Contracts & Legal

Data Rights

Data Rights (FAR Subpart 27.4) consist of the legal rights a contractor and/or the government have to use technical, Intellectual Property (IP), and software data. This data can include a proposal, source selection, software, management, concepts, and technical packages.

Definition: Data Rights refer to the Government’s nonexclusive license rights in two categories of valuable intellectual property, “technical data” and “computer software” delivered by contractors under civilian agency and DoD contracts.

Data Definitions

  • Technical Data (TD): includes any recorded information of a scientific or technical nature (e.g., product design or maintenance data, computer databases, and computer software documentation).
  • Computer Software: includes executable code, source code, code listings, design details, processes, flow charts, and related material that would enable the software to be reproduced, recreated or recompiled but excludes computer databases or software documentation.
  • Segregability: describes the separation of goods, components, or processes developed at private expense from those developed with Government backing. Any reasonable sub-item or sub-component level, or any segregable piece of a process, may be used to make the source of funds determination as directed by DFARS.

Data Rights Understanding

Typically, contractors maintain ownership of the technical data and computer software they create in accordance with a government contract. However, the government acquires data rights to this technical data and computer software, granting them a license to possess and utilize it within specified conditions and parameters.

Main Data Right Regulations

The primary Federal Acquisition Regulations (FAR) that affect data rights are outlined here. The FAR data rights provisions apply to government contracts with “civilian” agencies, while the DFARS provisions apply to government contracts with the Department of Defense (DoD).

Types of Data Rights

There are eight (8) major data right types:

  1. Unlimited
  2. Limited
  3. Copyrighted
  4. Government Purpose Rights
  5. Specifically Negotiated License Rights
  6. Small Business Innovative Research (SBIR) Data Rights
  7. Commercial Technical Data License Rights
  8. Commercial Computer Software Licenses.

1. Unlimited Rights Data

The rights of 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. The Government acquires unlimited rights in the following data except for copyrighted works:

  • Data first produced in the performance of a contract (except to the extent the data constitute minor modifications to data that are limited rights data or restricted computer software).
  • Form, fit, and function data delivered under contract.
  • Data (except as may be included with restricted computer software) that constitute manuals or instructional and training material for installation, operation, or routine maintenance and repair of items, components, or processes delivered or furnished for use under a contract.
  • All other data delivered under the contract other than limited rights data or restricted computer software

2. Limited Rights Data

This right enables a contractor to protect qualifying limited rights data and restricted computer software by withholding the data from the Government and instead delivering form, fit, and function data. If a contractor has funded the development of an item completely at private expense, then he may limit the government’s use of technical data using “limited” license rights, or restrict the government’s use using “restricted” license rights.

  • Limited Rights: means the government may use the data within the government but not release the technical data outside of the government (not even to support contractors), except if necessary for emergency repair or overhaul, and may not use the data for manufacturing additional quantities of the item.
  • Restricted Rights: means the government may only run the software on one computer at a time, may make only the minimum copies needed for backup, but may make modifications to the software. The software may not be released outside of the government except for emergency repair or overhaul

3. Copyrighted Data

Copyright data is information that is owned by a contractor or the government. A contractor must obtain permission prior to asserting rights in any copyrighted work containing data first produced in the performance of a contract. However, contractors are normally authorized, without prior approval of the contracting officer, to assert copyright in technical or scientific articles based on or containing such data that is published in academic, technical or professional journals, symposia proceedings, and similar works.

4. Government Purpose Rights

Frequently, both government and private funds are used in development efforts. In these cases, the contractor may be entitled to offer technical data or computer software with Government Purpose Rights (GPR). GPR is essentially a middle path unique to defense contracts that offers a way for contractors to exploit intellectual property commercially for a limited period of time while the government also gets immediate benefits.

5. Specifically Negotiated License Rights (SNLR)

This category pertains whenever the standard license arrangements are modified to the mutual agreement of the contractor and the government. In this case, the exact terms are spelled out in a specific license agreement unique to each application. [1]

6. Small Business Innovative Research (SBIR) Data Rights

This category pertains to all technical data or computer software generated under an SBIR contract. The Government cannot release or disclose outside the Government except to Government support contractors.

7. Commercial Technical Data License Rights

This category applies to technical data related to commercial items (developed at private expense) and is managed in the same manner as Limited Rights.

8. Commercial Computer Software Licenses

This category applies to any commercial computer software or software documentation and is controlled as specified in the commercial license offered to the public.

Addressing Data Right Issues

It is necessary to determine the particular item, component, or process upon which the data given to the Government is based to analyze data rights issues. When both public and private sources of money are being used, this discipline becomes even more essential and useful. For instance, an item, portion, or procedure may have been produced initially at private expense. It’s possible that later on, the government paid for an upgrade to that apparatus or method. If the analysis is done well, the contractor can keep the rights to the underlying item, component, or process (i.e., give data with limited rights) while giving the Government unlimited rights for enhancements.

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Incorporated FAR Clauses Regarding Data Rights

The following Federal Acquisition Regulation (FAR) contract clauses relate to data rights and are incorporated in federal contracts under specific circumstances:

  • FAR 52.227-14: Rights in Data Main contract clause that outlines the respective rights of the contractor and government in data and software that precedes the performance of the contract work. This clause also outlines the rights in data and software created during the performance of the contract. Pursuant to FAR 27.409(b)(1), this clause is inserted in solicitations and contracts “if it is contemplated that data will be produced, furnished, or acquired under the contract” unless one of the listed exceptions apply. See FAR 27.409.
  • FAR 52.227-15: Representation of Limited Rights Data and Restricted Computer Software Outlines the government’s known delivery requirements for data. Under FAR 27.409(c), this clause is inserted “if the contracting officer desires to have an offeror state in response to a solicitation whether limited rights data or restricted computer software are likely to be used in meeting the data delivery requirements set forth in the solicitation.” See FAR 27.409(c).
  •  FAR 52.227-16: Additional Data Requirements Allows the contractor, under certain circumstances, to order any data first produced or specifically used in performance of this contract. Under FAR 27.409(d), this clause is inserted in “solicitations and contracts involving experimental, developmental, research or demonstration work (other than basic or applied research to be performed solely by a university or college where the contract amount will be $500,000 or less) unless all the requirements for data are believed to be known at the time of contracting and specified in the contract.” See FAR 27.409(d). The clause may also be inserted in other contracts, as described in FAR 27.409(d).

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Updated: 8/22/2023

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