changes were made at that time. In the revised intellectual property section, at 10 CFR 600.136, DOE no longer cited the Bayh-Dole Act at 37 CFR Part 401, as does the Circular, but imposed instead provisions arising out of DOE’s own acquisition regulations, ibid. at 600.27, under authority of the Atomic Energy Act. As a result, DOE grant awards became governed by broader patent and data rights provisions than those used by other federal agencies and these DOE requirements were expressed and made enforceable in procurement terms.

In March l998, DOE finalized its revision of rules governing data rights. Although originally described in the proposed rule as a revision for contracts only, the final regulation was made applicable, after the fact, to assistance awards as well. The following analysis describes the general compliance obligations for universities resulting from the sum of the above-cited changes.

For grants as well as for contracts, DOE will use the FAR General Data Rights clause, at 48 CFR 52.227-14. The FAR clause has been amended in the definitions section (a) and by inserting (d)(3) of 48 CFR 927-409(a)(1). Use of Alt. V is also mandatory. In addition, solicitations must include the representation of Limited Rights Data and Restricted Computer Software provisions at 48 CFR 52.227-15.

These general instructions to DOE grantees are cited at 10 CFR 600.27(b)(2)(i)(A). However, ibid. (B) addresses the special provisions for university awardees regarding copyright. Except as otherwise specifically provided in the award, subparagraph (d)(3) of the DEARS clause requiring prior permission from DOE before awardees may secure copyright protection, will be deleted and the equivalent of FAR 52.227-14 Alt. IV will be authorized. This means that university grantees may "establish" copyright in all data first produced under the award, including computer software. To accomplish that purpose, DOE indicates it will use language cited at 10 CFR 600.27 (b)(2)(i)(B)(c), which expresses similar intent as FAR 52.227-14, rather than (c) in the FAR clause itself.

DOE states that, with respect to the universities’ right to establish copyright and the terms of the retained government copyright license, DOE’s assistance regulations are compatible with and have not exceeded OMB Circular A-110 guidance. However, with respect to other data rights, university grantees will have to accept the same expanded DOE rights as in contracts. If you wish to obtain more detail, please turn to the detailed review below.

a) Definitions:

The following definitions have been changed: computer databases; computer software; limited rights data; restricted computer software; unlimited rights. These changes are described in our analysis of the l998 DOE acquisition changes.

b) Securing copyright

The l996 revision of DOE’s financial assistance awards made all the key changes, introducing patent, data rights and copyright provisions into the management of assistance awards. By comparison, the l998 revision largely renumbers and updates the earlier instructions to grantees. The changes clarify and underscore DOE’s intent to incorporate into financial assistance awards the FAR clause without (d)(3) thus eliminating the requirement to obtain prior written approval from DOE legal counsel before being able to establish copyright. This parallels the decision by DOE to authorize use Alt. IV in contracts with institutions of higher education.

The options for institutions to establish copyright and the resulting rights of the government remain the same as in the l996 revision. DOE merely clarifies that the instructions at 600.27(b)(2)(i)(B)(c) supersede and replace those of the FAR clause (c) although the FAR clause prevails in all other respects.

How do the new DOE provisions for copyright in assistance awards compare to government-wide provisions for intellectual property under A-110? DOE claims it took great care to make sure its language, taken from procurement, would comply with A-110. In an explanatory letter to COGR, DOE states:

c) Other Required Clauses

As in contracts, the general data rights provisions for grants also require the use of Alt. V, which gives the government the authority to inspect records. Solicitations shall also include the Representations of Limited Rights Data and Restricted Computer Software at 48 CFR52.227-15.

DOE contracting officers will also incorporate Rights to Proposal Data, (Technical) (52.227-23) and Additional Data Requirements (52.227-16). For a detailed discussion of these and other provisions regarding sub-tier awards and policy regarding delivery of data, please refer to our analysis of DOE acquisition regulations.

Regarding copyright protection for data first produced under an award, DOE has stayed within the perimeters of OMB Circular A-110, taking advantage of the right to publish university generated software, which is a part of the OMB government license but is lacking in the FAR government license. Regarding data rights, DOE imposed all its procurement provisions on assistance, contrary to the Chiles Act, which draws a distinction between assistance and procurement, based on the separate purposes each serves. DOE has expanded its rights in the pre-grant area (Unlimited Rights in Proposal Data) and in the post-grant area (Additional Technical Data clause) compared with the rights retained by other agencies under the FAR, again citing its special mission under the Atomic Energy Act. In addition, contracting officers are instructed to treat data rights matters in accordance with 48 CFR 927.4 – the DOE technical data and copyright policy for procurements.

DOE does not justify its injection of acquisition terms into assistance awards beyond citing its special mission and its years of unchallenged practice of having done this de facto if not de jure. When questioned about the rules, DOE explained to COGR its position as follows:

Finally, a reminder about liability. DOE imposes liabilities on grantees as well as contractors, for knowingly including any material copyrighted by others in any written material furnished or delivered under an award, unless the appropriate licenses or approvals have been obtained.

One of the most important responsibilities of an institution with respect to data produced or delivered to the government is to appropriately protect its rights. Gone are the days when no assertive steps had to be taken by a university to retain its rights in the data or software delivered to the government. Today, federal contract and some grant regulations, especially those of DOD and DOE, rigorously require that technical data or computer software be marked with a proper notice identifying all sections where the government has limited rights. If the restricted data or computer software is not appropriately marked in accordance with the contract regulations, the government by default obtains unlimited rights. Simply stated: proprietary data that are not marked properly, are lost.

There are other traps for the unwary. If an institution marks the technical data and computer software, but the marking is done incorrectly, i.e., not in accordance with agency regulations, the government may also obtain unlimited rights. Protection and marking requirements vary among agencies and are different under contracts and grants. The following discussion provides information about some of the intricacies in marking data and software and the consequences of not doing it properly.

The FAR clauses used by the civilian agencies state precisely what a limited or restricted rights notice or legend must say when it is placed on data and software. Generally, the statement should provide notice to the government that it may reproduce the data for government purposes only but that the government may not use it for manufacturing purposes or disclose the data outside the government.

Unlike the DFARS, the FAR clauses do not state where to place the notice on the data and computer software. For instance, they are silent as to whether each page of the data should be marked as opposed to marking the first page or first screen on the software or marking just the software packaging.

If data (including software) are delivered without either the limited or restricted rights legend or copyright notice where appropriate, the FAR presumes that the institution provided the government with unlimited rights.

The government has two options if the data or software are incorrectly marked. The government has the right to ignore the markings, cancel the markings, or to return the data to the contractor as non-acceptable. Alternately, the government may allow the remarking of the data and software at the contractor’s expense. When research administrators know that a contract, regulated by FAR clauses, produces deliverable data, it is critically important for them to work with faculty and members of the research program to educate them on the appropriate way to mark their deliverables to the government. This is particularly needed if it is likely that a corporate subcontractor or corporate collaborator will be involved; if there are already existing copyrighted data or software that will be delivered; or if there is any opportunity to transfer or commercialize the data or software. Since the FAR does not provide as much guidance in marking and protecting data and software, it is recommended that universities incorporate the DFARS standards, which are discussed below, into their procedures and policies for protecting data and software.

When DOD revised its rights in technical data and computer software clauses in 1995, it also developed much clearer instructions to contractors for the marking and delivery of data and software to the government. Unfortunately, this precision is a two-edged sword. While the DOD regulations provide more information, they also make it mandatory to mark, in a very prescriptive manner, all restricted data and software delivered to DOD. The primary reason for the greater attention to marking is the new government purpose rights category for data and computer software developed with mixed funding.

In addition to correctly marking the data and software, the contractor must maintain written records sufficient to justify the validity of any restrictive markings on technical data and software delivered to DOD. While marking data may be part of the corporate environment, it is not part of the daily life of many universities and will require an education process for administrators and faculty. DFARS states that the contractor must have written procedures sufficient to assure that the restrictive markings are used only when authorized. Universities may be well advised to develop a policy or, at a minimum, a written statement explaining the requirements and processes they employ to mark and protect their technical data and software.

After developing a written policy or statement, the next step is to ensure that during the negotiation processes the university identifies, in an attachment to the contract, all technical data and computer software that will be delivered to the government with restrictive rights. If during the progress of the research, additional restrictive technical data or computer software are required to be delivered to the government, the university may negotiate with the government to modify the attachment by providing the government with a special form which identifies the additional restricted technical data and computer software.

Once an institution has determined what restrictive data it will deliver to the government, the marking process begins. DFARS 252.227-7013(f) prescribes that one of four allowed markings or legends must be used on the technical data and software. The four allowed markings each apply to one of the four categories of government rights: government purpose rights, limited rights, special license rights and copyright notice. The notice or legend must contain the identification of the government appropriate restrictive rights, contract number, contractor’s name, contractor’s address, expiration date of the restrictive rights, and the definition of the government rights and restrictions.

DFARS clarifies the appropriate information that should be contained in the legend or notice, and also clarifies how and where the legend should appear on the technical data or software. Legends or notices on the restricted technical or computer software need to be accurate, conspicuous, and legible. In addition, the legend must be placed on the transmittal document or storage container and on each page of the printed material. DOD also requires that the delivered restricted data be highlighted, underscored, or identified with marks that separate them from the technical data or software that is being delivered to the government without restrictive rights. Technical data transmitted directly from one computer or computer terminal to another must also contain a notice of restrictive use.

DOE uses modified FAR clauses for marking restricted proprietary data delivered to it by a contractor. The term "proprietary data" is used by DOE to indicate a contractor’s ownership interest in the data or software, as opposed to a confidential interest. DOE’s regulations follow almost exactly the FAR clauses and require that the restricted data be marked with the legend that notifies the government that it has no rights to commercially disclose the restricted data outside of the government.

Alternate II of the DOE regulations at 952.227-75 provides the government with the appropriate rights should it, or a third party on its behalf, require license rights to any proprietary contract data. If such rights are needed by the government, the contractor agrees to provide to the government and responsible third parties, a nonexclusive license in any contract data which are proprietary data, on terms and conditions reasonable under the circumstances. There are few circumstances under which the contractor will not have to provide the government with a non-exclusive license. The most common circumstances are: (1) the contractor can demonstrate to the satisfaction of DOE that the data are not essential to the design and fabrication of the processes developed under the contract; (2) such data have a commercially competitive alternative; (3) the contractor has already supplied the data in sufficient quantity to the government; or (4) the data can be obtained from another firm skilled in the art of manufacturing items.

Universities may not need the benefit of these rights in data clauses as independent contractors. However, when they subcontract or do collaborative work with industry, proper use of these clauses will be very important to industrial partners.

Generally, grants from NASA, NIH, NSF and EPA do not have elaborate requirements for the marking and protection of data and software created or delivered under a grant project. In fact, as stated earlier, the primary goal of the granting agencies is to disseminate the research results. However, institutions and faculty do have to take affirmative steps in identifying data and software that was created under the sponsored program and they must correctly mark restricted rights data that are delivered to the government.

NSF guidelines illustrate basic grant requirements for marking publications that are based on or developed under federal financial support. All such publications are required to include an acknowledgment of the financial assistance. The required acknowledgment states "This material is based on work supported by the National Science Foundation under Grant No.___." Disclaimers are also required on all publications that are not published as scientific articles or papers appearing in scientific, technical or professional journals. The disclaimer should read "Any opinions, findings and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect those of the National Science Foundation."

Most grant guidelines are silent on how to mark restrictive data delivered to the government. However, most grant guidelines clearly state that if unmarked data or software are delivered to the government without restrictive markings, the government obtains an unlimited license for any use in the delivered data. By using the DFARS marking requirements an institution will be assured of correctly marking and retaining their own or their subcontractor’s rights to the delivered restrictive data.