Employees aside, intellectual property (IP) is arguably the most valuable asset of an organization and needs protection. Do not dismiss IP clauses in contracts or undervalue your IP. Failure to review contracts and understand the licensing requirements may lead to the transfer of title or license rights that were not intended. Transfer of title or license may allow the buyer to outright own the IP or have rights to make, have made, sell, or otherwise use your IP.
Federal regulations recognize two main types of intellectual property (technical data and software) and provide for three levels of rights or licenses as defined in 227.7103-5 Government rights:
- Limited Rights (Restricted for software)
- Unlimited Rights
- Government Purpose Rights
Assertion of rights at time of quote, bid, or proposal is key to maintaining your rights, and is accomplished by simply including a document listing the IP offered, the rights associated with each item, and the basis for the determination. IP rights or data assertion lists should be reduce to the smallest segregable unit and include hard items such as products and soft items such as software, trade secrets, patents, and manufacturing know-how.
Limited rights come with those items developed at private expense where the Government receives a limited right to use the product – there is no license to make or have made associated with limited rights. Limited rights are often associated with commercial items or items that existed before the Government contracted to purchase them.
The Government gets unlimited rights in items it pays to develop. Think specialty items, development contracts, and cost-type contracts. If the Government pays for development, it owns the rights (not title) in those items and can solicit to have other companies make the products once it has the appropriate technical data.
Government Purpose Rights
Government purpose rights come into play when there is mixed funding and/or when there multiple items in a deliverable where some portions were developed at private expense or with mixed funding, and some items were developed with government funds. These rights are vague and require detailed notes in the contract IP clauses and data rights assertion list.